Crispin

This is an appeal from a decision of the United States District Court for the Northern District of California, in which the United States recovered certain refunds paid to the taxpayer on the ground they were not due him.

The refunds were for items of overpayment of taxes for the tax years 1943 and 1944. They were allowed and paid to taxpayer on the ground that annuities in the amount of $2,000. for each year returned as income were erroneously treated by the taxpayer as ordinary income, whereas each should have been taxed for but “ * * * 3 per centum of the aggregate premiums or consideration paid for such annuity.” Int. Rev.Code, § 22(b)(2)(A), 26 U.S.C. § 22 (b)(2)(A).

The facts are not disputed. Crispin was employed by Standard-Vacuum Oil Co. from 1930 to 1941 and resided continuously in China during this period of time up to December 10, 1940, when he returned to the United States. He participated in a group annuity plan of his employer whereby both employer and employee made contributions to the Metropolitan Life Insurance Company for an annuity agreement payable to Crispin during his life, conditioned on his remaining in the oil company’s employ until he became eligible…