Van Sciver v. Rothensies, 7704.
Decision Date | 03 September 1941 |
Docket Number | No. 7704.,7704. |
Parties | VAN SCIVER v. ROTHENSIES, Collector of Internal Revenue. |
Court | U.S. Court of Appeals — Third Circuit |
George P. Orr, of Philadelphia, Pa. (T. F. Dixon Wainwright, John W. Bohlen, and Orr, Hall & Williams, all of Philadelphia Pa., on the brief), for appellant.
Carolyn E. Agger, Sp. Asst. to Atty. Gen., and Gerald A. Gleeson, U. S. Atty., and Thos. J. Curtin, Asst. U. S. Atty., both of Philadelphia, Pa. (Samuel O. Clark, Jr., Asst. Atty. Gen., and Sewall Key and Helen R. Carloss, Sp. Assts. to the Atty. Gen., on the brief), for appellee.
Before BIGGS, CLARK, and JONES, Circuit Judges.
The appellant taxpayer, as often, has elected to come to us through the District Court rather than through the Board of Tax Appeals.1 He complains of the imposition of additional tax ($3,661.15) on income which he says is not his but his son's. This claim emanates from a paternal "rescue party." The son, Earl J. Van Sciver, had borrowed money from a bank. The collateral against this loan, along with most collateral, had gone below the financial Plimsoll mark. So father, George D. Van Sciver loaned his son $10,000 worth of bonds to be deposited under the account. At the next shrinkage (1933) the same thing happened to the collateral but something different was done about it. Out of that something different arises this litigation.
On November 1, 1933, appellant bought his son's securities from the bank for the amount of the loan. Two years later the account was closed out by the sale of these same or substituted securities. This sale realized a balance of $12,979.07 after the father had been fully reimbursed. The son did and the father did not include this profit in his personal income tax return for 1935. Appellant can justify his position only if the "arrangement" between father and son is either (1) a loan, (2) an option to repurchase, or (3) an irrevocable trust.
We are rather surprised at the vagueness of the testimony concerning this "arrangement." At the time of the trial, the father was in Arizona for his health and so could not give verbally the learned District Judge the benefit of his recollections. After all, however, the Federal Rules of Civil Procedure provide quite specifically for the taking and use of depositions and the old gentleman came within two of the categories there prescribed.2 We are, therefore, forced to rely principally upon the evidence given by young Mr. Van Sciver, which we now quote:
Appendix p. 28.
Besides this testimony, the record indicates two other factors. First, a loss was claimed by appellant on some of the securities sold in 1933. Second, on September 26, 1934, an entry was made in appellant's books in which the securities were entered under the heading "Earl J. Van Sciver Bond Account" with this notation:
While difficulty is encountered in attempting to place this informal arrangement in a category of legal relationship, the appellant's intent is obvious. He wished to assist his son and at the same time retain some strings upon the securities. Had he not desired to keep some ties on the bonds he would have lent or given his son the funds necessary for their purchase or he would have turned the bonds over outright to his son. Instead he kept the securities in his own possession and took the interest thereon "as interest on the money invested by him in the bonds." These circumstances lead to the belief that appellant substituted himself in place of the bank as his son's creditor — that he intended a loan and held the securities as collateral for the debt.3 But the notation in appellant's books does not indicate a loan. Furthermore, the son's testimony, above quoted, shows clearly that the relationship was not that of debtor and creditor.4
The equivocal nature of the father and son transaction is, in our judgment, completely dispositive of appellant's other two theories. Any contract with respect to purchase, whether by way of option or whether original or repurchase, as it is a bargain, must include the terms thereof. Here we have no mention of dates, price or method. Likewise, an obligation to give away one's property, whether by means of trust or otherwise, is not to be presumed. On the contrary, the beneficiary has the burden of proof and that proof must be of a particularly satisfactory character. Both the textbooks and the cases are insistent on that point and prescribe adjectives leaving no room for mental hesitation.5 As the learned District Judge indicates, those selected by the Pennsylvania cases are "clear," "precise," "indubitable" and "unequivocal."6
If it were necessary to affirmatively label the taxpayer's transaction, we should call it a gift or assignment in the future.7 The words found in the accountant's notation that "the above bonds which were bought Nov. 1, 1933, were to be held or sold for Earl J. Van Sciver" accord with this view. Since there was...
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Reynolds v. Reynolds, 21295
...This is true under the Federal discovery rules and the ruling in Smith v. Morrison-Knudsen Company, Inc., supra. In Van Sciver v. Rothensies, 3 Cir., 122 F.2d 697, taxpayers brought an action to recover taxes paid in the State of Pennsylvania, one of the plaintiffs being at the time in the ......
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Derewecki v. Pennsylvania Railroad Company, 15181.
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