Case Name: C. A. Hutton, Petitioner, v. Commissioner of Internal Revenue, Respondent
Court: United States Board of Tax Appeals
Jurisdiction: United States
Decision Date: 1930-10-28
Citations: 21 B.T.A. 101
Docket Number: Docket No. 21615
Parties: C. A. Hutton, Petitioner, v. Commissioner of Internal Revenue, Respondent.
Judges: Tetjssell, Phillips, Van Fossan, and Seawell agree with this dissent.
Reporter: Reports of the United States Board of Tax Appeals
Volume: 21
Pages: 101–106

Head Matter:
C. A. Hutton, Petitioner, v. Commissioner of Internal Revenue, Respondent.
Docket No. 21615.
Promulgated October 28, 1930.
Lloyd W. Dinkelspiel, Esq., for the petitioner.
R. W. Wilson, Esq., for the respondent.

Opinion:
OPINION.
MuRdock :
The petitioner waived one allegation of error, and the parties stipulated that an adjustment should be made in regard to the inventory on December 81, 1920. In the recomputation under Rule 50 this agreed adjustment shall be given effect.
Section 602 of the Revenue Act of 1928 amended Title IX of the Revenue Act of 1924, as amended, by adding to the end thereof two new sections under the heading " Transferee Proceedings." The first section is as follows:
Seo. 912. In proceedings before the Board the burden of proof shall be upon the Commissioner to show that a petitioner is liable as a transferee of property of a taxpayer, but not to show that the taxpayer was liable for the tax.
The usual rule of evidence which applies where the burden of proof is placed upon one party litigant is that if he makes a prima facie case he wins unless his opponent shall answer or rebut such prima facie case. In other words, once a prima facie case is made out, the obligation of going further then rests upon the other party. Jones on Evidence, Civil Cases, 3d Ed., ch. 6. There is no reason why a different rule should apply here. There are sufficient facts in the record to establish prima facie that the petitioner is liable as a transferee of property of a taxpayer. The petitioner was the sole stockholder of C. A. Hutton Flour Co., and as such received $72,000 in the liquidation of that company after it had realized on all of its sound assets, and after some of the largest creditors of the company had accepted in payment of their accounts some of the bills receivable of the flour company bearing the petitioner's personal endorsement and guarantee. If the case had stopped at this point, the respondent would be entitled to judgment. An obligation then rested upon the petitioner of going further if he wished to win. If there were other facts and circumstances which would show that he was not liable as a transferee of the property of the flour company, it was the petitioner's duty to establish those facts in the record. They were peculiarly within his knowledge. Apparently appreciating his duty, he alleged some such facts and some facts were stipulated which are not favorable to the Commissioner, but they fall short of rebutting the prima facie case made out by the Commissioner. We do not know the date upon which the petitioner received the $72,000 from the company, or the date or dates upon which he paid other creditors of the company, or the relation of this date to the date on which he first knew or should have known that the taxes were assessed against the company. It does not appear to whom he made the payments, whether he made the payments on his guarantee or whether to creditors whose claims were preferred or subordinate to the claims of the Government in the collection of its taxes. Perhaps the proof of some of these points would have placed the petitioner in a better position, but this we need not decide. Our judgment on this point is for the respondent.
Reviewed by the Board.
Judgment will be entered under Rule 50.