Kaiser v. United States
| Citation | 158 F. Supp. 865 |
| Decision Date | 19 February 1958 |
| Docket Number | No. 56-C-162.,56-C-162. |
| Parties | Allen KAISER, Plaintiff, v. UNITED STATES of America, Defendant. |
| Court | U.S. District Court — Eastern District of Wisconsin |
Max Raskin, Milwaukee, Wis., Harold Cranefield, Detroit, Mich., William F. Quick, Milwaukee, Wis., of counsel, for plaintiff.
Charles K. Rice, Asst. Atty. Gen., James P. Garland and Leland T. Atherton, Attys., Dept. of Justice, Washington, D. C., Edward G. Minor, U. S. Atty., and Francis L. McElligott, Asst. U. S. Atty., Milwaukee, Wis., for defendant.
The case is before the court on the government's motion, under Rule 50(b), F.R.Civ.P., 28 U.S.C.A., to set aside the verdict of the jury and the judgment entered thereon and to enter judgment in accordance with the government's previous motion for directed verdict; or, in the alternative, if the motion to set aside be denied, for a new trial.
The action was brought for refund of taxes allegedly erroneously collected. The only item in issue is an amount of $565.54 received during 1954 by plaintiff as strike benefits from the United Automobile, Aircraft and Agricultural Implement Workers of America, hereinafter referred to as the U.A.W. If such amount constitutes a nontaxable gift, plaintiff is entitled to a refund. If it represents taxable income to the plaintiff, the tax in respect thereof was correctly collected and plaintiff can have no refund.
Counsel for both parties informed the court at the time of the pretrial conference that this was a case of first impression and that there were an unbelievable number of men who had paid a similar tax under protest where a similar situation existed and who were awaiting the outcome of the trial in this case. At the close of plaintiff's case, defendant moved for a directed verdict, and a similar motion was made at the close of all the evidence. On both occasions, the court denied the motion without prejudice. It was apparent that if this were to be a test case, it would be reviewed by appellate courts, regardless of its outcome, and the court felt that there should be a complete record so that no new trial would be necessary if the appellate court reversed.
The issue was tried before a jury and a special verdict of one question was submitted:
"Were the amounts received by plaintiff, Allen Kaiser, from May 14th to December 31st, 1954, from United Automobile, Aircraft and Agricultural Implement Workers of America, a gift?"
To this question the jury answered "yes". Judgment for plaintiff was entered on the verdict; Rule 58, F.R.Civ.P.
Stipulations filed with the court before trial set forth the following facts: At the time he paid the tax in question, Allen Kaiser was a resident of Sheboygan, Wisconsin, and in 1954 and prior thereto was an employee of the Kohler Company at Sheboygan, Wisconsin. On March 4, 1954 a strike against the Kohler Company was authorized by the members of Local Union 833, approved by the U.A.W., which strike became effective on April 5, 1954. Kaiser was not present at the meeting of the Union when the strike vote was taken. He did not become a member of the Union until August 19, 1954. The decision to become a member of the Union was voluntarily arrived at by Kaiser. He was on strike at the time he was admitted to membership in the Union. He did not pay any initiation fee or dues because he was on strike.
Beginning with May 4, 1954, before he was a member of the Union, Kaiser received strike benefit payments from the U.A.W. It granted strike benefits to nonmembers who participated in the strike if they did not have sufficient income to purchase food or to meet the emergency situation. The Union treated non-members on the same basis as members, but non-members, as well as members, had to be strikers before they could receive assistance from the Union. A distinction was made by the Union between applicants in granting strike benefits to them, depending upon their marital status and number of dependents.
At the time of the declaration of the Kohler strike the U.A.W. had $9,141,488 in its strike fund, and Local Union 833 had in its strike fund $63,677.88, which latter amount was transferred to the U.A.W. in 1954 and was set up in a special bank account to deal with strike expenditures and strike needs of Kohler workers.
The Constitution of the U.A.W. contained the following provisions:
The testimony at trial showed that strikers were not required to serve on the picket lines, help in the soup kitchen, or render like services in order to receive strike benefits. They were encouraged to do so and were regarded by the Union as having a moral obligation to do so. The amount of $565.54 received by Kaiser as strike benefits was in the form of food, clothing, and payments by the Union on his room rent.
There was testimony that on occasion the Union had used money from this strike fund for flood relief and other charitable purposes. This usage is directly contrary to the express provisions of Article 16, Section 11 of the Constitution of the International Union quoted above.
Two of the arguments advanced by the government in support of its motion for a new trial have little weight: First, it is alleged that error was committed because the court did not specifically ask the jury, in the verdict, whether the Union intended to make a gift of the $565.54 to Kaiser. Accordingly, objection is made to the verdict used by the court which asked only whether the amounts received by Kaiser were a gift. To this point it is but necessary to answer that the proposed verdict submitted by the government to the court on the morning of trial consisted of a single question which asked whether "the sum * * * received by Kaiser from the Union * * * was a gift;" to point out that the government itself proposed an alteration in the verdict which was actually used and expressed satisfaction in the final form of the verdict when the court accepted the alteration; and to note that at no time did the government request the court to submit a separate question on the specific item of intent. The court is satisfied that the verdict used was the proper one for this case. The matter of intention of the Union was thoroughly covered in the instructions to the jury.
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Wilson v. United States
...of Internal Revenue, 326 F.2d 962, 966 (8th Cir.), cert. denied, 377 U.S. 978, 84 S.Ct. 1884, 12 L.Ed.2d 746 (1964); Kaiser v. United States, 158 F.Supp. 865 (1958), rev. on other grounds, 262 F.2d 367 (7th Cir. 1958), aff'd, 363 U.S. 299, 80 S.Ct. 1204, 4 L.Ed. 2d 1233 The Committee Report......
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Osborne v. Commissioner
...District Court concluded that the benefits paid were not gifts as a matter of law. Kaiser v. United States [58-1 USTC ¶ 9294], 158 F.Supp. 865 (E.D. Wis. 1958). The Court of Appeals reversed. Kaiser v. United States [59-1 USTC ¶ 9146], 262 F.2d 367 (7th Cir. 1958). The Supreme Court affirme......
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United States v. Kaiser, 55
...basis that as a matter of law the assistance was income to the respondent, and did not fall within the statutory exclusion for gifts. 158 F.Supp. 865. By a divided vote, the Court of Appeals for the Seventh Circuit reversed. 262 F.2d 367. It held alternatively that the assistance was not wi......