This case involves the construction and constitutionality, as applied, of section 402(f) of the Revenue Act of 1918 (40 Stat. 1097, 1098), which provides that the value of the gross estate of the decedent shall be determined by including the value, at the time of his death, of all property '(f) to the extent of the amount receivable by the executor as insurance under policies taken out by the decedent upon his own life; and to the extent of the excess over $40,000 of the amount receivable by all other beneficiaries as insurance under policies taken out by the decedent upon his own life.' Petitioners are the executors of the will of King Upton, who died in 1921 while the act of 1918 was in force. His wife survived him. Long prior to the passage of the act, a number of life insurance policies were issued to the decedent, among them four issued by the Berkshire Life Insurance Company of Massachusetts, originally payable to his estate; and one issued in 1883 by the Connecticut Mutual Life Insurance Company of Connecticut, payable to the wife of the decedent with a condition that in case of the predecease of the wife the amount of the policy should be payable to his children; or, if there be no children or descendants of children then living, to the legal representatives of the insured. In 1904, decedent assigned the four Berkshire policies to his wife, 'provided she survives me.' The decedent had no power, none being reserved, to change the beneficiaries, to pledge or assign the policies after the assignment to his wife, or revoke that assignment or surrender the policies without the consent of the beneficiaries. Central Bank of Washington v. Hume, 128 U.S. 195, 205, 9 S.Ct. 41, 32 L.Ed. 370; Miles v. Connecticut Life Ins. Co., 147 U.S. 177, 181, 182, 183, 13 S.Ct. 275, 37 L.Ed. 128, compare dissent 147 U.S. 188, 13 S.Ct. 279; Commonwealth v. Whipple, 181 Mass. 343, 63 N.E. 919; Pingrey v. National Life Insurance Co., 144 Mass. 374, 382, 11 N.E. 562.
After having deducted the specific exemption of $40,000, the Commissioner of Internal Revenue included the proceeds of these five policies in the decedent's gross estate, for the purpose of the federal estate tax. An action was brought in a Federal District Court to recover the amount of the tax resulting from the inclusion of these proceeds. That court rejected the view of the Commissioner and awarded judgment to the taxpayers upon the authority of Lewellyn v. Frick, 268 U.S. 238, 45 S.Ct. 487, 488, 69 L.Ed. 934; Bingham v. United States, 7 F.Supp. 907.
The Court of Appeals reversed, holding that the Frick Case was distinguishable. United States v. Bingham, 76 F.(2d) 573. We think the view taken by the District Court is the correct one.