¶1concurring: I concur in the result reached in the majority opinion, but I do not agree with the reasoning by which such result is reached.
¶2The majority opinion, in holding that Mary E. Fulham was not a person with a substantial adverse interest in the income or the principal of the Mary E. Fulham trust, in my judgment conflicts with our decision in Jane B. Shiverick, 37 B. T. A. 454. In that case, Jane B. Shiverick created a trust, reserving the power to revest in herself the corpus of the trust with the consent of her husband, Asa Shiverick, who was made cotrustee with the Cleveland Trust Co. Under the terms of the trust, after the decease of the settlor, in the event her husband was then living, so much of the income was to be paid him during his life as he might demand by a written instrument lodged with the trustee, and while he was the recipient of the income, the trustee was authorized to pay him from the principal of the trust such amounts as it should deem necessary or proper for his maintenance, support, and comfort.
¶3Thus it will be seen that the right of the settlor’s husband in the Shiverick case to share in the income of the trust or any of the corpus thereof, was contingent upon his surviving the settlor. Even though the husband’s interest in the income and corpus of the trust was a contingent one, we held that such interest was “a substantia] adverse interest” within the meaning of section 166 of the Revenue Act of 1932. On that point we said:
While his interest was contingent upon the death of his wife occurring before his decease, he might reasonably be expected to object to any change in the assets of the estate which would be inimical to his rights under the trust instrument in the event he outlived her. To that extent, at least, his *54interest was adverse. … The property placed in trust by the settlor was very substantial in amount — more than a half million dollars in bonds alone, half of which were Government bonds. The interest on the bonds was more than $20,000 a year. His right to receive this amount, contingent though it was, is sufficient,’we think, to justify us in holding that he had a substantial adverse interest.
¶4In the Mary E. Fulham trust involved in the instant case the interest of Mary E. Fulham was contingent, but, in the light of what we said in the SMvericTc case, it was a very substantial one. The settlor provided that “During my wife’s life, the trustee may pay to her at any time or from time to time any part or parts of the whole of the principal and/or accumulated income of the trust fund.”
¶5Therefore, for the reasons above stated, I do not agree with the majority holding that the interest of Mary E. Fulham was not a substantial adverse interest.
¶6However, under the doctrine announced by the Board in Mary Byerson Frost, 38 B. T. A. 1402, it is my opinion that petitioner would be taxable on the income in question under section 16/ of the Revenue Act of 1934, and it would seem that the same reasoning used in the Frost case would be equally applicable to section 166. In the Frost case, the grantor of the trust (Mrs. Frost) reserved a power, first in conjunction with her husband and after his death alone, to require the trustee to distribute to herself the trust principal, including a portion of the income which was to be accumulated. We held that under these circumstances the income was taxable to the settlor, Mary Ryerson Frost, under section 167 of the Revenue Act of 1934.
¶7In the instant case, the power to revoke the trust and revest the accumulated income and corpus in the settlor was placed in the hands of a committee by clause fifth of the trust instrument. This clause fifth was amended June 25, 1932, so as to take out the committee the power to alone revoke during the life of Mary E. Fulham and to confer upon her the power “to consent in writing” to a revocation of the trust. This power to consent to revocation by Mary E. Fulham, during her lifetime, was of course to cease at her death and the power to revoke was again to rest in the hands of the committee, the committee clearly not being an adverse interest.
¶8These facts, it seems to me, bring the instant case within the rule of the Frost case. For this reason, I concur in the result reached by the majority opinion but not in the reasoning by which such result is reached.
¶9dissenting: The underlying and controlling question here is whether under the trust above set out Mary E. Fulham had a substantial adverse interest within the meaning of that term in section 166 (2) of the Eevenue Act of 1934. If she did, the income of the trust was not taxable to the grantor and petitioner must prevail. If she did not, the contrary result is indicated. It is not contended that section 167 is applicable.
¶10The right to change, alter, and revoke the trust under consideration was originally vested in a committee. In 1932, however, the committee, by formal action, had abridged the provisions of the trust and the question at issue must be decided in the light of such amendment or abridgement.
¶11By this amendment the right to revest the corpus in the grantor, as originally granted to the committee, was changed so as to require the written consent of Mary E. Fulham. To make assurance doubly sure the committee formally relinquished and extinguished any power possessed by it to alter, amend, or revoke the provision requiring the consent of Mary E. Fulham. Such was the status in the taxable year.
¶12Obviously, the committee acting alone, as it might prior to 1932, did not possess a substantial adverse interest.. Accordingly, prior to 1932 the trust would have come within the provisions of section 166 (2). Subsequent thereto, as just indicated, this power, formerly vested in the committee, was conditioned on the written consent of Mary E. Fulham. Thus we arrive at the controlling question: Did Mary E. Fulham have a substantial adverse interest? In considering the question reference is made first to the trust provisions. Clause first provides:
Clause: First : Until the death of my wife, Mart E. Fulham, the trustees shall accumulate the income of the trust fund. During my wife’s life the trustees may pay to her at any time or from time to time any part or parts or the whole of the principal and/or accumulated income of the. trust fund.
¶13Respondent contends that the quoted provision was permissive but not mandatory and that Mary E. Fulham, could not have compelled payment to her of any part of the corpus or income. I can not agree.. In construing a trust, the intent of the grantor is controlling. It is not to be assumed that the provisions of the trust were idle gestures, lacking in substance. A reading of the trust instrument convinces me that the grantor contemplated and intended that Mary E. Fulham, his wife, have the right and power to draw on the trust, both corpus and accumulated income, so far as her needs might require and that if need had arisen she could successfully have enforced her demands. It is noteworthy that the provision in question is placed in clause first of the trust instrument. It is also to be noted that clause second provides, “upon the death of my said *56wife the trustees shall divide the remaining principal and all unpaid, accrued and accumulated income”, etc., thus confirming the suggestion that the grantor contemplated the payments to Mary E. Fulham. I am of the opinion that under the trust instrument Mary E. Fulham was a beneficiary of the trust holding a substantial adverse interest in the corpus and income thereof. See Jane B. Shiverick, 37 B. T. A. 454; Smith v. Commissioner, 59 Fed. (2d) 56 (C. C. A., 1st Cir.); Bessie B. Jones, 27 B. T. A. 171. Entertaining this view, it follows that I can not concur hi the opinion of the majority. I do not believe that the trust here in question falls within the provisions of section 166 (2) of the Revenue Act of 1934.