
    DANIELS & FISHER STORES CO. v. THE UNITED STATES
    [No. F-323.
    Decided March 7, 1932]
    
      
      Mr. Albert E. Ford for the plaintiff.
    
      Mr. John A. Rees, with whom was Mr. Assistant Attorney General Charles B. Rugg, for the defendant.
   Green, Judge,

delivered the opinion:

This suit is commenced to recover an overpayment in income and profits tax arising out of a loss alleged to have been sustained by the plaintiff in connection with four city lots in Denver, Colorado.

The petition states the cause of action in the alternative alleging first an overpayment in the taxes of 1918, and next stating that if it is not entitled to recover for an overpayment in 1918 it is entitled to recover for the year 1919. We do not think the plaintiff is entitled to recover on the basis of an overpayment in either year for several reasons, only part of which will be hereinafter set out.

The evidence shows that in 1901 the plaintiff acquired from William Cooke Daniels a department store business and thirty-two city lots, among which were four lots in relation to which it is alleged the loss was sustained. The-value of these lots on March 1, 1913, is shown by the findings, but there is no evidence to show the cost of the store property to the plaintiff or the cost of the four lots which constituted a part thereof. Prior to the year 1910 plaintiff obtained from William Cooke Daniels and wife certain conveyances of the four lots and had reason to believe that it had good title thereto. . In 1910 the four lots were conveyed by plaintiff to its subsidiary, the Daniels & Fisher Realty Company.

In the year 1918 one Sarah M. Kenyon notified the Daniels & Fisher Realty Company that for reasons not necessary to be enumerated here she claimed to be entitled to one-half interest in lots Nos. 13, 14, 15, and 16, in block 76, East Dénver, being the four lots to which reference has herein-above been made. Thereafter certain court proceedings were had which resulted in a judgment on August 25, 1919, quieting title in Sarah M. Kenyon to a one-fourth interest in said lots, and in 1920 $75,000 was paid by plaintiff to Sarah M. Kenyon for her one-fourth interest in the four lots, title to which had been quieted in her by the court, and she and her heirs conveyed this property to the Daniels & Fisher Realty Company.

The plaintiff’s suit, as before stated, is in the alternative and is based upon two claims for refund, one filed for the year 1918 and the other for the year 1919. It is insisted on behalf of defendant that the suit is not begun in time on either of these claims, but we do not think it is necessary to pass upon this defense.

Conceding that there was a loss within the meaning of the word as used in the statute, occasioned to the plaintiff by the facts above set forth, we are quite clear that it was not sustained in 1918, although Sarah M. Kenyon obtained her title thereto in that year as subsequently found by the court through the death of William C. Daniels, but there is nothing in the evidence to show that either plaintiff or the Daniels & Fisher Realty Company admitted in 1918 that she had any interest in the lots. In fact, the last-named company commenced an action in equity against Sarah M. Kenyon to quiet the title thereto against her claims while she on her part filed a cross-petition. The suit, after the usual court proceedings, resulted in a judgment in her favor in 1919. Up to the time of judgment, at least, plaintiff’s grantee retained possession of these lots and no loss had been sustained by anyone. There was indeed a liability, but its amount had not been determined and it was contingent upon demands made by Sarah M. Kenyon and enforceable only by an action at law against plaintiff’s subsidiary. We think that losses which depend on the result of a contested action in court can not be said to be definitely fixed prior to the rendition of judgment therein. In Lucas v. American Code Co., 280 U. S. 445, a somewhat similar case, it is said with reference to a loss arising on a breach of contract:

“The mere refusal to perform a contract does not justify the deduction, as a loss, of the anticipated damages. For, even an unquestionable breach does not result in loss if the injured party forgives or refrains from prosecuting his claim. And, when liability is contested, the institution of a suit does not, of itself, create certainty of loss.”

In that case, although a reserve was set up on the books to meet the liability, the Supreme Court refused to allow the loss for a year previous to that in which a judgment fixing the amount was rendered.

The claim for refund of part of the taxes for 1919 is merely a request for a refund without stating any amount claimed, or reciting any facts whatever making any statement with reference to the nature of the claim, or using any language to show to what it related. It in no manner complies with the statute and is .entirely insufficient upon which to base a suit for overpayment of taxes in the year 1919. For this reason we do not need to consider whether the plaintiff sustained any loss in that year.

The considerations stated above make it unnecessary for us to consider the numerous other objections which are made on the part of defendant to the action of plaintiff and the claims upon which it is based. We conclude that plaintiff’s petition should be dismissed, and it is so ordered.

Whaley, Judge; Williams, Judge; Littleton, Judge; and Booth, Chief Justice, concur.  