Commissioner of Internal Revenue v. Goodan, and Six Other Cases

195 F.2d 498 COMMISSIONER OF INTERNAL REVENUE v. GOODAN et al., and six other cases. No. 12550. United States Court of Appeals Ninth Circuit. March 5, 1952. Ellis N. Slack, Acting Asst. Atty. Gen., Helen Goodner, Louise Foster, Richard D. Harrison, Special Assts. to the Atty. Gen., Department of Justice, for petitioner. A. Calder Mackay, Arthur McGregor, Howard W. Reynolds, Adam Y. Bennion, all of Los Angeles, Cal., for respondents. Before STEPHENS and POPE, Circuit Judges, and JAMES ALGER FEE, District Judge. PER CURIAM. 1 These are petitions to review decisions of the Tax Court of the United States entered in the above entitled matters. The opinion of the Tax Court, as originally promulgated, is reported at 12 T.C. 817 . The decisions first entered pursuant to that opinion were vacated to enable the Court to consider a Motion to Reconsider. The order denying that motion was accompanied by a memorandum which appears in the margin. 1 2 The decisions were thereupon reentered and the petitions for review which are before us relate to the reentered decisions. 3 The questions presented upon such petitions for review, as stated in the petitioner's brief, were as follows: 4 "1. Whether…

(dissenting).

The decision of the Tax Court, based upon its two opinions, is now affirmed by the majority per curiam.' In each of these pronouncements, that court examined with meticulous insistence a collateral question of local California law which they are incompetent to decide. Local law should be left to the local courts, as this instance proves anew. After the Tax Court had rendered its first opinion, they were confronted squarely with another deliberate formulation of rule by the Supreme Court of California apparently diametrically opposed to the position which the majority of the Tax Court had taken in this case. Thereupon, they set aside their former decision, rationalized an explanation of the latest utterance of the highest court of California and smugly restored their former order.

The Tax Court should never have spoken upon a highly debatable question of local law. Notwithstanding the exhaustive but erroneous treatment of the local law upon which the Tax Court places the full weight of their final decision, I am told I cannot discuss the problem because the government did not argue the specific problem in their brief, but confined their attention to the…

These are petitions to review decisions of the Tax Court of the United States entered in the above entitled matters. The opinion of the Tax Court, as originally promulgated, is reported at 12 T.C. 817 . The decisions first entered pursuant to that opinion were vacated to enable the Court to consider a Motion to Reconsider. The order denying that motion was accompanied by a memorandum which appears in the margin.

*500 The decisions were thereupon reentered and the petitions for review which are before us relate to the reentered decisions.

The questions presented upon such petitions for review, as stated in the petitioner’s brief, were as follows:

“1. Whether the taxpayers who are the grantors, trustees and principal beneficiaries of the family trust involved here are subject to tax under Section 22(a) of the Revenue Act of 1938 and of the Internal Revenue Code on taxable stock dividends which were received by the trust in the taxable years and were added by the trustees to the corpus of the trust.

“2. Whether such stock dividends were taxable to the taxpayers herein as grantors of the trust under Section 167 of the Revenue Act of 1938 and the Internal Revenue Code.”

Without…