2 T.C. 276 (1943), 107866, Doll v. C. I. R.

Docket Nº:107866.
Citation:2 T.C. 276
Opinion Judge:TURNER, Judge:
Attorney:Malcom I. Frank, Esq., for the petitioner. Gene W. Reardon, Esq., for the respondent.
Case Date:June 25, 1943
Court:United States Tax Court

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2 T.C. 276 (1943)




No. 107866.

United States Tax Court.

June 25, 1943

1. Prior to December 15, 1932, the petitioner was engaged as a sole proprietor in the business of selling shoes on a commission basis. On December 15, 1932, the petitioner and his wife signed a writing wherein they purported to enter into a partnership for the conduct of the business, with the petitioner to have the management of the business to do as he should see fit. Thereafter the business was conducted in much the same manner as before, with the wife as a salaried employee and the petitioner reporting in his income tax returns the entire profit from the business. After the income for 1939 and prior years had been reported as his income and the tax thereon had been paid, petitioner filed amended returns for 1937, 1938, and 1939, claiming for the first time that the income from the shoe-selling business was partnership income only half of which was taxable to him. The amended returns were accompanied by claims for the refund of one-half of the tax theretofore paid for the said years. Held, that the respondent did not err in determining that all the income from the business during 1937 through 1939 was taxable to petitioner.

2. There was never any dispute or controversy between petitioner and his wife in respect of the shoe-selling business or the profits therefrom, but after the respondent's determination and the filing of the petition and answer in this proceeding, petitioner's wife filed a petition in a Missouri court naming petitioner as defendant, alleging the existence of a partnership under the writing of December 15, 1932, and asking for construction of the said writing. Petitioner filed an answer admitting all of the material allegations in his wife's petition. Held, that the findings and decree entered by the Missouri court as to the existence of a partnership are not controlling in the instant proceeding.

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Malcom I. Frank, Esq., for the petitioner.

Gene W. Reardon, Esq., for the respondent.

The respondent has determined deficiencies in income tax against the petitioner for the years 1937, 1938, and 1939 of $184.17, $153.07, and $170.97, respectively. The issue to be decided is whether the business of selling shoes on a commission was conducted by the petitioner as an individual enterprise or by a partnership consisting of the petitioner and his wife.


The petitioner is an individual and resides at 21 Ridgetop Drive, Richmond Heights, St. Louis County, Missouri. He filed his income tax returns for the years 1937, 1938, and 1939 with the collector for the first collection district of Missouri.

Prior to 1932, the petitioner, then a Spanish citizen, resided in Cuba. He was engaged with his brothers, Ralph Doll and Antonio Doll, in the business of selling shoes through a partnership by the name of F. Doll & Co., of which the three brothers were the members. There was a political uprising in Cuba and the petitioner came to the United States, locating in St. Louis, Missouri. He had previously married Cornelia Mitchell, an American citizen, and has since become a citizen of the United States himself.

After leaving Cuba, the petitioner made several trips to Puerto Rico, having in mind the developing of a market there for the sale of shoes. At or about the same time he, with his brother-in-law, A. L. Mitchell, planned to develop a business of selling St. Louis beer in Puerto Rico. On January 29, 1932, he opened a checking account with the First National Bank in St. Louis under the name of St. Louis Trading Co. and both he and Mitchell were authorized to draw checks on the account. The beer-selling business did not materialize, however, and the arrangement between petitioner and Mitchell was terminated.

Petitioner's business is and has been that of selling shoes strictly

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on a commission basis, and after leaving Cuba and coming to St. Louis he developed a market in Puerto Rico and after the political situation quieted in Cuba resumed the sale of shoes there. He receives no advances from the shoes manufacturers and his commissions are computed from the invoices of goods sold. In connection with his shoe-selling operations in Puerto Rico, he engaged the services of a salesman located there, while with respect to his business in Cuba he engaged the services of his brother, Antonio Doll. He sells the products of in excess of 40 manufacturers, most or a goodly number of them being located in St. Louis. All contracts with manufacturers under which the petitioner sells and has sold shoes were entered into by him personally. In issuing commission checks and for various purposes, the manufacturers have variously used the names F. Doll, Francis Doll, and St. Louis Trading Co.

During a part of 1932 and up to and including the taxable years here in question, the petitioner had offices at 1515 Washington Avenue, St. Louis, Missouri, in an office building owned by Craddock-Terry Shoe Co., a shoe manufacturing concern located in Lynchburg, Virginia. In lieu of the payment of rent for the office or offices occupied, the petitioner acted as agent for the Craddock-Terry Shoe Co. in the management of the building. The offices were...

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