McDonald v. Commissioner of Internal Revenue

• Citation: 9 BTA 1340
• Decision Date: 16 January 1928
• Docket Number: Docket No. 9336.
• Parties: MRS. LYDE McDONALD, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
• Court: U.S. Board of Tax Appeals

9 B.T.A. 1340 (1928)

MRS. LYDE McDONALD, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Docket No. 9336.

Board of Tax Appeals.

Promulgated January 16, 1928.

D. W. Robinson, Jr., Esq., for the petitioner.

C. H. Curl, Esq., for the respondent.

PHILLIPS:

This proceeding arises out of the determination by the Commissioner of deficiencies of $6,294.39 in income tax for 1922 and was submitted upon a stipulation of facts which has become a part of the record. Without reciting the stipulation here at length, we set out below what we regard as the principal facts upon which our decision must rest.

In March, 1922, the petitioner recovered a judgment of $40,000 in an action by her against R. S. DesPortes for damages for breach of promise to marry. This judgment was paid to her attorney in 1922. He retained $10,000 as his agreed fee and paid over $30,000 to petitioner. The Commissioner has included said $40,000 as income to the petitioner. She claims that no part of such amount is income or, in the alternative, that error was committed in refusing to make allowance for the amount paid to her attorney and for the March 1, 1913, value of the contract to marry, the contract having been made prior to that date. In the view we take, it is unnecessary to consider the alternative assignments of error.

The Judge presiding in the action in which the verdict was recovered charged the jury with respect to damages, and the measure thereof, as follows:

I charge you that if you should find that the defendant is liable then the plaintiff would be entitled to:

First, actual damages, that is compensatory damages, such damages as would be the natural and ordinary consequence of the breach of the contract, such damages as would have been in contemplation of the parties at the time the contract was made, and that the plaintiff suffered as a direct and natural cause of that breach.

In estimating the damages, if the jury find the plaintiff had a contract of marriage with the defendant and that the same had been breached by defendant as alleged by the plaintiff, the jury should endeavor to give such damages as would compensate the plaintiff for the actual injury and wrong which she has suffered at the hands of the defendant.

In estimating the damages, the jury is entitled to take into consideration mortification and pain or distress of mind, if there was such; loss of social standing, if there was such; injury to future prospects of marriage, if there was such; loss of benefits which the injured party might have derived from the union including loss of station to which the...