*1 time,” negative estoppel waiver sum- extension of not “waive the did judgment mary affidavits, that did not do no evidence that was there waive; and, second, duty produce Mooney that no so. evidence did not negative estoppel, jury on trial presented to the waiver and issue was no issues, not it did not To this since those were “that matter” [waiver]. judgment Now, having judge a so.9 obtained trial said: undisputed fact that based on the Well, that new matters all of are finding jury’s was late and the award bringing today, you me time, no extension of that there was yesterday pretrial a rather full had Mooney opportunity of denied the a is good this mo- and I never until heard trial, otherwise, jury es- waiver about whether ment one word prop- toppel. union, The did jury ques- a Court should submit estoppel erly on motion raise waiver opens up that waiver, tion of summary judgment and did show for new whole area. of that either issue was judge pointed he out that was The then fact, not raise with this material and did pretrial order and that bound summary judgment should court that being of waiver was raised matter specifical- granted, been and at trial the union the first time. Counsel ly it not ask that waiver be stated did then said: jury, gets a issue to submitted as an saying No, am not that the Court I that final its favor on factual submit an issue on waiver. am should appellate of court. at the hands issue law, saying that as a matter since of panel All members waiver, there has no evidence policy encouraging federal labor arbi- that aas matter law these issues tration. But I do not that understand am not submitted. be policy in which cases issue, your questing an Honor. required to tried district be in the reaffirmed that he The court then appeal. The courts and to be reviewed understanding correctly union counsel: judgment of district court should [N]ow, *: [THE COURT] affirmed. it, you are not insist- as I understand waiver, upon any question of THE UNION]: FOR [COUNSEL saying right, but we are That is as a issues should matter law these SCUDDER, is no M. Petitioner- submitted because there ** mean, evidence waiver. there was no
there is no evidence waiver. UNITED STATES America. Respondent-Appellee. buy argu- judge declined to The trial company ment of union counsel United States Court of discharge proof a burden of had failed Sixth Circuit. (which it not have event would case.)8 and, on an had issue compliance The fact technicality procedure no mere rules result of end is demonstrated having duty Mooney, no had case. jury above, company there was found As
7. noted fault agreed requested or either no extension produce evidence that to. of waiver and tend inferences to rebut estoppel. anyone, ma- whisper See footnotes no 8. The record shows estoppel. trial, jority opinion. during about before or *2 Rogovin, Atty. Gen., chell Asst. A. Lee
Jackson, Friedlander, William A. Robert Attys., Dept, Justice, J. Campbell, Washington, C.,D. on the brief. Before O’SULLIVAN CECIL, Judges, Senior Cir- Judge. cuit
ORDER This cause before now
upon Respondent-Commissioner’s peti- upon pleading tion for Louise M. Scudder “Mo- denominated tion to Amend and in the Alter- Rehearing.” native Petition for foregoing petitions and motion are The Commissioner asserts that our impermissible contains an disre- gard stipulation of a that monies taken by Frank Liquor Company, of which his Owensboro wife partner, constituted embezzlement. agreement This arose from an between counsel that monies withdrawn partnership Frank “were taken in the manner described sub- (b) paragraphs (e) paragraph respondent’s sub- answer.” Those paragraphs refer to “was income that variety derived from a of different sources, important in- the most of which volved his embezzlement of certain funds belonging partnership” to a and that “the sums total which Mr. Scudder thus unlawfully took and embezzled following less than employment amounts.” Conclusional word, “embezzlement,” where underlying dispute not in undisputed facts. Court, intent moreover, that the end result will be the same whether Frank Scudder’s with- drawals from the monies owned partnership of which his wife awas Hager, Owensboro, Ky., member John S. characterized unauthor- petitioner, Hager, John ized Morton J. Hol- loans or embezzlement. S. brook, Sandidge, Craig Holbrook, & distinguishing the cases relied Hager, Owensboro, Ky., on the brief. Court, the Tax recited that none Justice, Campbell, Dept, Robert of them hold that an innocent can Washington, C., respondent, D. Mit- held liable for income tax on monies her hus- partnership withdrawals, to Frank’s but distinguished those band. We further his other While some of businesses. *3 saying, by involves a “And none undoubtedly cases made these investments were embezzled partner- situation where the taken from the funds the earnings loans to al- funds were shown as ship, on them should the leged of the con- embezzler the books solely our has excluded because cern from the withdrawals already paying which tax on her from excused
made the monies from which the investments Wilcox, In v. were made.1 Commissioner announcing the for our basis 546, 404, L.Ed. S.Ct. 752 327 U.S. say, holding, to we took occasion (1946), though embezzled even just persuade ourselves cannot “We income, were held the not to be taxable joint the returns execution of the Supreme suggested profits Court here were not the use of the embezzled funds realized from fraud, equivalent wrong in might be taxable. trickery, and, indeed, the which duress [the embezzler] “Had the appears the Tax to concede will money the and obtained used embezzled victim from liabilities insulate its might profits therefrom, profits such accrue.” which would otherwise regardless taxable, of the speculative After our consideration as n 409, illegality at involved.” 327 U.S. whether the husband’s withdrawals 66 S.Ct. at might might or not be embezzlement the v. James United Louise make clear that Scudder’s We States, 1052, 213, 81 366 U.S. S.Ct. liability penalties on tax the and (1961), expressed our L.Ed.2d 246 we earnings from the return omitted that, further view any part expose shall not case, penalty illegally special amounts of this “Under holding partnership. by But we from the do not consider that a drawn by upon the of Frank look us that the monies withdrawn earnings his in- to include from Frank taxable in- Scudder Scudder were properties come which his victimized vestments and wrong equivalent pay, turn “conduct in must now run counter indeed, fraud, States, supra.” trickery, James v. United to hold that duress” which led us that, holding It our paying exempt tax Louise whether of the upon penalties monies il- assessed parties commits the husband’s us to view legally partnership. from the withdrawn embezzlement, as- the cir- withdrawals clear, however, comput- in We make cumstances ob- Scudder payable investment on such tax tained these monies forecloses the assess- wrongfully earnings, upon wronged ment his wife of income withdrawn shall be added penalties tax or thereon. the rate tax. thereto arrive Appellant Louise M. Scudder emphasize moves that this Court’s be re annual We requiring formed if it can be read as withdrawals Frank Scudder pay upon falsely $4,420 due tax income earned amount of entered prop partnership’s her husband investments and as travel ex- books by him, penses erties owned and to “insulate the in the same are to be treated illegal victim from re liabilities the other exonerating partnership, turn.” This would include the total whether payment in considered as embezzled funds or penalties attributable, come tax and loans or withdrawals. unauthorized Revenue, (6th 1949). 1. See Howell v. Comm’r of Internal 175 F.2d Cir. Therefore, upon of the consideration us,
matters before DURANT, Petitioner, William R. that the Motion Amend is ordered respective Petitions America, UNITED STATES are, be, they hereby Rehearing may Respondent, Appellee. Entered order the Court. United States Court First Circuit. Judge (dissenting *4 concurring part). part 9,May As Amended given consideration to appeal, the issues involved
grant petition and af- of the Tax firm the decision Court. light taxpayer’s admission that constituted husband’s embezzlements, my I do not funds were brethren not1 and therefore income. treating Moreover, I think that ignores loans the fact drawals as require “loans” the consent of parties the time the both agreement be- advanced. There was no parties here. tween the think the facts of also severally jointly case Although Congress liable. any exceptions out carved liability, exon- the courts have several co-signers joint returns if their erated signatures of duress however, Here, the Tax Court or fraud. signed taxpayer voluntarily found that could not there- returns and she signature to duress. fore attribute And fraudulent to the embezzlement of was related procurement of her not to the signature The un- returns. there- qualified of the statute liability. imposition compels fore respects I concur In all other original decision petitions denying its order hearing.