Court Opinion

ID: 4479573
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:13:45.323931+00
Date Added: 2024-06-11T15:03:32.677701
License: Public Domain

Withet, c/., dissenting: In my view the majority has mistakenly viewed the amounts paid the two “witnesses” as witness fees or litigation expense. The substance of this transaction seems clearly to be the operation of a joint venture wherein Bolling contributed his services as an attorney for a fixed percentage fee, the “witnesses” contributed their services by way of their testimony and their aid in the gathering of evidence, and petitioner Reffett contributed a chose in action. The “witnesses” were each to receive a fixed percentage of the proceeds from the joint venture and petitioner Reffett was to receive the remainder. The amounts received by the “witnesses” are not in the nature of witness fees which historically have been measured more or less arbitrarily by legislative bodies by the actual expense and loss to a person called to testify where he is required to travel to do so and to incur possibly his living expenses while doing so. Such expenses are here shown to have been paid by the “witnesses” themselves. Those amounts were deducted from their percentage shares of the recovery. It seems clear to me that neither Reffett nor Bolling, the attorney, ever received the amounts received by the “witnesses” in spite of the form of the transaction wherein the “witnesses” were paid by checks of Bolling made out to Reffett and by him endorsed to the respective “witnesses.” This was merely form and not substance. The amounts received by the “witnesses” were income to them which could not be income to either Bolling or Reffett because under no theory can it be said that the latter two ever received any portion thereof. That the transaction might 'be construed to be extortion or another form of criminal or immoral conduct does not prevent the amounts received by the “witnesses” 'being actually income to them. James v. United States, 366 U.S. 213 (1961); RutMnv. United States, 343 U.S. 130 (1951). Public policy is nob an issue here 'because the amounts received by the “witnesses” not having been received by either Bolling or Reffett could not have been “paid” by either to the “witnesses” and are hence not deductible by either as an expense.