# Riter v. Commissioner > United States Tax Court · February 18, 1944 · 3 T.C. 301 URL: https://www.frixlaw.com/law-library/cases/4478052 ## Case - **Full name:** Margaret A. C. Riter, Donee and Transferee v. Commissioner of Internal Revenue - **Court:** United States Tax Court - **Decided:** February 18, 1944 - **Citations:** 3 T.C. 301; 1944 U.S. Tax Ct. LEXIS 192 - **Precedential status:** Published - **Opinion:** Dissent by Leech - **Judges:** Smith, Muedock, Only, Disnet, Melloit, Leech - **Cited by:** 17 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/4478052 ## Opinion text Leech, J., dissenting: I dissent on the third issue stated in the headnote. Of course the judgment introduced here in evidence as supporting the pleaded estoppel does not lose its conclusive quality and thus its evidentiary value because it was entered upon a stipulation and agreement. In vol. 15, R. C. L., at page 646, appears the following: * * * the law has been broadly laid down that as between parties sui juris, and in the absence of fraud, a judgment or decree of a court having jurisdiction of the subject matter, and rendered by consent of the parties, though without any ascertainment by the court of the truth of the facts averred, is as binding and conclusive between the parties and their privies as if the suit had been an adversary one, and the conclusions embodied in the decree had been rendered upon controverted facts and due consideration thereof by the court. [Citing Thompson v. Maxwell. 95 U. S. 391 .] McGowan v. Parish, 237 U. S. 285 ; Harding v. Harding, 198 U. S. 317 ; United States v. Parker, 120 U. S. 89 ; Harniska v. Dolph, 133 Fed. 158 ; Eberle v. Sinclair Prairie Oil Co., 35 Fed. Supp. 296; affd., 120 Fed. (2d) 746; Hot Springs Coal Co. v. Miller, 107 Fed. (2d) 677; Burgess v. Seligman, 107 U. S. 20 ; Pick Mfg. Co. v. General Motors Corporation, 80 Fed. (2d) 639; Simmons v. Baynard, 30 Fed. 532 ; Libbie Rice Farish, 2 T. C. 949 . See also 34 C. J. 787, and cases there cited. It is true that neither the questioned judgment nor the stipulation and agreement upon which it was entered embodies expressly the basis for either. But, to be effective as an estoppel here, that is not necessary. It is sufficient if the record in evidence discloses without “uncertainty” that this judgment did, in fact, decide the point or issue which petitioner here pleads we are estopped from considering. As the Supreme Court said in Russell v. Place, 94 U. S. 606 , at page 608: * * * If there be any uncertainty on this head in the record, — as, for example, if it appear that several distinct matters may have been litigated, upon •one or more of which the judgment may have passed, without indicating which of them was thus litigated, and upon which the judgment was rendered, — the whole subject-matter of the action will be at large, and open to a new contention, •unless this uncertainty be removed by extrinsic evidence showing the precise point involved and determined. * * * Supplementing this statement, the rule quoted with approval in Masters v. City of Rainier, 238 Fed. 827 , at page 833, is: “The estoppel is not confined to the judgment, but extends to all facts involved In it as necessary steps or the groundwork upon which it must have been founded. It is allowable to reason back from a judgment to the basis on which it stands 'upon the obvious principle that, where a conclusion is indisputable and could have been drawn only from certain premises, the premises are equally indisputable with the conclusion.’ ” That the issue may be one of law or of mixed law and fact does not preclude estoppel. Warner v. Tennessee Products Corporation, 57 Fed. (2d) 642; certiorari denied, 287 U. S. 632 ; Anna Eliza Masterson, 1 T. C. 315 (on appeal, C. C. A., 5th Cir.). Nor is it material that the issue was there wrongly decided. The essence of the plea is that the issue was decided. Pryor & Lockhart Development Co., 34 B. T. A. 687. Oar decision in the recent case bf Libbie Rice Farish, supra, recognized and followed these rules. The majority here do not question their validity. They attempt to distinguish the Parish case on the ground that the judgment supporting the estoppel pleaded here was entered upon a mere stipulation and agreement settling a tax controversy without disclosing what issues, if any, aside from the amount of the tax liability involved, were decided. I disagree with that conclusion because, I think, its premise has no support and is definitely contradicted by the evidence. Thus, it is stipulated in the present proceeding that the very two exclusions for 1936 which respondent denies to petitioner now in computing t.he net gifts for that year in arriving at the tax on the 1938 gifts were allowed under the stipulation and agreement upon which the disputed judgment was entered. The record confirms the truth of that stipulation and agreement. It does more. It shows that the overpayment there stipulated and agreed was based wholly upon the allowance of those exclusions — and nothing else. It discloses that these exclusions were allowed on the ground that the gifts to the children by way of these two trusts were of present interests — and for no other reason. This is clear because (1) the 1936 deficiency, as disclosed by the notice of the same, resulted exclusively from the disallowance of these exclusions; (2) that disallowance was based in the deficiency notice on the ground, alone, that these gifts were of future interests; (3) such disallowance, specifically including that reason basing it, was the only error assigned in the petition originating the proceeding involving the 1936 deficiencyand (4) the amount of the stipulated and agreed overpayment was exactly as there claimed and based on that alleged error. 1 That record, I think, shows beyond the slightest doubt that the issue and the only issue settled by the stipulation and agreement, upon which the judgment in controversy was entered, was whether the gift to the children, effected in 1936 by means of the two trusts, were of present interests and so reducible by the exclusion from each, or were of future interests and, consequently, not so reducible. That is the issue here in which petitioner pleads estoppel. The facts that the former proceeding was between the respondent and the donor and that this petitioner was not a party of record are of no significance. An estoppel by judgment is equally conclusive on parties and their privies. Railroad Co. v. National Bank, 102 U. S. 14 . The donor and donee are privies in estate. Bigelow v. Old Dominion Copper Co., 225 U. S. 111 . It follows, I think, that petitioner’s plea of estoppel by judgment should be sustained. Disnet, «/., agrees, with this dissent. The figures in the petition, answer, and stipulation are entirely consistent with each other. The apparent differences result only from the differing viewpoints from which the petition on the one hand and the stipulation on the other were prepared. Thus the petition, in setting out the amount in controversy, merely adds the amount of the determined deficiency to the alleged overpayment. The stipulation and agreement starts out with the amount of taxes paid, from which it deducts the correct liability, thus leaving the amount of the overpayment. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4478052. Public record. Not legal advice.