Court Opinion

ID: 6884160
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:23:42.416213+00
Date Added: 2024-06-11T16:05:40.116701
License: Public Domain

MATHEWS, Circuit Judge
(dissenting in part).
On May 1, 1924, Signal Gasoline Company, a Galifornia corporation, hereafter called Company A, transferred all its assets to Signal Gasoline Corporation, a California corporation, hereafter called Company B. On September 11, 1924, Company A was dissolved.
Prior to December 1, 1928, all stock of Company B was acquired by appellant, Signal Oil & Gas Company, a Delaware corporation, which at all times thereafter was Company B’s sole stockholder. On December 12, 1928, Company B was dissolved by a judgment of the Superior Court of Los Angeles County, California.1 No other persons having been appointed,2 Company B’s directors thereupon became trustees of appellant (Company B’s sole stockholder), with “full powers to settle the affairs of the corporation, collect and pay outstanding debts, sell the assets thereof * * * and distribute the proceeds of such sales and all other assets to [appellant].”3 Appellant’s trustees executed a formal transfer of Company B’s assets to appellant on December 14, 1928. Actually, however, since appellant was Company B’s sole stockholder, title to Company B’s assets vested in appellant upon Company B’s dissolution.4
On October 2, 1928, the Commissioner of Internal Revenue determined that there was a deficiency in respect of Company A’s income taxes for 1923. On December 28, 1929, the Commissioner determined that there were deficiencies in respect of Company A’s and Company B’s income taxes for 1924. On September 9, 1938, appellee, the United States, began two suits against appellant — a suit (No. 1460) for the claimed amount of appellant’s liability in respect of Company A’s deficiencies for 1923 and 1924 and a suit (No. 1461) for the claimed amount of appellant’s liability in respect of Company B’s deficiency for 1924. Answering, appellant pleaded the statute of limitations. The suits were consolidated, trial was had and judgment was entered in favor of appellee. From that judgment this appeal is prosecuted.
The question is whether the suits were barred by the statute of limitations. The suits involved income taxes for 1923, imposed by the Revenue Act of 1921, and income taxes for 1924, imposed by the Revenue Act of 1924. With respect to such taxes, the Revenue Act of 1926 prescribes the following periods of limitation:
For assessing such taxes and for beginning a suit without assessment for the collection thereof, four years after the return was filed;5 for assessing the liability of a transferee of property of a taxpayer in respect of such taxes, five years after the return was filed;6 for beginning a suit without assessment for the collection of the amount of such transferee’s liability, three years after the return was filed; 7 for beginning a suit after timely assessment for the collection of such taxes or for the collection of the amount of such transferee’s liability, six years after such assessment.8 Any of these periods may be extended by agreement.9 As to all except the last mentioned (six-year) period, the running of the statute may be suspended.10
Suit No. 1460.
Company A filed its return for 1923 on March 15, 1924. A tentative return for 1924 was filed for Company A on March 16, 1925. An amended return for 1923 and a final return for 1924 were filed for Company A on May 13, 1925.
On October 2, 1928, the Commissioner mailed to Company B a notice of Company A’s deficiency for 1923 and of a proposed assessment of Company B’s liability in respect of that deficiency. On November 19, 1928, Company B petitioned the Board of Tax Appeals for redetermination. The proceeding thus begun was prosecuted by Company B until December 12, 1928, when Company B was dissolved. Thereafter it was prosecuted by appellant, acting by its trustees, and, though prosecuted in the name of Company B, was, in effect, a proceeding by appellant for a determination of appellant’s liability in respect of Company A’s deficiency for 1923.
*484On December 28, 1929, the Commissioner mailed to Company B a notice of Company A’s deficiency for 1924 and of a proposed assessment of Company B’s liability in respect of that deficiency. On February 24, 1930, appellant, by its trustees, petitioned the Board for redetermination. The petition purported to be Company B’s, but was in fact appellant’s petition. Though prosecuted in the name of Company B, the proceeding thus begun was, in effect, a proceeding by appellant for a determination of appellant’s liability in respect of Company A’s deficiency for 1924.
The proceedings were consolidated and heard together. On February 16, 1932, the Board rendered its decision sustaining the Commissioner as to both deficiencies.11 There was no petition for review. Consequently, the decision became final on August 16, 1932.12 On September 10, 1932, appellant’s liability in respect of Company A’s deficiencies for 1923 and 1924 was assessed. The assessment was, in form, an assessment against Company B, but was, in effect, an assessment against appellant.13 Having, by its trustees, acted under the name of Company B in its proceedings before the Board, appellant could not object to being assessed as Company B, nor could appellant be heard to say that such an assessment was not an assessment against appellant.
Nor can it be said that the assessment was untimely. The running of the statute of limitations was suspended, as to each of the deficiencies, from the date the deficiency notice was mailed until 60 days after the Board’s decision became final.14 The assessment was made within that period. Appellant could not be heard, in the court below or here, to say that the period of limitation for assessing appellant had expired before the deficiency notice was mailed; for that was an issue which could have been raised, and (if raised at all) should have been raised, in the proceedings before the Board. As to that issue, therefore, whether actually raised or not, the Board’s decision was conclusive against appellant.
Suit Na 1460 was begun within six years after the assessment and hence was not barred.
Suit No. 1461.
Company B filed its return for 1924 on May 13, 1925. On November 21, 1928— three weeks before Company B was dissolved — the Commissioner and Company B consented in writing15 that the time for assessing any deficiency in respect of Company B’s taxes for 1924 should be extended until December 31, 1929, and that if, before that date, a notice of deficiency was mailed to Company B, the time for assessing such deficiency should be further extended for the period during which the Commissioner was prohibited from making such assessment,16 and for 60 days thereafter.17
On December 28, 1929 — long after Company B was dissolved — the Commissioner mailed to Company B a notice of Company B’s deficiency for 1924 and other deficiencies of Company B not here involved. On February 24, 1930, appellant, by its trustees, petitioned the Board for redetermination. The petition purported to be Company B’s, but was in fact appellant’s petition. Though prosecuted in the name of Company B, the proceeding thus begun was, in effect, a proceeding by appellant for a determination of appellant’s liability in respect of Company B’s deficiencies.
On March 14, 1932, the Board rendered its decision sustaining the Commissioner as to these deficiencies.18 There was no petition to review that part of the decision which related to Company B’s deficiency for 1924.19 Consequently, that part of the decision became final on September 14, *4851932.20 On October 1, 1932, appellant’s liability in respect of Company B’s deficiency for 1924 was assessed. The assessment was, in form, an assessment against Company B, but was, in effect, an assessment against appellant.21 Here, as in suit No. 1460, appellant was estopped to deny that the assessment was an assessment against appellant. Also, as in suit No. 1460, appellant was precluded from questioning the timeliness of the assessment.
Suit No. 1461 was begun within six years after the assessment and hence was not barred..
The judgment should be affirmed.

 California Code of Civil Procedure, §§ 1227-1233.

 Id., § 565.

 California Civil Code, § 400, as amended by Stats.1921, p. 574.

 Capuccio v. Caire, 189 Cal. 514, 523-526, 209 P. 367.

 Revenue Act of 1926, § 277(a) (2).

 Id., §§ 277(a) (2), 280(b) (1).

 Id., §§ 277(a) (1), 280(a) (1).

 Id., § 278(d).

 Id., §§ 278(c), 278(d), 280(a) (1).

 id., §§ 277(b), 280(d).

 25 B.T.A. 532.

 Revenue Act of 1926, § 1001(a).

 The parties have stipulated that on September 10, 1932, the Commissioner “purported to assess [Company B] as a transferee of [Company A], for the above described tax liabilities of [Company A],” and that “no assessment was ever made against [appellant] for the said 1923 and 1924 tax liabilities of [Company A]which, I take it, simply means that the assessment of September 10, 1932, was, in form, an assessment against Company B and not against appellant. Whether or not it was, in legal effect, an assessment against appellant is, obviously, a question of law as to which this court is not bound by any stipulation.

 Revenue Act of 1926, §§ 277(b), 280 (dl-

 Id., § 278(c).

 Id., § 274(a).

 Id., § 277(b).

 25 B.T.A. 861.

 Other parts of the decision were reviewed in Signal Gasoline Corp. v. Commissioner, 9 Cir., 66 F.2d 886.

 Revenue Act of 1926, § 1001(a).

 The parties have stipulated that on October 1, 1932, the Commissioner “purported to assess [Company B] for its tax deficiency for the calendar year 1924,” and that “no assessment was ever made against [appellant] for the tax liabilities due from [Company B] for the year 1924;” which, I take it, simply means that the assessment of October 1, 1932, was, in form, an assessment against Company B and not against appellant. Whether or not it was, in legal effect, an assessment against appellant is, obviously, a question of law as to which this court is not bound by any stipulation.