*1 Judgment toas be entered will appear, and plaintiffs as interests damages according to the schedule findings 20. Defend- forth set perpetual with a further ant is vested flight operated for aircraft easement Group A, parcel parcels in over Group 32 in B. to the re- With maining petition parcels, dis-

missed. E. and

William Thelma DOBSON al. S. et UNITED STATES.

No. 401-62. Court Claims.

United States

April City, Wasson, York Houston H. New Lovejoy, Morris, plaintiffs. Wasson City, Huppuch, counsel. New York & Washington, Hubner, Jr., T. Conrad Atty. C., Asst. Gen. whom was D. Oberdorfer, for defendant.

Louis F. Smith, Lyle M. Turner R. Edward C., Miller, Washington, Philip D. R. counsel.

647 JONES, judgment Chief At the time Before the Tax Court WHITAKER, LARAMORE, DURFEE final in 1960 the became Limi- Statute of 1 Judges. DAVIS, run, tations had and would bar the de- ficiencies assessed in 1961 missioner for 1949 income taxes which Judge. DURFEE, subject action, are the this of unless the recovery $11,- of This is a suit mitigation provisions of 1311- sections year taxes for 054.95 as income 1315, 1954, Internal Revenue 26 Code of question presented 1949. The is whether 1311-1315, applicable. U.S.C. are §§ mitigation statutes, to sections 1311 of 1315 of the Internal Revenue Code 1311, Section entitled “Correc 1954, permitted assessment of provides: tion error” against ficiencies for 1949 “(a) General rule.— reported taxpayers. They had as (as “If a determination defined gain gain 1948 the entire 1313) in section is described stock, though part sale sale of paragraphs or one more of the price was not until 1949. and, section 1312 the date orig- Revenue Commissioner Internal determination, correction of ground inally deficiency asserted the effect of the error referred gain that the entire from the sale applicable paragraph of stock should be treated as prevented by 1312 is recognizable dividend income operation any or law rule (including the instant law, part than other this and other plaintiffs) appealed this assessment (relating than section. 7122 claiming Court, the Tax the entire compromises), then the effect gain properly capi- been as the error shall be corrected gain 1948, alternative, tal and in the adjustment made the amount moneys received in the sales specified and in the manner in sec- transaction 1949 con- could be tion 1314. recognizable sidered dividend income “(b) necessary Conditions for ad- Court, in 1948. The Tax in its decision justment.— 29, May 1959, part filed sustained “(1) Maintenance of an incon- Commissioner, addressing but itself position. Except sistent in cases contention, petitioners’ (B) paragraphs (3) described in stated: (4) adjust- ment shall be made under correct, however, “2. Petitioners are part only if— in their contention that the final cy, the dividend case ing than 1948. reported as ment on the Following statutory 1960). (1959, each of the from their was assessed aff’d failure to 279 F.2d * 32 T.C. * should have deficiencies result- *” notice of deficien- received in report Dudley (C.A.2, rather present paragraph (B) is inconsistent with payer nation deficiency adjustment collected in “(B) ^[*****] in case the amount maintained the case described in sub- under section made, in the determination a would the same manner as * * whom and the * assessed and the determi- there years 1. Section 6501 of the Internal Revenue assessment of the tax within three filing Code of 26 U.S.C. § of a after return. (648

payer plaintiffs the Tax Commissioner in first should tention that the sale which before the section 1313 fore The 1949 rather ers’ Code: After ' by any ' tion, which has n recognition, omission, plied.] the ^[*] n a gross income.—- “(1) “(3) “(A) report original deficiency. spect their inclusion in 1949. The come able which was gross filed the exclusion -X- judgment, word “determination” “determination” Court and Circuit an # “that the final case- “The erroneous have the omitted from the gain Double exclusion of an item -X- Items included ^[*] erroneous rejecting taxpayers’ the year, or by such income court of was that all of the income to which tax was >> ^[*] may item included the to mean: than 1948.” ” Tax Court exclusion from the allowance, includable in determination taken decree, 1948, be.” erroneously taxpayer or with re stock was a for 1948 of those inclusion, exclusion, amount by the Tax ' nonrecognition, from the competent jurisdic- related omission within the 1312(3) payment on in this case in 1949 was there- the court [Emphasis received become or other taken the Government gross in income. — gross disallowance, another against realized from as income is defined taxpayer; gross paid and (A) a Court excluded long-term first con- assessing income decisions return in 1949 final; order taxpay- failure by the *3 sup- of the tax- sums in or by taxpayers claimed a refund for 1944 on was made were received in that the ties then case, ute royalties should have been treated as the Commissioner quent determination established that the ordinary income. At the time of that grounds ernment relies on 79 S.Ct. able amounts received out: determination (C.A.2, on October position of petitioners fund was received termination denial $12,000 of an item consistent with filing royalties in 1945. This inconsistent circumstances are within ily return filed To sustain its adopted of the statute from their return termination became Tax Court in 23 T.C. 775. The 1944 which 1944, from which it would necessar- standing long-term amounts of limitations bar. actually “The the follow that sued in Docket No. error 1958), cert. denied 359 877, in the determination was received statutes to overcome the for received (1958), returns, No mention of the in their claim for only part the 1945 return. the 3 L.Ed.2d 834. required the exclusion * statutory petition for certiorari the position here, authorized notwith- Cory Commissioner, the * * erroneously omitted Tax Court had treated gain for 1945. The de- 1945, and none of remainder aff’d 261 taxes due The Commissioner most 37209, Tax Court position .'final year. * * of the 1945, for 1944. period of lim- included in correction by relying $42,000 of the the terms holding for upon them taken in were tax was A subse * sustained U.S. F.2d 702 by refund royalties royalties royalties of the In that on the only on the Later, was was royal the They Gov stat only 996, urging position by itations has run.” T.C. [29 at missioner’s alterna- emphasis supplied.] tively that if commission the value rights were ascertainable Cory distinguish attempt Plaintiffs of those at that time had by asserting taxpay- that whereas the through yet been collection. exceeded Cory ers in the took an case inconsistent commission The renewal received there- position by filing refund, a claim for fore would have a return of constituted plaintiffs here waited until sub- capital, not in 1953 and taxable income mitted their briefs before the Tax Court ultimately adopted 1954. The Tax Court asserting defense alternative and this latter view. The Commissioner position. However, apparent it is sought through *4 thereupon reopen the Tax Court reached its determination invocation of Cory, supra, solely statute."1 in on the basis Court, rejecting The Tax claim, upon of a formal but refund argument position by pointed sioner’s contentions and taxpayers taken out nei- that petition, proof necessary in the and ther of the two elements was briefs submitted. present. The same inconsistent seeing inconsistency Besides no position was in the maintained same taxpayers’ position, the court by manner in the alternative the tax- out: pres- before the Tax Court “The decision of Court in its reasoning case, ent and the Tax Court’s determination was inconsistent with Cory, supra, applicable. The fact position by taxpayers taken plaintiffs that this incon- maintained before the Court. This is true be- position as the 1949 sistent by cause virtue of the statement before the Tax Court the alternative Opinion, made in the Court’s requirements is sufficient to meet the of parties agreed the dissolu- 1311(b) (1) Estate Code. tion and distribution was a closed SoRelle transaction in then the com- (1958), Cory Commissioner, and su- mission collections would ordi- be pra. nary primary position income. The Plaintiffs have also cited the recent by taxpayers taken before the decision of the Tax Court in Estate Court, e., i. that the distributed Goldstein, j[63,258 Abraham P-HTC rights renewal commission had no Memo, September decided ascertainable fair market which held that the Commissioner failed distribution was de- prove po- by directly termined contrary. the Court to the sition that was inconsistent with their alone, think, This we in a closed inapplicable provisions makes Goldstein, supra, through had sections 1311 1314. No- gross any omitted from their where is there evidence in this any the fair market value re- of insurance record have at rights part liqui- agreed, contrary newal as time year, dation distribution of assets in that their 1950 return that the grounds rights rights that such had no as- renewal commission subsequent years, by certainable value. In they them the dissolution of A. &A. Corporation treated income received from such an ascertainable" long-term gain. fair market value at that time. The statutory inconsistency Commissioner notice issued a in this case to- deficiency years respondent. for the 1953 and 1954 be that He is the contending seeking adjust one the commissions received to now a closed year, income. The the return and prin- years contested this determination on the had ac- he throughout ground cepted. implicit cipal sums involvedwere It is gain. Congressional They history attacked sec- applica- adopted by seeking their are the court the de that one lions regarded always termination, may his own not benefit will tion consistency.” supplied] [Emphasis within the “inconsistent (1). 1311(b) by the hold that conclusion We this are narrow issue with which we con apply event Tax Court does taxpayers, by fronted is ing mak whether particular in' the facts and issues took an in alternative present case. or were successfully pointing inconsis out an inconsistency re tency position. in the main Government’s pres upon the Government lied my view, question In depends to that answer position main “the ent case is between court, in on whether or not the Taxpayer” tained argument adopting in its determination, in its the Tax determination, an in to make taxpay by the omission” the “erroneous dependent determination as to the merits return, re of income tax ers in their urged. argument If and 1949. ceived on the main taking al- conclude We *5 question logically is consistent with a de adopted by Tax the ternative way question cision either by on the raised Court, plaintiffs maintained argument, then the their errone- inconsistent was with that taxpayers have maintained an inconsist from income of this 1949 ous omission position.1 g., Cory ent E. v. Commission return, cir- such under er, (1958). However, 29 T.C. 903 if tax cumstances, statutes the argu in an alternative of the bar the defendant relieve would merely point ment out to the court that of limitations. statute of the adopts if it the on the main issue summary judg- urged by for motion Commissioner, Defendant’s the a consistent granted plaintiffs’ application cross-mo- position requires is ment the is, petition adoption by accord- taxpayers’ the tion is denied. court of the ingly, argument, dismissed. then posi

have not maintained an inconsistent tion but have out an in LARAMORE, Judge (concurring in consistency posi in result). the Government’s g., tion. E. Heer-Andres Investment Co. my majority’s It is that the belief (1954); interpre opinion is on a too broad based Estate of Abraham Goldstein Commis what an tation “inconsistent sioner, 1963-258, P-H,T.C. T.C.Memo holding, Under its is. arguments all alternative urged Memo,par. 63,258 (1963).2 by taxpayers the In latter receipts both concede that the accrued rental 1. In instant case the it agree parties for 1945 were not income in is an inconsisten there cy Commissioner’s in the earlier of treatment. of conflict contention The area inconsistency respect ease that the 1945 should be taxed with to whom income the was, therefore, the Commissioner’s to be attributed. n inconsistency taxpayer, and not that of Heer-Andres, application of and his effort in latter case to at- not be tribute income to 1945 could taxpayer’s proper accounting said to arise inconsisten- treat- from to the accrual cy. ment to be to rental accorded require advanced to exclude would court giving receipts sioner for 1945 Goldstein income certain rental improperly reported in amounts received on treatment which had been commissions, it re- since renewal 1946. The Court held that posi- agreed newal with the Commissioner's ques- corporate accounting valued in the dissolution be tion as to the accrual year received, logically tion, view- had to since the Commission the Commissioner position taken tenuous financial situation condition at all absolutely ques- relevant missioner times so as render promise their alternative tionable the it value of might give. Although former, court its while in note was adopt reject secured, can alterna- we do not know the value argument affecting security; certainly Na- tive without its tional stock little cision on the main issue. was of heavy view of National’s indebted- regard taxpayers, With to the instant virtually ness and the nonexistent necessity it did not follow of from the charter market the tankers. Commissioner’s dividend treatment of arrangement Finally, the escrow it- received, money the amounts self, whereby was in the note terms reportable would payable agents to the who escrow re- only The Commissioner possession tained the note re- urged Tax Court all the amounts payments thereon, ceived all indi- paid which were should be taxable cates that the not note was available although final installment was equivalent as an argued He until 1949. that the any practical of cash in or commer- not, fact, transaction an install- sense, cial nor was it intended be. ment sale since United 1948 had ob- It follows that the fair market value ligated pay itself to the entire sum and note, any, includible modifying agreement extending income but that privilege deferring some of the note should have been purely ments was incidental. Faced with received.” T.C. [32 590.] question, *6 Court had to make independent determination to Thus it is clear whether, among things, absolutely other the note of Commissioner did obligor obligor’s promise require to pay issue, The court for had the Tax found promise that: Court found that the United’s to “ * * * pay had value in the amounts Upon this record it in 1949 would have been taxable given postulated It follows under the test $350,000, evidence indebtedness of above, “in- Through- payment not in thereof. within promoting out this transaction the 1311(b) (1). Since it parties were interested cash agreed by both sides that the other re- by United, promise ment not in its quirements met, have been agreement pay. original statutes relieve defendant of the bar January provided that of the statute of limitations. deposit $150,000 per United should tanker as each tanker was delivered above, For the reasons I concur stated performance in order to secure its majority’s in the result reached op- should it choose to exercise opinion. deposit Apparently tion. Respondent WHITAKER, Judge, never made. does concurs concurring opinion. contest fact that United was in receipt adopts ed tbe as a closed court it giving ordinary transaction. This was out sioner’s they received, come further contended that be- treatment amounts given logically fore income treatment be it valuation follows that a had to they to the amounts received as renewal com- made and that entitled were to re- missions, entitled to cover their The Tax were recover basis first. their basis Thus the could first. not have Goldstein, adopting alternative without pointing argument. out Judge, DAVIS, JONES, Chief opinion believing that the court’s suggested, has is not as broad opinion and the court’s concur both Judge body LARAMORE’S concurring opinion' CCPA :si Application of Norman CHRIS- B. TENSEN. Appeal Patent No. 7084.

United States Court of Customs Appeals. and Patent

April *7 Cook, III, Akron, Ohio, Mack D.

appellant. Moore, Washington, Clarence W. D. C. Sears, (Jere C., Washington, W. D. counsel), for Commissioner of Patents. WORLEY, Before Chief RICH, MARTIN, AL- SMITH and Judges. MOND, Judge. SMITH, Appeals The Board of sustained the rejection appealed examiner’s claims appellant’s application 18 and 19 of “patentably indistinct” from claims appellant’s previously pate own issued application upon nt.2 The which the patent continuation-in-part3 was a issued 616,994, 2,970,614, 2. No. filed October U. S. Patent No. Serial issued Feb- ruary 7, Vehicle for “Control Device for entitled “Control Device Suspension.” Suspension.” for Vehicle 7-18,820, 3. Serial- No. filed March