Murray Hospital v. Rasmussen

20 F.2d 29, 6 A.F.T.R. (P-H) 6822, 1927 U.S. App. LEXIS 2457, 6 A.F.T.R. (RIA) 6822

• Court: Court of Appeals for the Ninth Circuit
• Decided: June 13, 1927
• Docket: No. 5055
• Status: Published

Opinion

RUDKIN, Circuit Judge

(after stating the facts as above). The right of the plaintiff in error to deduct from its gross income losses sustained during the taxable year, not compensated for by insurance or otherwise, is apparently not controverted, so that we are only concerned with the single question, whether the amended complaint shows any such losses. It is there directly averred that the plaintiff in error paid Murray within the taxable year the sum of $100,000, that $42,-800 of this amount was paid for stock held by Murray in the corporation, and that the balance was paid by way of settlement and compromise of the various claims and demands set forth in the amended complaint. Speaking generally, these were: The claim of the Granite-Alaska Company involved in the suit pending in the state court; the controversy with the same company over the contract to furnish steam heat and hot water for the hospital building; the settlement of the stockholder suit brought by Murray for an injunction and the appointment of a receiver; the settlement of the threatened suit to recover certain apparatus in the hospital; and other threatened litigation, the nature of whieh is not disclosed.

The demurrer was apparently sustained on the ground that this was “a suit over property rights, settled, bought, and paid for.” But wo do not think that this is a fair or reasonable construction of the pleading. By the settlement and compromise, the plaintiff in error acquired neither property nor property rights, unless it be said that it may have acquired something through the settlement of the claim made by Murray to the apparatus in the hospital. Aside from this, it acquired nothing, so far as we can discover, except freedom from turmoil and strife. It may be that the facts are not fully or correctly set forth, and it may be that the plaintiff in error will encounter insurmountable difficulties in making out a ease, but with these questions we are not now concerned. We think there is sufficient in the complaint to call for an answer, to the end that the case may be heard on the merits.

Reversed.