Court Opinion

ID: 9452216
Source: CourtListenerOpinion
Date Created: 2023-08-04 17:33:06.67332+00
Date Added: 2024-06-11T17:33:06.882498
License: Public Domain

DAVIS, Judge
(concurring):
I am unwilling to apply the bar of collateral estoppel, but instead would adhere on the merits to our ruling in 325 F.2d 730, 163 Ct.Cl. 525 (1963). There are two reasons, in my view, why it is inappropriate to invoke collateral estoppel. The first is the subsequent decision of the Fifth Circuit in Dyal v. United States, 342 F.2d 248 (1965), involving *1015the same lease-agreements and the same lands; that co-ordinate holding, sharply diverging in rationale from our 1963 decision, seems to me to have clouded the legal sky over this particular tax sector noticeably enough to dissolve estoppel. See CBN Corp. v. United States, Ct.Cl., 364 F.2d 393, decided July 15, 1966; Hercules Powder Co. v. United States, 337 F.2d 643, 647, 167 Ct.Cl. 639, 647 (1964) (dissenting opinion).1 The second reason for not applying collateral estoppel is that many of the facts here, although parallel to those in the 1963 case, are separate from and not identical with the earlier circumstances. Commissioner of Internal Revenue v. Sunnen, 333 U.S. 591, 601, 68 S.Ct. 715, 92 L.Ed. 898 (1948), tells us that in such a case the doctrine is not to be used. See Hercules Powder Co. v. United States, supra. For these reasons I would openly reach and dispose of the merits.
On that phase I agree with the court, since I am not persuaded that we erred in 19b0. The Chief Judge’s opinion points out that, in substance as well as in form, these were true leases of land, not merely sales or dispositions of timber. The taxpayer had the usual rights of leaseholders and actually enjoyed those privileges. See, e. g., footnote 6 of the court’s opinion. Defendant does not deny that if these were indeed leases of land, rather than sales or conveyances of timber, the taxpayer would be entitled to deduct the amounts paid in effect as rent for the land. The major expenditures here fell into that category and, accordingly, were chargeable as ordinary and necessary expenses of the business. As the court says, the Dyal opinion should not be followed insofar as it suggests that these agreements were timber sales and not leases; the revenue rulings on which the Fifth Circuit relies are distinguishable, dealing as they do with other forms of agreement.2

. As for United States v. Catto, 384 U.S. 102, 86 S.Ct. 1311, 16 L.Ed.2d 398 (1966), the livestock breeding decision, I agree with the court that it has no bearing upon either aspect of the present case.

. On the deduction of the management expenses, the Government argues only that Catto implicitly disapproved our 1963 holding, but surely Catto cannot be stretched that far. See footnote 1, supra.