Wallace v. United States

• Decision Date: 05 February 1970
• Docket Number: Civ. No. 8-2117-C-2.
• Parties: Henry B. and Betty J. WALLACE, Plaintiffs, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — Southern District of Iowa

309 F. Supp. 748

Henry B. and Betty J. WALLACE, Plaintiffs, v. UNITED STATES of America, Defendant.

Civ. No. 8-2117-C-2.

United States District Court, S. D. Iowa, C. D.

February 5, 1970.

COPYRIGHT MATERIAL OMITTED

David W. Belin and Jeffrey E. Lamson, Des Moines, Iowa, for plaintiffs.

Johnnie M. Walters, Donald R. Anderson, Nestor M. Nicholas, Dept. of Justice, Washington, D. C., for defendant.

MEMORANDUM AND ORDER

FINDINGS OF FACT AND CONCLUSIONS OF LAW

HANSON, District Judge.

This case came before the Court for trial without a jury. Neither party offered any testimony. The evidence consisted of stipulations of facts and documents, and party-admissions:

JURISDICTIONAL FACTS

1. On March 6, 1964, plaintiffs¹ duly filed their Federal Income tax return for the calendar year 1963 with the District Director of Internal Revenue at Des Moines, Iowa. Plaintiffs at the time of filing this return paid in full the tax shown by the return to be due in the amount of Thirteen Thousand Dollars and Eighty Cents ($13,000.80) (Tr. 12-13).

2. A deficiency for the 1963 taxable year in the amount of $47,250.30 was subsequently assessed and was paid on February 16, 1967, along with interest of $8,032.56, a total of $55,282.86 (Tr. 13).

3. Plaintiffs filed a timely claim for refund for the taxable calendar year 1963 on March 31, 1967, with the District Director of Internal Revenue at Des Moines, Iowa (Pltf. Ex. E; Tr. 13.

4. More than six months elapsed between filing the claim for refund and institution of this suit.

5. This Court has jurisdiction pursuant to Title 28, U.S.C. Section 1346(a) (1).

FINDINGS OF FACT

6. Henry B. and Florence Wallace were married on August 11, 1939 in Des Moines, Iowa. In November of 1962 Florence Wallace initiated divorce proceeding in Polk County, Iowa District Court against Henry B. Wallace (Tr. 12). Immediately thereafter the Court entered the following Restraining Order in the divorce action. (Pltf. Ex. C):

Now on this 9th day of November, 1962, upon reading the Petition of the Plaintiff in this cause and being advised in the premises the Court finds that the following Order should issue.

It is therefore ordered, adjudged and decreed that during the pendency of this action the Defendant be and he is hereby restrained from disposing of any personal property of the Plaintiff or the Defendant or of the children of the Plaintiff and Defendant except Defendant shall be permitted to expend reasonable amounts from his own funds for the purpose of his own usual and ordinary maintenance.

7. In April, 1963 Florence K. Wallace filed with the Polk County District Court in the divorce action an Application For Order Re Improvement of Family Dwelling (Pltf. Ex. D) alleging that heating facilities were inadequate to properly heat the first floor of the house, the heating system having only 57% of the needed capacity at the furnace and the distribution system also being inadequate. Mrs. Wallace claimed she had received medical advice to the effect that a new heating system along with air conditioning and an electro-static type filter were necessary to give some relief to her son who was suffering from asthma.

8. Joel D. Teigland, M.D. has stated in writing (Pltf. Ex. F):

Henry D. Wallace has been a patient since 1962 with severe asthma, rhinitis and allergic skin rash. Because of the continued asthma symptoms, all efforts have been made to control him with medication and desensitization.

To further avoid exposure, I recommend centralair conditioning and electrostatic filter in their home. With the above, his condition is definitely improved.

9. Plaintiffs claim a medical deduction of $3,946.12, a portion of the total cost of $4,946.12 which was expended for a new furnace, duct work, registers, central air-conditioning unit, humidity control unit, electric air filter and the related electric wiring in the home occupied by Henry Wallace's former wife Florence. The break-down of the total cost is as follows:

                   furnace, runs and registers   $1,991.74
                   labor on above                   450.00
                   air-conditioning unit          1,182.95
                   humidity control unit            106.00
                   electrostatic air filter         555.60
                   labor on above                   350.00
                   related electrical wiring        309.83
                                                 _________
                   TOTAL                         $4,946.12
                                                 =========
                

10. The record contains no evidence with respect to whether or not the fair market value of the home occupied by the former wife of Henry B. Wallace increased as the result of installation of central air-conditioning and an electrostatic filter.

11. On October 29, 1963 Florence K. Wallace and Henry B. Wallace executed a Stipulation of certain property rights which states in pertinent part (Pltf. Ex. B):

In the event that upon the trial of the above-entitled cause a divorce is granted by the Court dissolving the marriage between the parties hereto, the parties desire to settle all property rights of the parties except as otherwise expressly provided herein and alimony, custody and support payments in connection with and incident to the divorce if the same be granted and subject to the approval and decree of the Court.

Now, therefore, in consideration of the covenants and agreements hereinafter contained, it is mutually stipulated and agreed by and between the plaintiff and the defendant as follows:

1. The plaintiff is to retain as her own property all of the interest of plaintiff in any real estate located in Jasper County, Iowa.

2. The defendant shall convey to the plaintiff by good and sufficient warranty deed, free and clear of all liens and encumbrances including all regular and special taxes due and payable in 1963, the real estate locally known as 147 Tonawanda Drive, Des Moines, Iowa, and legally described as:

Lot One (1) of Gardner Cowles Woods, Plat 2, an official Plat, now included in and forming a part of the City of Des Moines, Iowa, and the North Ten (10) feet of the West One Hundred Forty-one and eight-tenths (141.8) feet of Lot Five (5) of Gardner Cowles Woods, an Official Plat, now included in and forming a part of the City of Des Moines, Iowa, and the South Two and One-half (2½) feet, more or less, of the North Six and Onehalf (6½) feet of Lot Seventy-six (76) paralleling the North line of said Lot Seventy-six (76), of Brown's Subdivision of Lots Eleven (11), Fourteen (14), and Fifteen (15) in Brown's Woods, Section Seven (7), Township Seventy-eight (78) Range Twenty-four (24), all in and now a part of the City of Des Moines, Polk County, Iowa.

3. The defendant shall pay to the plaintiff in cash the sum of $7,700.74, and in addition the defendant shall pay the Butcher Furnace Company bill of $4,636.29, plus the electrical work of Ace Heating and Electric Company of $309.83.

4. All of the home furnishings and fixtures shall be the property of the plaintiff except that the defendant shall be entitled to all of his personal effects, the twenty-year electric clock, the Indian drums, the two-wheel trailer, the watch in glass dome received from his father and mother, the antique rocker owned by his great-great-grandfather, his personal books, and one of the two silver platters received from the President's Cabinet.

5. Plaintiff will retain ownership to the 1960 Ford station wagon.

6. The defendant shall pay all Court costs.

7. The defendant shall pay the attorney fees for the plaintiff's attorney, Carl A. Smedal, in the amount of $12,500.00.

8. The defendant shall pay to Carl A. Smedal for the Brown Engineering Company the sum of $125.00 and to Martin, Cloutier & Sanderson the sum of $500.00.

* * * * * *

10. The plaintiff shall be entitled to no alimony.

* * * * * *

12. The parties acknowledge that this Stipulation Agreement does not include any division of property with regard to the stock of either party in Pioneer Hi-Bred Corn Company of Canada, Ltd., Pioneer Hi-Bred Corn Company, Des Moines, Iowa, Pioneer Hi-Bred Corn Company of Illinois, and Pioneer Hi-Bred Corn Company, Inc., Tipton, Indiana. It is the claim of the plaintiff that under the circumstances of this case, the Court, pursuant to the provisions of Section 598.14 of the 1962 Code of Iowa, should decree the plaintiff to be the owner of certain shares of stock in said companies in addition to these shares of stock already owned by the plaintiff. It is the claim of the defendant that the plaintiff is not entitled to any additional shares of stock in said companies because the stock was not accumulated through the joint efforts of plaintiff and defendant but rather was given to the defendant by his parents. The parties acknowledge that in the event the Court grants a divorce between the parties, the matter of disposition of stock in any of said companies under the law of Iowa and Section 598.14 of the 1962 Code of Iowa is vested in the Court and that the Court may make such order in relation to said property as shall be right.

13. The respective checking and savings accounts of the respective parties shall remain as their own property, and each party shall retain all insurance policies owned by the respective party.

* * * * * *

16. It is mutually agreed by the parties that each of the parties hereto agrees to execute and deliver to the other party any documents that may reasonably be required to accomplish the intention of the instrument and shall do all other things necessary to this end. If either party shall fail to comply with any of the provisions of this Agreement, this particular paragraph of this Agreement shall constitute an actual grant, assignment and conveyance of property and rights in such manner and with such force and effect as may be necessary to effectuate the terms of this Agreement.

17. Upon compliance by each of the parties with the terms and conditions set out by this Agreement and as specified herein, the obligations and liability of defendant to plaintiff and the

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