Libbey

This cause presents a new problem in interpretation of the ever troublesome section 811(c) of the Internal Revenue Code of 1939, 26 U.S.C.A. § 811 (c), de daring that the value of a decedent’s •gross estate shall include the value of all property of which he has at any time made a transfer intended to take effect in possession or enjoyment at death. The very narrow question tendered is whether an annuitant made a transfer within the meaning of Section 811(c) in refraining from exercising an option to convert a ten-year annuity providing survivorship benefits for his designed beneficiary to an annuity for his life only.

The facts have been stipulated. On February 26, 1937, the California Packing Corporation purchased from the John Hancock Insurance Company ten-year retirement annuities for all employees having twenty consecutive years of service. Among such employees was Fred N. Lib-bey, the husband of the plaintiff herein. His annuity contract entitled him to 120 monthly payments of $149.24 commencing on the contract anniversary nearest to his 65th birthday, namely, February 26, 1941. The contract provided that if he should die prior to that date, his wife or other substituted…