Lynch v. Rogan, 2484.

• Decision Date: 21 May 1943
• Docket Number: No. 2484.,2484.
• Citation: 50 F. Supp. 356
• Court: U.S. District Court — Southern District of California
• Parties: LYNCH v. ROGAN.

50 F. Supp. 356

LYNCH v. ROGAN.

No. 2484.

District Court, S. D. California, Central Division.

May 21, 1943.

Earl E. Moss, of Los Angeles, Cal., for plaintiff.

Leo V. Silverstein, U. S. Atty., E. H. Mitchell, Asst. U. S. Atty., and Eugene Harpole, Sp. Atty., Bureau of Internal Revenue, all of Los Angeles, Cal., for defendant.

O'CONNOR, District Judge.

This is an action by E. A. Lynch as trustee of the estate of American Realty and Development Company, a corporation, bankrupt, to recover $395.24 representing overpaid income taxes for the year 1936.

The name of the bankrupt, American Realty and Development Company, was previously the American Recovery Company, which duly and legally changed its name to that of American Realty and Development Company.

On March 15, 1937 the plaintiff filed a federal income tax return for the year 1936, disclosing income taxes to be due for said year in the amount of $2,197.31, which sum has been duly assessed by the Commissioner of Internal Revenue. That of the said sum reported to be due as income taxes for the year 1936, the sum of $1,647.76 has been paid in three installments, the last of which was on September 15, 1937. On September 28, 1938, the plaintiff filed its voluntary petition in bankruptcy and was adjudicated a bankrupt. The plaintiff has been the duly appointed, qualified and acting trustee of the estate of American Realty & Development Company since October 14, 1938.

The Referee in Bankruptcy determined that the plaintiff overpaid its income taxes for the year 1936. Not until June 7, 1940 did the plaintiff file its claim for refund of $395.24 of the income taxes paid for the year 1936. On January 10, 1942, the claim for refund was rejected. The plaintiff was authorized by the Referee in Bankruptcy to commence and maintain this action on August 15, 1942. The government asserts the statute of limitations in defense of its rejection of the plaintiff's claim for refund. Therefore, the sole issue in controversy is whether the plaintiff can maintain this action.

Section 322(b) (1), Revenue Act of 1936, 26 U.S.C.A. Int.Rev.Code, § 322(b), provides: "Unless a claim for credit or refund is filed by the taxpayer within three years from the time the return was filed by the taxpayer or within two years from the time the tax was paid, no credit or refund shall be allowed or made after the expiration of whichever of such periods expires the later. If no return is filed by the taxpayer, then no credit or refund shall be allowed or made after two years from the time the tax was paid, unless before the expiration of such period a claim therefor is filed by the taxpayer." In its reply brief the "plaintiff concedes that the various decisions cited by the government correctly construe Section 322(b) of the Revenue Act of 1936, concerning the period of limitation within which a claim for refund may be filed, and unless Section 11, sub. e of the Bankruptcy Act extends the time for the filing of such a claim, plaintiff's complaint does not state a cause of action."

Section 11, sub. e of the Chandler Act, 11 U.S.C.A. § 29, sub. e states: "A receiver or trustee may, within two years subsequent to the date of adjudication or within such further period of time as the Federal or State law may permit, institute proceedings in behalf of the estate upon any claim against which the period of limitation fixed by Federal or State law had not expired at the time of the filing of the petition in bankruptcy. Where, by any agreement, a period of limitation is fixed for instituting a suit or proceeding upon any claim, or for presenting or filing any claim, proof of claim, proof of loss, demand, notice, or the like, or where in any proceeding, judicial or otherwise, a period of limitation is fixed, either in such proceeding or by applicable Federal or State law, for taking any action, filing any claim or pleading, or doing any act, and where in any such case such period had not expired at the date of the filing of the petition in...