Court Opinion

ID: 9444908
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:15:43.987154+00
Date Added: 2024-06-11T17:30:03.710724
License: Public Domain

On Petition for Rehearing
Before BIGGS, Chief Judge, and GOODRICH, McLAUGHLIN, KALODNER, STALEY and HASTIE, Circuit Judges.
PER CURIAM.
The crux of the petition for rehearing is that “The contractor’s rights were at all times terminable by the taxpayer. The Tax Court so found, and the record amply supports its findings.” It must be pointed out that these statements are without basis. In the Tax Court the question presented was whether four independent contractors had an economic interest in the coal mined on the properties of petitioner (taxpayer). The four contractors were Capparell Stripping & Construction Co., Inc., Hillside Mining Company, Big Buck Mining Company, and North Basin Coal Mining Company. With respect to the last three mentioned companies, the Tax Court found that oral agreements which they had made with the taxpayer “ * * * were terminable at will,” and that they were in fact terminated by the taxpayer after a period of one year or less. The Tax Court made no specific finding with respect to the question as to whether the taxpayer’s written contract with the Capparell Stripping & Construction Co., Inc., was “terminable at will” by the taxpayer. However, the finding which it did make with respect to the termination of that written contract clearly discloses that the Capparell contract was not terminable at will but only for cause, i.e., bankruptcy or default by Capparell.
The instant appeal concerned only the taxpayer’s right to a percentage depletion deduction with respect to the Capparell contract. The Commissioner did not appeal the depletion issue as it pertained to the contracts with Hillside, Big Buck, and North Basin.
It may be noted parenthetically that Usibelli v. Commissioner of Internal Revenue, 9 Cir., 229 F.2d 539, relied on by the taxpayer, is in complete accord with the disposition which we made in the opinion filed by the Court in this case on November 30, 1955. In Usibelli the Court pointed out that the contract there was terminable at the will of the taxpayer mine owner.
The petition for rehearing will be denied.