Lyeth v. Hoey

Lyeth v. Hoey
Lyeth v. Hoey
	Supreme Court of the United States
Argued November 16, 1938; Decided December 5, 1938
Full case name	Lyeth v. Hoey
Citations	305 U.S. 188 ( more ) 59 S. Ct. 155; 83 L. Ed. 119
Case history
Prior	Summary judgment granted, 20 F. Supp. 619 (S.D.N.Y. 1937); reversed, 96 F.2d 141 (2d Cir. 1938); cert. granted, 304 U.S. 557(1938).
Subsequent	Summary judgment granted on remand, 27 F. Supp. 9 (S.D.N.Y. 1939); affirmed, 112 F.2d 4 (2d Cir. 1940).
Holding
	Property received by an heir under an agreement compromising and settling his contest of the decedent's will is property acquired by "inheritance," within the meaning of § 22(b)(3) of the Revenue Act of 1932, which exempts the value of such property from the income tax.
Court membership
	Chief Justice Charles E. Hughes Associate Justices James C. McReynolds · Louis Brandeis ; Pierce Butler · Harlan F. Stone ; Owen Roberts · Hugo Black ; Stanley F. Reed
Case opinion
Majority	Hughes
Laws applied
	§ 22(b)(3) of the Revenue Act of 1932

Last updated August 13, 2019

Lyeth v. Hoey, 305 U.S. 188 (1938), is a United States Supreme Court case in which the Court held that property received by an heir under a settlement agreement resolving a dispute over the decedent's will is property acquired by "inheritance," which exempts the value of such property from the income tax.^[1]

The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. Established pursuant to Article III of the U.S. Constitution in 1789, it has original jurisdiction over a narrow range of cases, including suits between two or more states and those involving ambassadors. It also has ultimate appellate jurisdiction over all federal court and state court cases that involve a point of federal constitutional or statutory law. The Court has the power of judicial review, the ability to invalidate a statute for violating a provision of the Constitution. Executive acts can be struck down by the Court for violating either the Constitution or federal law. However, it may act only within the context of a case in an area of law over which it has jurisdiction. The court may decide cases having political overtones, but it has ruled that it does not have power to decide non-justiciable political questions.

Background

The Petitioner was a grandson of Mary B. Longyear, who died in 1931, a resident of Massachusetts, leaving as her heirs four surviving children and the petitioner and his brother, who were sons of a deceased daughter. In her will, the decedent gave to her heirs certain small legacies. The entire residuary estate, amounting to more than $3,000,000, was bequeathed to an Endowment Trust, the income from which was payable to another trust described as the Longyear Foundation. The main purpose of the Longyear Foundation was to preserve "the records of the earthly life of Mary Baker Eddy," the founder of the Christian Science religion.

Mary Baker Eddy was an American writer and religious leader who established the Church of Christ, Scientist, as a Christian denomination and worldwide movement of spiritual healers. She wrote and published the movement's textbook, Science and Health with Key to the Scriptures and 15 other books. She started several weekly and monthly magazines—the Christian Science Sentinel, The Christian Science Journal, and The Herald of Christian Science—that feature articles on Christian Science practice and verified testimonies of healing. In 1908, at the age of 87, she founded The Christian Science Monitor, a global newspaper that has won seven Pulitzer Prizes. Eddy's book Science and Health with Key to the Scriptures has been a best seller for decades, and was selected as one of the "75 Books by Women Whose Words Have Changed the World", by the Women's National Book Association. In 1995 Eddy was inducted into the National Women's Hall of Fame. In 2002, The Mary Baker Eddy Library opened its doors, giving the public access to one of the largest collections about an American woman.

Christian Science is a set of beliefs and practices belonging to the metaphysical family of new religious movements. It was developed in 19th-century New England USA by Mary Baker Eddy, who argued in her 1875 book Science and Health that sickness is an illusion that can be corrected by prayer alone. The book became Christian Science's central text, along with the Bible, and by 2001 had sold over nine million copies.

When the will was offered for probate in Massachusetts, there was objection by the heirs upon the grounds, among others, of lack of testamentary capacity and undue influence. After a hearing, the probate court granted a motion for the framing of issues for trial before a jury. In that situation, a compromise agreement was entered into between the heirs, the legatees, the devisees, and the executors under the will and the Attorney General of Massachusetts. This agreement provided that the will should be admitted to probate and letters testamentary issued; that the specific and pecuniary bequests to individuals should be enforced; that the bequest of the residuary estate to the Endowment Trust should be disregarded; that $200,000 should be paid to the heirs, and a like amount to the Endowment Trust, and that the net residue of the estate, as defined, should be equally divided between the trustees of the Endowment Trust and the heirs.

The question presented was whether property received from the estate of a decedent in compromise of a claim (settlement of litigation) as an heir was taxable as income. Because of a conflict with the decision of the Court of Appeals for the Fourth Circuit in Magruder v. Segebade,^[2] certiorari was granted.^[3]

The United States Court of Appeals for the Fourth Circuit is a federal court located in Richmond, Virginia, with appellate jurisdiction over the district courts in the following districts:

Certiorari is a court process to seek judicial review of a decision of a lower court or administrative agency. The term comes from the name of an English prerogative writ, issued by a superior court to direct that the record of the lower court be sent to the superior court for review.

Opinion of the Court

Writing for the majority, Chief Justice Hughes held that whether the petitioner would receive any property in his capacity as heir depended upon the validity of his ancestor's will and the extent to which it would dispose of his ancestor's estate. When, by compromise and the decree enforcing it, that disposition was limited, what he got from the estate came to him because he was heir, the compromise serving to remove pro tanto the impediment to his inheritance. As such, the exemption applies.

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References

↑ Lyeth v. Hoey, 305 U.S. 188 (1938).
↑ Magruder v. Segebade, 94F.2d177 ( 4th Cir. 1938).
↑ Lyeth v. Hoey, 304 U.S. 557(1938).

External links

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The United States Reports are the official record of the Supreme Court of the United States. They include rulings, orders, case tables, in alphabetical order both by the name of the petitioner and by the name of the respondent, and other proceedings. United States Reports, once printed and bound, are the final version of court opinions and cannot be changed. Opinions of the court in each case are prepended with a headnote prepared by the Reporter of Decisions, and any concurring or dissenting opinions are published sequentially. The Court's Publication Office oversees the binding and publication of the volumes of United States Reports, although the actual printing, binding, and publication are performed by private firms under contract with the United States Government Publishing Office.

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[1] Lyeth v. Hoey, 305 U.S. 188 (1938).

[2] Magruder v. Segebade, 94F.2d177 ( 4th Cir. 1938).

[3] Lyeth v. Hoey, 304 U.S. 557(1938).