Case Name: Appeal of F. W. GASKINS
Court: United States Board of Tax Appeals
Jurisdiction: United States
Decision Date: 1926-07-31
Citations: 4 B.T.A. 619
Docket Number: Docket No. 4242
Parties: Appeal of F. W. GASKINS.
Judges: Before Tkussell, Littleton, and Smith.
Reporter: Reports of the United States Board of Tax Appeals
Volume: 4
Pages: 619–625

Head Matter:
Appeal of F. W. GASKINS.
Docket No. 4242.
Decided July 31, 1926.
Frank Reagan, Esq., for the petitioner.
T. P. Dudley, Jr., Esq., for the Commissioner.
Before Tkussell, Littleton, and Smith.

Opinion:
OPINION-.
Teussell:
1. The grant of land by word of mouth and delivery of seisin without any written instrument is as old as the beginning of the English common law and in vogue for many centuries when the art of writing was little known. The making of written deeds of conveyance and the public record thereof are comparatively modern contrivances developed of necessity from the complexity of modern business conditions. A grant of land accompanied by delivery of possession is no less a grant than when evidenced by a deed of conveyance.
The United States Supreme Court clearly stated the law in the case of Neale v. Neales, 9 Wall. 1, 9, where the court said:
Equity protects a parol gift of land, equally with a parol agreement to sell it, if accompanied by possession, and the donee, induced by the promise to give it, has made valuable improvements on the property.
This is the common-law rule enunciated in 1869 and has not since become less favorable to the donees. Riggles v. Erney, 154 U. S. 244, 254; Townsend v. Vanderwerker, 160 U. S. 171. The donees in the Gaskins case have complied with this rule, and more.
The land involved is in the State of Georgia. The law of that State governs the devolution of land between private individuals there. The decisions of its courts are in accord with the views above stated. In Harrell v. Nicholson, 119 Ga. 458; 46 S. E. 623, 624, the court said:
Our code, which is but a codification of the common law on the subject, states the rule thus: "To constitute a valid gift, there must be the intention to give by the donor, acceptance by the donee, and delivery of the article given, or some act accepted by the law in lieu thereof." Civ. Code 1895, § 3564.
In the case of Hadaway v. Smedley, 119 Ga. 264; 46 S. E. 96, the syllabus written by the court said:
1. Where a father in possession of land under a bond for titles, a part of the purchase money being paid, makes a parol gift of the land to a son, and the latter goes into possession, and, on the faith of the gift, makes valuable improvements on the land, and subsequently the father acquires the legal title by a conveyance from the maker of the bond for titles, the title thus acquired by the father passes, by the statute of uses, into the son, and inures to his benefit, in preference to one to whom the father conveyed after he had acquired the legal title.
2. Under such a state of facts, when the son has been ousted from the possession he is entitled to maintain an equitable petition for specific performance by the father, and to have the deeds made by the father canceled, after proving that the purchasers bought with notice of the son's equity, as' evidenced by his possession.
The parties to this appeal have brought themselves clearly within the requirements here stated.
Walker v. Neil, 117 Ga. 733; 45 S. E. 387, was a suit in equity brought by Mrs. Neil and involved her title to a dwelling house and lot. Her father had made an unconditional parol gift of the property to her and placed her in possession, since when she had been "in the open, notorious, continuous, exclusive, and adverse possession of the same under claim of title, occupying the dwelling house as a residence." He frequently stated that he would deed the property to her but died without having done so. Seven years after his death the executor of his will sold the property and accepted as consideration a debt due the grantee from the father's estate and executed a deed in her favor. The court held in favor of Mrs. Neil that the grantee under the deed took nothing.
In further support of the taxpayer's position it is found that the State of Georgia, within which this taxpayer resides and within which his and his children's property is located, has in its statutory law the following provision (Georgia Code, 1910, vol. I, p. 1019, section 4151):
Presumption" op Gift. The exclusive possession by a child of lands belonging originally to the father, without payment of rent, for the space of seven years, shall create conclusive presumption of a gift, and convey title to the child, unless there is evidence of a loan, or of a claim of dominion by the father acknowledged by the child, or of a disclaimer of title on the part of the child.
We are thus led to the conclusion that on November 26, 1919, the taxpayer's son, A. W. Gaskins, and his daughter, Mrs. A. H. Gid-dens, were each the owners of tracts of land of 1,066 and 980 acres, respectively, and that they were then the owners of the timber standing on said lands and all the rights pertaining thereto. The fact that they did not join in the execution of the instrument of sale of such timber can not have the effect of defeating their title to the timber, their right to participate in the distribution of the selling price thereof, and their duty to account under the income-tax laws of the United States for their share of the gains derived from the sale of such timber. And the taxpayer herein can not be charged with a greater portion of the gains derived from such sale than the proportion of his retained acreage was to the acreage of'the entire tract belonging to himself and to his son and daughter.
, 2. Ten witnesses, all , of whom qualified by virtue of their experience and knowledge of the properties here in question, gave opinion testimony concerning the value of the projaerty and rights here in question as of March 1, 1913. Each of these witnesses gave independently his opinion as to the March 1, 1913, value of this timber. The lowest estimate was $171,000 and the highest $210,000. One of the witnesses testified that either in 1913 or 1914 Norman & Willis, who finally bought this timber in 1919, authorized him to negotiate for the purchase of the same properties at that time and fixed the maximum amount which they were willing to pay at $181,000. In view of this testimony, we are convinced that on March 1, 1913, the timber and property rights, sold in 1919, had a value of $175,000, and we have, therefore,- found the said amount to be the fair market value of the properties on March 1, 1913.
3. It appears from the record of this case that the parties to the selling and purchasing transaction all regarded it as a completed deal in the year 1919 and regarded the deferred payment in the light of an extension of credit on the part of the vendors to the vendees; that the taxpayer as well as his son and daughter, in making their income-tax returns for the year 1919 computed their gross gain on the basis of a completed transaction; and, although there is no evidence of any bookkeeping or accounting on their part, we are of the opinion that upon the evidence in this case the taxpayer is properly chargeable with gross income for the year 1919 in the amount of all of his proportion of the gain realized from the sale, although a portion of it was not actually received in money until a later year.
Order of redetermination will ~be entered on 15 days' notice, under Bule 50.