Ingraham v. Commissioner of Internal Revenue

• Decision Date: 11 April 1941
• Docket Number: No. 9679.,9679.
• Parties: INGRAHAM v. COMMISSIONER OF INTERNAL REVENUE.
• Court: U.S. Court of Appeals — Ninth Circuit

119 F.2d 223 (1941)

INGRAHAM v. COMMISSIONER OF INTERNAL REVENUE.

No. 9679.

Circuit Court of Appeals, Ninth Circuit.

April 11, 1941.

Walter Ames and B. Kenneth Goodman, both of San Diego, Cal., for petitioner.

Samuel O. Clark, Jr., Asst. Atty. Gen., and Sewall Key and L. W. Post, Sp. Assts. to Atty. Gen., for respondent.

Before DENMAN, MATHEWS, and STEPHENS, Circuit Judges.

DENMAN, Circuit Judge.

Harold Ingraham petitions for a review of a decision of the Board of Tax Appeals holding him liable for a deficiency income tax arising from the inclusion by the Commissioner in his taxable income for the years 1934-1937, inclusive, of the income of a trust created by him in 1924 for the benefit of his then wife and their children, still minors in the tax years in question. In 1926 taxpayer was divorced from his wife by a decree of the Superior Court of Hartford County, State of Connecticut. The ground of the challenged decision of the Board is that Ingraham owed an obligation in the tax years in question to support his divorced wife and his minor children and that the trust income was income to him because used by him through the medium of the trust he created to discharge this obligation.

The entire income of the trust was payable to the wife during her lifetime, with no requirement to use any of it for the support of the children. The custody of the children was awarded to the mother by the decree of divorce and in the tax years in question she did in fact devote a part of the trust income not determinable on this record to the care and support of the children.

The first question to be determined is whether taxpayer during these years was under any obligation to support his wife. In addition to the trust, taxpayer prior to the divorce had transferred to her the family home, together with its furnishings and furniture and the family automobile. The decree of divorce is silent as to alimony and made no reservation of control over the litigants or their former matrimonium. It was not appealed from and became final long before the tax years in question.

The Board refused to hold that the law of Connecticut imposed no obligation on a husband so divorced for future support of his former wife. The Board sits in Washington with jurisdiction extending over all the states. Section 1111 of the Revenue Code, 26 U.S.C.A. Internal Revenue Code, provides: "The proceedings of the Board and its divisions shall be conducted in accordance with such rules of practice and procedure (other than rules of evidence) as the Board may prescribe and in accordance with the rules of evidence applicable in the courts of the District of Columbia in the type of proceedings which prior to September 16, 1938, were within the jurisdiction of the courts of equity of said District." (Emphasis supplied.)

The supreme court of the District of Columbia applies the rule of judicial notice of the laws of the states of the Union by virtue of the statute which provides that it shall possess the same powers and exercise the same jurisdiction as the circuit and district courts of the United States and shall be deemed a court of the United States. Moore v. Pywell, 29 App. D.C. 312, 9 L.R.A.,N.S., 1078.

We are of the opinion that the Connecticut law is clearly determinable and that after such a decree there is no continuing liability in the husband for the support of the wife. The Commissioner cites no case in the century and a quarter of Connecticut litigation in which a Connecticut lawyer has sought to obtain for a wife, divorced by such a decree, such subsequent support from a husband. In Connecticut divorce, including its incident of alimony, is a creature of statute. German v. German, 1936, 122 Conn. 155, 160, 188 A. 429, 481.

The Commissioner does not contend that there is any Connecticut statute which specifically creates a new jurisdiction over the parties after a divorce decree becomes final. The only statute creating the right of alimony, in force in 1926 at the time of the Ingraham divorce, is: "Alimony and change of name. The superior court may assign to any woman divorced by such court a part of the estate of her husband and, in addition thereto or in lieu thereof, may order alimony to be paid from the husband's income, may change her name and may order alimony pendente lite to be paid to the wife in any complaint or cross-bill for divorce pending in said court. In fixing the amount which shall be allowed, the court shall take into consideration the amount of the husband's income, whether the same is derived from property already acquired or from his personal daily exertions or from both and, whenever an order shall be made for the payment, at stated periods, of alimony from the income of the husband, the court may, at the time of issuing such order, fix a definite amount which may, at any time, be paid by the husband in lieu of all periodical payments which would otherwise accrue after the payment of such amount. Any order for the payment of alimony from income may, at any time thereafter, be set aside or altered by such court. The costs of commitment of any person imprisoned for contempt of court by reason of failure to comply with an order of the court issued under the provisions of this section shall be paid by the state as in criminal cases." (Emphasis supplied.) Section 5182 of Connecticut General Statutes, Revision of 1930.

In Connecticut the granting of or failure to grant alimony is discretionary. The statute is permissible not mandatory. Felton v. Felton, 1938, 123 Conn. 564, 196 A. 791, 793. We do not find in the statute which creates in the court the right to grant alimony any provision that the court retains jurisdiction over the parties to exercise that discretion after the divorce proceeding is terminated by a final decree.

In Felton v. Felton, supra, cited by the Commissioner, the petitioner recognized the absence of the power to grant alimony after final decree. She sought, before it became final, a modification of a decree without an alimony provision to have a nominal alimony award therein and thus preserve the court's jurisdiction for a future enlargement. The court denied the modification of the decree over which it still had control, not on the ground that it had the power at any future time to grant alimony, but because the facts as then existing did not warrant any modification. Had there been such power, in the absence of an alimony award in the decree, all the court's discussion justifying the denial of the nominal award in the decree would have been entirely unwarranted.

The Commissioner cites no case from any American state court in which such jurisdiction is held to be retained by the divorcing court in the absence of a legislative provision making it an incident in the statutory right of divorce. Two cases are relied on by the Commissioner — Smith v. Smith, 88 N.J.Eq. 319, 102 A. 381 and Cross v. Cross, 63 N.H. 444. In each case the state statute gave expressly the court the power after decree to make new orders. See 19 New Jersey Divorce Act, P.L.1902, p. 507; New Hampshire Public Laws, c. 287, § 12.^*

On the contrary the state cases cited by Ingraham are unanimous in holding that in the absence of a power reserved by statute a court granting a final divorce decree without an alimony award does not retain jurisdiction over the parties for the ordering of a future alimony. All these states have statutory provisions similar or equivalent to that italicized in Section 5182, of the Connecticut General Statutes, cited above, providing that "Any order for the payment of alimony from income may, at any time thereafter, be set aside or altered by such court."

Under a statute which provided that "the court may from time to time modify its orders in these respects alimony," the court in Howell...