Cunningham v. Commissioner of Internal Revenue, 5099.
| Decision Date | 21 September 1933 |
| Docket Number | No. 5099.,5099. |
| Citation | 67 F.2d 205 |
| Parties | CUNNINGHAM v. COMMISSIONER OF INTERNAL REVENUE. |
| Court | U.S. Court of Appeals — Third Circuit |
Randolph W. Childs, of Philadelphia, Pa., for petitioner.
Sewall Key and John G. Remey, Sp. Assts. to Atty. Gen. (C. M. Charest, Gen. Counsel, Bureau of Internal Revenue, and W. R. Lansford, Sp. Atty., Bureau of Internal Revenue, both of Washington, D. C., of counsel), for respondent.
Before BUFFINGTON, DAVIS, and THOMPSON, Circuit Judges.
In this case it appears the taxpayer, a resident of Philadelphia, had served as president of a Canadian company at a salary of $15,000 a year. The stock of the company was purchased by Canadian interests and a new set of directors elected by these new owners. Thereupon the president resigned. The reason for his so doing he thus stated:
It will thus appear that the taxpayer very properly recognized the propriety of the company having a president who was in touch with the new owners, and that the matter was of such importance that the company's bank so let him know. His conduct was highly commendable, and his voluntary resignation evidently so impressed the board that, after accepting his resignation, a resolution was adopted as follows: "Resolved that in appreciation of Mr. Cunningham's excellent guidance of this Corporation through times of difficulty and depression a sum of $15,000 be, and is hereby, awarded to Mr. Cunningham as an honorarium, said sum to be payable forthwith."
The taxpayer was not present when this action was taken. The company was under no obligation to pay him. He had performed no service other than the duties of his office, for which he had been paid. The money was "awarded" to him; it was called an "honorarium," and that word, in common understanding, means voluntary reward for that for which no remuneration could be collected by law. It is clear to us that the money was a gift, a voluntary honorarium, and was freely given without any...
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