Continental Petroleum Co. v. United States

• Decision Date: 14 December 1936
• Docket Number: No. 1452.,1452.
• Citation: 87 F.2d 91
• Parties: CONTINENTAL PETROLEUM CO. v. UNITED STATES.
• Court: U.S. Court of Appeals — Tenth Circuit

87 F.2d 91 (1936)

CONTINENTAL PETROLEUM CO. v. UNITED STATES.^*

No. 1452.

Circuit Court of Appeals, Tenth Circuit.

December 14, 1936.

Elmer J. Lundy and Thos. D. Lyons, both of Tulsa, Okl. (Floyd F. Toomey, of Washington, D. C., Frank Pace, of Little Rock, Ark., and Troy Pace, of Los Angeles, Cal., on the brief), for appellant.

George H. Zeutzius, Sp. Asst. to the Atty. Gen. (Robert H. Jackson, Asst. Atty. Gen., and J. Louis Monarch, Andrew D. Sharpe, and Maurice J. Mahoney, Sp. Assts. to the Atty. Gen., on the brief), for the United States.

Before PHILLIPS, McDERMOTT, and BRATTON, Circuit Judges.

BRATTON, Circuit Judge.

This is an action to recover upon an alleged overpayment of income taxes for the calendar year 1922, in the sum of $253,620.84. Several defenses were interposed, the second being that an order of redetermination of the Board of Tax Appeals was res judicata of the matters in controversy. A jury was waived and the case tried before the court.

The court directed that the evidence first offered be confined to the plea of res judicata. That was done and it disclosed these facts. The taxpayer sold certain oil and gas leases in Oklahoma to Trans-Continental Oil Company in 1922 for $5,000,000, payable part in cash, part in notes, and part from oil when produced. It filed a return for that year which disclosed a tax liability of $184,839.54, and that sum, plus interest, was paid in 1923. The Commissioner subsequently caused an investigation to be made of the affairs of the taxpayer for the years 1920 to 1924, inclusive, and determined a deficiency for the years 1920, 1921, and 1922, in the sum of $161,154.30, of which $135,763.44 was attributed to 1922; and a jeopardy assessment was made for the full amount. The deficiency letter was dated December 11, 1926, and it contained the usual statement that the taxpayer had until February 11, 1927, within which to file a petition with the Board of Tax Appeals contesting the correctness of such determination. On February 5, 1927, the taxpayer wrote the Board as follows: "On December 11, 1926, we received a letter from Commissioner D. H. Blair advising of an assessment against our company of $81,395.39 covering the years 1920 to 1924 inclusive. The letter gave us until February 11, 1927 to file a protest with your body in the event that we so decided. It is our intention to protest the assessment but our Mr. John J. O'Brien, Auditor and Assistant Secretary, is confined to his bed and it will be impossible to complete the protest in the given time. Mr. O'Brien has considerable of the work done as he is the only one familiar with the records and the conditions surrounding the assessment we respectfully ask that you grant us an additional 60 days to complete the work. It will work a hardship on us if you fail to help us and will put us to considerable unnecessary expense. Will you not be kind enough to wire us upon receipt of this letter advising that the extension has been granted. We have signed new waivers extending the jurisdiction of the government with respect to the old years that would ordinarily be outlawed so an extension will in no way hazard the government in the collection of its taxes." Three days later, that is on the 8th, the taxpayer sent this telegram to this Board: "Please advise that you have granted sixty day extension as requested our letter of the fifth to file protest against tax assessment answer today." It was admitted in the trial court that the taxpayer received a telegram from the Board on the same day, but neither party could produce the original or a copy of it. Later that day the taxpayer transmitted telegraphically $10 to the Board for filing fees, with this message: "The Money Transfer paid you herewith from Continental Petroleum at Bristow Okla included the following message: This for filing fees as per your telegram of today."

The Board filed the letter as a petition for redetermination on February 8th, its filing stamp appearing thereon. It was given a docket number and was treated in all respects as though it complied with the rules of the Board. The taxpayer filed a paper on March 23d, designated, "Petition of the Continental Petroleum Company, Bristow, Oklahoma, before the United States Board of Tax Appeals, Docket Number 23915." That was the docket number given the case on February 8th, and placed on the letter. When the Board received the petition it was stamped, "Amended Petition Appeal Filed 2-8-27"; and the Board treated it as an amended petition. It set up a claim for depreciation and depletion on the leases sold and contained an exhaustive analysis of the facts giving rise to the claim; and it set out the deficiency letter. The Commissioner filed his answer in May and the cause was placed on the general calendar of the Board to await assignment for hearing. A copy of the answer, with notice of its filing and notice of the placing on the general calendar, was given to the taxpayer. Numerous conferences between representatives of the Commissioner and representatives of the taxpayer were thereafter held. The parties reached an agreement and signed a written stipulation, which provided that the unpaid portion of the correct tax liability for the year 1922 was $70,320.48; that an overassessment of $11,388.67 should be abated; that the Board should enter its order of redetermination in accordance; that the Commissioner should, after the entry of such order, assess and collect the deficiency; and that the appeal for the years 1923 and 1924 should be dismissed. The stipulation was filed with the Board on December 15, 1928, and 13 days later the Board entered an order in accord with its terms. The taxpayer thereafter paid the deficiency and the overassessment was abated, all in accordance with the stipulation and the order of redetermination.

Upon the conclusion of the evidence relating to the plea, the court filed a written opinion consisting of findings of fact and conclusions of law. The plea was sustained and judgment rendered against the taxpayer This appeal seasonably followed.

A motion was filed to strike the bill of exceptions because it was not signed, settled, and approved during the term of court at which the judgment was rendered, or within an asserted 60-day extension allowed for that purpose. The cause was tried and the judgment entered in April, 1936. The bill was settled and approved in June. The terms of court in the Western District of Oklahoma begin at Oklahoma City on the first Monday in January, at Enid on the first Monday in March, at Guthrie on the first Monday in May, at Mangum on the first Monday in September, at Lawton on the first Monday in October, at Woodward on the first Monday in November, and at Ponca City on the first Monday in December. 28 U.S.C.A. § 182. It is contended that the bill was settled after the 60-day extension expired and during a new term of court which had convened at Guthrie. The record does not contain an order of extension, all reference to its existence or nonexistence appearing in affidavits of counsel. The certificate and order of the court settling and approving the bill expressly recites that it was made during the term at which the cause was heard and determined. A certificate of the clerk likewise discloses that the term had not been expressly adjourned at the time the bill was settled and approved. The essence of the motion and of the argument made in support of it, is that the term at which the judgment was rendered automatically expired upon the convening of the next term on the date fixed in the statute. The contention fails to find support in the authorities. A bill of exceptions must be settled during the term at which the judgment was rendered or during an extension of such term for that purpose, United States v. Jones (C.C.A.) 78 F.(2d) 1005; but, in the absence of an order expressly adjourning it sooner, the term does not expire until the time fixed by law for the convening of the next term at that place. Harlan v. McGourin, 218 U.S. 442, 31 S.Ct. 44, 54 L.Ed. 1101, 21 Ann.Cas. 849; East Tennessee Iron & Coal Co. v. Wiggin (C.C.A.) 68 F. 446; Denver Live Stock Commission Co. v. Lee (C.C.A.) 18 F.(2d) 11. It...