Sullivan v. Comm'r of Internal Revenue

• Citation: 29 T.C. 71
• Decision Date: 18 October 1957
• Docket Number: Docket No. 60294.
• Parties: KENNETH T. SULLIVAN, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
• Court: United States Tax Court

29 T.C. 71

KENNETH T. SULLIVAN, PETITIONER,

v.COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Docket No. 60294.

Tax Court of the United States.

Filed October 18, 1957.

Milton I. Baldinger, Esq., for the petitioner.

John W. Dowdle, Jr., Esq., for the respondent.

Where petitioner and his spouse were divorced a mensa et thoro in 1951 and before the end of the taxable year, they appealed from the decree of divorce, and the appellate court did not affirm the lower court decree until April of the following year, held, petitioner and his spouse were legally separated under a decree of divorce as of the end of the taxable year and were not entitled to file a joint return for that year. Therefore, the spouse's personal exemption on the purported joint return was properly disallowed.

OPINION.

TRAIN, Judge:

The Commissioner determined a deficiency of $7,265.08 in the income tax of petitioner for the calendar year 1951. The only question for decision is whether petitioner and Carrie Miller Sullivan were husband and wife at the end of the year so as to entitle them to file a joint return and include Carrie's personal exemption as a taxpayer on such return.

All the facts have been stipulated and are hereby found as stipulated.

Petitioner, an individual residing in Montgomery County, Maryland, and Carrie Sullivan, on March 15, 1952, filed a purported joint return for the taxable year ended December 31, 1951, with the then collector of internal revenue for the district of Maryland. On the return they each claimed their personal exemptions as taxpayers.

Petitioner and Carrie were married on May 7, 1931. On June 9, 1950, Carrie filed suit for a limited divorce and for the custody of their three children. Petitioner filed a cross bill praying for a limited divorce and custody. On October 15, 1951, the Circuit Court for Montgomery County granted a divorce a mensa et thoro to the petitioner and gave custody of the children to Carrie. Both parties to that proceeding filed appeals prior to January 1, 1952. Neither party filed an appeal bond. On April 3, 1952, after the purported joint return had been filed, the Court of Appeals of Maryland affirmed the decree of the Circuit Court.

Petitioner contends that he and Carrie were husband and wife at the end of the year within the meaning of the relevant statute, section 51(b) of the Internal Revenue Code of 1939.¹ He contends that the divorce decree was not final at that time since it was on appeal. Respondent contends that, regardless of the appeal, the decree was final and in effect as of the end of the year, and therefore, petitioner and Carrie were legally separated under a decree of divorce and not husband and wife for purposes of section 51(b).

We agree with the respondent.

Petitioner does not seriously contend that had there been no appeal it would be proper for petitioner to file a joint return and such a contention would be without merit. Marcel Garsaud, 28 T.C. 1086 (1957). In the Garsaud case, petitioner, separated from his spouse under a Louisiana decree of separation a mensa et thoro, claimed an exemption credit on a separate return for his spouse under section 25(b)(1)(A) of the 1939 Code. We held that the credit was properly disallowed by the Commissioner because petitioner in that case was legally separated from his spouse under a final decree of divorce. We found that Congress intended a decree of limited or absolute divorce to be sufficient to abolish the status of husband and wife for purposes of the section in question, quoting S. Rept. No. 1013, 80th Cong., 2d Sess., 1948-1 C.B. 285, which states, in part, at p. 324:

The second rule is that an individual legally separated (although not absolutely divorced) from his spouse under a decree of divorce or of separate maintenance shall not be considered as married.

While the Garsaud case involved the claim of an exemption under section 25(b) (1)(A),² the statutory test of status is similar to that provided by section 51(b)(5), and the same rule must govern. In order to dispel any doubt on this score, the above-quoted report of the Senate Committee on Finance continues, again at p. 324:

Similar rules for the determination of status are provided in section 23(aa) (6) of the Code (as added by section 302(c) of the bill, relating to the standard deduction, and in section 51(b)(5) of the Code (as added by section 303 of the bill) relating to joint returns. A uniform construction of all these provisions is intended. (Emphasis added.)

Likewise in Maryland, a decree of divorce a mensa et thoro is a judicial or legal separation which definitely alters the marital status of the parties. It relieves the parties of certain duties and removes certain rights, and can result in the determination of alimony and support payments and custody. Miller v. Miller, 153 Md. 213, 138 Atl. 22 (1927); Sharp v. Sharp, 105 Md. 585, 66 Atl. 463 (1907); Md. Ann. Code, art. 16, sec. 34 (1951). It is granted for the same reasons as is an absolute divorce, though the grounds need not be of the same intensity or duration. Md. Ann. Code, sec. 34, supra; Flohr v. Flohr, 195 Md. 482, 73 A.2d 874 (1950); Miller v. Miller, supra; Levering v. Levering, 16 Md. 213 (1860). Such a decree is final and clearly distinguishable from an interlocutory decree. In Maryland, only final decrees are appealable; interlocutory decrees are not, with certain exceptions irrelevant here. It is evident that a limited divorce decree can be appealed. Md. Ann. Code, art. 561 (1885); Md. Ann. Code, art. 5, sec. 31 (1951); Waverly Mut. & Permanent Land, L. & B. Ass'n. v. Buck, 64 Md. 338, 1 Atl. 561 (1885); Newbold v. Green, 122 Md. 648, 90 Atl. 513 (1941); Heath & Lovejoy v. Ireland, 11 Md. 388. By its title and terms, the instant decree is final and presently effective, presently altering rights and status, and thus distinguishable from interlocutory divorce decrees, which either by their very terms, or by statute, are effective only after some prescribed lapse of time. Unlike an interlocutory decree, a limited divorce decree is the only decree that need be entered to permanently fix the status of the parties, though it is modifiable. J. R. Calhoun, Jr., 27 T.C. 115 (1956); Alice Humphreys Evans, 19 T.C. 1102 (1953); affd. 211 F.2d 378 (C.A. 10, 1954); Marriner S. Eccles, 19 T.C. 1049 (1953), affd. 208 F.2d 796 (C.A. 4, 1953); Md. Ann. Code., sec. 34, supra. As petitioner contends, it is true that a limited divorce decree does not dissolve the marital bond and that neither party can remarry, but in light of the Garsaud case, the language of section 51(b)(5)(B), and the reasoning of the Eccles and Evans cases, that fact is not controlling. Had the decree not been appealed, the Garsaud case would control the disposition of the present case.

Therefore, one question to be decided is whether the appeal vacated or annulled the decree as of the end of the year, and before affirmance by the appellate court. That is, was the decree wholly ineffective, thus leaving the parties' marital status unaltered as though no decree had been rendered?

State law determines the marital status of the parties. J. R. Calhoun, Jr., supra; Alice Humphreys Evans, supra; Marriner S. Eccles, supra. Likewise, it would seem proper to apply the rule of law regarding the effect of an appeal on the decree of the State which rendered the decree. Assuming that State law does control the question of the effect of the appeal, we have respondent's contention that article 5, section 33 of the Maryland Annotated Code (1951) decides the issue.³

Prior to the enactment of the predecessors of the statute, an appeal evidently did not annul an equity decree or even stay execution of the decree appealed from.⁴ But, pending the appeal, proceedings could be stayed by order of the chancellor on application to him for that purpose. While appeal bonds were not expressly authorized by statute, they were allowed for this purpose by analogy to the statutes providing for the same in the case of appeals in courts of common law. Thompson; v. M'Kim, 6 Har. & J. 302 (Md., 1825); Smith v. Dorsey, 6 Har. & J. 261 (Md., 1924); see Fullerton v. Miller, 22 Md. 1 (1864). Since the only effect of filing an appeal bond was to stay execution of the decree, it seems evidence that an appeal did not annul or vacate the decree.

One of the early predecessors of the present statute, ch. 374, Acts of 1853 (Md.), provided for no stay of the operation of an injunction or of the order refusing to dissolve an injunction unless the appellant gave bond, and ‘upon the giving of such bond, the appeal shall stay the operation * * * in the same manner as appeals do from final decrees.’ In Blondheim v. Moore, 11 Md. 365, 371 (1857), there is dictum that under that statute, because of such language, upon filing bond the operation and effect of the injunction would wholly cease. The dissent's view that an appeal stays further proceedings pending t e appeal and does nothing more coincides with those expressed in the earlier cases of T thompson v. M'Kim, supra, and Smith v. Dorsey, supra, and would seem to be embodied in the present statute. The cases consistently hold that the only effect of filing bond is to stay execution of the decree, and unless bond is filed there can be no stay. Holloway v. Safe Deposit & Trust Co., 152 Md. 289, 136 Atl. 269 (1927); Shirk v. Soper, 114 Md. 269, 124 Atl. 911 (1923); McNiece v. Eliason, 78 Md. 168, 27 Atl. 940 (1893). The advantages of article 5, section 33, supra, footnote 3, are unavailable in divorce proceedings, and after a decree of divorce a mensa et thoro and during the pending of an appeal there cannot be a stay of an order for alimony and counsel fees to the wife. Berman v. Berman, 191 Md. 699, 62 A.2d 787 (1948); Chappell v. Chappell, 86 Md. 532, 39 Atl. 984 (1898).

The statute embodies the only rule ever known in Maryland regarding the effect of an appeal of a final decree, and this rule provides only for a...