Law School Case Briefs | Legal Outlines | Study Materials: April 2013

Monday, April 29, 2013

INDOPCO, Inc. v. Commissioner case brief

503 U.S. 79,112 S. Ct. 1039, 117 L. Ed. 2d 226, 1992 U.S.

CASE SYNOPSIS: Petitioner corporation sought review from a judgment of the United States Court of Appeals for the Third Circuit, which found in favor of respondent Internal Revenue Service that professional expenses incurred by petitioner in the course of its friendly takeover by another corporation were capital expenditures, and not income tax deductible ordinary and necessary business expenses under 26 U.S.C.S. § 162(a).

FACTS: In the course of its friendly takeover by another corporation, petitioner incurred expenses of over $ 2.75 million, representing fees paid to investment bankers and attorneys, as well as other miscellaneous expenses. Petitioner claimed an income tax deduction for most of this amount, but respondent Internal Revenue Service disallowed the deduction.

ANALYSIS:
This decision was affirmed by the tax court, the court of appeals, and the Supreme Court, which held that the expenses petitioner had incurred were capital expenditures and were thus non-deductible pursuant to 26 U.S.C.S. § 263, and were not deductible ordinary and necessary current business expenses under 26 U.S.C.S. § 162(a). The court rejected petitioner's argument that an expenditure had to serve to create or enhance a separate and distinct asset in order to be a capital expenditure, and also held that consideration of the future benefit of an expenditure was undeniably important. The court then noted the long-term benefits of petitioner's takeover and held that the expenses petitioner incurred for the purpose of changing the corporate structure for the benefit of future operations were not ordinary and necessary business expenses.

CONCLUSION: The court affirmed the judgment.

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Welch v. Helvering case brief

290 U.S. 111, 54 S. Ct. 8, 78 L. Ed. 212, 1933 U.S.

CASE SYNOPSIS: Certiorari was granted to the United States Court of Appeals for the Eighth Circuit to review the affirmance of an action by respondent, the Commissioner of the Internal Revenue Service, disallowing deductions in the computation of petitioner taxpayer's income for payments petitioner made to creditors of a bankrupt corporation in an effort to strengthen his own standing and credit.

FACTS: After the corporation for which he was formerly secretary was adjudged bankrupt, petitioner sought to reestablish his relations with customers and to solidify his credit and standing by paying a portion of the corporation's discharged debts. Over five successive years, petitioner made substantial payments to creditors and deducted the payments from his income.

ANALYSIS:
The Supreme Court affirmed a ruling of respondent that these payments were not deductible from income as ordinary and necessary expenses, but rather, were in the nature of capital expenditures, an outlay for the development of reputation and good will. Although petitioner's payments were necessary because they were appropriate and helpful to the continuation of his business, his payments of another's debts with no legal obligation to do so were not ordinary because they were not the common and accepted means of heightening his reputation for generosity and opulence. Since petitioner failed to sustain his burden of overcoming the presumption of correctness of respondent's ruling, he was not entitled to the deduction.

CONCLUSION: The Supreme Court affirmed an action by respondent disallowing deductions in the computation of petitioner taxpayer's income.

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Overton v. Commissioner case brief

162 F.2d 155, 1947 U.S. App. 47-1 U.S. Tax Cas. (CCH) P9292; 47-1 U.S. Tax Cas. (CCH) P10,564

CASE SYNOPSIS: Petitioners appealed Tax Court ruling on gift tax and income tax liability for transfer of stock pursuant to a plan devised to lessen taxes.

FACTS: Pursuant to a plan devised to lessen taxes, petitioners amended their certificate of incorporation to provide for changing the outstanding common stock into 2,000 shares without par value, of which 1,000 were denominated Class A and 1,000 Class B. The old stock was exchanged for the new, the shareholders then gave the B stock to their respective wives, and new certificates were issued to the wives. The B stock had a liquidating value of one dollar per share; everything else on liquidation was to belong to the holders of the A stock, who had also the sole voting rights for directors and all ordinary matters. Under a subsequent agreement restricting alienation of their stock, the wives were precluded from realizing more than one dollar a share by selling their shares. The Tax Court held that the arrangement, though made in the form of a gift of stock, was in reality an assignment of part of the taxpayers' future dividends.

ANALYSIS:

On appeal, the court affirmed that ruling, noting that anticipatory assignments of income, whatever their formal cloak, are ineffective taxwise.

CONCLUSION: The court affirmed the ruling, holding that the arrangement, though made in the form of a gift of stock, was really an assignment of part of the taxpayer's future dividends.

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Commissioner v. Culbertson case brief

337 U.S. 733, 69 S. Ct. 1210, 93 L. Ed. 1659, 1949 U.S.

CASE SYNOPSIS: Petitioner Internal Revenue Service commissioner appealed a judgment of the Court of Appeals for the Fifth Circuit reversing petitioner's determination of a deficiency in respondent's income tax for 1940 and 1941, which was sustained by the Tax Court. Petitioner maintained that the entire income from a partnership entered into by respondent and his four sons was taxable to respondent.

FACTS: Respondent entered into an oral partnership agreement with his four sons to join in the operation of a cattle ranch. Respondent sold an undivided one-half interest to the four sons, which was to be paid under a note due one year later. A partnership return was filed for two years, indicating a division of income approximating the capital attributed to each partner. Petitioner Internal Revenue Service commissioner made a determination of a deficiency in respondent's income tax for both years, which was sustained by the Tax Court. Petitioner appealed an appellate court judgment reversing the determination.

ANALYSIS:

On certiorari, the court reversed and remanded the case to the Tax Court for a decision as to which, if any, of respondent's sons were partners during the two tax years because the lower court applied an improper objective standard. The court ruled that under the correct standard, if upon consideration of all the facts, it was found that partners joined together in good faith to conduct a business, having agreed that the services or capital to be contributed by each was of such value that the contributor should participate in the distribution of profits, that was sufficient.

CONCLUSION: The court reversed the judgment and remanded.

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Helvering v. Clifford case brief

309 U.S. 331, 60 S. Ct. 554, 84 L. Ed. 788, 1940 U.S.

CASE SYNOPSIS: The appellate tax board held that appellee taxpayer's gross income was deficient because he failed to include trust income that was paid to his wife. The United States Court of Appeals for the Eighth Circuit reversed the decision. The tax commissioner sought review.

FACTS: A taxpayer created a short term trust, paid a federal gift tax on the transfer, and paid the trust's income to the taxpayer's wife. The appellate tax board assessed a deficiency against the taxpayer, and the appellate court reversed. On further review, the United States Supreme Court found that the taxpayer was the owner of the trust for purposes of § 22 (a) of the Revenue Act of 1934, 48 Stat. 680.

HOLDING:
The Court held that the taxpayer's trust created a temporary re-allocation of income within an intimate family group.

ANALYSIS:
The Court found that because the income remained in the family and the taxpayer retained control over the trust, he was completely assured that the trust would not substantially change his economic position. The Court found that the taxpayer wrongly omitted the trust income from his tax returns, even though his wife included the income on her return.

CONCLUSION: The Court reversed the appellate court's judgment and affirmed the tax board's judgment.

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Morrill v. United States case brief

228 F. Supp. 734 (D. Me. 1964)

CASE SYNOPSIS: Plaintiff taxpayers initiated a tax refund action against defendant government, alleging that trust income applied to the payment of the tuition and room charges for the taxpayers' four minor children was not taxable as income under I.R.C. § 677.

FACTS: The taxpayers established four short-term trusts for the benefit of their four minor children. The trusts provided that during the minority of the children, the trustee could use trust income for payment of room, tuition, books, and travel to and from any private college or school. The children attended private schools and colleges. The taxpayers requested that the trustee pay from the trusts the room and tuition charges on the bill. The taxpayers submitted a joint income tax return and did not include any of the income of the four children's trusts. The government determined a deficiency, claiming that the trust income that had been applied in payment of the children's tuition and room charges was taxable under § 677. The taxpayers initiated a refund action.

ANALYSIS:

In entering judgment for the government, the court found that the trust income was used to satisfy the taxpayers' legal obligations so that it was taxable as income. The court held that the trust income was used to defray expenses that the taxpayers were legally liable. The taxpayers expressly assumed the responsibility to pay for the expenses and obligated themselves to pay the children's bills.

CONCLUSION: The court entered judgment in favor of the government.

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Corliss v. Bowers case brief

281 U.S. 376, 50 S. Ct. 336, 74 L. Ed. 916, 1930 U.S.

CASE SYNOPSIS: Petitioner sought review of a judgment of the Circuit Court of Appeals for the Second Circuit, which denied his request for the refund of a tax paid under §§ 219(g), 219(h) of the Revenue Act of 1924, 26 U.S.C.S. § 960, asserting the trust which he created for the benefit of his wife and children, but for which he retained the power to abolish or change, was not taxable.

FACTS: Petitioner sought review of a judgment, which denied his request for a refund of tax paid pursuant to §§ 219(g), 219(h) of the Revenue Act of 1924, 26 U.S.C.S. § 960, asserting that he should not have been taxed on trust created for the benefit of his wife and children. The court found that under the terms of the trust, petitioner reserved the power to abolish or change the trust at his will.

HOLDING:

The court held that under §§ 219(g) and 219(h), when the grantor of a trust had the power to re-vest in himself title to any part of the corpus of the trust, then the income of such part of the trust for such taxable year was to be included in computing the net income of the grantor. Accordingly, the judgment that denied petitioner's request for a tax refund was affirmed.

CONCLUSION: The judgment that denied petitioner's request for a tax refund was affirmed because when the grantor of a trust had the power to re-vest in himself title to any part of the corpus of the trust, the income of such part of the trust for such taxable year was to be included in computing the net income of the grantor.

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Salvatore v. Commissioner case brief

29 T.C.M. (CCH) 89 (1970)

CASE SYNOPSIS: Petitioner taxpayer sought review of a decision of respondent Commissioner of Internal Revenue (commissioner), who determined a deficiency in the taxpayer's income tax.

FACTS: The taxpayer had inherited a gas station from her husband upon his death. The taxpayer later contracted to sell the station to an oil company but gave a one-half interest in the property to her children before completing the sale. After paying off the liens on the property, the taxpayer received one-half of the profit from the sale and the children split the rest. The taxpayer reported a capital gain on her half of the profit and gifts made to each of her children. The commissioner determined that the entire amount from the sale was taxable to the taxpayer as long-term capital gain. The taxpayer sought review, and the court ruled in favor of the commissioner.

HOLDING:

The court held that although the children obviously had expected to receive a share of the property, they held no property interest in it when the taxpayer contracted to sell it to the company.

ANALYSIS:
The taxpayer's subsequent conveyance, unsupported by consideration, was merely an intermediate step in the transfer of legal title from the taxpayer to the company and whether the gift was completed prior to sale was immaterial. The substance of the transaction governed over the form.

CONCLUSION: The court ruled in favor of the commissioner in the taxpayer's action challenging the commissioner's determination of an income tax deficiency.

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Estate of Stranahan v. Commissioner case brief

472 F.2d 867,1973 U.S. App. 73-1 U.S. Tax Cas. (CCH) P9203; 31 A.F.T.R.2d (RIA) 710

CASE SYNOPSIS: The United States Tax Court partially denied appellant estate's petition for a redetermination of a deficiency in the decedent's income tax. The estate sought review.

FACTS: A taxpayer needed to accelerate his income to take advantage of certain interest deductions. To this end he assigned to his son anticipated stock dividends from his company for which the son paid consideration. The company was instructed to issue future dividend checks to the son. When the dividends for the tax year in question were paid to the son appellee United States government attributed the dividends to appellant taxpayer's estate and assessed tax accordingly. The trial court partially denied appellant's petition for a redetermination of the deficiency in the deceased taxpayer's income tax and appellant sought review.

ANALYSIS:

The court reversed because the transaction involving the sale of future dividends was valid and for consideration. The taxpayer reported the money paid to him by his son as income and the son likewise reported the dividend received as income.

CONCLUSION: The court reversed the denial of appellant estate's petition for a redetermination of a deficiency in the decedent's income tax.

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Helvering v. Horst case brief

311 U.S. 112, 61 S. Ct. 144, 85 L. Ed. 75, 1940 U.S.

CASE SYNOPSIS: Petitioner Commissioner of Internal Revenue sought certiorari review of a judgment from the United States Court of Appeals for the Second Circuit, which reversed an order from the Board of Tax Appeals sustaining petitioner's determination of a deficiency in income tax against respondent taxpayer.

FACTS: Respondent, the owner of negotiable bonds, detached from the bonds negotiable interest coupons shortly before their due date and delivered them as a gift to his son who in the same year collected them at maturity. Petitioner ruled that under § 22 of the Revenue Act of 1934, 48 Stat. 686, the interest payments were taxable, in the years when paid, to respondent donor who reported this income on the cash receipts basis. The court of appeals reversed an order sustaining the tax. The sole issue on appeal was whether the gift of the coupons during respondent donor's taxable year, delivered to the donee and later in the year paid at maturity, was the realization of income taxable to respondent.

ANALYSIS:The United States Supreme Court reversed and held that the deficiency was properly assessed against respondent because when respondent gave the gift of the coupons, he separated his right to interest payments from his investment and procured the payment of the interest to his donee and enjoyed the economic benefits of the income in the same manner and to the same extent as though the transfer were of earnings.

CONCLUSION: The Court reversed and held that the deficiency was properly assessed against respondent.

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Commissioner v. Giannini case brief

129 F.2d 638 (9th Cir. 1942)

CASE SYNOPSIS: Petitioner Commissioner of Internal Revenue sought review of a decision of the United States Board of Tax Appeals (board), which held that there was no deficiency in respondent taxpayer's federal income tax for the year 1928. The commissioner had assessed a deficiency against the taxpayer in the amount of $ 137,344.

FACTS: After the taxpayer performed his services for 6 years without compensation, the corporation elected to compensate the taxpayer at a rate of 5 percent of the corporation's net profits each year, with a guaranteed minimum of $ 100,000 per year. When the taxpayer learned in 1927 that he would receive $ 445,704 as compensation through July 1927, he informed the board of directors that he would not accept any further compensation for 1927. The corporation then passed a resolution to contribute $ 1,500,000, which was the estimated amount of five percent of the corporation's net profits for 1927, to a university. The taxpayer personally covered the deficiency in the corporation's contribution to the university. The commissioner then assessed a deficiency in the taxpayer's federal income taxes for 1928, as he had failed to report any part of the corporation's payment to the university. The board held that there was no deficiency in respondent taxpayer's federal income tax for the year 1928. The court affirmed the board's judgment.

HOLDING:
The court held that the board's findings were supported by the evidence, as the taxpayer did not receive the money and he did not direct its disposition.

CONCLUSION: The court affirmed the board's findings that there was no deficiency in the taxpayer's federal income tax for the year 1928.

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Lucas v. Earl case brief

281 U.S. 111, 50 S. Ct. 241;74 L. Ed. 731; 1930 U.S.

CASE SYNOPSIS: Petitioner Commissioner of Internal Revenue sought review of a judgment of the United States Circuit Court of Appeals for the Ninth Circuit, which reversed the imposition of a tax upon the whole of the earned salary of respondent taxpayer by the Commissioner and the Board of Tax Appeals.

FACTS: The taxpayer claimed that he should not be taxed for the whole of the salary and attorney fees earned by him because he and his wife had contracted that any property either of them owned or thereafter acquired, including salaries, would be owned as joint tenants, with right of survivorship. He contended that he should only be taxed for half of his salary and attorney fees based on the contract with his wife. Despite the validity of the contract, the Commissioner of Internal Revenue, and the Board of Tax Appeals imposed a tax upon the whole salary. Their decisions were reversed by the appellate court.

ANALYSIS:

Upon review under writ of certiorari, the Court reversed because there was no doubt that the Revenue Act of 1921, 42 Stat. 227, required salaries to be taxed by those who earned them and provided that the tax could not be escaped by anticipatory arrangements and contracts however skillfully devised to prevent the salary when paid from vesting even for a second in the man who earned it.

CONCLUSION: The Court reversed the appellate court's judgment.

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Raytheon Production Corporation v. Commissioner case brief

144 F.2d 110

CASE SYNOPSIS: Petitioner corporation sought review from a judgment of the Tax Court of the United States, holding that an amount received in settlement of a federal antitrust suit for damages was taxable income.

FACTS: The corporation brought suit alleging that a the government conspired to destroy its established business, and large and valuable good will in interstate commerce, which were totally destroyed. The antitrust suit and a counterclaim for non-payment of royalties were settled for a cash payment in favor of the corporation, but the amount paid was not allocated between patent license rights and settlement of the suit. The corporation treated most of the settlement as a non-taxable return of capital, but the government determined the entire settlement sum was taxable income. The court found the recovery for destruction of the business and good will represented a return of capital. However, the court also found that the corporation's conversion of property into cash meant that compensation for loss of good will in excess of its cost basis would be gross income to the corporation. The corporation was the result of a series of tax-free reorganizations; there was no evidence of its original predecessor's basis in good will. Since the amount of any nontaxable capital recovery could not be ascertained, the entire settlement amount was taxable income.

CONCLUSION: The court affirmed the judgment.

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Zarin v. Commissioner case brief

916 F.2d 110,1990 U.S. App. 17775, 90-2 U.S. Tax Cas. (CCH) P50,530; 66 A.F.T.R.2d (RIA) 5679

CASE SYNOPSIS: Appellants, a taxpayer and his wife, sought review of the decision of the United States Tax Court holding that taxpayer recognized income from discharge of indebtedness resulting from his gambling activities and that he should be taxed on the income.

FACTS: Appellant taxpayer was extended gambling credit by casino and became a compulsive gambler. The state casino control commissioner issued an emergency order making further extension of credit to the taxpayer illegal, but the casino continued to extend credit. The taxpayer ran up a debt in excess of three million dollars and the casino filed suit to collect. The taxpayer stated that the debt was unenforceable under state law, and the matter settled for $ 500,000.00. The Internal Revenue Service asserted that the forgiven portion of the contested debt was income to the taxpayer and imposed tax. The tax court agreed and the taxpayer appealed. The court reversed the tax court's decision and remanded the matter on the grounds that the taxpayer realized no income tax by reason of his settlement with a third party creditor.

CONCLUSION: Decision of the tax court was reversed and remanded because the taxpayer realized no income by reason of his settlement of his gambling debt with a third party creditor.

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United States v. Kirby Lumber Co. case brief

284 U.S. 1, 52 S. Ct. 4;76 L. Ed. 131, 1931 U.S. 457

CASE SYNOPSIS: The United States sought certiorari review of a judgment from the United States Court of Claims, which held that respondent taxpayer did not realize a taxable gain from the purchase of its own bonds on the open market at less than their par value, which it had received when it issued them.

FACTS: The trial court held that respondent taxpayer did not realize a taxable gain from the purchase of its own bonds on the open market at less than their par value, which it had received when it issued them.

HOLDING:
Upon the petition for certiorari review by the United States, the United States Supreme Court reviewed § 213(a) of the Revenue Act of November 23, 1921, and held that gross income included gains or profits and income derived from any source whatever.

ANALYSIS:

By the Treasury Regulations authorized by statute, if a corporation purchased and retired any such bonds at a price less than the issuing price or face value, the excess of the issuing price or face value over the purchase price was income for the taxable year. The Court found no reason to disregard the regulations. There was no shrinkage of assets, and respondent made a clear gain. As a result of its dealings, respondent realized a certain sum previously offset by the obligation of bonds. Therefore, respondent realized taxable income.

CONCLUSION: The court reversed a judgment holding that respondent taxpayer did not realize a taxable gain from the purchase of its own bonds on the open market for less than it had received for them. The court concluded that respondent made a clear gain in a certain amount previously offset by the obligation of bonds.

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Commissioner v. Tufts case brief

461 U.S. 300,103 S. Ct.1826,75 L. Ed. 2d 863,1983 U.S. 27

CASE SYNOPSIS: Petitioner, Commissioner of the Internal Revenue Service, challenged the judgment of the U.S. Court of Appeals for the Fifth Circuit, which held that respondents, taxpayers in a partnership, did not have to include unpaid balance of a mortgage property when it was sold, when computing the amount the taxpayers realized on the sale.

FACTS: Respondents, taxpayers in a partnership, sold an apartment complex with an encumbered nonrecourse mortgage, with a value greater than the property's value. Respondent did not include the unpaid balance of the mortgage in computation of the amount the taxpayer realized on the sale. Petitioner, Commissioner of the Internal Revenue Service, performed an audit and determined that the sale resulted in a partnership capital gain, on the theory that the partnership had realized the full amount of the nonrecourse obligation, and assessed a deficiency. Respondents challenged petitioner's determination, arguing that under the internal revenue code, petitioner failed to properly take into account that the value of the mortgage exceeded the sale, and therefore there was no economic benefit to be realized from the sale.

HOLDING:

The court upheld petitioner's assessment, holding that under previous precedent, petitioner's position was just and reasonable.

ANALYSIS:

The court determined that it was irrelevant that there was no economic benefit, since under the code, the value of the mortgage was relieved, and thus was a taxable benefit to respondents.

CONCLUSION: The court reversed the decision of the lower court and upheld petitioner's assessment of a deficiency against respondents from the sale of their encumbered mortgaged property.

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Crane v. Commissioner case brief

331 U.S. 1, 67 S. Ct.1047,91 L.Ed.1301,1947 U.S.3021

CASE SYNOPSIS: Petitioner taxpayer sought certiorari from a decision of the United States Circuit Court of Appeals for the Second Circuit concerning how a taxpayer who acquired depreciable property subject to an unassumed mortgage, held it for a period, and finally sold it still so encumbered, must compute her taxable gain.

FACTS: Petitioner appealed from a decision reversing a tax court determination that expunged part of a deficiency determined by the tax commissioner on account of the income tax on a gain realized on the sale of an apartment house which had been acquired by petitioner by bequest subject to an unassumed mortgage. Certiorari was granted because of the importance of the questions raised as to proper construction of gain and loss provisions. The Supreme Court sought to determine the gain or loss applying proper interpretation and construction.

ANALYSIS:

The Court concluded the first step was to determine the basis of the property, and found the basis to be the value of the property undiminished by mortgages under I.R.C. § 113 (a) (5) (1938). Second, the Court examined whether depreciation adjustments were proper under § 113 (b) (1) (B) (1938). Third, the Court looked at the amount realized on the sale of the bequeathed property. Section 111 (b) defined "amount realized" from "the sale of property" as "the sum of any money received plus the fair market value of the property," not its equity. The Court affirmed the appeals court judgment finding the tax court's use of equity as a basis was improper.

CONCLUSION: The Court affirmed the judgment of the appeals court, which held that the tax court's use of equity as a basis for the determination of gain or loss was improper.

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International Freighting Corporation, Inc. v. Commissioner case brief

135 F.2d 310,1943 U.S. App. 3268, 43-1 U.S. Tax Cas. (CCH) P9334; 30 A.F.T.R. (P-H) 1433

CASE SYNOPSIS: Petitioner freight corporation challenged a decision of the Tax Court of the United States determining that petitioner's delivery of shares to its employees as additional reasonable compensation was a taxable gain.

FACTS: Petitioner freight corporation delivered shares to its employees in 1936 as an additional reasonable compensation for past services actually rendered. The shares were disposed of for a valid consideration equal at least to the market value of the shares when delivered. The tax court determined that delivery of the shares resulted in a taxable gain to petitioner.

ANALYSIS:

On appeal, the court affirmed, noting that delivery of the shares was not a gift, the value of shares could not be deducted as an expense, and that the employees as donees would not be obliged to pay an income tax on what each received.

CONCLUSION: The court affirmed the tax court's determination that petitioner freight corporation's delivery of shares to its employees as additional reasonable compensation was a taxable gain.

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Farid-Es-Sultaneh v. Commissioner case brief

160 F.2d 812, 1947 U.S. App. 3403, 47-1 U.S. Tax Cas. (CCH) P9218; 35 A.F.T.R. (P-H) 1049

CASE SYNOPSIS: Petitioner sought review of a decision of the United States Tax Court that upheld a decision of the Tax Commissioner that determined that stocks petitioner obtained pursuant to a pre-nuptial agreement were taxable for capital gains.

FACTS: Petitioner executed a pre-nuptial agreement with her extremely wealthy, soon to be, new husband. The pre-nuptial agreement stipulated that petitioner was to receive a certain amount of shares in a corporation that was to be an ante-nuptial settlement in the event the parties divorced. Petitioner released all dower and other marital rights, including the right to her support. The parties ultimately did divorce. The Tax Commissioner determined that stocks petitioner obtained pursuant to a pre-nuptial agreement were taxable for capital gains. The Tax Court upheld that decision. Petitioner sought review.

HOLDING:

The court reversed holding that income tax provisions were not to be construed as though they were in pari materia with either the estate tax law or the gift tax statutes.

ANALYSIS:
Petitioner gave fair consideration in relinquishing her marital rights, which were worth far more that the stock.

CONCLUSION: The court reversed the capital gains tax assessment against petitioner ex-wife holding that petitioner gave fair consideration in relinquishing her marital rights, for the stock she received. Income tax provisions were not to be construed in pari materia with either the estate or gift tax statutes.

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Taft v. Bowers case brief

278 U.S. 470, 49 S. Ct. 199,73 L. Ed. 460,1929 U.S. 17

CASE SYNOPSIS: Petitioners, donees of stocks, sought certiorari review of the decisions from the Circuit Court of Appeals that reversed judgments in favor of the donees in actions against respondent, the Collector of Internal Revenue, to recover money paid as income taxes because of advancement in the market value of the donees' stocks while owned by the donors.

FACTS: During the calendar years 1921 and 1922, the father of a donee, gave her certain shares of stock then more valuable than when acquired by him. The donee sold them during 1923 for more than their market value when the gift was made. The United States demanded an income tax reckoned upon the difference between cost to the donor and price received by the donee. The donee paid accordingly and sued to recover the portion imposed because of the advance in value while the donor owned the stock. The appellate court reversed the judgment entered in favor of the donee. The judgment was affirmed.

ANALYSIS:
The United States Supreme Court ruled that § 202(2) of the Revenue Act of 1921, where one who purchased shares of stock after February 28, 1913, gave them to another after December 31, 1920, when their market value had increased over the investment, and the donee afterwards sold them at a price still higher, the gain taxable to the donee was the difference between the price realized by him and the price paid by the donor. Congress had power under the Sixteenth Amendment to treat the entire increase in value, when separated from the investment by the sale, as income of the donee.

CONCLUSION: The Court affirmed the judgments.

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Philadelphia Park Amusement Co. v. United States case brief

126 F. Supp. 184 (Ct. Cl. 1954)

CASE SYNOPSIS: Plaintiff corporate taxpayer brought suit against defendant government to recover overpaid income taxes resulting from plaintiff's claim that it was entitled to depreciate the cost of a franchise obtained through the exchange of a bridge, using as the basis for the franchise as the undepreciated cost of the bridge.

FACTS: Plaintiff operated an amusement park that was serviced by a bridge conveying rail and pedestrian traffic to the park. After being told that the bridge needed repairs for which plaintiff was obligated to effect, it entered into a deal where the bridge would be given to the city in exchange for a ten-year franchise in which it would retain a right of way over the bridge. Since the franchise had no established value, plaintiff used the undepreciated cost of the bridge as its basis for depreciating the franchise. Plaintiff thereafter sought to recover an overpayment of taxes made by its failure to claim any depreciation.

HOLDING:

The court of claims held that plaintiff was entitled to use the fair market value as the cost basis of the franchise for purposes of determining depreciation and loss, and remanded the question of fair market value of franchise to the commissioner of the court to make that determination.

CONCLUSION: Judgment was rendered for plaintiff, and the case was remanded the question of fair market value of franchise to the commissioner of the court for taking evidence and filing a report thereon.

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Wolder v. Commissioner case brief

493 F.2d 608, 1974 U.S. App. 9955, 74-1 U.S. Tax Cas. (CCH) P9266; 74-1 U.S. Tax Cas. (CCH) P12,982

CASE SYNOPSIS: Appellant taxpayer and Appellee Commissioner of Internal Revenue (United States) sought review of the judgment of the Tax Court (United States), which held that the stock and cash received by appellant under his client's will constituted taxable income, under I.R.C. § 61, and was not exempt as a bequest, under I.R.C. § 102, and that the stock and cash were constructively received in the year of the client's death.

FACTS: Pursuant to a written agreement, appellant taxpayer, an attorney, provided legal services to her at no charge to his client who bequeathed her stock to appellant upon her death. Appellant received the stock and cash one year after the client's death, when its value had considerably increased. The tax court held that the stock and cash were taxable income, under I.R.C. § 61, and were not exempt as a bequest, under I.R.C. § 102, and that appellant constructively received the stock and cash in the year of the client's death rather than the year in which he actually received it. Appellant and appellee Commissioner of Internal Revenue (United States) sought review.

ANALYSIS:

The court affirmed the judgment in part, holding that the gift was not excludable, under § 102, as the contract was, in effect, one for the postponed payment of legal services rather than for a gift. The court reversed the judgment in part, holding that the date of the transfer of the stock was the date of appellant's actual receipt rather than the date of the client's death, as the income was not unqualifiedly subject to the demand of appellant because it was open to the residuary legatees.

CONCLUSION: The court affirmed the judgment in part, holding that the bequest of stock and cash by appellant taxpayer's client to him was not exempt from taxation, as the bequest was not a gift but a postponed payment for uncharged legal services. The judgment was reversed in part, as the bequest was taxable in the year that appellant received it, rather than in the year of the client's death, because it was not unqualifiedly subject to appellant's demand.

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Lyeth v. Hoey case brief

305 U.S. 188, 59 S. Ct. 155,83 L. Ed. 119, 1938 U.S. 1173

CASE SYNOPSIS: Certiorari was granted to the Circuit Court of Appeals for the Second Circuit, to review whether property received by petitioner, grandson of decedent grandmother, from the estate in compromise of his claim as an heir, was taxable as income under the Revenue Act of 1932.

FACTS: Petitioner inherited property from his grandmother. When the will was offered for probate in Massachusetts, the heirs objected, citing lack of testamentary capacity and undue influence. A compromise agreement was entered into. Heirs formed a corporation, to which they assigned their interests in the estate in exchange for common stock. Petitioner received his share of the estate, and respondent Commissioner of Internal Revenue taxed petitioner's share as income. The district court granted summary judgment to petitioner, but the intermediate appellate court reversed.

HOLDING:

On further appeal, the court reversed that decision and affirmed the district court.

ANALYSIS:

The intermediate appellate court erred in applying the Massachusetts rule, which depended upon the law of the jurisdiction under which petitioner received the property. What an heir acquired by inheritance within the meaning of federal statute was a federal, not state, question. State law controlled only when the federal taxing statute, by express language or necessary implication, made its operation dependent upon state law. There was no such expression or implication here, and exemption from taxation applied.

CONCLUSION: The court reversed the decision of the intermediate appellate court, holding that the property petitioner inherited from his grandmother was exempt from taxation under the Revenue Act of 1932.

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Commissioner v. Duberstein case brief

363 U.S. 278, 80 S. Ct.1190, 4 L. Ed. 2d 1218, 1960 U.S. 2030

CASE SYNOPSIS: Petitioner government appealed judgments from the United States Court of Appeals for the Second Circuit and the United States Court of Appeals for the Sixth Circuit that reversed determinations of whether transfers of property and money to respondent taxpayers constituted gifts excludable from gross income under I.R.C. § 22(b)(3).

FACTS: Respondent taxpayer one received an automobile from a businessman. Respondent taxpayer two received a sum of money from an employer. Respondents did not include the transferred property in their gross incomes, deeming them gifts. A district court held that the automobile was remuneration for services rendered to the businessman. Another district court held that the sum of money was a gift. The appellate courts reversed the judgments. The court reversed the judgment in respondent one's case and vacated the judgment in respondent two's case.

ANALYSIS:
The court refused to create a standard test because the conclusion of what constituted a "gift" under I.R.C. § 22(b)(3) required consideration of the factual circumstances surrounding the transfer, in particular the transferor's intent. The district court's determination that the transfer of the automobile was recompense for respondent one's services was not clearly erroneous, based upon the evidence. The judgment in respondent two's case was vacated because the district court's conclusory and general findings were insufficient for the appellate court to reverse its determination that the transfer of money was a gift.

CONCLUSION: The court reversed and vacated the judgments overturning the district courts' determinations as to whether the transfers to respondents constituted gifts.

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Dean v. Commissioner case brief

187 F.2d 1019, 1951 U.S. App. 3961,51-1 U.S. Tax Cas. (CCH) P9237; 40 A.F.T.R. (P-H) 352

CASE SYNOPSIS: Appellant taxpayer challenged the judgment of the United States Tax Court, which held that appellant was required to pay income taxes for the rental value of property held in the name of a corporation of which the taxpayer and his wife were the sole shareholders.

FACTS: Appellant taxpayer and his wife were the sole shareholders in a corporation. The wife owned real estate prior to the marriage, and after marriage, transferred title to their corporation. Appellant and his wife continued to occupy the real estate as their home following the transfer. Appellant was in military service during the late war, but received from the corporation the difference between his military pay and the salary he had previously received. Appellant also shared in the occupancy of the home as he was free to do so. Appellee Commissioner of Internal Revenue ordered that the fair rental value of the residence property was to be included in the taxpayer's gross income under the general provisions of 26 U.S.C.S. § 22. Appellant challenged the ruling, and the trial court found in appellee's favor. Appellant sought further review, and the court stated that it was appellant's legal obligation to provide a family home and if he did it by the occupancy of a property which was held in the name of a corporation of which he was president, the fair value of that occupancy was income to him.

HOLDING:
The court affirmed the lower court's ruling, and ordered that appellant pay the income tax.

CONCLUSION: The court affirmed the judgment of the lower court, and held that appellant taxpayer was required to include in his gross income the fair rental value of the residence property held in title by a corporation that was solely owned by appellant and his wife, and therefore appellant owed taxes for the deficiency.

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Helvering v. Independent Life Insurance Co. case brief

Helvering v. Independent Life Ins. Co. case brief

292 U.S. 371,54 S. Ct. 758, 78 L. Ed. 1311, 1934 U.S.715

CASE SYNOPSIS: Petitioner commissioner sought a writ of certiorari to review a decision of the Circuit Court of Appeals for the Sixth Circuit wherein the court affirmed a decision of the Board of Tax Appeals that petitioner commissioner's deficiency assessments of income taxes against respondent life insurance company constituted a direct tax and were therefore invalid.

FACTS: Respondent life insurance company owned a building of which it occupied part and rented part. Its tax returns for each of two years included in gross income the rents received for the space let and deducted the taxes, expenses, and depreciation chargeable to the whole building. Pursuant to § 245(b) of the 1921 Revenue Act, petitioner commissioner added to the rents received from lessees in each year a sum sufficient to make the net for each tax year equal to four percent of the book value of the real estate as required under said section. Accordingly, petitioner assessed tax deficiencies against respondent for the subject years. The tax appeals board held that the assessed deficiencies were direct taxes and therefore invalid. The court of appeals affirmed, and petitioner sought a writ of certiorari.

HOLDING:
The court reversed, explaining that § 245(b) did not lay a tax on respondent's building or the rental value of the space it occupied.

ANALYSIS:

Rather, the statute was in substance a diminution or apportionment of expenses to be deducted from gross income under the circumstances specified thereunder and Congress was clearly authorized to so condition deductions from gross income.

CONCLUSION: Court reversed lower court's determination that assessments of income taxes against respondent life insurance company constituted a direct tax and were therefore invalid. Court explained that § 245(b) did not lay a tax on respondent's building or the rental value of the space it occupied, but was in substance a diminution or apportionment of expenses to be deducted from gross income under the circumstances specified thereunder.

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Charley v. Commissioner case brief

91 F.3d 72,1996 U.S. App. 18248, 96-2 U.S. Tax Cas. (CCH) P50,399; 78 A.F.T.R.2d (RIA) 5694

CASE SYNOPSIS: Appellant taxpayers challenged a decision of the United States Tax Court, which determined an income tax deficiency for tax year 1988 in the amount of $ 882 and an addition to tax of $ 44 pursuant to I.R.C. § 6653, holding that travel credits constituted taxable income and upholding the imposition of the addition to tax by appellee Commissioner of Internal Revenue.

FACTS: Appellant taxpayer was authorized first class travel for his employer. Several times in 1988, appellant had a travel agent book a coach ticket but charge for first class. Appellant would then use frequent flyer miles that he'd earned at no cost to upgrade coach tickets to first class, and have the agent transfer the amount of the price difference into his personal travel account. Appellee Commissioner of Internal Revenue determined that appellants, taxpayer and his wife, had a gain of $ 3,149.93 for the credits, the market value of the property minus the adjusted basis of zero, which was taxable. The tax court found that appellants had a tax deficiency of $ 882 and an addition to tax of $ 44 pursuant to I.R.C. § 6653 for negligent disregard of the tax rules.

ANALYSIS:

On appeal, the court affirmed the deficiency because the funds credited to the account were taxable, whether as a gain from the disposition of property or as additional compensation, where appellants did not prove that the funds were excluded. The court reversed the § 6653 penalty, however, because a reasonable person would not conclude from the record that the conversion would constitute taxable income.

CONCLUSION: The determination of tax deficiency owed by appellant taxpayers was affirmed on the merits, but the penalty was reversed because the tax court was correct in concluding that the travel credits constituted taxable income under the facts of the case, but erred in assessing the penalty where the record did not show that appellants negligently ignored the tax rules with respect to frequent flyer miles.

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Commissioner v. Glenshaw Glass Co. case brief

348 U.S. 426, 75 S. Ct. 473, 99 L. Ed. 483, 1955 U.S.

CASE SYNOPSIS: Petitioner Commissioner of Internal Revenue sought review of a judgment of United States Court of Appeals for the Third Circuit, which affirmed a tax court judgment holding that respondent taxpayers were not required to report their awards of punitive damages as income under 26 U.S.C.S. § 22(a).

FACTS: The taxpayers received punitive damages from judgments in their favor, but they did not report the damages as gross income. The tax court and the appellate court concluded that they did not have to report the damages as income under § 22(a).

HOLDING:

On certiorari, the Court held that recovery of punitive damages was taxable income under § 22, which determined what was taxable gross income and which was given a broad and liberal construction.

ANALYSIS:

The intention of Congress was to tax all gains of income except those specifically exempted. In reversing the judgment, the Court held that it was anomalous to conclude that recovery of actual damages was taxable, but not the additional amount extracted as punishment for the same conduct that caused the injury. Punitive damages were not gifts, could not be considered a restoration of capital for taxation purposes, and did not fit under any exemption provision of the Internal Revenue Code.

CONCLUSION: The Court reversed the appellate court's judgment.

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Old Colony Trust Co. v. Commissioner case brief

279 U.S. 716, 49 S. Ct. 499,73 L. Ed. 918, 1929 U.S.

CASE SYNOPSIS: Petitioner corporation challenged the decision of the U.S. Circuit Court of Appeals for the First Circuit, which held that payment by the employer of the income taxes assessable against the employee constituted additional taxable income to such employee. Respondent, the Commissioner of Internal Revenue, assessed a deficiency against the employees.

FACTS: Petitioner paid the federal income taxed owed on salaries for some of its executives. The Commissioner assessed a deficiency against the employees, arguing that petitioner's payment of their taxes constituted additional salaries, which was taxable.

ANALYSIS:

The Court first determined that the Circuit Court and itself had jurisdiction over appeals from the tax appeals board, finding that there was a live case or controversy. The Court also determined that, by petitioner paying its executives' income taxes, that in itself was a form of taxable compensation, whereupon additional tax was due. The Court upheld respondent's deficiency determination and ordered that additional taxes must be paid.

CONCLUSION: The Court affirmed the appellate court's judgment.

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Cesarini v. United States case brief

296 F. Supp. 3, 1969 U.S. Dist. 69-1 U.S. Tax Cas. (CCH) P9270; 23 A.F.T.R.2d (RIA) 997

CASE SYNOPSIS: Plaintiff taxpayers filed an action for the recovery of income tax payments made plus interest on an amount of money they found inside a piano they owned; in the alternative, plaintiffs requested the money be treated as capital gains.

FACTS: Plaintiffs filed an action against defendant federal government, contending that taxes paid on money they found inside of a piano was erroneous and they were entitled to a refund of that money, along with interest.

ANALYSIS:

The court found plaintiffs were unable to point to any inconsistency between the gross income sections of the Internal Revenue Code, 26 U.S.C.S. § 61(a), the interpretation of them by the regulations and the courts, and the revenue ruling they attacked as inapplicable, Treas. Reg. § 1.61-14. On the other hand, defendant showed a consistency in letter and spirit between the ruling and the code, regulations, and court decisions. Since the statutes and rules clearly included treasure trove in calculations of gross income, plaintiffs were not entitled to a refund. Moreover, plaintiffs did not sell or exchange either the piano or the money, so no capital gains could be realized on either the money or the piano.

CONCLUSION: The court denied the refund and found plaintiffs were not entitled to capital gains treatment on the income item at issue.

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Commonwealth v. Stockhammer case brief

409 Mass. 867, 570 N.E.2d 992, 1991 Mass.

CASE SYNOPSIS: Defendant sought review of his conviction after a jury-waived trial in the Superior Court Department (Massachusetts) on charges of rape and assault with intent to commit rape.

FACTS: Defendant and complainant were college freshman. After a sexual incident, complainant confidentially told friends that she was raped by defendant. Defendant was later invited to visit complainant's home, and complainant broke up with her regular boyfriend. Months after the sexual incident, complainant, at the prompting of her father who learned of the incident through an anonymous call, reported to police that defendant raped her. Complainant received psychiatric treatment by psychiatrists and counselors. After an in camera inspection of the complainant's psychiatric records, the trial court refused to disclose them to defendant. The trial judge also ruled that defendant could not question complainant about her sexual activity to establish her consent, bias, and motive to falsify testimony. Defendant was convicted.

HOLDING:
On appeal, the court held that the evidence was sufficient to support the conviction.

ANALYSIS:
However, the court reversed the conviction because the trial court erred in precluding relevant cross-examination of complainant and because privileges prohibiting disclosure of psychiatric records yielded to defendant's state constitutional right to confront his accuser.

CONCLUSION: The court reversed defendant's conviction on charges of rape and assault with intent to commit rape because the trial court erred in precluding relevant cross-examination concerning complainant's sexual activity to establish her consent, bias, and motive to falsify testimony, and because privileges prohibiting disclosure of psychiatric records yielded to defendant's state constitutional right to confront his accuser.

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Morales v. Portundo case brief

154 F. Supp. 2d 706, 2001 U.S. Dist.

CASE SYNOPSIS: Petitioner sought a writ of habeas corpus regarding his second-degree murder conviction. The court denied the petition, but the United States Court of Appeals for the Second Circuit remanded the case.

FACTS: Petitioner was convicted of murder in state court. After the trial, but before sentencing, another person told a priest, the co-defendant's mother, petitioner's attorney, and a Legal Aid attorney that he and two other individuals had committed the murder. The state court determined that the statements to the mother and petitioner's attorney were inadmissible hearsay. After the declarant died, the priest and the Legal Aid attorney disclosed the declarant's statements. Petitioner filed a petition for a writ of habeas corpus. The court granted the petition.

HOLDING:

Petitioner's due process rights were violated because he had a right to present evidence of the statements to a jury and the trial court improperly excluded the statements.

ANALYSIS:

The statements made to the mother and petitioner's attorney were admissible because the statements met the requirements of the exception for declarations against penal interest. The statements made to the priest and the Legal Aid attorney were admissible under the residual exception. In addition, the statements bore sufficient indicia of reliability and trustworthiness to make them admissible. Privileges did not bar admission of the statements.

CONCLUSION: The habeas corpus petition was granted.

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Daubert v. Merrell Dow Pharmaceuticals, Inc. case brief

Daubert v. Merrell Dow Pharmaceuticals, Inc. case brief

509 U.S. 579, 113 S. Ct. 2786, 125 L. Ed. 2d 469, 1993 U.S.

CASE SYNOPSIS: Petitioners appealed an order from the United States Court of Appeals for the Ninth Circuit, which affirmed the trial court's grant of summary judgment for respondent drug company. Petitioners challenged the finding that its experts' opinions were inadmissible as unreliable where opinions were based on recalculations of study data and such recalculations had not been subjected to peer review or published.

FACTS:

The summary judgment was reversed where expert opinions were admissible to show respondent's drug caused birth defects despite the fact that the experts' analysis had not been published or subject to peer review.
Petitioners were children with serious birth defects.
Their parents alleged that the mothers' ingestion of respondent's drug caused defects.
Respondent brought a motion for summary judgment, supported by proof that the drug did not cause defects.
Petitioners responded with expert opinions that the drug did cause defects.
The opinions were based on a reanalysis of previously published studies stating the drug did not cause defects.
The trial court granted respondent's motion, holding petitioners' scientific evidence was inadmissible because the reanalyzed studies were not reliable where they had not been published.
Petitioners appealed.

ANALYSIS:

The Court vacated and remanded, holding that a technique upon which an expert opinion was based did not have to be generally accepted as reliable as a precondition to the opinion's admission as long as the standards of reliability and relevance under the federal evidence rules were met.

RULE: See Daubert Standard.

CONCLUSION: The Court vacated and reversed the appellate court's affirmance of a judgment granting respondent summary judgment. Where petitioners' expert evidence was reliable under federal rules, the evidence was admissible. The common law standard for determining reliability of scientific evidence was inapplicable where federal evidence rules superceded the common law. Publication or peer review of the experts' recalculation was thus unnecessary.

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State v. Batangan case brief

71 Haw. 552, 799 P.2d 48, 1990 Haw.

CASE SYNOPSIS: Defendant sought review of the judgment from the First Circuit Court (Hawaii), which allowed expert testimony that was objected to by defendant and convicted defendant of first degree sexual abuse.

FACTS: Defendant was accused of having sexual contact with the complainant, his daughter. The state presented an expert witness who testified regarding his evaluation of the complainant. The testimony included the expert's opinion that the complainant was believable in her accusations. Defendant objected to the testimony, but the trial court determined that it was admissible. Defendant was found guilty of first degree sexual abuse, but on appeal, the court vacated the judgment and remanded for a new trial.

ANALYSIS:

The court determined that the expert's testimony was inadmissible under Haw. R. Evid. 702 and that it was prejudicial to defendant. Although the expert was qualified, the testimony that he provided regarding the behavior of a sexually abused child was a minor part of the case; however, the expert did impermissibly leave the jury with the indication that the accusations by the complainant were truthful and believable.

CONCLUSION: The court vacated the judgment of the trial court convicting defendant of first degree sexual assault and remanded the case for a new trial.

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Hygh v. Jacobs case brief

961 F.2d 359, 1992 U.S. App.

CASE SYNOPSIS: Defendant police officer sought review of a decision from the United States District Court for the Northern District of New York, which rendered judgment in favor of plaintiff claimant, in plaintiff's action for damages pursuant to 42 U.S.C.S. § 1983 (1988), based on allegations of false arrest, excessive use of force, and malicious prosecution. Plaintiff cross-appealed the award of nominal damages on the malicious prosecution claim.

FACTS: Plaintiff claimant filed an action for damages against defendants, police officer, municipality, and individuals, pursuant to 42 U.S.C.S. § 1983, after plaintiff was injured during an arrest. The trial court rendered judgment for plaintiff, and defendant officer sought review. On appeal, the court affirmed in part and reversed in part.

ANALYSIS:

The court affirmed the judgment as to defendant's excessive use of force; although the trial court had erred in admitting conclusory expert testimony on the issue, the court held the error was not reversible because the evidence supported the finding and proper jury instructions were given. The court vacated the false arrest damage award, finding that the award was inconsistent with substantial justice because evidence concerning events following plaintiff's arraignment, testimony by plaintiff concerning his pain and suffering, and a mugshot of plaintiff depicting his facial injuries were all inadmissible. The court also reversed the malicious prosecution judgment because, as a matter of law, a dismissal in the interest of justice was not a termination in plaintiff's favor and therefore an essential element of the claim was not established.

CONCLUSION: The court affirmed the excessive use of force judgment in favor of plaintiff claimant because the trial court's error in admitting conclusory expert testimony was negated by jury instructions and the evidence supported the judgment. The court vacated and remanded plaintiff's false arrest judgment because prejudicial evidence was erroneously admitted, and reversed plaintiff's malicious prosecution claim, because it was legally not proven.

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Beech Aircraft Corp. v. Rainey case brief

488 U.S. 153, 109 S. Ct. 439, 102 L. Ed. 2d 445, 1988 U.S.

CASE SYNOPSIS: Plaintiff surviving spouses brought an action against defendant manufacturer and defendant service company, seeking damages arising from an aircraft crash. The trial court (United States) entered judgment, upon a jury verdict, in favor of the manufacturer and the service company. On review, the United States Court of Appeals for the Eleventh Circuit reversed and remanded for a new trial. On rehearing en banc, the panel's judgment was reinstated.

FACTS: After the crash of a military plane, the surviving spouses brought their product liability suit against the manufacturer and the service company, which serviced the plane under contract with the Navy. The surviving spouses alleged that the crash had been caused by a loss of engine power due to a defect in the aircraft's fuel control system. The manufacturer and the service company advanced the theory of pilot error. At trial, portions of an investigatory report pointing to pilot error were admitted into evidence. The jury returned a verdict for the manufacturer and the service company.

ANALYSIS: A panel of the court of appeals reversed and remanded for a new trial because Fed. R. Evid. 803(8)(C) did not encompass evaluative conclusions or opinions, and thus, the conclusions contained in the investigatory report should have been excluded. On rehearing en banc, the court of appeals divided evenly on the question of R. 803(8)(C). On further review, the Court reversed and remanded in part because the trial court determined that certain of the report's conclusions were trustworthy and the trial court rightly allowed them to be admitted into evidence.

CONCLUSION: The Court reversed that part of the court of appeals' decision, which held that certain conclusions within an investigatory report should have been excluded at trial. The Court affirmed that part of the court of appeals' decision, which held that the trial court erred in refusing to permit the testifying surviving spouse to present a more complete picture his own investigation of the crash.

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Johnson v. State case brief

967 S.W.2d 410, 1998 Tex. Crim. App.

CASE SYNOPSIS: Appellant sought review of the decision of the court of Bexar County (Texas), which convicted appellant of capital murder and sentenced appellant to death. Appellant raised 53 points of error on direct appeal.

FACTS: Appellant was convicted of capital murder for the shooting death of a man, and was sentenced to death. On appeal, appellant raised 53 points of error, including allegations regarding the sufficiency of the evidence, and the admission of extraneous evidence.

ANALYSIS:
The previously recorded statement of a prosecution witness was read into the record after the witness indicated that he had no recollection of the events in question. The court held that the statement was admitted without proper predicate under Tex. R. Evid. 803(5). The court held that the trial court committed an additional error requiring reversal when it admitted evidence of two prior extraneous offenses of which appellant had been acquitted. The court reversed appellant's conviction and sentence and remanded for new trial.

CONCLUSION: The court reversed appellant's capital murder conviction and remanded for a new trial. The court held that the trial court committed reversible error in admitting the recorded recollection of a prosecution witness without proper predicate, and in admitting evidence of two prior extraneous offenses which appellant was acquitted of.

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U.S. v. Iron Shell case brief

633 F.2d 77, 1980 U.S. App.

CASE SYNOPSIS: Defendant appealed from a judgment of the United States District Court for the District of South Dakota, which convicted him of assault with intent to commit rape in violation of the Major Crimes Act, 18 U.S.C.S. § 1153.

FACTS: Defendant appealed his assault with intent to commit rape conviction, challenging evidentiary rulings and the failure to instruct the jury on an assault charge, and alleging that the Major Crimes Act, 18 U.S.C.S. § 1153, violated the U. S. Const. XIV equal protection clause.

ANALYSIS:

The court ruled that the victim's statements to a doctor regarding what happened were admissible under Fed. R. Evid. 803(4) because they were pertinent to diagnosis and treatment, and statements to a police officer an hour after the assault were admissible under Rule 803(2). The U. S. Const. amend. VI confrontation clause was not violated because the statements had sufficient indicia of reliability. Denial of the instruction on the assault by striking charge was proper because it required physical contact and was not a lesser included offense. The Act did not violate equal protection because defendant was entitled to an instruction on a state child molestation charge, but declined.

CONCLUSION: The court affirmed defendant's conviction of assault with intent to commit rape because victim's statements to doctor were pertinent to diagnosis, statements to police officer one hour after assault were excited utterances, and denial of jury instruction on assault by striking was proper because it was not lesser included offense.

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Mutual Ins. Co. v. Hillmon case brief

145 U.S. 285, 12 S. Ct. 909, 36 L. Ed. 706, 1892 U.S.

CASE SYNOPSIS: Defendants appealed both the exclusion of the alleged deceased's letters as evidence to prove his intentions and the consolidation of their cases at trial under Rev. Stat. § 921, in plaintiff's action seeking to recover the proceeds of a life insurance policy in the Circuit Court of the United States for the District of Kansas.

FACTS: Plaintiff sought recovery from three separate defendant insurance companies who issued life insurance policies on her husband. Plaintiff claimed that her husband was killed in an accidental shooting and his body was buried following an inquest. Defendants claimed that the body was that of the deceased's travelling companion and not the deceased himself.

ANALYSIS:

The United States Supreme Court found that exclusion of defendants' introduction of the travelling companion's letters to his fiance for the purpose of establishing his intent to accompany the insured was error. The Court indicated the expressed intentions were verbal acts reliable for proving a then existing state of mind from which a jury could decide reliability. The Court found that the lower court's allocation of only three peremptory challenges among defendants was error because defendants each had the right to three challenges and consolidation for purposes of judicial economy did not divest them of their individual rights.

CONCLUSION: The Court reversed the judgment against defendants because it was error to exclude letters as evidence of a then existing state of mind and error to allocate three peremptory challenges in a consolidated action when each defendant, individually, had the right to three challenges.

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