*1 feeling any had any shareholder “equitable were not the accounts years. un- Not during all these balance” had been shares til the Universal after sug- Unopco president and the sold gen- nice “a it would be gested that appreciation their thing” show erous honorarium gift or of a the form ever considered. payments these matter of an the sister recipients was One in 1919. life his had lost employee who pure- her was Certainly payment compensa- taxed ly and cannot gift a nothing to services; yet there for actu- her was indicate pay- any motive different ated others. ments to voluntary employer makes a When employee, it is reasonable payment to very special infer, in the absence ad circumstances, intended as v. Com Fisher compensation: ditional When (C.C.A. 2). F.(2d) 192 missioner, 59 stranger, natural payment is Lunaford gift. that of inference Commissioner, 6). (C.C.A. F.(2d) 740 employer, corporate of a Stockholders employ to its strangers legally as addi ees, may gifts make Hawley, 62 compensation. Bass v. tional stock 5). There the (C.C.A. F.(2d) 721 owned employer corporate of the pay made the company, which holding to be served an interest ment loyalty good will maintaining em corporate to their employees case the stockhold present ployer. In the possible receive can ers pres former or payments to benefit deci employees of Universal. ent goes majority of the court sion of authority ex previous than (C.C.A. cept v. Commissioner Walker Cravath, Gersdorff, Wood, de Swaine & 61, involving 12, 1937) 88
Feb. City Whitney, (Wm. D. of New York at bar. as the case transaction the same Wilmer, City, H. Richard York dissent in that Morton’s agree I with Tyler, C., George G. Washington, D. case. peti- City, counsel), York of New
tioner. Morris, Atty. Gen., Asst. W. James Monarch, Key, Louis Sewall John J. Atty. Gen., Pringle, Jr., Sp. Assts. to the J. respondent. HELVERING. HAND, SWAN, and OLSEN Before L. AU- HAND, Judges. Circuit N. GUSTUS Appeals, Second Circuit. HAND, Judge. L. 8, 1937. appeal from an order is an This Appeals, determining Board of de- year ficiency in income tax for the against Robert M. as administrator
651 every purpose of properly been swered a notice The deceased Olsen. of Neal S. him; he addressed to that the Com distribution knew the the beneficiaries one of meant missioner to assess him admin Products as Universal Oil employees of the to istrator; Corpora- he understood for the the reason by the made Company, duty 1931, assessment and that it to re was his the January, in spond. petition His Board Helver- review to the Bogardus in is decided which perfectly plain down makes it he was not 646, that F.(2d) handed 88 ing (C.C.A.) misled, enjoyed every privilege and had more nothing merits On herewith. the formally which a notice correct would procedural said, are but there be need true, given him. This we are being have separate discus- require questions which in unwilling to construe even a tax statute on December died S. Olsen sion. Neal spirit necessary in- archaic to defeat this filed an the administrator 13, and his 1931 only 1932, levy; per notice 11, the to advise the is return on March tax come pay deficiency son is to the that the who to December January 1st period from the him; any Commissioner means to dis- assess 1931, paid He was 13th, the tax. and thing unequivocally good does this is time before that administrator some charged as no all enough. While decision on day is 9, 1934, Commis- which the deficiency on fours, there are several which to hold a notice of addressed sioner in the notice frus Street, mistakes which do not Brook- 14-77th N. S. “Mr. purpose, Robert, are York,” negligible. trate its Burnet v. whose lyn, which New 123, Co., Joaquin I. Borough of San F. & 52 in the was business address (C.C.A.9); Manhattan, in 128 Commissioner v. Nichols due course. On received Co., (2d) F. 1934, (C.C.A.6); & 65 8th, petition with Cox L. 1009 May he filed a Lucas, Whitmer the 53 Appeals, disputing F.(2d) 1006 (C.C.A. the Board of distribution, 7); Commissioner v. in income of the New York Trust inclusion him, Co., (2d) validity against Haag 54 F. 465 (C.C.A.2); assessment the Commissioner, discharged; but not v. 59 F.(2d) (C.C.A.7). he had been 516 because or the notice was invalid suggesting that question depends upon The other Rob order From Board’s irregular. the even discharge ert M. Olsen’s administrator as appeals objections he now overruling probate the court deficiency before the first, questions at issue: Two are to us. levied, theory that, being being was the deficiency was valid whether the notice officio, liability functus thereafter no new (k) Revenue 272 Act under section imposed upon him, could be and that the note); (26 U.S.C.A. 272 1928 § tax if collectible all only at was collectible whether, second, so, discharged if as of kin from the next as transferees. On administrator, subject he was to as- still jurisdiction the this Board is the appeal sessment, Board as and could rest, thought to since if he was not assess “taxpayer.” able, not “taxpayer,” he was and could petition 272(a) not under of the Revenue Act section 272(a). Section The searching note) invalidity re more (26 U.S.C.A. would seem of 1928 to § invalidity be give to quires the Commissioner to notice assessment itself. matter was Supreme we whole “taxpayer,” and will assume without before the in Hulburd v. Commissioner, when an ad Court deciding, that executor or an 296 U. such, files return for S. 56 S.Ct. as where ministrator life, it held that if he, under period of the deceased’s the local law probate alone, so, discharge “taxpayer.” If sec court of an exec he apply completely utor or administrator did not to case (k) tion 272 ends his at power represent bar, only filed the de to returns deceased —to con “person” ceased, by person tinue his exempt for whom some oth or —he “fiduciary” assessment. has been substituted mean After er an extended ; protect consideration Illinois it was the Com law the while court gave when the there concluded that- missioner return evi state the dis that, just did charge substitution and when and it dence of the there therefore de notify except the assessment had no one the clared invalid. fore he It seems Upon supposed that for person interpre filed. who such an this reason the as invalid, equally void, bar notice was and section sessment at tation the but that it; only may in case the did not need we assume law of 272(k) New York much, Illinois. because it makes no difference is like that of We should be In fact obliged result. the notice reached to examine our selves, delay Robert M. Olsen without were an- course opinion the supra, in Hulburd v. Cardozo discussed also Mr. Justice York, found law of which he the to be unchanged common-law. *3 It is this was essential result, we should nevertheless not feel re-examine free to considered, deliberately thus persuasive we knew find as where to authority upon the law of New York.
Order affirmed.
SWAN, (concurring). Accepting majority opinion in Bo-
gardus establishing question, I concur.
COPLIN et al. v. UNITED STATES.* Appeals, Ninth Circuit. 1937.
Rehearing Denied March 1937. —. S.Ct. denied 57
*Writ of certiorari