261 F.2d 316 (1st Cir. 1958), 5359, United States v. Saxe

Docket Nº:5359, 5360.
Citation:261 F.2d 316
Party Name:UNITED STATES of America, Plaintiff, Appellant, v. Hyman G. SAXE et al., Executors, et al., Defendants, Appellees (two cases).
Case Date:November 19, 1958
Court:United States Courts of Appeals, Court of Appeals for the First Circuit

Page 316

261 F.2d 316 (1st Cir. 1958)

UNITED STATES of America, Plaintiff, Appellant,

v.

Hyman G. SAXE et al., Executors, et al., Defendants, Appellees (two cases).

Nos. 5359, 5360.

United States Court of Appeals, First Circuit.

November 19, 1958

Heard Oct. 7, 1958.

Page 317

I. Henry Kutz, Atty., Dept. of Justice, Washington, D.C., with whom Charles K. Rice, Asst. Atty. Gen., and Lee A. Jackson and Fred E. Youngman, Attys., Dept. of Justice, Washington, D.C., Anthony Julian, U.S. Atty., and Andrew A. Caffrey, Asst. U.S. Atty., Boston, Mass., were on the brief, for appellant.

Harry Bergson, Boston, Mass., with whom Maurice Wolf, Harry Bergson, Jr., and Bergson & Wolf, Boston, Mass., were on the brief, for appellees.

Before MAGRUDER, Chief Judge, and WOODBURY and HARTIGAN, Circuit judges.

WOODBURY, Circuit Judge.

The only question presented on this appeal is whether a document entitled 'Claim of the United States for Texas' filed in the Massachusetts Probate Court for Norfolk County in the Estate of David Saxe, deceased, constituted 'a proceeding in court' within the meaning of that phrase as used in § 276(c) of the Internal Revenue Code of 1939, Revenue Act, 1938, 52 Stat. 540, 26 U.S.C. § 276(c), quoted in material part in the margin. 1

The following essential facts are not in dispute.

In March, 1948, the Commissioner of Internal Revenue made assessments of Income tax deficiencies, which with penalties and interest thereon amounted to more than $50, 000, against the decedent, David Saxe, for the years 1942 through 1945. Lists covering these assessments were received by the Collector of Internal Revenue at Boston in the same month and he immediately issued notices thereof and demanded payment, which it is alleged 'were then and there and thereafter refused.' The Collector filed notices of liens on December 10, 1948.

David Saxe died testate on November 18, 1951, and in regular course thereafter his will was admitted to probate in Norfolk County Massachusetts and the defendants-appellees, Hyman G. Saxe and Saul A. Shuman, were appointed executors of his estate. They have never represented that the estate would probably prove insufficient for the payment of the decedent's debts and they are still administering it.

Page 318

On December 4, 1952, within one year from the time the executors gave bond for the performance of their trust, the United States filed in the Probate Court for Norfolk County in the David Saxe estate a claim for the taxes allegedly due to it from the estate. This document, entitled as set out earlier herein, consists in the words of the District Court (159 F.Supp. 222) '* * * of a sworn statement by the Director of Internal Revenue to the effect that the decedent was indebted to the United States in the sum of $74, 720, describing the nature of the indebtedness; that no portion of the same had been paid; that the United States did not have any security, other than statutory liens; that the indebtedness was presently due, and that it had certain statutory priorities. It concluded as follows: 'Attention is also called to the provisions of Section 3467 of the Revised Statutes (31 U.S.C.A. § 192), with respect to the personal liability of every executor, administrator, or other person who fails to pay the claims of the United States in accordance with their priority.''

Nearly five years later, on September 12, 1957, the United States filed its complaint in the court below in the instant case wherein it asked not only for a money judgment against Saxe and Shuman as executors for alleged deficiencies in income taxes due from their decedent, but it also asked for similar judgments against the two individually for asserted deficiencies in their respective personal income taxes. As executors, the defendants-appellees moved for a summary judgment dismissing the complaint as to them in their fiduciary capacity on the ground that the government's suit so far as they were concerned in that capacity was barred by the statute of limitations. The court below ruled that the action would have to be dismissed as against the defendants as executors and on the same day that it filed its opinion, January 24, 1958, it entered an order allowing the defendants' motion to dismiss. The United States filed a timely notice of appeal from this order. But in the meantime the defendants had moved for judgment under Rule 54(b), Fed.Rules Civ.Proc. 28 U.S.C. and the court below on March 5, 1958, in compliance with the motion, entered a final judgment in accordance with that Rule directing the entry of a judgment dismissing the complaint as against the defendants as executors...

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