United States v. Coulby
| Decision Date | 07 January 1919 |
| Docket Number | 3233. |
| Citation | 258 F. 27 |
| Parties | UNITED STATES v. COULBY. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Joseph C. Breitenstein, Asst. U.S. Atty., of Cleveland, Ohio.
A. C Dustin, of Cleveland, Ohio, for defendant in error.
Before WARRINGTON, KNAPPEN, and DENISON, Circuit Judges.
This case presents the question: Whether the portion of a dividend which was paid on corporate shares to a partnership holding such shares as an asset, and which portion was ultimately paid to a member of the firm as his proportionate share of the firm's profits, was, within the true meaning of the Federal Income Tax Act of 1913 (Act Oct. 3, 1913, c. 16, 38 Stat. 114), net income in the sense that the corporation and the partner were each bound to pay thereon the normal tax of 1 per cent.; in a word, was it the purpose so to tax the same dividend twice? The question has been decided both ways in the Internal Revenue Department (Montgomery's Income Tax Procedure (Ed. 1918) pp. 231, 232); and hence the effect usually given to an established practice of an executive department charged with the execution of a statute has no present relevancy. The court below denied recovery, and the government brings error.
The facts of the case and the question involved, as well as the manner in which the issue was made and tried, are fully set out in the opinion of Judge Westenhaver; and in view of his discussion of the Income Tax Act of 1913, and of the effect upon that act of the later one of 1916 (Act Sept. 8, 1916, c 463, 39 Stat. 756), an opinion here would not accomplish any useful end. We concur in and adopt the conclusion reached. However, the statement made in the opinion that a partnership has no legal existence, aside from the members who compose it, is too broad, as, for instance, in view of the Bankruptcy Act (Act July 1, 1898, c. 541, 30 Stat. 544 (Comp. St. Sec 9585 et seq.)), yet as applied to the particular portion of the statute and the question in hand it is correct, and with this explanation we approve the reasoning of the opinion.
It may be added that, unless the construction placed on the statute by the learned trial judge is the natural and the rational one (38 Stat.pp. 166, 167, 169, 172), the language of the act is of such doubtful import as to require it to be construed most strongly against the government and in favor of the taxpayer. Gould v. Gould, 245 U.S. 151, 153, 38 Sup.Ct. 53, 62 L.Ed....
To continue reading
Request your trial
-
Shwab v. Doyle
...R.R. Co., 196 U.S. 1, 20, 21, 25 Sup.Ct. 158, 49 L.Ed. 363; United States v. Coulby (D.C.) 251 F. 982, 985, 986, affirmed (C.C.A. 6) 258 F. 27, 169 C.C.A. 165. Meaning of the Phrase 'in Contemplation of Death.'-- Plaintiff asked an instruction that-- 'The words 'in contemplation of death' d......
-
Wegener v. COMMISSIONER OF INTERNAL REVENUE
...v. Com'r, 7 B.T.A. 223; Tilton's Estate, 8 B.T.A. 914; Lloyd v. Com'r, 15 B.T.A. 82; United States v. Coulby, D.C., 251 F. 982; Id., 6 Cir., 258 F. 27. 7 Ortiz Oil Co. v. Commissioner, ...
-
Neuberger v. Commissioner of Internal Revenue
...5 Cir., 110 F.2d 945; Craik v. United States, Ct.Cl., 31 F.Supp. 132; United States v. Coulby, D.C., 251 F. 982, affirmed, 6 Cir., 258 F. 27. Nor is the deduction claimed here precluded because Congress, in Sections 184 188, has particularized instances where partnership income retains its ......
-
Palda v. Comm'r of Internal Revenue, Docket Nos. 13705-7.
...is proportionately deductible from that of the partner, United States v. Coulby, (N.D., Ohio) 251 F. 982, affirmed per curiam (C.A. 6) 258 F. 27; payments made to a partnership by a partner for services are proportionately not taxable to him as his income, Benjamin v. Hoey, (C.A. 2) 139 F.2......