Anne G. Moholy, as Administratrix of the Estate of Philip F. Moholy, Deceased, and Anne Moholy v. United States

This is an appeal from a judgment of the United States District Court for the Northern District of California, denying appellant a refund of federal income tax. The District Court held that a San Francisco fireman’s sick leave pay was not an amount “ ‘received through accident or health insurance * * *, as compensation for * * * sickness * *’ ” and consequently was properly included in his gross income. Appellant contends that this was improper construction of the exclusion provided for in Section 22 (b) (5) of the Internal Revenue Code of 1939.

Appellant’s late husband, a Captain in the San Francisco Fire Department, had bronchitis and was unable to work for 35 days in 1949. Under the provisions of the City Charter and certain Ordinances and Regulations he was paid $489.17, and the suit is for a refund of the tax attributable to that amount. The Fire Department “Sick Rule” provides for a leave of absence with full pay in case of illness. Firemen employed at least one year are entitled to two weeks leave annually. This leave is cumulative when not used, but the maximum leave may not exceed six months. A fireman must report illness immediately, file physician’s certificates and…