Angello v. Metropolitan Life Insurance Company

Citation430 F.2d 7
Decision Date22 June 1970
Docket NumberNo. 28154.,28154.
PartiesMrs. Frances ANGELLO, Widow of Jack Sparacio, Plaintiff-Appellant, v. METROPOLITAN LIFE INSURANCE COMPANY, Defendant-Appellee, and United States of America, Intervenor-Appellee.
CourtU.S. Court of Appeals — Fifth Circuit

Patrick M. Schott, Reuter, Reuter & Schott, New Orleans, La., for petitioner-appellant.

Richard C. Brown for Metropolitan Life Ins.

Louis C. LaCour, U. S. Atty., New Orleans, La., Johnnie M. Walters, Asst. Atty. Gen., Lee A. Jackson, Elmer J. Kelsey, Stephen H. Hutzelman, Benjamin M. Parker, Attys., Tax Div., United States Dept. of Justice, Washington, D. C., for intervenor-appellee.

Before AINSWORTH, DYER and SIMPSON, Circuit Judges.

DYER, Circuit Judge:

This is a companion case to Mitchell v. Commissioner of Internal Revenue, 5 Cir. 1970, 430 F.2d 1, decided this day. Essentially the same question is posed in both cases: i. e., under Louisiana community property law is the wife's interest in the community of such a character that her separate property is liable for one-half of the income taxes due on the community income? The District Court found that "each spouse is liable for one-half of the federal income taxes related to Community income," and entered judgment for the Government. We reverse.

Appellant, Mrs. Frances Sparacio Angello, was the wife of Jack Sparacio from 1959 through 1961 and resided in Louisiana under the community of acquets and gains. No income tax returns were filed for those years. On February 19, 1965, the District Director of Internal Revenue made an assessment against Mrs. Angello and her husband for federal income tax liabilities for those years in the amount of $12,239.27. Based upon these assessments the United States, on April 13, 1965, filed a Notice of Federal Tax Lien with the Recorder of Mortgages, Parish of New Orleans. On April 30, 1965, a notice of levy demanding all property in its possession belonging to the Sparacios was addressed to the Metropolitan Life Insurance Company, which had issued a policy to Jack Sparacio with a face value of $2,000, Mrs. Angello being the revocable beneficiary.

Jack Sparacio died on March 11, 1966. Mrs. Angello completed the necessary forms and filed a claim for the proceeds of the policy with the insurer. Metropolitan refused to pay the proceeds to Mrs. Angello because of the lien and levy served upon it by the United States.

Mrs. Angello then brought this action in the state court against Metropolitan seeking the proceeds. The United States intervened, and upon its motion the case was removed to the Federal District Court. After removal Metropolitan paid the proceeds into the court registry and was dismissed from the case.

On August 5, 1968, the Director of Internal Revenue made an abatement of its previous assessment and is now claiming the amount of $3,902.94 on a theory of imputation to Mrs. Sparacio of one-half of the community income from her husband's business for the years in question.

Both Mrs. Angello and the government moved for summary judgment. The Court granted the government's motion and held Mrs. Angello indebted to the United States for $4,570.18 representing the income taxes due on her one-half of the community income for 1959 through 1961 computed on a separate return basis and interest accrued thereon through August 5, 1968. The federal tax lien was foreclosed against the interpleaded funds. This appeal followed.

The government contends that for federal income tax purposes a husband and wife domiciled in Louisiana, a community property state, are to be treated as separate taxpayers as to their respective portions of the community income, and the tax liability for one-half of the community income is the wife's personal obligation and thus can be satisfied out of her separate property.

In Mitchell v. Commissioner of Internal Revenue, 5 Cir. 1970, 430 F.2d 1, we held that under Louisiana law the wife's interest in the...

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6 cases
  • United States v. Mitchell
    • United States
    • U.S. Supreme Court
    • June 7, 1971
    ...of Internal Revenue, 430 F.2d 1 (CA5 1970).2 Judge Simpson dissented on the basis of Judge Forrester's opinion in the Tax Court. 430 F.2d, at 7. Mrs. Angello. Throughout the calendar years 1959—1961 Mrs. Angello, who was then Frances Sparacio, lived with her husband, Jack Sparacio, in Louis......
  • UNITED STATES V. MITCHELL
    • United States
    • U.S. Supreme Court
    • June 7, 1971
    ...v. Commissioner, 430 F.2d 1 (CA5 1970). [Footnote 2] Judge Simpson dissented on the basis of Judge Forrester's opinion in the Tax Court. 430 F.2d at 7. Mrs. Angello. Throughout the calendar years 1959-1961 Mrs. Angello, who was then Frances Sparacio, lived with her husband, Jack Sparacio, i......
  • Mitchell v. CIR
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • June 23, 1970
  • Broday v. United States
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • March 1, 1972
    ...the decisions of this Court in Mitchell v. Commissioner of Internal Revenue, 430 F.2d 1 (5th Cir. 1970) and Angello v. Metropolitan Life Ins. Co., 430 F.2d 7 (5th Cir. 1970). This Supreme Court decision controls the instant case. Indeed, it is pointed out in the government's brief that the ......
  • Request a trial to view additional results

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