DocketNumber: Docket No. 5459.
Citation Numbers: 12 B.T.A. 543, 1928 BTA LEXIS 3517
Judges: Littleton
Filed Date: 6/11/1928
Status: Precedential
Modified Date: 1/12/2023
*3517 Findings made in 1922 by the State Banking Commissioner as to the financial condition of petitioner and the decree of the State court approving such report and declaring the bank insolvent are not
*543 June 17, 1925, the Commissioner determined a deficiency in income and profits tax for the year 1920 in the amount of $109.85, and in the same notice determined overassessments for each of the years 1916 to 1919, inclusive. The petitioner contends that all of the Commissioner's findings, both with respect to the deficiency and overassessments, are erroneous for the reason that the proper allowance was not made for losses sustained by the bank during each of said *544 years. It further contends that the Board*3518 has jurisdiction to determine the correct liability to income and profits tax for years prior to 1920, in order to properly adjust invested capital for the year 1920.
FINDINGS OF FACT.
The Guaranty State Bank of Greenville, Tex., was a banking organization under the laws of the State of Texas, and had been in operation for some years prior to 1922. June 1, 1922, this bank passed into the hands of the State Banking Commissioner for liquidation under the laws of Texas.
June 17, 1925, the Commissioner issued the statutory notice of his determination showing a deficiency of $109.85 for the year 1920 and overassessments for each of the years 1916 to 1919, inclusive.
The Banking Commissioner in the discharge of his duty as statutory receiver marshalled the assets and ascertained all liabilities of the insolvent bank, and, having revised its books of account to show the same, reported his findings to the State District Court of Greenville, Tex., a court of competent jurisdiction, and petitioned for approval thereof as well as his other acts as statutory liquidator stated in said petition. In his petition to the State court the Banking Commissioner set forth that the bank suffered*3519 losses from bad debts in each of the years 1916 to 1920, inclusive, in excess of the debts actually charged off the books by the bank within the years mentioned and which excess amounts were charged off by the Banking Commissioner subsequent to June 1, 1922.
The Texas State court approved the report of the Banking Commissioner as set forth in his petition and report showing the insolvency of the Guaranty State Bank of Greenville, Tex., and adjudged the losses and gains determined and made of record in the liquidation to be as reported, annulled the charter of the bank, ordered the proceeds of assets paid over to a trust company and discharged the Commissioner of Banking.
The Commissioner of Internal Revenue was not a party to the proceedings in the Texas court, nor was there any issue or question as to the Federal income and profits tax raised and adjudicated in such proceedings. The alleged worthless debts now claimed were not ascertained to be such and charged off in 1920, nor is there any competent evidence to establish that any losses not compensated for by insurance or otherwise were actually sustained in the year 1920, or prior years.
OPINION.
LITTLETON: Counsel*3520 for petitioner insists that this case presents the single issue on its merits of the faith and credit to be given to findings made by the Commissioner of Banking of Texas in the *545 discharge of his statutory duties, and also to the decree of the State court approving the Commissioner's report. He insists that the findings of the Banking Commissioner approved by the court are binding on the Board. The report of the Banking Commissioner and the decree of the court approving it constitutes the only evidence offered before this Board. The Banking Commissioner's report and the court decree were admitted in evidence at the hearing of this proceeding over the objection of counsel for the Commissioner for the consideration of the Board as to their competency, relevancy and materiality.
It is urged on behalf of petitioner that the question in this proceeding as to the income and profits tax claimed is really
The Board does not agree with petitioner's interpretation of the "full faith and credit" clause of the Constitution of the United States. At the time the statutory notice of deficiency was issued by the Commissioner of Internal Revenue, the Guaranty State Bank of Greenville, Tex., was in the hands of the State Banking Commissioner for liquidation and subject to the jurisdiction of said district court. The State Banking Commissioner instituted this proceeding by the filing of a petition on July 11, 1925, and under the decision of the Board in
Petitioner contends that if we do not accept the certified copy of the findings of the banking commissioner as conclusive, we will violate the provisions of
In
In the case of
* * * The essential conditions under which the exception of the
*546 To the same effect is
In
* * * But we concede that in a subsequent suit upon a different cause of action, the question whether the matter decided on the former occasion was within the issues then proper to be decided, or was presented and actually determined in the course of deciding those issues, is open to inquiry, and that, unless it be answered in the affirmative, *3523 the matter is not
What was involved and determined in the former suit is to be tested by an examination of the record and proceedings therein, including the pleadings, the evidence submitted, the respective contentions of the parties, and the findings and opinion of the court; there being no suggestion that this is a proper case for resorting to extrinsic evidence.
Jones on Evidence 3d Ed., sec. 590, p. 918, states:
* * * Where the parties to the suit are not the same or in privity, the record of the former suit cannot be introduced to establish the facts on which it was rendered, yet there are certain incidental purposes for which such records may be introduced. * * *
He quotes Stephen as stating:
All judgments, whatever, are conclusive proof, as against all persons, of the existence of this state of things which they actually effect, when the*3524 existence of the state of things so effected is a fact in issue, or is, or is deemed to be relevant to the issue.
In
As a general rule the parties must be the same and the point in issue must be the same. * * * But the testimony offered in this case was not admissible, according to any of the authorities we have examined. The parties in the present suit are not the same as in the former, nor are they in privity with them, so as to be bound by what was said and done in that action. Peter E. Hadley, one of the present defendants, was plaintiff in that suit; but the other defendant so far as the case shows, had no connection with the proceedings either as a party or a privity,
The determination, after due hearing before bankruptcy, by the State Board of Assessment or other state tribunal having in charge the settlement of disputes*3525 over the amount of taxes, is not
Where the state asserted a claim for corporation taxes on the bankruptcy of a corporation, it is the duty of the bankruptcy court to reassess the tax, in case objection is made, regardless of its original assessment by the proper state authority. (
It is clear from the authorities cited that all the essentials necessary for the application of the doctrine of
The doctrine of
In
The placing of a value upon certain stock by the District Court in a suit not involving parties before the Board does not render the question of value
We are of opinion*3526 that the findings of the Banking Commissioner are nor binding on the Board and the decree of the court is not
In
The Board is of the opinion that the report of the Commissioner of Banking and the decree of the District Court of Hunt County, Tex., approving such report are incompetent as evidence herein and without any probative force to establish petitioner's claims before this Board, and for lack of other competent evidence, the determination of the Commissioner is approved.
*548 Petitioner's motion made at the hearing of this proceeding that this Board withhold dicision*3528 on the issues raised and transfer the proceeding under section 282 of the Revenue Act of 1926 to the State District Court of Hunt County, Tex., for determination of the Federal tax liability is denied.
Reviewed by the Board.
Oklahoma v. Textas , 41 S. Ct. 420 ( 1921 )
Mayor of Vicksburg v. Henson , 34 S. Ct. 95 ( 1913 )
National Foundry & Pipe Works v. Oconto Water Supply Co. , 22 S. Ct. 111 ( 1902 )
Baker v. Cummings , 21 S. Ct. 578 ( 1901 )
Last Chance Mining Co. v. Tyler Mining Co. , 15 S. Ct. 733 ( 1895 )
Russell v. Place , 24 L. Ed. 214 ( 1877 )
Lyon v. Perin & Gafe Manufacturing Co. , 8 S. Ct. 1024 ( 1888 )
Washington, Alexandria, & Georgetown Steam-Packet Co. v. ... , 16 L. Ed. 650 ( 1861 )