Blair v. Curran
| Decision Date | 04 February 1928 |
| Docket Number | No. 2172.,2172. |
| Citation | 24 F.2d 390 |
| Parties | BLAIR, Commissioner of Internal Revenue, v. CURRAN. |
| Court | U.S. Court of Appeals — First Circuit |
Thomas P. Dudley, Jr., of Washington, D. C. (Mabel Walker Willebrandt, Asst. Atty. Gen., and C. M. Charest, General Counsel Bureau of Internal Revenue, of Washington, D. C., on the brief), for petitioner.
George E. Cleary, of New York City (Root, Clark, Buckner, Howland & Ballantine, of New York City, on the brief), for Curran.
Before BINGHAM, JOHNSON, and ANDERSON, Circuit Judges.
The Commissioner of Internal Revenue on October 22, 1924, assessed an additional tax for the calendar year 1917, in the sum of $152,261.48, as an income or profits tax, against Maurice J. Curran, under the provisions of section 274 of the Revenue Act of 1924 (26 USCA §§ 1048-1054; Comp. St. § 6336 1/6zz 1, pars. a to g). November 24, 1924, Curran appealed to the United States Board of Tax Appeals. Thereafter on the 16th day of February, 1926, the case came on for hearing before the Board of Tax Appeals, the parties being represented by counsel. At this time the evidence in the case, all of which related to the merits of the controversy, was introduced and such arguments were made as counsel saw fit. The hearing was then closed, permission being given to the respective parties to submit written briefs by March 15, 1926, which was done. On October 26, 1926, the Board made findings of fact and rendered an opinion, in which it held that none of the profits involved were taxable at the rates prescribed for the year 1917, and on February 5, 1927, it entered an order or decision that Curran's deficiency tax for 1917 was $135,001.16. It is this order or decision that the Commissioner seeks to have reviewed by this writ of error.
The errors assigned go to the merits of the controversy, the Commissioner's contention being that the distribution of earnings or profits, declared by the directors of the Gillette Safety Razor Company December 12, 1916, and paid to Curran January 15, 1917, were distributions of earnings or profits of that company for the year 1917, and not for the year 1916, as decided by the Board, and were subject to the rates prescribed for the year 1917. We are met, however, at the outset, with the objection that this court is without jurisdiction over the case. Our jurisdiction is challenged on the ground that when the provisions of section 283 (j) of the Revenue Act of February 26, 1926 (44 Stat. 65 26 USCA § 1064 (j)), are properly construed and applied to the facts in this case, no right of review exists.
Section 1001 (a) of the Revenue Act of 1926 (26 USCA § 1224 a) provides:
Section 283 (j) reads as follows:
It is conceded that the present case falls within the scope of subdivision (b) of section 283 (26 USCA § 1064 d), to wit: That before the enactment of the Act of 1926, Curran appealed to the Board of Tax Appeals under subdivision (a) of section 274 of the Revenue Act of 1924 and that his appeal was pending before the Board at the time of the enactment of the Act of 1926. The question, therefore, is whether the decision of the Board of Tax Appeals was final and non-reviewable, and left the Commissioner to bring a suit and be heard de novo as to his right to recover any part of the amount disallowed by the Board, subject to the findings of the Board being used against him as prima facie evidence of the facts so found; or is open to review before this court because, before the passage of the Revenue Act of 1926, the hearing contemplated by section 283 (j) had not been had before the Board of Tax Appeals.
Our attention has been called to the case of Chicago Ry. Equipment Co. v. Blair (C. C. A.) 20 F.(2d) 10, in which the construction and application of section 283 (j) was under consideration. It appeared in that case that evidence had been taken before the Board on February 2 and 3, 1926, and 45 days given in which to file briefs and submit proposed findings of fact; and that this was done in March and within the time limited. It does not appear that all the evidence had been submitted, oral arguments made, and the hearing closed on February 3d as in this case, with permission to file briefs thereafter, if the parties saw fit. For all that appears the case may have been left open and not intended to be closed until the expiration of the 45 days within which the briefs and proposed findings were to be submitted. It was there conceded that the word "hearing" as used in the statute was not meant to embrace the whole proceeding including the "decision," for the language of the act clearly indicated that the "decision" was no part of the "hearing." It was held, however, that unless it appeared that "the whole proceeding was concluded before the passage of the act February 26, 1926, so that it only remained to make the decision," a review in the Court of Appeals could be had. The court took jurisdiction of the case and thereby inferentially held that, on the facts before it, the hearing had not been concluded before the passage of the act, even if a "decision" is not a constituent part of the hearing. With the facts in that case and the deduction from them we are not concerned. It seems to us that on the facts in the instant case the proceeding was concluded on the afternoon of ...
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