Blair v. Rosseter

Decision Date17 June 1929
Docket NumberNo. 5724.,5724.
Citation33 F.2d 286
PartiesBLAIR, Commissioner of Internal Revenue, v. ROSSETER.
CourtU.S. Court of Appeals — Ninth Circuit

Mabel Walker Willebrandt, Asst. Atty. Gen., and J. Louis Monarch, Sp. Asst. to the Atty. Gen. (C. M. Charest, General Counsel, and Shelby S. Faulkner, Sp. Atty., Bureau of Internal Revenue, both of Washington, D. C., of counsel), for petitioner.

Hugh Goodfellow and Hillyer Brown, both of San Francisco, Cal. (Orrick, Palmer & Dahlquist and Christopher M. Jenks, all of San Francisco, Cal., of counsel), for respondent.

Before RUDKIN, DIETRICH, and WILBUR, Circuit Judges.

RUDKIN, Circuit Judge.

This is a proceeding to review an order or decision of the United States Board of Tax Appeals. From 1910 to 1920 the respondent was president of the Sperry Flour Company. During that period, he devoted about one-fourth of his time to the service of the company, and was paid an annual salary of $6,000 in full compensation for such service. On August 16, 1920, the stockholders of the company, by unanimous vote, instructed the board of directors to authorize the payment of $50,000 to the respondent as a gift in recognition of his able and successful direction of the affairs of the company during the past ten years. Pursuant to this authorization, the board of directors directed the payment of the above amount to the respondent in accordance with the resolution of the stockholders. On August 17, 1920, the money was paid by the corporation as directed, and was charged to its surplus account. On the foregoing facts, the Board of Tax Appeals found that the payment was a gift, not subject to income tax. The Commissioner of Internal Revenue filed the present petition for review, contending that the payment was taxable income for the year 1920.

A gift is generally defined as a voluntary transfer of property by one to another, without any consideration or compensation therefor. 28 C. J. 620. The payment here in controversy was denominated a gift by both stockholders and directors; it was without consideration or compensation, and we think it must be conceded that it has all the earmarks of a gift or windfall. The Commissioner seems to contend that there was a consideration for the payment, but manifestly an agreement on the part of a corporation to pay additional compensation to its president for services performed over a period of ten years for which he had already been fully compensated is without consideration and void. Alaska...

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8 cases
  • Roberts v. Commissioner of Internal Revenue
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • June 27, 1949
    ...And generally, the courts insist that the essential characteristics of a gift, — absence of consideration — be present. Blair v. Rosseter, 9 Cir., 1929, 33 F.2d 286; Schumacher v. United States, 1932, 55 F.2d 1007, 74 Ct.Cl. 720; Weagant v. Bowers, 2 Cir., 1932, 57 F.2d 679; and see, Bass v......
  • Frank v. United States
    • United States
    • U.S. District Court — Southern District of New York
    • November 10, 1966
    ..."* * * generally, the courts insist that the essential characteristics of a gift,—absence of consideration— be present. Blair v. Rosseter, 9 Cir., 1929, 33 F.2d 286; Schumacher v. United States, 1932, 55 F.2d 1007, 74 Ct.Cl. 720; Weagant v. Bowers, 2 Cir., 1932, 57 F.2d 679; and see, Bass v......
  • Silverman v. Comm'r of Internal Revenue
    • United States
    • U.S. Tax Court
    • August 28, 1957
    ...supra; Wilkie v. Commissioner, 127 F.2d 953, 956, certiorari denied 317 U.S. 659; Poorman v. Commissioner, 131 F.2d 946. Cf. Blair v. Rosseter, 33 F.2d 286, and Cunningham v. Commissioner, 67 F.2d 205, in both of which cases the corporation considered and, by corporate action, treated payme......
  • Wallace v. Commissioner of Internal Revenue
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • March 2, 1955
    ...7 T.C.M. 776; where the payee has been too ill during the tax years to devote his time to the employer's business, Blair v. Rosseter, 9 Cir., 33 F. 2d 286; where payment was reimbursement for legal expenses incurred in connection with the employment but otherwise than for the employer's ben......
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