
    SAMUEL ZEMURRAY v. THE UNITED STATES
    [No. E-428.
    Decided February 20, 1928]
    
      On the Proofs
    
    
      Income and excess-profits taxes; cdmpromise settlement; community property; separate returns of Imsdand and wife. — (1) Tbe acceptance by tbe Commissioner of Internal Revenue, approved by tbe Secretary of tbe Treasury, of plaintiffs oiler of a stated sum as' “ in compromise of his civil and criminal liabilities incurred for filing incorrect income-tax returns for 1917 and 1918,” together with voluntary payment of tbe taxes without suggestion of overpayment, was, in tbe absence of a right to make a subsequent return of one-half tbe income, under tbe community-property system of husband and wife prevailing in Louisiana, final and binding as to tbe taxes found due.
    (2) Under tbe system of community property prevailing in Louisiana tbe husband may dispose of tbe income from bis own labor without accounting to his wife, except for fraud to her injury, and a return of tbe entire amount thereof, solely by the husband, for Federal income and excess-profits tax purposes, together with assessment and voluntary payment of tbe tax on that basis, is in accordance with the taxing statutes and precludes recovery by the taxpayer on the basis of a subsequent return by him of one-half only of said income.
    
      The Reporter's statement of the case:
    
      Messrs. Spencer Gordon and Monte M. Lemann for the plaintiff. Covington, Burling do Rublee were on the briefs.
    
      Messrs. Fred K. Dym, John A. McCann, and F. W. Dewart, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant. Mr. Alexander H. McCormick was on the brief.
    
      The court made special findings of fact, as follows:
    I. The plaintiff, Samuel Zemurray, and his wife have since 1904 resided in New Orleans and have been and are citizens of the State of Louisiana.
    II. Plaintiff’s income and excess-profits tax return for the year 1917 was prepared by an accountant retained by him and signed, during his absence from the United States, by one of h,is employees. This return showed income and excess-profits taxes due for the year 1917 of $34,502.97, which sum was paid on or about the 15th day of June, 1918, during plaintiff’s absence from the United States. This return was erroneous and incorrect in that it failed to disclose the full amount of plaintiff’s income for the year 1917. Upon his return to this country, which was some time after the tax had been paid, he became aware of the failure of the return to set forth his entire income and insisted that the same be corrected immediately, but the accountant who had prepared the return was opposed to making the correction at that time. Plaintiff was again called out of the United States, but before his departure instructed his employee, Mr. Schultz, to file his return for 1918 in such a way as to prevent the disclosure of the incorrectness of the 1917 return, and to do nothing that might draw suspicion to the 1917 return, declaring that upon his return to the United States he would make a voluntary disclosure to the appropriate Government officials, and would pay all taxes due the Government for the years 1917 and 1918. The 1918 return, as prepared by plaintiff’s employee, showed taxes due the United States for the year 1918 in the sum of $76,927.12. This return, like the return for 1917, was incorrect in that it failed to disclose the full amount of taxable income for that year.
    III. Shortly after plaintiff’s return to the United States, which was some time prior to August 15, 1919, he retained Joseph W. Montgomery, an attorney of New Orleans, and directed him to have the returns for 1917 and 1918 corrected and to make payment to the Government of the taxes that were due the Government by him for those years. Mr. Montgomery, at the request of plaintiff, came to Washington and saw Daniel C. Eoper, the then Commissioner of Internal Eevenue, and explained the case to him. Commis-s,ioner Eoper referred Mr. Montgomery to the Assistant Commissioner of Internal Eevenue, Joseph H. Callan. Mr. Montgomery made the request that Mr. Zemurray be permitted to file amended returns for the years 1917 and 1918 in Washington, which request was declined by Mr. Callan, who stated that the matter would have to be handled through the collector at New Orleans, who at that time was J. Y. Fauntleroy. Mr. Montgomery proceeded to New Orleans. and on or about August 15, 1919, he filed with the collector at New Orleans plaintiff’s amended returns for the years 1917 and 1918. The amended return for 1917 showed a tax of $280,528.87. The amended return for 1918 showed a tax of $685,372.18.
    In the amended returns, as in the original returns, the excess-profits taxes for the years 1917 and 1918 were computed at 8% under section 209 of the revenue act of 1917, on the theory that the plaintiff’s business had no invested capital or nothing more than nominal capital.
    IY. Collector Fauntleroy called Mr. Zemurray and his auditor, who had prepared the amended returns, together with the bookkeeper in Mr. Zemurray’s office, and examined them under oath concerning the amended returns and incorrect returns originally filed. Later Mr. Montgomery and Collector Fauntleroy came to Washington and had another conference with the assistant commissioner, Mr. Callan, and delivered the amended returns to him. The amended returns were audited by the audit section of the Bureau of Internal Eevenue to determine the amount of taxes due by Mr. Zemurray for the years 1917 and 1918. As a result of the audit it was determined by the Government officials that plaintiff’,s excess-profits taxes for 1917 and 1918 should not be computed at 8% under section 209, the nominal capital section, as had been done by the taxpayer in his .original and amended returns, but that the taxes should be computed under section 210, the special assessment section, and found a total income and excess-profits tax due for the year 1917 of $355,118.45, and for the year 1918 of the sum of $685,-372.18. The taxpayer had already paid the gum of $34,-502.97 for the year 1917 and had paid $76,927.12 for the year 1918. These computations were made the subject of a memorandum by the audit section of the Internal Revenue Department dated August 25, 1919, and this memorandum was given to Mr. Montgomery at that time.
    The object of Mr. Montgomery’s visit to Washington was to settle and adjust all matters of dispute existing between Mr. Zemurray and the Government in reference to taxes due the Government from Mr. Zemurray for the years 1917 and 1918. Mr. Montgomery wag clothed with full power and authority to represent Mr. Zemurray in the matter of making a settlement and to pay all taxes due for those years, together with such penalties as were attached by reason of the incorrectness of the returns. Mr. Montgomery and the collector of the New Orleans district, Mr. Fauntleroy, held several conferences with Mr. Callan, the assistant commissioner, and other Government officials between August 25, and September 3, 1919. At the first conference, on August-25, 1919, Mr. Montgomery, representing the plaintiff, expressed a desire to settle the whole matter, including the amount of taxes due and the penalties resulting from the failure to file correct returns. Mr. Montgomery conceded that the audit made by the official^ of the Government was mathematically correct, but contended that the taxes should be settled on a personal-service basis rather than on an invested-capital or special-assessment basis. Mr. Callan overruled his contentions about this feature of the ca^e, but stated that the law was new and that it was not an easy matter to determine just what was and what' was not personal service, and that if they could come back later and show the department that it was wrong the matter would be corrected. At this same conference it was agreed by Mr. Callan and other officials of the Internal Revenue Department that if the taxpayer would promptly pay the taxe,s due as shown by the audit made by the Government officials they would, subject to the approval of the Secretary of the Treasury, accept the sum of $150,000 in compromise of all civil and criminal liability for filing incorrect tax returns. This proposition was accepted by Mr. Montgomery, and then and there he delivered to the Treasury official three checks, one for $320,615.48 for 1917, ,one for $608,445.06 for 1918, and one for $150,000 for the penalty.
    Y. In order to make a record of the transactions, two letters were written in the presence of Mr. Callan, one by Mr. Montgomery to Mr. Fauntleroy, collector of internal revenue, wherein he offered the sum of $150,000 in full settlement of the penalty on account of the incorrect returns, and one by Mr. Fauntleroy, collector, to Commissioner Daniel C. Roper, inclosing to Mr. Roper the letter written to him "by Mr. Montgomery offering the sum of $150,000 in compromise and recommending that said offer in compromise be accepted.
    Under date of September 2,1919, formal notices of demand for the taxes and penalty were prepared and delivered to Mr. Montgomery as the representative of Mr. Zemurray. They were as follows:
    (Form 1-I7b-Revised. United States Internal Revenue)
    DEMAND EOR PAYMENT OP INCOME AND EXCESS-PROPITS TAX
    FOR 1917
    Office of Collector of Internal Revenue, -
    
      New Orleans, La., Sept. 8,1919.
    
    Demand is hereby made for the amount of income and excess-profits tax stated opposite your name. Failure to pay this tax on or before the due date given below will cause a 5 per cent penalty to accrue with interest at 1 per cent per month from the due date until paid.
    Add. tax, 1917_$320, 615.48
    100% Pen. 1917, 50% Pen. 1918, Spec. Pen_ 150,000.00
    470, 615.48
    J. Y. Fauntleroy, Collector of Internail Revenue.
    
    Samuel Zemurray, New Orleans, La., $470,615.48. Date due, Sept. 12, 1919.
    Paid, Sept. 3, 1919. Collector, of Internal Revenue, Dist. of La.
    
      (Form l-TTb-Revised. United States Internal Revenue)
    DEMAND EOR PAYMENT OE INCOME AND EXCESS-PROFITS TAX
    FOR 1918
    Office of Collector of Internal Revenue,
    
      New Orleans, La., Sept. #,1919.
    
    Demand is hereby made for the amount of income and excess-profits tax stated opposite your name. Failure to pay this tax on or before the due date given below will cause a 5 per cent penalty to accrue with interest at 1 per cent per month from the due date until paid.
    J. Y. Fatjntleroy,
    
      Collector of Internal Revenue.
    
    Aug. Spec/)-l. Additional tax for 1918, $608,445.06.
    Samuel Zemurray, New Orleans, La., $608,445.06. Date, due, Sept. 12, 1919.
    Paid, Sept. 3, 1919. Collector of Internal Revenue, Dist. of La.
    These notices were stamped “Paid” by the collector of internal revenue, district of Louisiana, under date of September 3, 1919. On the same date Mr. Roper, Commissioner of Internal Revenue, wrote to Mr. Montgomery, as follows:
    Treasury Department, Washington, September 5,1919. Hon. Joseph W. Montgomery,
    
      Attorney at Lam, Hibernia Building,
    
    
      New Orleans, Louisiana.
    
    (Personal.)
    Dear Sir: Referring to the offer of $150,000 made by Samuel Zemurray, of New Orleans, Louisiana, in compromise of his civil and criminal liabilities incurred for filing incorrect income-tax returns for 1917 and 1918, you are advised that with the approval of the Secretary of the Treasury, I have accepted said offer, and the case is closed in the files of this office.
    Respectfully,
    Daniel C. Roper, Commissioner.
    
    (Note. — This letter bears the date of September 5th, but in truth and in fact it was written on September 3d and delivered to Mr. Montgomery on that date.)
    VI. During these conferences between Mr. Montgomery and various people connected with the Bureau of Internal Revenue there was no discussion of any possible division of income between the plaintiff and Mrs. Zemurray for the years 1917 and 1918 on a community-property basis. Thereafter, by Treasury Decision 3071, following an opinion of the Attorney General, the Secretary of the Treasury decided on September 18, 1920, that the earnings of a husband and wife domiciled in Texas were community income and that such husband and wife might render separate income-tax returns and each report as gross income one-half the total earnings of the husband and wife. Thereafter, by Treasury Decision 3138, following another opinion by the Attorney General, the Secretary of the Treasury, on March 3, 1921, extended this ruling to Louisiana, and held that for the years 1917 and 1918, and other years not applicable to this case, a husband and wife residing in Louisiana might render separate income-tax returns, each reporting as gross income one-half of the total income of the husband and wife, on the ■ground that such income simultaneously with its receipt became community property. Following this decision, on September 25, 1921, Mr. and Mrs. Zemurray filed additional amended returns for the years 1917 and 1918 dividing the total income of Mr. Zemurray between them, Mrs. Zemurray having no separate income. On October 21, 1921, Mr. Zemurray filed a claim for refund in the sum of $118,246.73, or such greater amount as was legally refundable, covering the years 1915 to 1918, inclusive, based on the contention that he was entitled to the benefit of the community property ruling under Treasury Decision 3138.
    VII. Based on the community-property decision contained in Treasury Decision 3138, but in every other way calculating the taxes in accordance with the findings of the audit section Of the Bureau of Internal Revenue referred to in Finding IV hereof, including special assessment for 1917, the total income and excess-profits taxes payable by Mr. Zemurray would be for the year 1917, $154,735.83 and for the year 1918, $314,393.16. Mr. Zemurray has paid total income and excess-profits taxes of $355,118.45 for the year 1917 and $685,372.18 for the year 1918. Mrs. Zemurray has paid no income and excess-profits taxes for either year. Mr. Zemurray has stated on the record that he is willing to have any additional taxes which may be due from Mrs. Zemurray applied against any refund which may be due him. Taxes payable by Mrs. Zemurray under the community-property decision would be $154,061.02 for the year 1917 and $314,393.16 for the year 1918. Subtracting from the income and excess-profits taxes paid by Mr. Zemurray for the years 1917 and 1918 the total income and excess-profits taxes, which would be payable by Mr. Zemurray and Mrs. Zemurray together for the years 1917 and 1918 if Treasury Decision 3138 were applied to them, would leave an amount repayable to Mr. Zemurray of $102,907.46 with interest from September 3, 1919. The Bureau of Internal Revenue has uniformly allowed other Louisiana taxpayers to file amended returns on a community-property basis for the years 1917 and 1918 and has given them refunds based on Treasury Decision 3138. But no such refund or repayment has ever been allowed to Mr. Zemurray.
    VIII. Under date of January 18, 1923, an internal-revenue agent was directed to make an examination and report in the case of Samuel Zemurray for the years 1917, 1918, and 1919, based upon a letter from the Deputy Commissioner of Internal Revenue dated May 22, 1922, to the internal-revenue agent in charge at New Orleans. The agent was instructed to determine the plaintiff’s income-tax liability in accordance with the provisions of the community-property decision contained in Treasury Decision No. 3138. Upon calling at the offices of the plaintiff the agent met Mr. Joseph Montgomery, the plaintiff’s personal attorney, and was informed by Mr. Montgomery that there was no necessity for an examination of the plaintiff’s records prior to the year 1919, inasmuch as the plaintiff’s records for the prior years had been audited. Mr. Montgomery at the same time displayed to the agent a letter, a copy of which is as follows:
    WASHINGTON, D. C., Sept. 9,1919.
    
    L-FW-McR.
    Hon. J. Y. Fauntleroy,
    
      Collector of Internal Reverme,
    
    
      New Orleans, La.
    
    (Personal.)
    Referring to the offer of $150,000 made by Samuel Zemur-ray, New Orleans, La., in compromise of his civil and criminal liabilities incurred for filing incorrect income-tax returns for 1917 and 1918, you are advised that, with the approval of the Secretary of the Treasury, I have accepted said offer, and the case is closed in the files of this office.
    Respectfully,
    Daniel C. Roper, Commissioner.
    
    The agent thereafter examined Mr. Zemurray’s books for the year 1919, but did not examine his records for the years 1917 and 1918. A portion of Mr. Zemurray’s books and records for the years 1917 and 1918 were at that time in Honduras, which fact was made known to the revenue agent. The agent also knew that Mr. Zemurray had filed his claim for refund covering the years 1917 and 1918 and that this claim was still pending.
    IX. The claim for $118,246.73, or such greater amount as is legally refundable covering the years 1915 to 1918, inclusive, which had been filed by Mr. Zemurray in the Bureau of Internal Revenue on October 21, 1921, was rejected by the Commissioner of Internal Revenue April 21, 1924. The taxpayer requested reconsideration and the claim was finally rejected January 22, 1925, by letter as follows:
    Treasury Department,
    
      Jam. 22,1925.
    
    Mr. Joseph W. MoNtgomery,
    
      Attorney at Law,
    
    
      lf.10 Gamp Street, New Orleans, La.
    
    In re: Samuel Zemurray, 2 Audobon Place, New Orleans, La.
    Sir : On October 21,1924, you were given a hearing in this office on the claims filed by the above-named taxpayer for refund of income taxes paid for the year/s 1915 to 1919, inclusive. The claims are based upon the contentions that taxpayer is entitled to have his income for the several years apportioned between him and his wife on the community-property basis, and that the excess property tax for 1917 was incorrectly assessed. At the conclusion of the hearing you were informed that the case would be carefully considered and that you would be advised of the decision reached.
    I have gone through the file of this case very thoroughly and have considered all the evidence and the argument made by you at the hearing, and I am of the opinion that the compromise effected by taxpayer for the years 1917 and 1918, the terms of which it is not necessary to restate here, wa,s a full, complete, and final settlement of Mr. Zemurray’s tax liability for those years, and that the cáse can not now be reopened by either him or the Government. The bureau must, therefore, decline to reopen the case for those years.
    With reference to the claim for refund for the years 1915, 1916, and 1919, I find that the tax liability for those years was not affected by the offer in compromise referred to. There is, therefore, no objection to reopening the case for those years and considering taxpayer’s claims for refund provided they were filed within the time allowed by law.
    Respectfully,
    C. R. Nash,
    
      Assistant to the Commissioner.
    
    X. The source of plaintiff’s income upon which the said returns and assessments were made for the years 1917 and 1918 does not appear, except from the averments of the petition in that regard. Mrs. Zemurray never made any return for income and excess-profits taxes for the years 1917 and 1918 until September 25, 1921, at which time she and her husband filed additional amended returns for the years 1917 and 1918, dividing the total income of Mr. Zemurray between them.
    The court decided that plaintiff was not entitled to recover.
   Campbell, Chief Justice, court :

delivered the opinion of the

The plaintiff during all of the time involved in this case resided with his wife in New Orleans, and they were citizens of Louisiana. There was filed for him in his absence an income-tax return for the year 1917 and the tax shown thereon was paid in due course. This return, however, showed a greatly less tax than was actually due. Plaintiff, having learned this fact, directed another employee to make up and fije a tax return for the year 1918. This likewise failed to reflect the proper amount of taxes. Payment was made under this return. Coming back to the United States in 1919, the plaintiff employed an attorney in New Orleans .to get a correction of the returns and secure proper settlement oh account of the taxes due and the penalties that could be imposed under the statutes. As a result of the attorney’s efforts, plaintiff was permitted to file amended returns with the internal-revenue collector of the district in which New Orleans is located. This was in August, 1919. The amended return for 1917, as finally audited, showed a tax of $280,-528.87 instead of $34,502.97 originally returned. The amended return for 1918 showed a tax due of $685,372.18 instead of $76,927.12 in the original return. When these greatly increased amounts had been ascertained by the audit section the question was taken up as to the penalties the plaintiff would be subjected to because of the false returns. It appearing that the original returns had been made in plaintiff’s absence and that he had voluntarily sought to have them corrected the assistant commissioner announced that a proposition to settle the amount of the penalty would be considered. Plaintiff’s attorney proposed and the commissioner accepted the sum of $150,000 in settlement of the penalties. The additional tax for the two years, amounting . to $864,560.96, and the penalty of $150,000 were paid by separate checks, the bills for the increased tax and the penalties being stamped “ paid ” on the same date. The income and excess profits upon which these taxes were .imposed arose, according to the averments of the petition, from a business conducted by the plaintiff in his own name in New Orleans and to a small extent, under another name, in Mobile, consisting of the purchase and sale of bananas. “ This business was originated by the claimant at a time when he had no cap.ital and no capital was used by him in starting the business. The method of carrying it on down to and during the year 1917 was to buy ripe bananas from banana importers on credit and dispose of them without delay to his customers. Payment for the bananas by the claimant was made from receipts from his customers, making the use of capital unnecessary.” It is further averred in the petition that “ claimant’s wife had no separate income for the years 1917 and 1918.”

On or about the 24th day of September, 1921, plaintiff and his wife filed separate amended returns for the years 1917 and 1918 wherein the income above referred to was treated on the community-property basis; that is, that each of them owned one-half of such income. It appears that by Treasury Decision 3071 in September, 1920, and Treasury Decision 3138 in March, 1921, the Secretary of the Treasury, following opinions of the Attorney General on the subject, promulgated rules that a husband and wife domiciled in Louisiana were entitled to the community-property rule. The filing of the additional or amended returns by the plaintiff and his wife in September, 1921, was an attempt to secure the benefit of these rulings. The situation thus developed would present a question not easy of solution if it were the controlling one in the case in this court. The tax assessable on the entire income has been paid and the commissioner has denied the application for a refund. No assessment has been made against the wife. We are asked to decide that the husband was only liable to taxation on one-half of the income and should therefore have judgment for substantially one-half of the amount of taxes paid, but also to go further and deduct ■from the amount so found to be due the tax which the wife would have to pay if assessed upon one-half of the income, to the end that her taxes shall be paid, and having made this deduction that he be given judgment, with interest, on the balance. The commissioner has made no assessment agajnst the wife. What, if any, penalties would be assessed on account of her failure to make a proper return in due time in nowise appears.

It is to be observed that the suit in this court for a refund of taxes rests upon section 3220, Revised Statutes, as amended (40 Stat. 1145), which authorizes a refund by the Commissioner of Internal Revenue, subject to regulations by the Secretary of the Treasury, of taxes erroneously or illegally assessed or collected or excessive in amount or in any manner wrongfully collected. See also in this connection section 3226 as amended by the revenue act of 1924, 43 Stat. 343, and see section 252 of the revenue act of 1921, 42 Stat. 22Y, or other acts requiring refunds. This being a law of Congress within the meaning of that phrase in section 145, Judicial Code, the Court of Claims is authorized to award a judgment for the amount of the refund, which, under the facts, the commissioner should have allowed, provided he has rejected, or has failed within a stated period to pass upon, the application for a refund. See Rock Island case, 254 U. S. 141, affirming case 54 C. Cls. 22. Indeed, it was at a comparatively recent date that it was finally determined that the taxpayer in such case could come to the Court of Claims instead of suing the collector. See United States v. Emery, 237 U. S. 28, 31; Hvoslef case, 237 U. S. 1, 10; United States v. Savings Bank, 104 U. S. 728, 734. Whether there could at this time be any assessment by the commissioner against the wife is not the material question. Nor is the sole question, as is urged by plaintiff, whether or not there was a compromise of the taxes. The important question for this court to decide is whether there has been wrongfully collected from the plaintiff taxes which upon seasonable application the commissioner has refused to refund. After the taxes in the greatly increased amounts for the years 1917 and 1918 had been determined and the large penalty had been exacted there were promulgated as above stated two Treasury decisions following two opinions by the Attorney General which recognized the community-property rule existing in several of the States — Louisiana among others. The payment was made two years before the application for a refund was made, but within a few months after the promulgation of the Treasury decision the plaintiff and his wife filed amended but separate returns already mentioned. The commissioner’s reply to the husband’s application was to the effect that the compromise effected by the taxpayer for the years 1917 and 1918 ” was a full and final settlement of his liability for those years and that the case could not be reopened by either him or the Government. The contention here is that there was never “ a compromise ” of the taxes but a compromise of the civil and criminal liabilities, and therefore that the commissioner’s reason for his refusal is unfounded. We think it is true that the tax liability upon the basis of the income and excess profits of plaintiff was ascertained without deduction and the full amount of the taxes so determined was paid. But the amount of the taxes and the penalties to be accounted for were parts of one settlement. The liability for both was recognized. The plaintiff initiated this settlement and voluntarily paid the amount found due, suggesting no question as to his liability for the whole tax. It is not claimed that the amount of the taxes based upon the stated amount of income and excess profits was less than was agreed to be paid. In these circumstances we think there was a full settlement binding upon both parties, whether it be called settlement or compromise, unless it is to be held that the Treasury decisions mentioned gave a legal right to the plaintiff to make another and a subsequent return of one-half of the income, and also gave his wife the right to make a separate return of the other half and thereby to open up the settlement voluntarily made two years before.

Upon the question of community property we think it must be conceded that in Louisiana the wife’s half interest in community property is a vested right as distinguished from a mere expectancy. Phillips v. Phillips, 160 La. Ann. 814; Arnett v. Reade, 220 U. S. 311; Warburton v. White, 176 U. S. 484. But when it comes, to earnings such as we find in this case, it is to be noted that the statute of Louisiana provides, art. 2404, that the husband is the head and master of the partnership or community of gains; he administers its effects, disposes of the revenues which they produce, and may alienate them by an onerous title without the consent and permission of his wife. Except for fraud, to her injury, she can not call him to account, and in that case the statute provides for suit against “ the heirs ” of the husband. Given this right of control and disposition without liability to account, is it to be said that when the husband returns the income from hi,s own labor for taxation and pays the tax properly assessable on such income he has done something illegal or wrongful, or that the tax has been in any manner erroneously collected from him? Having the right of disposition of this income, the authority to alienate it or even dissipate it, is it to be said he may not use a part of it to pay taxes due upon the whole? He did make the returnp as if the income were his own; he did pay the correct amount of taxes due according to the returns; he did these things voluntarily and he had a legal right to do them. The case of United States v. Robbins, 269 U. S. 315, is in point. That was a suit by executors to recover income taxes paid by the decedent for the year 1918, one of the years mentioned in the instant case. He had been required by the Treasury Department to return and pay the tax upon the whole income of certain community property against the effort of himself and his wife to file separate returns, each of one-half. He therefore was required to pay more taxes than he would have paid if the contention of himself and wife had been allowed. The claim was predicated upon the laws of California. The Supreme Court, recognizing the distinction drawn in some of the States having the community-property system between the wife’s interest being vested or a mere expectancy, accepts the view that in California the wife had an “ expectancy.” But the opinion states (p. 327) : “ Even if we are wrong as to the law of California and assume that the wife had an interest in the community income that Congress could tax if so minded, it does not follow that Congress could not tax the husband for the whole,” and concludes (p. 328) : “ The reasons for holding him are at least as strong as those for holding trustees in the cases where they are liable under the law.” The plaintiff asserts, however, that what we have quoted from the Bobbins case was mere dictum. We do not so consider it. The court did not confine it,s decision to the point that in California the wife’s interest was a mere expectancy. It held that regardless of that condition the Government could tax the income in the husband’s hands. In a case decided January 3, 1928, Richmond Screw Anchor Co. v. United States, 275 U. S. 331, the question was raised that a statement in a prior .opinion was not necessary to the decision and could only be regarded a,s obiter dictwm, but Mr. Chief Justice Taft, speaking for the court, said: “It does not make a reason given for a conclusion in a case obiter dictwm-, because it is only one of two reasons for the same conclusion.” See also United States v. Title Insurance & Trust Co., 265 U. S. 472, 486. The power and intent of the revenue acts under which the taxes were collected are in this case just as the power and intent of the act mentioned in the Robbins case were before the court in that case, and that the same conclusion should be reached in both cases seems to be clear. We think that under the taxing acts the income could be taxed against the husband. Especially should this follow when the returns were voluntarily made and the taxe,s as well as the penalties were paid without objection by the one who had control and the right of disposition of the income involved and who is now seeking a return of the taxes paid in the circumstances already stated. There was no taxing statute expressly recognizing the community-property rule, and plaintiff’s claim is based upon Treasury decisions promulgated after the taxes were paid, in turn based upon two opinions of the Attorney General, both of which have since been withdrawn. We do not think that section 1212, revenue act of 1926, 44 Stat. 130, determines the result in this case, though we incline to the view that the second sentence in that section would bar recovery by a husband who had elected to return the income as hifs own. Our conclusion is that the petition should be dismissed. And it is so ordered.

Moss, Judge; Graham, Judge; and Booth, Judge, concur.  