Federal Procedure - Realignment of Parties in Non-Diversity Case

Plaintiff (S1), a surety for the subcontractor, brought an action against the subcontractor and the prime contractor to compel them to set off their respective counterclaims in order to diminish the liability of S1. The subcontractor had another surety (S2) on a different obligation arising out of the same construction job, and the prime contractor, uncertain where liability should be placed, impleaded S2. On S1\u27s motion to vacate the impleader order, held, denied, and the court on its own motion directed realignment of the parties, ruling that the main issue was division of liability between the subcontractor\u27s two sureties, S1 and S2, to the prime contractor. The prime contractor was made plaintiff and the other parties, the subcontractor, S1 and S2, defendants, with the result that all matters in controversy could be settled in one action with one trial. In directing this order, the court stated that it relied on its inherent power to require realignment for convenience and expediency. Travelers Indemnity Co. v. J. S. Ramstad Construction Co., (D.C. Alaska 1954) 118 F. Supp. 423

TAXATION - FEDERAL INCOME TAX - DEFERRED COMPENSATION AS AFFECTED BY CONSTRUCTIVE RECEIPT DOCTRINE

Prior to his retirement as a general agent of a life insurance company, the petitioner entered into a new contract with the company by which he was to receive upon retirement fixed monthly instalments for fifteen years in lieu of his original contract rights to receive renewal premium commissions as they were paid into the company. Petitioner, as a cash basis taxpayer, reported as income only the instalments received. The Commissioner assessed deficiencies in the reports, contending that petitioner\u27s taxable income consisted of all renewal commissions received by the company during the taxable year, rather than the instalment payments. Rejecting the Commissioner\u27s argument that the constructive receipt doctrine was applicable to the renewal commissions, the Tax Court upheld the petitioner\u27s challenge of the assessment of the deficiencies. On appeal, held, affirmed. Since the new contract calling for fixed monthly instalments was a binding substituted contract, the taxpayer had no contractual right to the additional renewal commissions. Therefore the constructive receipt doctrine was inapplicable and only the fixed monthly instalments were income to the taxpayer. Commissioner v. Oates, (7th Cir. 1953) 207 F. (2d) 711

EVIDENCE-PRIVILEGE-USE OF PRIVILEGED ACCIDENT REPORT TO REFRESH OFFICER\u27S RECOLLECTION

Plaintiff, a passenger in an automobile, recovered a judgment for injuries received in a collision. Defendants\u27 motion to exclude testimony of the police officer investigating the accident as to admissions of the driver was overruled by the trial court. Defendants contended that the required accident report filed by the defendant driver was privileged by statute, and therefore the testimony of the officer was inadmissible. On appeal, held, reversed on other grounds. It was proper for the officer to testify as to the defendant driver\u27s admissions even if it was necessary for him to refresh his recollection of these admissions by using the statutory report filed by the defendant. Wallace v. Skrzycki, 338 Mich. 165, 61 N.W. (2d) 106 (1953)

CONFLICT OF LAWS--EFFECT OF FORUM\u27S STATUTE OF FRAUDS ON FOREIGN ORAL CONTRACT TO BEQUEATH PROPERTY

Plaintiff brought an action in New York for specific performance of an oral agreement allegedly made by testator in Florida not to change his will without plaintiff\u27s consent. Defendant\u27s motions for dismissal of the complaint and summary judgment were dismissed. The appellate division on reargument entered orders reversing the lower court. On plaintiff\u27s appeal to the court of appeals, held, affirmed. The New York Personal Property Law, which states that oral contracts to bequeath property are void, is controlling, regardless of whether this section of the statute of frauds is procedural or substantive. If the section is procedural, the law of the forum would apply making the oral contract unenforceable; if substantive, the contract is void because the statute is an expression of the public policy of the forum, permitting the forum to disregard ordinary conflict of laws rules. Rubin v. Irving Trust Co., 305 N.Y. 288, I 13 N. E. (2d) 424 (1953)

TAXATION - FEDERAL INCOME TAX - DEFERRED COMPENSATION AS AFFECTED BY CONSTRUCTIVE RECEIPT DOCTRINE

Prior to his retirement as a general agent of a life insurance company, the petitioner entered into a new contract with the company by which he was to receive upon retirement fixed monthly instalments for fifteen years in lieu of his original contract rights to receive renewal premium commissions as they were paid into the company. Petitioner, as a cash basis taxpayer, reported as income only the instalments received. The Commissioner assessed deficiencies in the reports, contending that petitioner\u27s taxable income consisted of all renewal commissions received by the company during the taxable year, rather than the instalment payments. Rejecting the Commissioner\u27s argument that the constructive receipt doctrine was applicable to the renewal commissions, the Tax Court upheld the petitioner\u27s challenge of the assessment of the deficiencies. On appeal, held, affirmed. Since the new contract calling for fixed monthly instalments was a binding substituted contract, the taxpayer had no contractual right to the additional renewal commissions. Therefore the constructive receipt doctrine was inapplicable and only the fixed monthly instalments were income to the taxpayer. Commissioner v. Oates, (7th Cir. 1953) 207 F. (2d) 711

Federal Procedure - Realignment of Parties in Non-Diversity Case

Plaintiff (S1), a surety for the subcontractor, brought an action against the subcontractor and the prime contractor to compel them to set off their respective counterclaims in order to diminish the liability of S1. The subcontractor had another surety (S2) on a different obligation arising out of the same construction job, and the prime contractor, uncertain where liability should be placed, impleaded S2. On S1\u27s motion to vacate the impleader order, held, denied, and the court on its own motion directed realignment of the parties, ruling that the main issue was division of liability between the subcontractor\u27s two sureties, S1 and S2, to the prime contractor. The prime contractor was made plaintiff and the other parties, the subcontractor, S1 and S2, defendants, with the result that all matters in controversy could be settled in one action with one trial. In directing this order, the court stated that it relied on its inherent power to require realignment for convenience and expediency. Travelers Indemnity Co. v. J. S. Ramstad Construction Co., (D.C. Alaska 1954) 118 F. Supp. 423