Court Opinion

ID: 9639907
Source: CourtListenerOpinion
Date Created: 2023-08-22 16:51:27.28324+00
Date Added: 2024-06-11T18:10:22.392546
License: Public Domain

HEALY, Circuit Judge
(concurring in part and dissenting in part).
The Board of Tax Appeals declined to inquire behind the decree of distribution of the Superior Court, holding that “the court’s decree of settlement of the estate of James M. Botts is the law of the case.” I agree with the majority that in this holding the board was wrong.
The board made no finding on the issue of the creation of a joint tenancy, although .that was a matter in controversy before it. Indeed, the board appears to have thought itself foreclosed from resolving that phase of the dispute. There is a recital that Mr. and Mrs. Botts “had contemplated” placing the stock in a joint tenancy but there is no ultimate finding that they in fact did so. An ultimate finding of that character would not here be mere conclusion of law, for there are other evidentiary recitals decidedly at variance with the thought that a joint tenancy relationship had in fact been created. The Commissioner contends that the relationship did not exist. While the board’s recitals make it appear probable that a joint tenancy was effected, they do not eliminate the possibility of mutual mistake or other circumstance of that nature. One would want to study the whole evidence before making up his mind.
The evidence, however, is not before us. I think the case should be returned to the board for a specific finding on this issue.
On other phases I am in accord with the conclusions of the majority. It may be conceded that in a sense Mrs. Botts was a “distributee”,1 but it does not necessarily follow that she was a distributee of anything except her own property. The decree of the Superior court did not adjudicate the source or extent of her title to the stock. Her liability is by the statute, § 311(a) (1), made dependent upon a showing that she was “a transferee of property of [the] taxpayer.” Manifestly a distribution to her of her own property, if such it was, did not make her either in fact or in law a transferee of property of the deceased taxpayer.
I think Freuler v. Helvering, 291 U.S. 35, 54 S.Ct. 308, 78 L.Ed. 634, is not in point and is of aid to neither party. Nor do I understand that the principle of Erie R. R. Co. v. Tompkins is relevant to the discussion. See Helvering v. Leonard, 310 U.S. 80, 85, 86, 60 S.Ct. 780, 84 L.Ed. 1087. What we are construing is a federal taxing act. Had it seen fit to do so, Congress could by definition have declared a surviving joint tenant a transferee of his deceased co-tenant for the purpose of collecting the tax. Congress has not done that, although the “shifting of economic interest” (United States v. Jacobs, 306 U.S. 363, 371, 59 S.Ct. 551, 555, 83 L.Ed. 763) which undoubtedly takes place upon the death of a joint tenant would be ample warrant for so treating the survivor. It is on the basis of this accretion to the survivor that the Commissioner urges a broad construction of the word “transferee” as used in the federal statute, not because of any lack of understanding on the Commissioner’s part of the legal attributes of a joint tenancy estate in California.