PAY AND ALLOWANCES-Continued.
ized by law to be paid an officer of his grade who is
on active duty, Sweeney v. United States, 82 C. Cls.
640, and Ralston v. United States, 91 C. Cls. 91,
distinguished. Blair, 555.
See National Industrial Recovery Act II.
POSTMASTER GENERAL.
See Ocean Mail Contract I, II, III.
PUNCTUATION.
See Taxes XLIII.
RATIFICATION OF INDIAN EXPENDITURES.
See Indian Claims III, V.
RENTAL OF PROPERTY BY GOVERNMENT.
I. Where the Government occupied as lessee premises be-
longing to plaintiff, and where before the expiration
of the lease on June 30, 1934, defendant on February 19,
1934, initiated negotiations for further occupancy of
said premises for an additional six months' period, and
thereafter at defendant's option on a monthly basis
until April 30, 1935, and that it should, if it left the
premises before April 30, 1935, give 30 days' notice; and
where the lease was extended in accordance with these
negotiations; and where defendant continued to occupy
the premises after the expiration of the extended lease
on April 30, 1935, and until March 31, 1936, paying the
rent as before; and where defendant without notice
vacated the premises on March 31, 1936; it is held that
the defendant was liable as on a consensual contract
and the plaintiff is entitled to recover. Raymond
Commerce Corp., 698.
II. The defendant's obligation after April 30, 1935, was the
same as before and was contractual within the meaning
of the act (U. S. Code, title 28, sec. 250) conferring
jurisdiction upon the Court of Claims. Id.
III. Where one person occupies the property of another for a
period under an express agreement as to the terms
of his occupancy, and after the end of the period
such person continues to occupy without any indica-
tion that he contemplates a change in terms, and
where the other accepts rent, thus consenting to con-
tinued occupancy, without indicating that he contem-
plates a change; it is held that their continued rela-
tion is consensual. Id.
IV. The fact that legal doctrines relating to landlords and
tenants would, or might, impose the same legal obli-
gations upon them if they acted as they did, even
RENTAL OF PROPERTY BY GOVERNMENT-Continued.
though they expressed an unwillingness to become so
obligated, does not keep their transaction from being
treated, for any material purpose, as consensual if
it is consensual in fact. Goodyear Tire & Rubber
Co. v. United States, (No. F-20, 62 C. Cls. 270; 276
U. S. 287; 66 C. Cls. 764) distinguished. Id.
REORGANIZATION.
See Taxes XXI, XXII, XXIII.
REPETITIONS.
See Taxes XIX, XX.
REWARD FOR INFORMATION.
'See Internal Revenue I, II.
ROTATABLE GUN MOUNT.
See Patents XI, XII, XIII, XIV.
ROYALTIES.
See Indian Coal Lands I, II, III.
RULES OF THE COURT.
See Motion To Dismiss.
SALES THROUGH SUBSIDIARY.
See Taxes XLVII.
SHARES RETURNED AS INCOME.
See Taxes XXXV.
SPORTING GOODS.
See Taxes LIII, LIV.
STATUTE OF LIMITATION.
See Taxes LVIII;
See Patents V.
STATUTORY WORDS.
See Taxes XL.
STOCKS LIQUIDATED.
See Taxes XXVI.
SUBCONTRACTOR.
See Contracts XXI, XXVI.
SUBSEQUENT LEGISLATION.
See Taxes XLIV.
SURETY.
See Contracts IX, X.
TAKING OF PROPERTY.
See Flood Control I, II.
I. (1) Under section 119 (b) of the Revenue Act of 1932
providing that from the gross income of taxpayer
"shall be deducted the expenses, losses, and other
deductions properly apportioned or allocated
thereto, and a ratable part of any expenses,
TAXES-Continued.
INCOME TAXES-Continued.
losses, or other deductions which cannot be al-
located to some item or class of gross income,"
and "the remainder, if any, shall be included in
full as net income from sources within the
United States," it is held that the "ratable part"
of such expenses is the ratio between all of tax-
payer's gross income in the United States, in-
cluding dividends, and its total gross income from
all sources. London and Lancashire Ins. Co.,
Ltd. v. Commissioner, 34 B. T. A., distinguished.
Third Scottish American Trust Co., 160.
II. (2) If a statute is plain and unambiguous, it must be
enforced as written, although the result be il-
logical. Id.
III. (3) The provision for the deduction of a “ratable part
of any expenses, losses, or other deductions which
cannot definitely be allocated to some item or
class of gross income" includes the general ex-
penses of a foreign corporation the principal
business of which may have been carried on
outside of the United States. Id.
IV. (4) Where the British income tax was levied on the
plaintiff's entire income, including its income
from sources within the United States, it is
held that, under section 119 (b) of the Revenue
Act of 1932, a ratable part of such taxes should
be deducted in determining the income tax to be
paid to the United States. Id.
V. (5) Where interest on taxpayer's debenture stock cer-
tificates was payable irrespective of the suffi-
ciency of the earnings or of the surplus of the
company, and where on liquidation both the
principal and the interest due on said certificates
were entitled to share pari passu with unsecured
creditors; it is held that payments of said in-
terest were payment of interest rather than
distribution of dividends. Id.
VI. (6) Interest paid on borrowed money, including interest
on debenture certificates and on debenture stock
certificates, have a connection with all of the
company's investments, including its investments
in the United States, and plaintiff is accordingly
entitled to deduct a ratable part of said interest,
under section 119 (b) of the Revenue Act of 1932.
Id.
TAXES-Continued.
INCOME TAXES-Continued.
VII. (7) Where taxpayer in 1929 upon the liquidation of
a corporation in which he was a stockholder
received his share of the proceeds of the assets
distributed in liquidation to the stockholders,
said share so received representing a profit to
said taxpayer, and included as income in tax-
payer's income tax return for 1929; and where
later, in 1931, the Commissioner advised the
corporation of a defiiciency in said corporation's
income tax for 1928, due primarily to restoring
to 1928 gross income the profit on sale of the
assets of the corporation transferred to the
trustee in-liquidation and sold by said trustee
in 1929; and where taxpayer contributed his
share of the amount contributed by the dis-
tributees to pay said corporation's tax plus in-
terest; it is held that the amount of the
liquidation dividend distributed to the taxpayer
in 1929 was received by him without restrict-
tion or limitation on its use and disposition,
was acquired under a claim of right and with-
out knowledge of any infirmity of title, was
income to taxpayer for that year, and plaintiff
is not entitled to recover, North American Oil
v. Burnet, 286 U. S. 417, 424 cited. Schramm,
181.
VIII. (8) The plaintiff, incorporated as a fraternal bene-
ficial association, with membership confined to
members of a certain church, or religious de-
nomination, which had local churches in several
States, and not organized or operating under
the lodge system or for the exclusive benefit of
the members of a fraternity itself operating
under the lodge system, is not exempt from
income taxes under section 103 (10) of the
Revenue Act of 1929 and the same section of
the Revenue Act of 1932, since it is not an
association "of a purely local character" (In-
ternal Revenue Code, sec. 101 (10)). Family
Aid Association, 201.
IX. (9) Where the testimony shows that the entire ac-
tivities of a fraternal beneficial association
were the collections of dues from the members,
the making of assessments against them when
a member died, and the payment of sums for
funeral expenses upon the death of a mem-
TAXES-Continued.
INCOME TAXES-Continued.
ber, and there is no testimony to show that
said association operated under the lodge sys-
tem or for the exclusive benefit of the mem-
bers of a fraternity itself operating under the
lodge system, plaintiff is not exempt from in-
come taxes under section 103 (3) of the Rev-
enue Act of 1928 and the same section of the
Revenue Act of 1932 (Internal Revenue Code,
sec. 101 (3)). Id.
X (10) Where a wife, having no taxable income of her
own for the year 1932 but on the contrary a
considerable net loss, made no separate income-
tax return; and where her husband made a joint
return of the incomes and losses of both for
said year, with no separation on the return of
the items of income and loss as between him-
self and his wife; it is held that under the pro-
visions of section 51 (b) of the Revenue Act of
1932 the wife is liable for the income tax orig-
inally assessed and for a deficiency assessed
upon the aggregate taxable income of herself and
her husband. Helvering v. Janney, 311 U. S.
189; Taft v. Helvering, 311 U. S. 195, cited.
Moore, 208.
XI. (11) The filing of a joint return by husband and wife
creates a "joint taxable unit" at least to the
extent that it is to the advantage of one of the
spouses to create such a unit.
XII. (12) The wife cannot allow a joint return to be filed
without becoming liable for the tax assessed
thereunder. Id.
XIII. (13) Where the husband making a joint return for
himself and wife, under section 51 (b) of the
Revenue Act of 1932, fails to pay the assessed
tax, the wife cannot still take advantage of the
deductions allowable on the husband's income
and assert there is no liability, or only a pro-
portionate liability, upon her for said tax. Id.
XIV. (14) Dividends declared by a corporation on July 19,
1932, and distributed on June 30, 1933, were
not taxable under section 213 (a) of the Na-
tional Industrial Recovery Act of June 16, 1933,
which provided that "the tax imposed by this
section shall not apply to dividends declared
before the date of the enactment of this Act."
Smith & Co., 227.
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