The opinion of the court was delivered by: BYERS
This case is before the court on the settlement of proposed findings as respectively submitted, pursuant to remand from the Supreme Court directed in its opinion filed June 13, 1960, in two cases, No. 376 and No. 546, C.I.R. v. Duberstein, 363 U.S. 278, 80 S. Ct. 1190, 4 L. Ed. 2d 1218.
The latter is the instant cause, which was tried before the undersigned on October 29, 1958, as the result of which judgment was granted to the plaintiffs. The action was brought to secure a refund of $ 15,056.29 paid as income tax by Mr. Stanton for the year 1943 (his wife is a nominal party only because of the filing of a joint return).
The sole question for decision was whether the sum of $ 20,000 voted to Mr. Stanton by the directors of Trinity Operating Company, Inc. on November 19, 1942 according to the terms of the following resolution, constituted a gift and was excludable as such from his federal income tax liability:
'Whereas Mr. Alden D. Stanton has tendered his resignations from all the offices he held under the Corporation of Trinity Church and its subsidiaries; and
'Whereas said resignations have been accepted, to be effective as of November 30, 1942;
'Be It Resolved that in appreciation of the services rendered by Mr. Stanton as Manager of the Estate and Comptroller of the Corporation of Trinity Church throughout nearly ten years, and as President of Trinity Operating Company, Inc., its subsidiary, a gratuity is hereby awarded to him of Twenty Thousand Dollars, payable to him in equal instalments of Two Thousand Dollars at the end of each and every month commencing with the month of December, 1942; provided that, with the discontinuance of his services, the Corporation of Trinity Church is released from all rights and claims to pension and retirement benefits not already accrued up to November 30, 1942.'
The case proceeded to trial as stated, and the only witnesses who testified were:
Woolsey A. Sheppard (deposition), a member of the Vestry of Trinity Church, and general counsel to both the Church and the Trinity Operating Company, at the period involved.
Frederick E. Hasler, a member of the Vestry, and Chairman of its Standing Committee in November of 1942.
Alden D. Stanton, the plaintiff.
In addition, there was documentary evidence, Plaintiffs' Exhibit 1 and Defendant's Exhibits A to H inclusive being directors' minutes of the Operating Company for October 14, 1942; October 28, 1942; October 30, 1942; November 5, 1942; November 19, 1942; November 23, 1942; December 28, 1942; January 8, 1943.
The foregoing constituted all the evidence in the case, and no suggestion has been made that it ought to be supplemented for present purposes.
The judgment in plaintiffs' favor was reversed by the Court of Appeals for the Second Circuit by decision of July 6, 1959, one judge dissenting (268 F.2d 727). The opinion of that court does not so state explicitly but obviously the finding made by this court was held to be clearly erroneous, as appears in the dissenting opinion.
Certiorari was granted December 14, 1959, 361 U.S. 923, 80 S. Ct. 294, 4 L. Ed. 2d 239 and the action of the Supreme Court has been stated. The majority opinion concludes with these words '* * * in Mo. 546, that the judgment of the Court of Appeals is vacated, and the case is remanded to the District Court for further proceedings not inconsistent with this opinion.' (363 U.S. 278, 80 S. Ct. 1201.)
It is clear that the original finding of this court therefore survives the action of the Court of Appeals, but was not deemed by the majority of the Supreme Court to be adequate to sustain the judgment based upon it. Thus: '* * * there comes a point where findings become so sparse and conclusory as to give no revelation of what the District Court's concept of the determining facts and legal standards may be * * *. It (this court's finding) cannot stand as a fulfillment of these requirements. It affords the ...