Recent Cases

ADMINISTRATIVE LAW--RADIO LICENSES--FCC CONTROL OF RADIO PROGRAMMING CONSTITUTIONAL LAW--CORPORATIONS--STATUTE REQUIRING SECURITY FOR COSTS IN STOCKHOLDER\u27S DERIVATIVE SUIT CONSTRUCTIVE TRUSTS--TAX SALES--RIGHT OF REMAINDERMAN TO PURCHASE AT TAX SALE TO THE EXCLUSION OF LIFE TENANT CRIMINAL PROCEDURE--EVIDENCE--EXCLUSION OF VOLUNTARY CONFESSION OBTAINED DURING ILLEGAL DETENTION DOMESTIC RELATIONS--ALIMONY-POWER OF COURT TO MODIFY OR REMIT PAST DUE INSTALLMENTS EMINENT DOMAIN--REMOVAL COSTS WHEN PART OF A LEASE IS TAKEN--EFFECT OF RENEWAL OF OPTION TAKING ALL OF LEASE EVIDENCE--CHARACTER WITNESS FOR ACCUSED--CROSS-EXAMINATION AS TO KNOWLEDGE OF ARREST MANY YEARS PREVIOUSLY FEDERAL PROCEDURE--FOREIGN CORPORATIONS--WAIVER OF VENUE BY DESIGNATION OF AGENT FOR SERVICE OF PROCESS FULL FAITH AND CREDIT--SUIT ON FOREIGN REVIVED JUDGMENT--EFFECT OF LOCAL STATUTE OF LIMITATIONS ON REVIVAL OF JUDGMENTS JUDGMENTS--RES JUDICATA--PRIVITY AS BETWEEN BAILOR AND BAILEE MARRIAGE--ANNULMENT FOR INCAPACITY--EFFECT OF ISSUE FROM ARTIFICIAL INSEMINATION BY HUSBAND NEGLIGENCE--EMPLOYEE IN PERIL DUE TO OWN FAULT--LIABILITY OF EMPLOYEE AND EMPLOYER TO ONE INJURED TRYING TO RESCUE EMPLOYEE NEGLIGENCE--PROOF OF CAUSE IN FACT--LIABILITY OF TWO NEGLIGENT DEFENDANTS WHEN IMPOSSIBLE TO TELL WHOSE SHOT INJURED PLAINTIFF WILLS--HOLOGRAPHIC CODICIL--INTERLINEATIONS ON FACE OF WIL

Family Partnership v. Corporation -- Income Tax Aspects

At the outset, it must be emphasized that a decision as to the more desirable mode of doing business should never be based solely upon tax considerations. In every instance, the following legal and practical advantages of transacting business as a corporation must always be borne in mind: (1) Limited Liability. The liability of a stockholder for the debts of the corporation is limited to his investment in its stock, while all of the property bf a general partner is subject to the claims of the firm\u27s creditors, if its assets are insufficient to satisfy such claims in full. (2) Continuity of Existence. A corporation may have perpetual existence, since changes in the ownership in its shares, whether resulting from the death of a stockholder or otherwise, have no effect upon the continuance of the corporation. Ordinarily the death or withdrawal of a partner dissolves the partnership but a partnership agreement may provide that the firm shall be continued by the surviving partners.(3) Ready Transferability of Shares. The disposal of the interest of a stockholder in a corporation is a very simple matter, since it merely requires the transfer of his stock to another person, but the sale of a partnership interest usually involves an accounting to determine the value of the retiring partner\u27s share. These points are, of course,\u27elementary, but perhaps it may be for that very reason that there is a recent tendency in some quarters to minimize them

Tennessee Death Taxes

The leading articles in this symposium stress the problems which federal death duties create in the planning of estates. The purpose of this note is to discuss the Tennessee Inheritance Tax,\u27 and to indicate how its treatment of particular types of property and forms of ownership differs from the federal succession tax. The federal tax poses no problem to the Tennessean of moderate means in planning his estate. By some elementary advance planning, all but very substantial estates may be made free of federal tax. In no event will an estate be subject to federal tax which is valued at less than $60,000 after authorized deductions. This specific exemption of$60,000 is now only the starting point. The Revenue Act of 1948 has included an additional deduction where property passes to a surviving spouse. By use of this marital deduction there is a splitting of ownership for estate tax purposes. A similar drastic change was made in the federal gift tax. Under prior law the donor could make annual gifts of $3,000 to any number of donees. In addition to these annual exclusions, the donor had a specific exemption of$30,000. This amount could be given in any one year or spread over several years. The 1948 Act has provided that a married donor under certain circumstances may avail himself of his spouse\u27s exemptions and exclusions. This doubles the amount of property of which such donor may divest himself free of tax

Options and Valuation of Property for Federal Tax Purposes

In Estate of John Q. Strange, there was an agreement between two brothers, engaged in business in a close corporation, which provided that upon the death of either, the survivor might acquire the stock of the other upon payment of $10,000 to his estate. Payment was so made following the decedent\u27s death. The fair market value of the stock on the date of death was stipulated to be$238,126.54. The Board of Tax Appeals held that the option price of $10,000 was the proper amount to be included in the decedent\u27s gross estate as the value of his stock. In Lomb v. Sugden, the decedent owned at death a number of shares of stock which she bequeathed to her husband as part of her residuary estate. About a year prior to death she had entered into an agreement with the other stockholders of the company that none would sell his stock without first offering it to the other stockholders, who were to have the right to purchase in proportion to their then respective common stockholdings at approximately$69 per share. The controversy involved the question whether the Commissioner might value the stock at its fair market value of $100. It was held that because of the agreement the decedent could not have secured a greater price than$69 at the time of her death and, therefore, the value for estate tax purposes could not exceed that sum. One further case may be noted. In Commissioner v. Bensel, a father and son had become estranged. The father, a majority stockholder, arid the son, an employee of a corporation, entered into a contract in which the son agreed to continue to work for the company in return for an option to purchase his father\u27s stock at the latter\u27s death at a price which turned out to be considerably less than the value of the stock at the later date. The option price was held to fix the value for estate tax purposes