Court Opinion

ID: 8589109
Source: CourtListenerOpinion
Date Created: 2022-11-23 15:42:40.444067+00
Date Added: 2024-06-11T16:54:22.430304
License: Public Domain

Madden, Judge,
dissenting :
The Government in its brief, after referring to the case of Roebling v. Commissioner, 78 F. 2d 444 (C. C. A. 3d), and other decisions says “In view of these decisions we do not contend that where income, which under the terms of the trust instrument is to be distributed in the discretion of the fiduciaries, is accumulated and paid to the beneficiary as a part of the corpus, it is taxable to the beneficiary.”
According to the stipulation of the parties, this income was accumulated and paid to the beneficiary as a part of the corpus. If force were given to the stipulation and concession, the only way in which the Government would, ordinarily, hope to win this case would be by persuading the court that this income was not “to be distributable in the discretion of the fiduciary” within Section 162 (c) of the Revenue Act, and was not, therefore, governed by the concession made in the brief.
The Government, in its brief, then proceeds to urge that the income here in question, when it came to the trust, was income “to be distributed currently,” within the meaning *743of Section 162 (b) of the Act, and was therefore taxable to the beneficiary, whatever its ultimate disposition. It bases this argument upon the original trust agreement, disregarding the 1933 modification of it, apparently as being beyond the powers of the trustees to consent to.
No member of the court, as I understand it, is persuaded by the Government’s argument. But the majority of the court, disregarding the Government’s concession that income to be distributed in the discretion of the trustees is not taxable to the beneficiary if it is distributed as corpus, hold that income which was to be distributed in the discretion of the trustees, and which, according to the parties’ stipulation, was accumulated and distributed as corpus, was nevertheless taxable to the beneficiary under Section 162 (c).
It is unusual, of course, to decide a case in favor of a party on a legal ground which that party has conceded, at least for the purposes of the instant suit, to have no validity. It means that the court has had no assistance from the briefs or oral arguments of either party. It means that possible untoward effects upon the law or its administration of the victory resting upon an unwanted ground, are not pointed out. It means that the decisions of other courts, in point or closely relevant, have not been defended as they perhaps could have been, since neither party has thought or urged that they were wrong. I would, in general, and in this case, take the deliberate concession of a sui juris litigant at face value, and decide the case accordingly, unless I was persuaded that somehow I was being imposed upon. And I would regard Government counsel’s client as sm ju/ris. Of course, the effect as a precedent of a decision made on the basis of a concession would not be great. In the instant case, since I agree with my brethren that the grounds on which the Government asks us to decide the case in its favor are unsound, I would decide for its adversary and permit him to recover.
JoNES, Judge, took no part in the decision of this case.