Court Opinion

ID: 4478532
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:13:08.353671+00
Date Added: 2024-06-11T14:53:55.965180
License: Public Domain

TURNER, J., dissenting: In my opinion, it is of common knowledge and notorious that there is no such thing as sudden loss or damage from termites, and under the rule of ejusdem generis, a loss represented by termite damage is not a casualty loss within the meaning of section 165(c) (3) of the Internal Revenue Code of 1954 or section 23(e) (3) of the Internal Revenue Code of 1939, the language of the two sections being identical. We so held as far back as 1940, in Charles J. Fay, 42 B.T.A. 206, affirmed by the United States Court of Appeals for the Second Circuit at 120 F. 2d 253. In affirming the Fay case, the Circuit Court cited with approval the opinion of the Court of Appeals for the Ninth Circuit in United States v. Rogers, at 120 F. 2d 244, wherein that court applied the doctrine of ejusdem generis to the effect that the statute must be construed as though it read “loss by fires, storms, shipwrecks, or other casualty of the same kind.” In Martin A. Rosenberg, 16 T.C. 1360, we followed our prior holding in Charles J. Fay, sufra, with the support of the affirmance by the Court of Appeals for the Second Circuit, and the opinion of the Court of Appeals for the Ninth Circuit in United States v. Rogers, supra. In reversing the Rosenberg case, 198 F. 2d 46, the Court of Appeals for the Eighth Circuit attempted to distinguish the Fay and Rogers cases, by concluding that the facts in that case, unlike the facts in the Fay and Rogers cases, disclosed a suddenness of the termite damage which would bring the Rosenberg case within the reasoning of the Fay and Rogers cases. In my opinion, the Circuit Court completely and wholly misconstrued the facts, in that in order to find substance to its conclusion of suddenness, it departed from the facts relating to the occurrence of damage and attempted to apply the statute to the discovery of the damage. Very plainly, the right to the deduction does not turn upon the discovery of damage, but upon the occurrence thereof. Similarly, in the instant case the findings as I view them contradict rather than support a conclusion of the suddenness of the termite damage. The only event reasonably shown as sudden by the facts was the discovery that the damage had already occurred and not the occurrence of the damage itself, the expressed conclusion being that the damage had occurred sometime between January 1 and actual discovery thereof in April. Furthermore, the disclosure, upon examination, of old channels as well as current channels was indicative that the damage had been steady and gradual over a long period of time. The existence of the fresh channels merely disclosed where the current activity was going on. Furthermore, since the termites operate within planks, timbers, or beams, and there being no showing that their periodic swarmings are necessarily in the vicinity of their wood-eating operations, the fact that the petitioner never saw a moving termite inside or outside his house prior to April is of no importance. In view of the fact, therefore, that the Eighth Circuit Court of Appeals in the Rosenberg case accepted the interpretation of the statute as declared in the Fay and Rogers cases, and this Court in its opinion in the instant case does not pointedly depart from that construction, it is my opinion that the facts require a result contrary from that reached. In conclusion, however, it might be said that the respondent, in the Department of Agriculture, undoubtedly has at hand and could call as witnesses the leading authorities on termites and their activities, and if it is to be his policy to continue to press cases such as this to decision, it would seem desirable that he call those experts as witnesses, and put to rest any and all questions of fact as to whether or not there could be any substantial damage occasioned by termites with a suddenness comparable to that caused by fire, storm, shipwreck, or other casualty of the same kind. And in the absence of such rebuttal of testimony, as was the situation here, he should either reconsider his administrative position with respect to the applicability of the sections involved to such losses, or should ask Congress to expand the statute. Murdock, HaRron, and Raum, JJagree with this dissent.