*1 77 capital to the represented partnership accrued all salaries that ** * * * * from Teaford assets K. since [the amount of John Teaford, Co., agree of this tax final sale & as court did] Danches K. paid John of the said interests was consum- date shall in in mated 1943.” Lucas v. Star Teaford.” North Co., Texas Lumber agree- November Under both of 74 L.Ed. Commissioner sellers to the the consideration ments Cir., Segall, of Internal Revenue v. aggre- 8387,500 above over and Certainly 114 F.2d 709. un- Appel- gate capital investment. their gain place til the sale takes there is no portion sale reported of the lants computation. or loss for From the docu- original in- price their “over and above” testimony ments of record and the it gain capital in their as vestment clearly appears that sale date was year spective calendar tax returns postponed “until the Bank consented Re- They a cash basis. on 1943. are partnership until oc- indebtedness jecting Commissioner treatment the intention, parties’ curred in 1944.” The petitioner’s distribu- redetermined clearly manifested, beyond so sound being $387,500 as tax- share tive Company bate. Elsinore Com- Cattle v. Basically ordinary income. able as missioner, Rep. par. 5 CCH 1950Fed.Tax speaking, contended the Commissioner (M), (M) Dec. 17516 contained no were deficient the several returns countervailing evidence on the issue partner- they left distributable because sale, quite the critical date of unlike this unreported. Or, tax ship as the income appeal. position: the Commissioner’s court stated “ * * * judgments tax are (proportionate court amounts affirmed. $387,500) represented parts distri- earnings partnership accrued Judgments bution affirmed. Com- in 1943.” Of the or accumulated underlying his missioner’s DUFFY, contention Judge, Chief concurs in gain capital treatment disallowance result. “ * * * main- tax said: court part- completed sale that no of the tains nership’s concluded in 1943 interest that, being true, income normally partnership accrued respective partners close year pursuant to section
taxable 182(c) Revenue Code
of the Internal 182(c)] tax- and is U.S.C.A. [26 The UNITED America, STATES of Plaintiff-Appellee, ordinary under them as income able to 22(a) provisions of Section v. But, 22(a)], [26 Joseph KILLIAN, 1939 Code U.S.C.A. § John Defendant- Appellant. insists, event, respondent even if having occurred sale considered as No. 11967. aggregate of the amount Appeals United States Court cap- over and above the amount ceived Seventh Circuit. of considera- ital investment in the form June tion, nevertheless, actually represented Rehearing Petition for partnership for that accumulated income Aug. ordinary year such is and as taxable income.” agree which
We with the tax court unnecessary peti- rule
found it “to interest
tioner’s contention all their *2 Chicago, Rothstein, 111., M.
David B. Meyers. Essin, Milwaukee, Wis., Michael Rothstein, Chicago, 111., and Basil & Pollitt, Brooklyn, Y., counsel, N. appellant. Attorney, Dept, Coben, Carl G. of Jus- Tieken,
tice, Washington,
C., Robert
D.
Attorney, Chicago, 111.,
F.
U. S.
William
Atty. Gen.,
Tompkins, Asst.
Harold D..
Koffsky, Cyril
Wofsy, Attorneys,
S.
Dept,
Justice, Washington,
C.,
D.
John
Lulinski,
Parsons,
James B.
Peter
Asst.
Attys., Northern
U. S.
Il-
District of
linois, Chicago, 111.,
appellee.
DUFFY,
Judge,
Before
Chief
LINDLEY,
FINNEGAN
Circuit.
Judges.
Judge.
DUFFY, Chief
convicted
on both-
charg-
counts of a two-count
indictment
of Title 18
violation
U.S.C.
1001.1
any
knowingly
willfully
“Whoever,
falsifies,
1001:
matter
Section
depart
up
by any
scheme,
trick,
ceals or
covers
within
fact,
agency
a material
or
of the United States
device
makes
incorporated by reference
This section is
“Where To File.—Local Labor Or-
Taft-Hartley Act,
ganizations
29 U.S.C.A. §
must file this affidavit with
charged
159(h).2
de
The indictment
Regional
Office
the National Labor
fendant
to a Gov
made false statements
*3
they usually
Relations Board with which
Agency, namely,
ernment
National
dispute
file cases.”
It is
without
Board,
with
Labor Relations
in a matter
Regional
question
Office in
was located
that Board.
Chicago,
Illinois.
9, 1952,
December
exe-
October,
1, 1953,
From
1952 to March
cuted an affidavit of a noncommunist
appellant
1111,
was an officer of Local
-wording of
union officer. The form and
Electrical,
United
Radio and Machine
appears
the face of the affidavit
(UE).
Workers of America
This Union
margin.3
Allen-Bradley
had a labor contract with
The
two instructions
on the
Company
9,
of Milwaukee. On June
were,
pertinent
part,
verse side
1952,
special meeting
of the officers of
follows:
Local 1111
principal,
was held. The
if
sole,
not the
business
transacted
Must
“Who
File.-—This affidavit must
meeting was the execution of noncommu-
organi-
by
officer
filed
of a labor
previously
nist
on
affidavits
form
organization
de-
may
zation before that
signed
scribed. As each
help
officer
his af-
of the National
ceive
Labor Re-
fidavit, it was notarized and then stacked
An
lations Board.
affidavit must be on
previously
a desk with
your
the affidavits
file for each officer listed in
Con-
notarized.
Bylaws.
The affidavits were
then
stitution and
E.D.T.,
120,
I,
false,
101,
c.
Title
§
or
Stat.
fictitious
fraudulent
statements
22, 1951,
534,
representations,
l(c, d),
any
O.H.
c.
or
or
or makes
uses
Stat.
writing
knowing
601.”
false
or document
tlio
any false,
to contain
same
fictitious or
3.
“United States of America
entry,
fraudulent
statement
or
shall be
National Labor Relations Board
$10,000
impris-
fined not more than
or
Affidavit of Noncommunist Union Officer
years,
oned not more than
or
five
both.
Electrical,
Local
United
Radio and
25, 1948,
June
c.
62 Stat. 749.”
(UE)
Machine Workers of America
Electrical,
159(h):
investigation
United
2. Sec.
“No
shall
Radio and
Machine
by
any
(UE)
Workers
made
the Board
America
affect-
concerning
undersigned, being
ing
representa-
duly sworn,
The
commerce
poses
says:
employees,
by
and
raised
tion
a labor or-
responsible
ganization
(c)
I
1.
am a
under
subsection
this
officer
section,
complaint
union
and no
named
shall
below.
be issued
pursuant
charge
by
I am
not a
made
a labor
member of the Com-
organization
(b)
par-
munist
or
under subsection
affiliated with
sec-
ty.
title,
tion 160
unless there is on
in,
I do
with the Board an
not
file
affidavit
believe
executed
and I am
contemporaneously
preced-
support any organ-
member of nor
or within
do
I
period by
ization
twelve-month
each officer
believes in or
teaches
organization
labor
overthrow of
of such
and the offi-
United States Govern-
by
any
by any illegal
national or
force or
cers
international
la-
or un-
organization of which
constitutional
it is an
methods.
bor
affiliate
or constituent unit that he is
Local
not a mem-
United Electri-
cal,
ber
Radio
affiliated
and Machine
party,
(UE)
with such
that he
Workers of
does not
America
in,
sup-
Electrical,
and is not a member of or
believe
Radio and
organization
ports
that believes in or
Machine
Workers
Ameri-
teaches,
(UE)
the overthrow of
the United
ca
by any
Signature:
force or
States Government
il-
John J. Killian
legal
unconstitutional
methods.
Address:
The
1233 S. 17th Street
provisions
sections
Milwaukee Wise.”
ap-
“(Perforated)
and 1023 of Title 18 shall be
respect
plicable in
to such
As
“REC’D
affidavits.
p.
amended
June
3:17
m.
placed
envelope
Certainly,
in an
to the Na-
and sent
there
no evidence
trary.
tional Labor Relations Board.
The instructions on the affidavit
stamp
specifically
of the Board on the affidavits
stated that
affidavit had
Chicago
they
shows
to be
were received at the
filed with the Board if
Union
office
on December Local were to
Labor Board
be entitled to receive the
sign-
help
day
the second
after the
Board. The affidavits were
ing.
together
kept
placed
After
determined that
the Board
were
in one
envelope.
affidavits,
They
promptly
all of the officershad executed
received
Chicago
Local 1111
officeof
was notified that it had com-
the National La-
plied
bor Relations
with the Act
could
Board. We hold there was
avail itself
*4
proof
sufficient
of
that
the facilities of
defendant caused the
the Board.
alleged false affidavit
be filed with
to
argument
is
Defendant’s
the Board.
allegedly
that
false statement was
argues
jurisdiction
not made
Defendant
within the
a
the Govern
prove
Agency.
to
Government
failed
he was a member of
Section 1001 re
Party
quires,
crime,
Communist
as an
or was in affiliation
element of the
that
ju with the
such
Communist
statement be
on December
“made within the
Agency
risdiction” of an
date when he
executed the
the United
true,
affidavit. It
States.
is
We think
the record contains
this contention is en
tirely
pin-pointing
no
membership
evidence
without merit. The affidavit came
jurisdiction
or affiliation on
within
December
as
but
Board
proof
necessary
we do
think
such
soon as it
was
was filed. The Board had the
power
judgment
upon
to sustain
it,
did,
fact,
to act
of conviction.
compliance
find Local 1111 to
inbe
un
proof
The
discloses defendant was a
Labor-Management
der
Relations member of the Student Branch of the
Act because the affidavit of
County,
defendant
Wisconsin,
Dane
Communist
and the affidavits of the other officershad Party
early October,
as
1949. Meet-
been filed.
ings were held three or four times a
regular
month and defendant was a
at-
argues
Defendant next
that the
group meetings
tendant. Some of the
prove
Government did not
that he know
apartment.
were held at his
ings
These meet-
ingly filed the affidavit or
it to
caused
open only
were
to
of this
members
be filed. Section 1001 is directed
to
Party group,
special
Communist
and a
making
of a false statement “in
mat
procedure
gain
was used in order to
ad-
ter within the
de
meetings
mission. These
by
were screened
partment
agency
the United
playing
phonograph
records to
requirement
States.” There is no
in that
suspicion.
paid
avoid
Defendant
his dues
filing
section as to the
of an affidavit.
group.
to the Chairman of this
However,
juris
in order to be within the1
December, 1949,
diction of the
National
In November
Labor Relations
Board,
9(h) requires
Section
identified himself as a Section
fendant
that such
Organizer
Party.
affidavit
must be on file
De-
with the Board.
explained to Robert
fendant
Sullivan
response to a
In
oral ar-
Party Madison,
that the Communist
gument, defendant’s counsel assured us
Wisconsin, had been broken down into
contending
he was not
that the
Gov-
groups
security purposes;
small
per-
defendant,
must
ernment
show
assignments
group
particular
had
each
sonally, filed the affidavit with the Board.
as the National Association for the
However,
did
he
insist
there was no
Young
People,
Advancement
Colored
showing that defendant caused the affi-
Progressives America,
and certain re-
agree.
do not
filed. We
davit to be
ligious groups.
a well-educated man. He
is
eeting
speaker
special
Defendant was the
at various
purpose
m
knew
meetings.
group
At
executed. He
some of
the affidavits
Communist
was to
urged
signed.
present
purchase
all
to
presumed
read what he
them
to have
Party meet-
and,
Later,
Daily
another Communist
subscriptions
Worker
to
Again
home.
at defendant’s
occasion,
was held
funds
solicited
on one
present and
Rose and Silverstein
literature.
payment
debt for
of a
urged
aof
establishment
the immediate
attended
spring
1951 defendant
In the
Kling,
League
Allen-Brad-
Labor Youth
at the
meeting
of Jack
home
meeting
ley plant.
It
decided at
was
the Wisconsin
Chairman
the State
Party.
that this should
done.
attended
Defendant
Communist
Kling
meetings
spoke, in-
where
other
cluding
meeting
April,
held
In
Kling
stated
one at which
mailing to
defendant’s house to discuss
accept
present
the fact
must
those
Day
May
special
certain individuals of a
peace
any permanent
can be
there never
Daily
edition of the
At defend-
Worker.
capitalistic
coun-
and socialistic
between
suggestion
agreed
amail
ant’s
it was
Kling pointed
this doctrine
out
tries.
copy to
at Allen-
the stewards
an International
laid down at
had been
fund-raising
Bradley.
later,
A week
Party in
of the Communist
Conference
meeting
Party was
present
would have
1927 and those
quota
held at defendant’s home. The
impor-
Kling
accept
also stressed
it.
group
$100.
*5
gaining
control
tance of Communists
pledged
upon behalf
$35
of himself and
country.
in
the labor movement
wife.
November,
About the middle of
assigned
Defendant
mem-
himself as a
meeting
Party group
was
a Communist
Legislative
ber of the
Lo-
Committee of
held at defendant’s home. Defendant
Ondrejka’s
cal
but vetoed
choice
meeting
purpose
was to
stated
of the
the
to be a member of the Welfare Commit-
Party at
cell
form a
urged
importance
tee. Defendant
the
Allen-Bradley plant.
in-
Defendant
the
by
Union,
work
committee
in a
that
joined
Ondrejka
the
formed
had
who
Party
committee,
trol of a Union’s
the
Party
request
Communist
at the
being
could control the Union without
I.,
F. B.
im-
that it was of the utmost
officers of it. Defendant further ex-
portance
they
both become stewards
plained
single
how a
member of a com-
plant
in the
in order to make a more ef-
obtain
mittee could
control of that com-
Party
did
fective Communist
cell. Both
mittee.
security
but,
become stewards
rea-
meeting
in
A
was held
defendant’s
sons,
Ondrejka
defendant and
avoided
Recruiting
May,
in
home
of mem-
meetings.
each other
stewards’
at the
Party
for the
dis-
bers
Communist
was
During February, 1953, a Communist
copies
cussed. It was decided to send
Party meeting was held in defendant’s
Daily
people
to
Worker
“liberal”
Jerry
present were
home. Also
Rose
Allen-Bradley plant.
The names
Silverstein,
and
South
Ted
Side Sec-
appeared
those who
to be interested
Coordinator,
tion Leader
Youth
be
would
turned over to defendant and
spectively,
Party
the Communist
in
these would be considered fertile field
praised
Milwaukee. Rose
the work that
Party
Communist
could
from which the
doing
Ondrejka
defendant
had been
future members.
obtain
Party
for the
Allen-
Communist
meeting
Allen-Bradley
Bradley plant,
Another
of the
and stated that the time
group
in
in defendant’s home
had arrived to
held
coordinate activities un-
regulations
security
July,
1953. New
der a new Communist
Club. Rose
group
suggested
Members of the
were outlined.
defendant made
be
Chairman
longer to
mem-
no
contact another
of the Club
because it would be easier
by telephone,
only
contact
be
to
ber
Rose and defendant to meet and dis-
calling
agenda.
meeting
through
Chairman. When
cuss
At
this same
keep
Chairman,
plans
the member was to
Silverstein discussed
for the forma-
recog-
League
talking until
the Chairman
of a
Youth
tion
Labor
at the Al- on
len-Bradley plant.
his voice.
nized
urges
abundantly
erred
the de-
trial court
It is thus
clear
refusing
production of
in
order the
and dedicat-
to
fendant was an enthusiastic
Ondrejka,
reports by
F.
De-
B.
witnesses
ed
and after
I.
Communist
before
both
nothing
find
not
do
cember
Sullivan and Fensholt. We
1952. There is
any request
suggest
in
defendant
had a
record
defendant
record
to
reports
change
production
that date.
after
heart before or
Having
9, Ondrejka4
failed
Sullivan.
About three months after December
figure
to make such demand
cannot
dominant
defendant was the
meetings
group
make
in not
claim the Court erred
Communist
which
meeting
they
quiring
produced.
be
were held at his
At the
home.
Jerry Rose,
February 22, 1953,
held
large
reports,
dis
As to Fensholt’s
South
Side Section Leader
judge
must
allowed
trial
cretion
“ * * * During
stated
the course
respect
production
with
of docu
very
past
Party abuse,
ments and
the absence of
job
pleased
well
with
credible
up
exercise
of that discretion will
* * *
Ondrejka)
(and
John Killian
States,
set. Goldman
v. United
doing
had
Par-
been
for the Communist
1322;
86 L.Ed.
ty.” Also, Ondrejka
had
testified
d’Aquino
States,
Cir., 192
v. United
party
known
member
defendant to be a
F.2d
certiorari denied 343 U.S.
April,
August,
from
72 S.Ct.
96 L.Ed.
Lightfoot, Cir.,
We hold
States v.
4. There was a