Court Opinion

ID: 9461070
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:05:05.587477+00
Date Added: 2024-06-11T17:36:52.603306
License: Public Domain

WILLIAM E. DOYLE, Circuit Judge
(concurring).
I concur in the result, but in reaching this conclusion I would stress the dearth of factual material to rebut the testimony of the appellees. Inasmuch as I do not find the case to be an open and shut one, I must express some of my reservations based on the facts.
1. The payments giving rise to the charitable deductions in question had their origin in sums advanced by the doctors to South Davis Community Hospital Development, Inc. evidenced by notes later executed and given to South Davis Community Hospital for payment of part of the purchase price of the hospital to Development. These transactions ought to be considered in light of the fact that the doctors were stockholders in the Development company.
2. The advances were made by the doctors 'to Development during the six years prior to 1966 and they totaled approximately $125,000, finally.
As indicated, the notes were not given at the time of the advances nor was interest paid on these advances. The records which would have indicated whether the advances were charged to the doctors’ accounts had been destroyed prior to suit.
Doctors Belnap and Brown, when asked whether the advances were loans or contributions to capital, said they did not know the difference. This, notwithstanding that Dr. Brown was sophisticated, being licensed to sell and buy stock.
The notes in question were not signed as evidence of the supposed indebtedness until October 1966, just three to four months prior to the donation to Community. Counsel for the plaintiffs said that the notes were prepared in connection with negotiations for sale of the hospital by Development to Community.
3. The evidence as to the value of the notes is far from satisfactory. True, the parties testified that their notes were worth face value but they did not give any underlying reasons for these opinions.
A qualified appraiser testified that the notes were worth face value. He had been hired to appraise them for purposes of suit some three years after the notes had been donated. His appraisal was based in part on the fact that the notes were given over with full recourse and regarded the assets of the doctors as being adequate, even though he had made no investigation of their finances. Also, he was a personal friend of the doctors. But the government offered no countervailing evidence.
4. At no time during the entire history of these advances was there an effort on the part of the doctors to collect the “debts.”
5. The question whether the statute of limitations had run on the underlying obligations was never inquired into. See Utah Code Ann. § 78-12-25 (1953).
6. The evidence as to the value of the hospital was, to say the least, weak. One of the doctors said that in his opinion it was worth about $850,000. But there is evidence that Community, the buyer, could not pay more than $675,000. One circumstance suggesting that it was *596not worth anything like the sale price is that when Community was leasing the hospital from Development it had difficulty making the rental payments.
In the final analysis, my concurrence results from the fact that the government utterly failed to introduce any evidence dealing with the issues that are mentioned. It was content to put the taxpayers on their proof and to expect to discover a seam in the taxpayers’ case.
In sum:
The mentioned lack of evidence on behalf of the government is a justification for the trial court’s findings and judgment. I do not subscribe to giving the taxpayer the benefit of every doubt. I do not believe that the government should have a further opportunity by way of a remand. It is obligated to present its ease at the trial, and where it fails to do so it is not entitled to a second go around, so to speak.