*1
271
.
ing,
Revenue,
It
Com’r
Commissioner, Cir.,
642
116 F.2d
Internal
28 B.T.A.
2
143,affirmed,
recap
Cir.,
1015;
2
was a
74 F.2d
Baltimore
there
cannot
denied that
Commissioner,
&
“reorganization”
Cir.,
Ohio R. Co. v.
4
italization
hence
by section F.2d 460.
described
within the definition
112(b)(3)
Hence section
112(g)(1)(D).
The order
Board is affirmed.
preclude
gain or
recognition
would
pay
Except
the cash
loss.
extent
ment,
112(c)(1),
provided
in section
the old shareholders
distribution to
not .taxable.
argued
It
the distribution
the 221.2
was in effect
same
shares
$222,-
of a cash dividend
distribution
LOUIS
OF
V.
ASS’N
TERMINAL R.
ST.
buy
used to
120 which the stockholders
STAENGEL.
gave
But the offer
them no
shares.
No. 11935.
their
election to
shares or cash at
take
option.
large
of holders
Had a
number
Eighth
Appeals,
Circuit.
Court of
cash,
recapitali
plan
stood out for
July 30, 1941.
zation
aban
doubt
been
doned.
Aug. 30,
Rehearing
1941.
Denied
theory,
an alternative
As
Nov.
1941.
Denied
Writ of Certiorari
taxpayer urges
221.2
shares of new
181, 62 S.Ct.
L.Ed.-.
See
dividend,
preferred
stock
constituted a
paid
to a dividends
entitled
theory,
27(e).
credit
under section
On
proof
as to the fair market value
required,
none
stock was
was offered
hearing.
at
decision the tax
After
payer
reopen
leave to
the case in
asked
proof.
order to adduce such
This motion
the Board denied
refusal
and its
is now
alleged
granting
as error. The
or denial
of such motions rests in the
dis
sound
cretion
Board.
Commissioner v.
Sussman,
Cir.,
102 F.2d
no abuse of
we can see
case
bar
The Board’s refusal
discretion.
arbitrary.
hearing
At the
motion
specifically
attention had
counsel’s
proof of
market
the fact
called to
stock
offered if the
divi
should be
value
upon.
theory
relied
He
dend
the case
to submit
without
content
proof.
such
final issue is on the Board’s
as a deductible business ex
disallowance
$15,000 attorney’s
paid
pense
fee
corporate recapitaliza
connection
exchange of old
stock for new.
tion and
expenses
are deductible
Business
“ordinary”.
“necessary”
Deputy
Pont,
488, 497,
Du
308 U.S.
Expenses
recap
relating
mercial Investment
v. Helver-
*2
switches,
including
lined for
were
go along
track
it would
train
hour,
per
Going at
miles
20 to
passed
on track
over switch
*3
car
except
this last
trucks of
72
the rear
riding). When
(on
plaintiff
which
was
switch, the wheels
this
those trucks reached
along
11th Street
track
went
thereof
which had
following the
of
train
instead
front trucks
gone along
72. With its
track
11th
Louis,
on
its
trucks on the
track 72 and
rear
Sheppard,
Mo.
L.
St.
Arnot
track,
Davis,
car was caused
Street
rear
Hadley
N.
(Carlton
Walter
S.
a
car
increasingly
for
few
brief),
move
sidewise
Louis, Mo., on
for
both
of St.
pier (between
lengths until
struck
steel
appellant.
tracks)
supporting an elevated
these two
Louis,
Elam,
P.
Mo.
Roberts
St.
rear
started
structure. When
trucks
Louis, Mo.,
(Mark
Eagleton,
D.
of St.
on
switch,
track at the
along
11th Street
brief),
appellee.
for
plaintiff
signal
“sign” (switch
noticed the
STONE, WOODROUGH,
Before
track,
light) was
the -11th Street
set for
JOHNSEN,
Judges.
Circuit
for
indicated that the switch
set
which
go
should
Knowing the train
that track.
STONE,
Judge.
something
72, he
along track
realized
appeal by
This is
from a
an
defendant
up.
get
Before
wrong
and started
judgment
personal
injury
for
ain
so,
pier,
car struck the
he
do
brought
Employ-
action
under the Federal
violently
ground with
throwing him
Act,
Liability
ers’
51-60.
U.S.C.A. §§
injuries in suit here.
the resultant
Two issues are submitted
here.
Appellant places
contention
its
first
do with
of the case
has to
submission
been directed
verdict should have
loquitur
ipsa
under
res
ipsa
not a
(1)
bases:
that this is
res
two
ind,
ap-
particularly,
doctrine
view
case;
that,
loquitur
(2)
if
even
pellant’s contention that
its
com-
evidence
case,
ipsa loquitur
res
entire
pelled a
verdict for it. The sec-
directed
justified
such direction since the
application
ond
concerns
of Rule
in-
by appellant conclusively rebutted the
Procedure,
the Rules of Civil
28 U.S.C.A.
prima
presumption raised
ference or
following
723c.
section
by appellee.
facie case made
Jury.
I. Submission to the
Loquitur
If
Ipsa
(1) Res
Case.
involves
This
examination of
issue
relationship
parties
between the
legal
A very
fact situation.
concise outline
authorize,
whether
here)
such as
(as
how
accident occurred
follows.
ipsa
which the rule of res
is one to
a case
employed by
had been
Plaintiff
depends upon
applicable
properly
loquitur
many years
switchman in
its
causing
of the occurrence
the character
yards.
on
Sometime after nine o’clock
thing
injury.
applicable
The rule is
20, 1939,
acting
night
he was
of October
time,
was,
under
injury
causing the
twenty
string
on
as rear switchman
control of defendant and
the exclusive
freight
being
East
Odd
cars
hauled from
as,
ordinary
was such
occurrence
Illinois,
Louis,
Ewing
St.
to defendant’s
happen
things,
if the
course of
does
Louis,
yards
Mis-
Avenue switch
in St.
exclusive control uses
having such
one
sitting on an end sill at
souri. He was
Light & Transit
(San
proper care
Juan
car —which was
the rear end of
98,
89,
Requena,
224 U.S.
Co.
heavily
unusually long car
loaded with
an
680).
399, 56 L.Ed.
movement
course of
its
sand.
by the above
Tested
considera
yards before reach-
through
Louis
the St.
outlined,
fact situation above
yards,
the switch tions
ing
Ewing Avenue
ipsa loquitur case.
a res
This
track this is
main line
over the
was routed
Railway
Southern
directly ruled
Co.
con-
crossing
tower
(track 72)
various
566,
Bennett,
34 S.Ct.
58 L.
switches,
operated
which
one of
trolled and
was a suit under the Fed
Ed.
con-
This switch
as switch 13.
known
Liability
Employers’
Act
the death
Street
eral
leading to the 11th
a track
nected
(an engineer)
employee
the fall-
yards
The various
track
with main
ing
burning
through
of his
trestle.
engine
19 F.2d
this court said that
Cir.]
injury
presumption
It was there held that
to an em-
arising from the
doctrine
ployee
ipsa
resulting
loquitur
from “defective instru-
res
take
the case
S., page
(page
mentalities”
85 of 233 U.
‘unless the entire evidence is such
S.Ct.,
860)
566 of
could be that
presumption
against
58 L.Ed.
stand
cannot
recovered under
Act under the res
case was reversed
on the
there
it/
ipsa loquitur
precise
ground
That is the
situ-
rule.
the circumstances
that case
clearly
ation here.
presumption.
rebutted the
controlling issue in that case
whether
(2) Appellanfs (defendant’s) evi
the defendant had
known
a defect
compelled
dence
verdict. On
directed
wiring system
electric
long enough to
issue, appellant presents
preliminary
(a) a
*4
remedy the same and the evidence of the
argument
may
that verdict for defendant
clearly
showed
that the defect had
case;
ipsa loquitur
be directed in a res
not existed as much as an hour and
it
that
and, then, (b) that its evidence here com
was such
character
defect as not to man-
pelled such direction.
ifest
short,
itself before the accident.
In
(a)
applicable
The
is
’rule
law
here
it is not enough that the evidence
cases,
Court,
to be found
in
three
in
would,
true, be
defendant
if
sufficient
Brown,
Dierks Lumber
& Coal Co. v.
presumption,
rebut the
because it is
for
Cir.,
732;
8
Ry.
19 F.2d
Southern
v.Co.
jury to pass upon the
credibility
wit-
Hussey, Cir.,
70,
1172,
8
42 F.2d
74 A.L.R.
nesses and the truth
testimony,
but
May Department
Bell,
and
Stores Co. v.
the circumstances must be such
no ju-
Cir.,
8
ceived) such fur- and that such shocks short, ly di compel ever since. (b) Does switch, whether all showed an abnormal action of inquiry rected is verdict? as to evidence showed action the evidence here so conclusive which defendant’s that, func- happened un with normal negligence lack of defendant could not decision, not ac- which tioning der the above rules of verdict so, any explanation. ev for nor directed. If count offer should have been explanation” (San must furnish idence “an evidence as of this Even we take all Requena, su Light Transit & Co. have been true, clear that there Juan pra, page page 32 S.Ct. in these switch instrumentali- some defect 680) 56 L.Ed. of the occurrence 11th Street ties did shift because con no compelling verdict very after the track within few seconds trary allowed to stand. should car over it. passed front of this trucks explanation for this Defendant offers evidence, not re- essentials position switch action. Its opinion, peating earlier in this that stated instrumentality just before was in order This was set are follows: switch the occurrence. just All of the train it. track 72 when entered passed ex- over onto track 72 verdict, directing a justify To Be- cept trucks of last car. the rear compelled must be to the conclusion *5 Court momentary trucks tween the time the front not differ as that reasonable minds could passed and the switch of this car over negligence to lack of defendant. the of it, the rear switch the trucks reached do of an ac here in face This it changed the 11th track. The to Street conclusively showing de tual occurrence by parties both foregoing is the evidence operation the switch which is of fective by physical facts. The evidence explanation. entirely We have devoid that few minutes after defendant was is not com no that such conclusion doubt accident, the switch was found set for bring The here does not pelled. evidence no had or track 72 and that control slight (an weakening within that case this have the switch could been exercised over Hussey case) in by this Court nounced part tower after a of the from control that no verdict can be directed rule passed switch and entered on train ipsa loquitur case. does not fur res It in a operated That was track 72. switch required “explanation” by the Re nish the solely by tower levers influenc- from the quena case. pneumatic device the switch. That ing the trial Appellant contends that automatically by switch locked “(1) if Judge verdict: de must direct a passing a train was circuit while electric overwhelmingly so evidence is fendant’s part long any train over it a ver plaintiff’s evidence that contrary to on the track 72 circuit to connected to be plaintiff’s favor would have in dict That this circuit switch. extended for by judge acting aside the trial set beyond the 300 feet switch. That cir- discretion; (2) if defendant’s or sound might by insulated sand the rails cuit unimpeached uncontradicted, is evidence suph insulation would to but that have physical natural contrary to laws and not on one for for all wheels rail the entire Lamborn, 248, 45 S.Ct. (Small U.S. of the in length the circuit. That the 597; Cooley, 300, Gunning 69 L.Ed. operated perfectly before and switch after 720; 90, 231, 50 S.Ct. 74 L.Ed. Penn repair this occurrence without Chamberlain, sylvania R. R. Co. v. U. working upon inspec- order entire found 391, 333, 819).” 53 S.Ct. 77 L.Ed. S. very shortly happen- tion made perfect- Appellant That has worked insists rule above stated ing. the switch jury question negligence is nish circumstantial evidence of whether plaintiff.” preponderance is with the where direct evidence of it lack- point ing, weighed, it is evidence to be decided that ease was necessarily accepted of-proof to be the burden was not not as suffi- that shifted they by showing cient; explanation prima call for or to defendant facie necessarily they ipsa loquitur rebuttal, plaintiff not in a res case. re- they quire it; Pages U.S., pages 417, make a case to be jury, by S.Ct., not 418 of 33 L.Ed. Ann.Cas. decided fore- meaning ipsa loquitur, 1914D, Res the verdict. 905. The of the above stall simply prima applies, quotation is it does not convert facie where the de- shifting general issue is without fendant’s into an affirmative case rebuttable proof. in, When all burden defense. the evidence is device, open; ipsa loquitur locking with tric applies cases it could to res to open just enough ci- given momentarily long did vigor. We are undiminished — go none. allow to off on the and have found these rear trucks tation to effect true, closed promptly is obvious 11th Street If this track —and insistence he lo- ipsa again; produced res ac- practical what this abnormal usefulness known; switches, including This quitur materially reduced. tion is not all rule will be plain- one, reasonably inspected. that a would mean so because it were to present indisputable evidence tiff evidence that the switch did explanation every directly opposed the occur- so change to the evi- overthrow show would electrically rence which dence that locked and plaintiff If lack of failed negligence. change. change, If it could so do, stand impossible of defendant would disbelieve the tower man and, unimpeached, un- operate who testified he did not uncontradicted laws, re- physical contrary less change? switch cause the More than quire This he would twenty verdict. directed cars of this train and front sole reason in the face of the passed rapidly do trucks of the rear car rule, loquitur is that ipsa safely over the res switch and the accident was hap- how the occurrence knowledge solely by momentary caused shift of the knowledge pened peculiarly within the any switch with no evidence of influence re- require of defendant. To rear trucks. thereon these The situa- explanation by defendant made fute an might tion is unusual. The most pe- knowledge as truth is where the justified believing any part or culiarly possession of defendant would and, therefrom, exculpating de- practically any usefulness annihilate fendant. The trial court was not entitled ipsa loquitur rule. res that all to direct the of such evidence less, and, much must be true that it cleared *6 exceptions (such With the rarest defendant blame. of all Brown, Coal as Dierks Lumber & Co. supra), the rule is announced we think as Rule II. Virginia Midland Railroad Gleeson all At the close of evidence and before 435, 444, Co., appellant requested argument, an instrucr “The law L.Ed. as follows: tion as follows: negligence plaintiff show “You are instructed that a case prima by This is done facie defendant. where, already as I character have plaintiff passenger, be a showing, if you, right, have but are not you stated occurred. If that acci accident compelled, plaintiff inferring by to find be the result of dent was in causes fact negligence part the fact on of some responsibility, yond or the defendant’s defendant because the facts and circum- God, the act of still none the true less plaintiff’s surrounding injury, stances nev- plaintiff prima has made out his ertheless, if the defendant’s evidence shows proves facie case. he When occurrence ap- you was no defect that there in its the defendant must answer accident case, pliances in this if involved or that ex case from all circumstances of defect, there such was the defect was cre- culpation, by one whether disclosed by beyond ated or its arose circumstances party They matter or the other. are its control, you if find ex- or that such defect say, for the defense. And isted, period but had for so short a existed testimony, light of all and under of time defendant could not reasona- court, the instructions of the whether expected bly have been to have been ad- exist, and effect as relation of cause did by ordinary vised of it the exercise of care defense, by the the acci claimed between part, explained on its then has alleged exonerating dent and the circum your the occurrence and verdict must stances.” for defendant. words, consideration in connec Another “In other the defendant ex- appellant tion con ways with this contention of onerate itself in the three one appellant showing mentioned, namely; (1) cerns by above appliances relies for verdict. That a directed no men- there was defect in evidence; up following: (2) to the switch could or if there sums tioned in tower; operated only defect, from the switch was such it arose and created beyond perfectly by before and switch worked defendant’s con- circumstances occurrence; trol; defect, any because of elec- such if (3) or there argument after the period of correct the situation was, short had existed reasonably begun. had not time that defendant could byit expected advised of to have been object Sheppard: I want to What “Mr. part.” ordinary care on its use of Court’s incorporation into the to now the A then refused. This instruction was that the defend- charge statement fol- charge given as portion of the of three itself in one might ant exonerate you greater from : “If conclude lows ways; namely, there was by, showing that the derailment weight of the evidence in ev- a de- appliances mentioned defect in the defendant, negligence of by the was caused ; was such (2) idence if there or employ- agents, any servants or or ees, fect it arose and created circum- as injuries sustained control; (3) beyond or stances defendant’s derailment, your such a direct result of defect, any was, ex- had if there plaintiff; if verdict will be for the period that defend- so short of time isted ant could not evidence, in- the consideration of reasonably expected to defendant, you are cluding that offered by the use of or- have advised of it ev- say weight greater unable to that, dinary the fact as care. In view of negli- supports idence an inference that dic- just has I understood and as the Court the defendant caused the derail- gence of record, those statements into the tated would not be plaintiff’s injuries, you if ment or con- incorporated Charge, into appliances clude there was no defect in not, therefore, argue free to I feel did involved, if there was a defect but that or things to the Had I known those it either was not caused within circumstances incorporat- hypotheses that those would be control of the defendant or certainly Charge I ed into the argued for the de- long enough had existed strenuously I fendant, care, ordinary exercising highly important are jury because it, your discovered remedied verdict in this case. the defendant’s defense should be for defendant.” argument I think the “The Court: shows the in con- following proper record even I had not would have been exception nection argument taken: I all. think the mentioned proper general under the would have been proposition Sheppard: “Mr. I one understood that negligence. Go what my instructions based on the Dierkes ahead. .casewas I argue refused and those did *7 questions all. my impression at That was Sheppard: that not I felt I could “Mr. your certainly when chambers. I arguing we left be a that would argue it because argued very strongly if I jury the would question of law to you it, had going give known were but charge, to and in the Court’s not included be you going I understood were to particular refuse it. arguing from those I refrained points.” “The Court: The-record should show that appellant contends this ac- the to Counsel possibly exact situation limited extent; violated Rule 51 the the Court tion of we discussed the instructions in prejudi- Procedure Civil Rules of cial error chambers. deprived op- him of the since it Sheppard: “Mr. Which one that? presented. so argue the issues portunity to “The That Court: is Number—I do not First, observed court will be believe it was dis- numbered at the we time part the instruction asked. as gave cussed since it. I have numbered nine. requires the court to in- the Rule Whether We discussed the instruction in chambers. part or the substance of form counsel instruction The ed erroneous as a whole consider- request given, we need part will be clearly I indicated that it because of considerations not determine given. be considering would not the present purpos- For our to stated. next be argument course during matter the duty assume such exists. we will es parts to me occurred that of that instruc- requests counsel submit proper I Where probably injected were tion evidence, at close of the the extent instructions another instruction to the into course, requires shall in that “the court Charge. in Rule 51 noted in fair- the Of upon proposed action you the that ness record should show form counsel arguments to prior to their requests you that the instruction as a understood jury way instruct court shall jury, I knew no whole would be refused. completed.” failing arguments are Counsel not to criticized for be provision is that purpose requirement request to make obvious since this light precedent may in the the Rule is novel to argue the facts and he had no counsel go, which, requests guide However, as him. is no reason far law so require will later they may presume Court a retrial which have procedure. saved natural charge aforestated judgment affirmed. should be and is to indicate What did here was the Court requested instruction that this argu- WOODROUGH, Judge (concur- during the given. be ment, Thereafter and portion ring). that a determined Court in the request included of charge should judg- I concur in the affirmance of the part in- was done. The given ment and in for sustain- the reasons was, standpoint appel- from the cluded jury, ing submission of the case to request. lant, important portion of the an proposed con- agree but I can not with the application struction and of Rule 51.. a troublesome sit This creates says may requests The rule counsel file practical handled in which must be uation instruct “on law that the court as the court to important consid way, one side is the On requests”, requires set forth free, up Court should eration “pro- counsel of its inform jury, to make charging the time of prior upon requests action posed be. It is he it should charge thinks arguments jury”. their I think the unusual, arguments themselves contemplation tra- rule is drawn in charge affect the out matters which bring practice ditional cases where coun- Also, established law it is given. to be present separate “requests” sel numbered requested may refuse a the court instruc7 for instructions the law so formulated portion include a a whole and then tion as refusing request informs giving or hand, charge. the other in the On thereof counsel of the court’s action thereon with- contemplates counsel shall the Rule it, meaning in the of the rule. As I see requested informed, far as so application strictly of the rule must be instructions, charge court what the will provi- limited to that construction of its arguments they may pattern their request sions. Often a embodies more charge given later. fit the concept legal than one -and several of them prevent the exercise of the To may applicable sound to the case court, penal functions at above request improper. while the as a whole is trial, promote does not voiding the ty of But “proposed the rule deals with action practical way any justice if there is requests” and has do nothing to ’ and, time, such result same avoid particular concepts or declarations litigants. rights of the To protect the af requests. be included within the protections both to the court ford the above object There was give rule to *8 parties, practical think the to the we counsel information about instructions court, follows. Where the solution is as arguments. before their But the trial court contained in charge, includes matter in its performs duty complies its with the parties request, party or af rejected requests rule when it acts giv- should, thereby fected exceptions connection with ing refusing argu- or them before their charge, to the call the attention jury. thereby ments to the It informs specific to of the court quest matter and re proposed counsel of if action. Of course argue right particular court should deceive counsel refus- exceptions matter to the Since requested the ing give instruction aft- charge (under provisions must other instruction, giving the same erwards Rule) taken before this the to retirement of point be made under Rule 51. opportunity jury, an thus afforded presented. But that situation is not It if, matter, light correct duty of the court instruct the at that time (including argu situation fairly upon fully the law and the fact made), already ments should need cor court’s instructions in- Such solution will op rection. proper concepts afford clude some that were al- portunity requests to obviate granting new suggests trials or so embodied refused upset making prejudicial. errors which a verdict. no reason To construe request reargue Here no mean made rule to that the trial court must who treated the situation whether it give counsel as static. tell counsel will request, court or but that the refuse various also declare itself about incorporated concepts may have been unjusti- requests, to me seems within the disruptive ju- fied. I think it would ry obligation trials to create such an up- error rested assignments of to consider it. discharge on a court’s failure to trial er- I affirm because there no error given instructions
ror requested instruc- give in refusing to
tions. CENT. R. CO. v. SIGLER.
ILLINOIS v. BERRYHILL. SAME 8638, 8639.
Nos. Appeals, Sixth Circuit. Court of
Aug. 15, 1941.