Weagant v. Bowers

Citation57 F.2d 679
Decision Date11 April 1932
Docket NumberNo. 277.,277.
PartiesWEAGANT v. BOWERS.
CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)

George Z. Medalie, U. S. Atty., of New York City (Leon E. Spencer, Asst. U. S. Atty., of New York City, of counsel), for appellant.

Adrian C. Humphreys and Robert N. Anderson, both of Washington, D. C., for appellee.

Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges.

SWAN, Circuit Judge.

The plaintiff sued to recover sums paid by him as additional income taxes for the years 1917 and 1919 in the amounts of $6,042.77 and $3,072.09, respectively. The additional assessments resulted from the inclusion by the Commissioner of Internal Revenue in the taxpayer's gross income, of $33,333.33 received by him in the former year, and $16,666.66 in the latter year, from Marconi Wireless Company of America, by whom he was employed. The taxpayer contends that these payments were gifts; the defendant that they were taxable income within the meaning of the Revenue Acts of 1917 and 1918 (40 Stat. 300, 1057). A jury having been waived by written stipulation, the case was tried to the court, who made findings of fact upon which he held that the plaintiff was entitled to recover. Judgment was entered accordingly.

This case was formerly before us in Weagant v. Bowers, 24 F.(2d) 362, where we affirmed a judgment holding the complaint insufficient, but gave the plaintiff leave to file an amendment. This he did, and the appellant now challenges the amended complaint as being not materially different from the one held insufficient on the prior appeal. As to this it will suffice to say that we think the amended complaint alleges with adequate certainty facts which we said in our former opinion might, if properly proved, show a cause of action. The complaint now alleges that the instrument of October 3, 1917, though in form a contract, was a sham and never intended by the parties to be a contract; also facts to show the plaintiff gave no consideration for it.

The next contention of appellant is that the court's findings that the instrument of October 3, 1917, was a memorial of a gift, that the plaintiff gave no consideration for it, and that the payments in question were gifts instead of taxable income are wholly without support in the evidence. But before turning to the evidence we will consider the plaintiff's argument that in any event the 1917 tax was illegally collected because barred by the statute of limitations set up in section 250 (d) of the Revenue Act of 1921 (42 Stat. 227, 264, 265). The taxpayer's 1917 return was filed March 29, 1918; the additional tax for that year was assessed February 26, 1923, and was paid to the collector on April 26, 1923. Thus, although the assessment was made within five years after the date when the return was filed, the payment was made nearly thirty days after the expiration of the five-year period. Thus was too late for the government to begin a suit or "proceeding" for collection of the 1917 tax. Bowers v. N. Y. & Albany Co., 273 U. S. 346, 47 S. Ct. 389, 71 L. Ed. 676. We may assume that the tax was paid to avoid distraint, as the complaint alleges, although the stipulation of facts admits only the fact of payment, and was illegally collected. See Bonwit Teller & Co. v. United States, 283 U. S. 258, 259, 51 S. Ct. 395, 75 L. Ed. 1018. But granting this, the question is of the plaintiff's right to recover it when his claim for refund neither asserted as a ground that the tax was collected more than five years after the return was filed nor alleged facts showing this to be the case. Rev. St. § 3226 (26 USCA § 156) requires a claim for refund to be made in accordance with the regulations, and these required that all facts relied upon should be clearly set forth. Art. 1036, Reg. 62; Art. 1306, Reg. 65. The plaintiff filed two claims for refund of the 1917 tax, but each relied solely upon the ground that the disputed item of income was a gift. Neither claim disclosed the date when the taxpayer's return was filed and therefore did not set forth all the facts necessary to show that the tax was collected too late. Consequently the point is not now available to the plaintiff. Connell v. Hopkins, 43 F.(2d) 773 (D. C. N. D. Tex.), is squarely in point, and cases too numerous for complete citation have recognized the principle that a taxpayer who brings suit after a refund has been denied can rely for recovery only on grounds presented to the commissioner. See United States v. Felt & Tarrant Mfg. Co., 283 U. S. 269, 272, 51 S. Ct. 376, 75 L. Ed. 1025; J. P. Stevens Engraving Co. v. United States, 53 F.(2d) 1 (C. C. A. 5); Lewis A. Crossett Co. v. United States, 50 F.(2d) 292 (Ct. Cl.); Tucker v. Alexander, 15 F.(2d) 356 (C. C. A. 8), reversed on another ground in 275 U. S. 228, 48 S. Ct. 45, 72 L. Ed. 253.

We now return to appellant's contention that the proof will not support the court's finding of a gift. Weagant was employed by the Marconi Company as an assistant engineer, his duties including work of research and experiment. On February 5, 1914, in consideration of the continuance of his employment he signed a contract by which he agreed that on making any discovery or invention relating to his employer's business, he would disclose the same to his employer, "which said discovery or invention (even should the employee fail to disclose the same) shall become and be the property of the Company at the time of such discovery or invention, for which patent or patents may be taken out by it or not and in the name of the employee or its own name at the option of the company." The contract also provided that he should execute all such papers, without remuneration other than his regular salary, as may be deemed necessary "to absolutely and fully vest the discovery or invention and the patent in the Company." In 1917 Weagant made new and useful improvements in the art of wireless telegraphy and telephony, and applied for two United States patents covering the same. By two assignments referring respectively to his patent applications, he assigned to the Marconi Company "the full and exclusive right to the said invention, as fully set forth and described in the specification accompanying the aforesaid application," and requested that the patent be issued to the company. Subsequently, the instrument of October 3, 1917, was executed by Weagant and the company. The execution of this instrument was authorized at a meeting of the executive committee, held on the same date, by a resolution reading as follows:

"Contract drawn and prepared by Messrs. Sheffield and Betts regarding patents of Mr. Weagant was submitted and read to the meeting. After due consideration thereof, on motion duly made and seconded it was

"Resolved, that the contract with Roy A. Weagant regarding patent on his most recent invention as presented to the meeting is hereby ratified, approved and confirmed and the officers of the Company are hereby authorized and empowered to execute with the seal of the Company said contract."

The instrument executed...

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15 cases
  • Prentis v. United States
    • United States
    • U.S. District Court — Southern District of New York
    • July 10, 1967
    ...upon grounds not presented to the Commissioner in a timely claim or by a proper amendment to a timely claim. Weagant v. Bowers, 57 F.2d 679, 680 (2nd Cir. 1932). THE CLAIM FILED ON JULY 2, It is obvious that the claim filed with the Internal Revenue Service on July 2, 1964 cannot be treated......
  • Roberts v. Commissioner of Internal Revenue
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • June 27, 1949
    ...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. Hawley, 5 Cir., 1933, 62 F.2d 721, 732; Simpkinson v. Commissioner, 5 Cir., 1937, 89 F.2d 397, 399; Willki......
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    ...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. Hawley, 5 Cir., 1933, 62 F.2d 721, 732; Simpkinson v. Commissioner of Internal Revenue, 5 Cir., 1937, 89 F......
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