Branum v. Campbell, 14721.
| Decision Date | 19 March 1954 |
| Docket Number | No. 14721.,14721. |
| Parties | BRANUM et ux. v. CAMPBELL. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Chas. D. Turner, Turner, Rodgers, Winn, Scurlock & Terry, Dallas, Tex., for appellants.
John C. Ford, Asst. U. S. Atty., Dallas, Tex., H. Brian Holland, Asst. Atty. Gen., Ellis N. Slack, Sp. Asst. to Atty. Gen., Frederic G. Rita, Sp. Asst. to Atty. Gen., Robert B. Ross, Sp. Assts. to Atty. Gen., Heard L. Floore, U. S. Atty., Fort Worth, Tex., for respondent.
Before HUTCHESON, Chief Judge, and HOLMES and BORAH, Circuit Judges.
This appeal is from a judgment denying the taxpayer's claim for a refund of income taxes paid on a capital gain. On February 10, 1948, the taxpayer entered into a contract, effective April 1, 1948, by which he agreed to sell to C. T. Green a one-half interest in his brokerage business for $15,000. The contract provided that the business was to be operated on a partnership basis for an indefinite period of years unless sooner terminated by operation of law or by agreement of the parties. On September 30, 1948, a second contract was entered into which provided for the dissolution of the partnership and the payment by the taxpayer of $15,000 to Green for the latter's interest in the business. It provided further that Green's one-half interest in the accounts receivable should be paid to him as the proceeds were collected.
The taxpayer filed a joint income tax return with his wife for the year 1948, but did not report any taxable gain on the sale of his business. By way of explanation, he attached to the return a statement to the effect that he had sold a one-half interest in his business with the understanding that, if the partnership relation proved to be unsatisfactory, he would reimburse the purchaser; that the partnership had proved to be unsatisfactory; and that he had repurchased Green's one-half interest for $15,000.
The Commissioner did not accept the explanation, and increased the taxpayer's net income by $7,052.33, reflecting the gain realized on the sale. If there was a completed sale, the computation of the gain from the initial sale is undisputed. The Commissioner made the adjustment because the sale by the taxpayer on April 1, 1948, was a taxable transaction, and his repurchase of the one-half interest on September 30, 1948, was a separate transaction which resulted in the taxpayer's obtaining an increased basis in one-half of his business, but which had no effect on the...
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Reeves v. United States, Civ. A. No. 1466-N.
...Bassett and Collins. The conclusion reached by this Court upon the facts as above recited is in accord with the case of Branum v. Campbell, 5 Cir., 1954, 211 F.2d 147. Upon consideration of the foregoing and for good cause shown, it is the Order, Judgment and Decree of this Court that the p......
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Applying the rescission doctrine.
...could not occur unless the original contract raised the possibility that a rescission later might become desirable (Branum v. Campbell, 211 F2d 147 (5th Cir. 1954)),modern law does not appear to follow this The rescission doctrine has been applied to a variety of transactions, including sal......