Ellison

Appellants (husband and wife at times here material) brought this action for refund of an alleged overpayment of Federal individual income taxes paid to appellee for the year 1949. The lower court entered final judgment for appellee and this appeal is from that judgment.

In 1947, the United States, through the Forest Service of the Department of Agriculture, offered to sell the timber on a tract of land on the Green Forks River under a “pay-as-eut” contract which provided for payment for the timber as it was cut. The Forest Service awarded the timber and the contract right to cut that timber to Northwest Door Company (hereafter “Northwest”) by Contract Form 202, No. A6 fs-16060. By its terms, Northwest would purchase, cut and pay for the timber from the Green Forks tract. Title to the timber remained in the United States until after the timber had been “felled, scaled, paid for, etc.”. The court also found that title then passed to Northwest which was “financially liable to the United States for performance of the contract.”

Since Northwest wanted the timber for its mill operations rather than for any “logging” profit, it contracted with Robert F. Ellison for Ellison to do the…