Judson,
J.
(all
concur)
:—The
respondents
are
the
executors
of
the
last
will
and
testament
of
Harris
Cox,
deceased.
The
sole
issue
on
appeal
is
whether
there
is
to
be
included
in
the
property
passing
on
the
death
of
Harris
Cox,
the
face
value
of
a
policy
of
life
assurance
or
$6,076.50
as
the
subject-matter
of
a
gift
made
by
the
deceased
within
three
years
prior
to
his
death.
In
an
assessment
by
the
Minister
under
Section
24
of
the
Estate
Tax
Act,
the
face
value
of
the
policy,
$50,000,
was
included
in
the
computation
of
the
aggregate
net
value
of
the
property
passing
on
death
within
Section
3(1)
(c).
On
an
appeal
by
the
executors,
the
subject-matter
of
the
gift
was
held
to
be
$6,076.50
and
not
the
face
value
of
the
policy.
The
Minister
now
appeals
from
that
decision.
In
my
view
the
appeal
must
be
allowed,
and
the
original
assessment
by
the
Minister
affirmed.
On
November
15,
1957
the
deceased
entered
into
a
contract
of
assurance
which
was
to
pay
$50,000
on
his
death.
Yearly
premiums
were
to
be
$1,526.50.
On
October
22,
1962
the
deceased
assigned
this
policy
to
his
wife.
The
cash
surrender
value
of
the
policy
then
was
$4,550.
On
October
24,
1962
the
deceased
delivered
to
his
wife
the
assignment,
the
policy
and
his
cheque
for
$6,076.50
payable
to
her.
In
return,
his
wife
gave
him
a
cheque
drawn
on
her
account
for
$4,550.
When
these
cheques
were
drawn
and
cashed,
the
deceased’s
account
showed
a
balance
of
$1,697.22,
while
only
$453.40
stood
to
his
wife’s
credit
in
her
account.
The
deceased
died
on
September
19,
1965.
The
executors
of
his
estate,
in
computing
the
aggregate
net
value
of
property
passing
on
death,
included
$6,076.50
as
being
the
subject-matter
of
the
gift
made
by
the
deceased
to
his
wife
on
October
24,
1962.
By
this
view,
the
wife’s
cheque
for
$4,550
was
payment
for
the
then
cash
surrender
value
of
the
policy
in
consideration
for
its
assignment
to
her.
The
Minister
included
in
his
assessment
the
value
of
the
policy
as
being
the
subject-matter
of
the
gift
made
on
October
24,
1962,
pursuant
to
Section
3(1)
(c)
of
the
Estate
Tax
Act.
At
trial,
it
was
held
that
there
were
two
real
transactions
involved,
a
gift
of
money
by
Mr.
Cox
to
his
wife
and
a
purchase
of
the
policy
by
Mrs.
Cox
from
her
husband.
Accordingly,
the
subject-matter
of
the
gift
was
the
sum
of
$6,076.50.
In
the
agreed
statement
of
facts
it
was
admitted
that
the
purpose
of
the
transfer
on
October
24,
1962
was
to
avoid
the
inclusion
in
the
aggregate
net
value
of
the
property
passing
on
the
death
of
the
deceased
the
face
amount
of
the
policy
pursuant
to
Section
3(1)
(m)
of
the
Estate
Tax
Act.
The
relevant
provisions
are:
8.
(1)
There
shall
be
included
in
computing
the
aggregate
net
value
of
the
property
passing
on
the
death
of
a
person
the
value
of
all
property,
wherever
situated,
passing
on
the
death
of
such
person,
including,
without
restricting
the
generality
of
the
foregoing,
(c)
property
disposed
of
by
the
deceased
under
a
disposition
operating
or
purporting
to
operate
as
an
immediate
gift
inter
vivos,
whether
by
transfer,
delivery,
declaration
of
trust
or
otherwise,
made
within
three
years
prior
to
his
death;
(m)
any
amount
payable
under
a
policy
of
insurance
effected
on
the
life
of
the
deceased
(whether
or
not
to
a
preferred
beneficiary
within
the
meaning
of
any
statute
or
law
relating
to
insurance
applicable
to
such
policy),
where
such
policy
was
immediately
prior
to
the
death
of
the
deceased,
(i)
owned,
either
alone
or
jointly
or
in
common
with
any
other
person,
(A)
by
the
deceased,
.
.
.
I
am
in
complete
agreement
with
the
Minister’s
contention
that
the
exchange
of
cheques
was
merely
the
machinery
used
to
effect
a
gift
of
the
policy
by
the
deceased
to
his
wife.
The
simultaneous
exchange
of
cheques,
where
neither
would
be
honoured
due
to
insufficient
funds
were
it
not
for
the
offsetting
entry
of
the
other
cheque,
can
only
be
viewed
as
a
single
transaction.
In
substance,
the
deceased
transferred
to
his
wife
the
policy
of
life
assurance
plus
the
exact
amount
of
the
next
year’s
premium,
the
sum
of
$1,526.50,
being
the
difference
between
$6,076.50
and
$4,550.
The
deceased
received
no
consideration
for
this
transfer,
thereby
constituting
a
gift
of
the
policy
within
the
provisions
of
the
Estate
Tax
Act,
the
face
value
of
which
was
properly
included
in
computing
the
aggregate
net
value
of
property
passing
on
death.
I
would
allow
the
appeal
with
costs.
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