Appleman v. United States, 14592.

• Decision Date: 19 November 1964
• Docket Number: No. 14592.,14592.
• Citation: 338 F.2d 729
• Parties: John Alan APPLEMAN and Jean G. Appleman, Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

338 F.2d 729 (1964)

John Alan APPLEMAN and Jean G. Appleman, Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant.

No. 14592.

United States Court of Appeals Seventh Circuit.

November 19, 1964.

Louis F. Oberdorfer, Asst. Atty. Gen., J. Edward Shillingburg, U. S. Dept. of Justice, Washington, D. C., Carl W. Feickert, U. S. Atty., E. St. Louis, Ill., Lee A. Jackson, David O. Walter, Attys., Dept. of Justice, Washington, D. C., for appellant.

John Alan Appleman, Urbana, Ill., Jean Appleman, Chicago, Ill., for appellees.

Before CASTLE, KILEY and SWYGERT, Circuit Judges.

CASTLE, Circuit Judge.

The government prosecutes this appeal from a judgment for $1,642.68, with interest, entered against it by the District Court in an action brought by John Alan Appleman and Jean G. Appleman¹ to recover alleged overpayments of federal income taxes for the taxable years 1956, 1957, and 1958. The taxpayers had taken deductions on their income tax returns for those years for depreciation in value of their property as a result of the loss of elm trees occasioned by phloem necrosis.² The deductions were disallowed, the taxpayers paid the additional tax resulting from the disallowance, and their claims for refund thereof were rejected. Their action for recovery of the amounts of the additional tax paid was tried by a jury, which returned a verdict favorable to the taxpayers. The District Court denied the government's motion for judgment notwithstanding the verdict and entered judgment in accordance with the verdict. The government's appeal is predicated upon the contention that the court erred in denying its motion.

Our review of the denial of such a motion is limited to a determination of whether the evidence warranted submission of the case to the jury. Such motion raises a question of law as to whether the evidence, together with all reasonable inferences which may be drawn therefrom, when viewed in the light most favorable to the party against whom the motion is directed, is insufficient to support the verdict. Lambie v. Tibbits, 7 Cir., 267 F.2d 902, 903; Lescher Building Service, Inc. v. Local Union No. 133, etc., 7 Cir., 310 F.2d 331, 333. If there is any evidence which, if believed by the jury, warranted the verdict the judgment in favor of the taxpayers must stand. But if the taxpayers failed to present proof which would warrant a favorable finding as to an element requisite to the establishment of their cause of action it was error to deny the government's motion. Cf. Gordon v. Illinois Bell Telephone Company, 7 Cir., 330 F.2d 103, 106.

It is not disputed by the government that the evidence warranted findings by the jury that the taxpayers sustained a depreciation in the value of their property due to the death of elm trees located thereon, in the amount as fixed by the verdict for each of the years involved. And the government does not dispute that the evidence supports the conclusion that the death of the trees, and the resulting loss, was due to phloem necrosis. The basic contested issue precipitated by the government's appeal is whether the loss so sustained by the taxpayers is a "casualty" within the purview of Section 165(c) (3) of the Internal Revenue Code of 1954 (26 U.S.C.A. § 165(c) (3)) which authorizes a tax deduction by an individual for an uncompensated loss of property not connected with a trade or business, and sustained during the taxable year, if such loss:

"* * * arises from fire, storm, shipwreck, or other casualty, or from theft. * * *"

In the absence of any congressional explanation of the phrase "or other casualty" as used in the above section, the courts have turned to the traditional rule of ejusdem generis as an intrinsic guide to the construction and application of the term. Rosenberg v. Commissioner, 8 Cir., 198 F.2d 46, 50, 41 A.L.R.2d 684; United States v. Rogers, 9 Cir., 122 F.2d 485. "Other casualty" is an omnibus phrase. And as used in Section 165(c) (3) it follows an enumeration of specific categories of casualty. Absent some indication of congressional intent to the contrary the phrase must be taken as restricted to things of the same kind or quality as those specifically enumerated. United States v. Stever, 222 U.S. 167, 174, 32 S.Ct. 51, 56 L.Ed. 145. Among characteristics of the specific casualties enumerated in the section are suddenness and unforeseeability of the occurrence. Fire and shipwreck are undesigned, sudden and unexpected events. While storms are to a degree predictable the factors of their violence and the particular site of loss or damage are uncertain.

We have reviewed and considered the decisions cited by the taxpayer and those cited by the government in which the "other casualty" provision of the section has been involved. For the most part they represent determinations made with reference to one or more of the factors above mentioned.³ And the elements or factors, or absence thereof, which have been deemed controlling and...