State of California, Department of Employment v. Fred S. Renauld & Co.

This is an appeal from an order of the district court upon a petition for review affirming the order of. a referee in bankruptcy. The proceedings were under Chapter XI, sections 301-399, of the Bankruptcy Act, 11 U.S.C.A. §§ 701-799 , and an order confirming the debtor’s plan of arrangement *607 had been entered. The facts are presented to us on appeal in an agreed statement pursuant to Rule 76, Federal Rules of Civil Procedure, 28 U.S.C.A. Appeal to this Court was [sought to be] taken by notice of appeal filed in the district court.

The referee disallowed in part a claim asserted against the debtor by the Department of Employment of the State of California, in the amount of $1,503.98 for taxes arising under the California Unemployment Insurance Act. 3 Deering’s General Laws of California, Act 8780d. The part of that amount which was disallowed and which is the subject of this appeal is $454.99.

The dispute arises over interpretation of the exemption from taxation of wages in excess of $3000 paid in any calendar year. 3 Deering’s General Laws of California, Act 8780d, § 11(c) (1).

The Fred S. Renauld & Co. corporation is the successor to a partnership, and its stock is held by…

concurring.

I concur in the reversal. Under the facts here presented the predecessor partnership and the succeeding corporation constituted two employers. Pursuant to Regulation 65 quoted by Judge Stephens each of said two employers was required to pay the tax upon the first $3,000 paid. Those who had originally made up the partnership determined to avail themselves of the advantages of a corporation. Since such advantages come to the corporation upon the theory that it is a new entity such new entity should be subject to the tax burden here involved.

179 F.2d 605 STATE OF CALIFORNIA, DEPARTMENT OF EMPLOYMENT, v. FRED S. RENAULD & CO. et al. No. 12198. United States Court of Appeals Ninth Circuit. Jan. 12, 1950. Fred N. Howser, Attorney General, Chas. W. Johnson, Vincent P. Lafferty Deputy Attorney Gen., for appellant. Rupert B. Turnbull, Los Angeles, Cal., for appellee Fred S. Renauld & Co. George Gardner, Los Angeles, Cal., for appellee George Gardner. Before STEPHENS and BONE, Circuit Judges, and BLACK, District Judge. STEPHENS, Circuit Judge. 1 This is an appeal from an order of the district court upon a petition for review affirming the order of a referee in bankruptcy. The proceedings were under Chapter XI, sections 301-399, of the Bankruptcy Act, 11 U.S.C.A. §§ 701-799 , and an order confirming the debtor's plan of arrangement had been entered. The facts are presented to us on appeal in an agreed statement pursuant to Rule 76, Federal Rules of Civil Procedure, 28 U.S.C.A. Appeal to this Court was (sought to be) taken by notice of appeal filed in the district court. 2 The referee disallowed in part a claim asserted against the debtor by the Department of Employment of the State of California, in the…