author: Per Curiam. Mr. Justice Douglas,

text:
    MORRIS v. WEINBERGER, SECRETARY OF HEALTH, EDUCATION, AND WELFARE
    No. 71-6698.
    Argued January 17, 1973
    Decided February 22, 1973

      E. R. McClelland argued the cause and filed a brief for petitioner.

      Walter H. Fleischer argued the cause for respondent. On the brief were Solicitor General Griswold, Assistant Attorney General Wood, Mark L. Evans, Kathryn H. Baldwin, and Michael Kimmel.

   Per Curiam.

Twenty days after this Court granted a writ of certiorari, 409 U. S. 841, Congress amended the relevant statutory provisions, § 202 (d)(8) of the Social Security Act, 42 U. S. C. §402 (d)(8). See § 111 (a), Social Security Amendments of 1972 (Oct. 30, 1972), Pub. L. 92-603, 86 Stat. 1329. The writ of certiorari heretofore granted is dismissed as improvidently granted.

Mr. Justice Douglas,

dissenting.

In this case, petitioner was denied social security benefits for his dependent adopted daughter because her court-approved adoption was not supervised by a child-placement agency. As noted by the Court, the section which barred his claim at the time that it was filed has now been repealed. What the Court does not deal with, however, is the patchwork nature of the relief that Congress has provided.

Section 111 (b) of the new Act specifies the dates and circumstances to which § 111 (a) applies. As I read § 111 (b), should petitioner qualify for increased benefits under § 111 (a)’s new standards, he could now secure retroactive application of the revised Act to cover the entire period at issue in this case. It is true that § 111 (a) no longer requires that court-authorized adoptions be supervised by a child-placement agency. Petitioner’s lot is not, however, bettered since § 111 (a) now imposes a new requirement which petitioner cannot meet: that benefits may be paid to an adopted child only if the child was living with the beneficiary "for the year immediately before the month in which began the period of [compensable] disability . . . § 111 (a)(8)(D)(ii) (II). Petitioner began receiving disability insurance benefits in July 1957. His adopted daughter was not born until 1965, however, and petitioner will accordingly not benefit under the terms of § 111 (a).

Section 111 (b) does not alter 42 U. S. C. § 402 (d) (8) as to the applications filed before October 1972 for benefits accruing before October 30, 1972. Such an application is before us in this case. Petitioner is therefore entitled to benefits under the former statute, if there is merit to his claim that the old § 402 (d) (8) distinctions among types of adoption supervision are constitutionally infirm.

Because the new Act does not provide coverage for petitioner’s child but the old Act remains applicable to the claim before us, I would reach the merits.

       Social Security Amendment of 1972, Pub. L. 92-603, 86 Stat. 1329, §111.

       “The amendment made by subsection (a) shall apply with respect to monthly benefits payable under title II of the Social Security Act for months after December 1967 on the basis of an application filed in or after the month in which this Act is enacted; except that such amendments shall not apply with respect to benefits for any month before the month in which this Act is enacted unless such application is filed before the close of the sixth month after the month in which this Act is enacted.”

       The relevant portion of that section reads:
      “(8) In the case of—
      “(A) ....
      “(B) an individual entitled to disability insurance benefits . . . . a child of such individual adopted after such individual became entitled to such . . . benefits shall be deemed not to meet the requirements of clause (i) . . . of paragraph (1) (C) unless such child—
      “(C) ....
      “(D) (i) was legally adopted by such individual in an adoption decreed by a court of competent jurisdiction within the United States,
      “(ii) was living with such individual in the United States and receiving at least one-half of his support from such individual . . . for the year immediately before . . . the month in which such individual became entitled to disability insurance benefits, and
      “(iii) had not attained the age of 18 before he began living with such individual.”


source: Caselaw Access Project

license: Public Domain

text:
    DEPARTMENT OF MOTOR VEHICLES OF CALIFORNIA v. RIOS
    No. 72-686.
    Decided February 26, 1973
   Per Curiam.

Petitioner, a California motorist, was involved in an automobile collision on March 18, 1971. Both drivers filed accident reports with the California Department of Motor Vehicles as required by the California Financial Responsibility Laws. Without affording petitioner a hearing on the question of potential liability, and based solely on the contents of the accident reports, the Department found that there was a reasonable possibility that a judgment might be recovered against petitioner as a result of the accident. Since petitioner was uninsured and could not deposit security, his license was suspended. The Supreme Court of California reversed, holding that prior to suspension “a hearing is required and that at such a hearing the licensee is entitled to review the reports or other evidence upon which the department contemplates determining that he is possibly responsible for the accident, and to present reports or testimony to establish his claim of nonculpability, all within reasonable due process procedures which the department may employ.” Rios v. Cozens, 7 Cal. 3d 792, 799, 499 P. 2d 979, 984 (1972).

We are unable to determine, however, whether the California Supreme Court based its holding upon the Due Process Clause of the Fourteenth Amendment to the Constitution of the United States, or upon the equivalent provision of the California Constitution, or both. In reaching its result in this case, the California court relied primarily upon this Court’s decisions in Bell v. Burson, 402 U. S. 535 (1971), and Jennings v. Mahoney, 404 U. S. 25 (1971), but also cited its own decisions in Randone v. Appellate Department, 5 Cal. 3d 536, 488 P. 2d 13 (1971); Blair v. Pitchess, 5 Cal. 3d 258, 486 P. 2d 1242 (1971); McCallop v. Carberry, 1 Cal. 3d 903, 464 P.2d 122 (1970), and Cline v. Credit Bureau of Santa Clara Valley, 1 Cal. 3d 908, 464 P. 2d 125 (1970), which apparently were premised upon both the state and federal provisions. In addition, the court in Rios specifically overruled its own prior decisions in Orr v. Superior Court, 71 Cal. 2d 220, 454 P. 2d 712 (1969), and Escobedo v. State of California, 35 Cal. 2d 870, 222 P. 2d 1 (1950), which had upheld the procedures here under attack under both the state and federal provisions. Thus, as in Mental Hygiene Dept. v. Kirchner, 380 U. S. 194, 196-197 (1965), “[w]hile we might speculate from the choice of words used in the opinion, and the authorities cited by the court, which provision was the basis for the judgment of the state court, we are unable to say with any degree of certainty that the judgment of the California Supreme Court was not based on an adequate and independent nonfederal ground.” We therefore grant the State of California’s petition for certio-rari, vacate the judgment of the Supreme Court of California, and remand the cause to that court for such further proceedings as may be appropriate. California v. Krivda, 409 U. S. 33 (1972); Mental Hygiene Dept. v. Kirchner, supra; Minnesota v. National Tea Co., 309 U. S. 551 (1940); State Tax Comm’n v. Van Cott, 306 U. S. 511 (1939).

It is so ordered.

Mr. Justice Douglas,

with whom Mr. Justice Brennan, Mr. Justice Stewart, and Mr. Justice Marshall concur,

dissenting.

The Court is quite correct in saying that we have vacated and remanded eases from state courts which we took by way of appeal or certiorari, when we were uncertain whether the judgment rested on state or federal grounds. But Minnesota v. National Tea Co., 309 U. S. 551, shows how unhappy that practice is. Yet, even assuming it is the proper procedure, we should not use it to determine whether we should take a case. No case from a state court can properly reach here until and unless a federal question is presented. Our Rule 19 (1)(a) states as a standard for granting certiorari from a state court the following:

“Where a state court has decided a federal question of substance not theretofore determined by this court, or has decided it in a way probably not in accord with applicable decisions of this court.”

The Court in Commercial Bank v. Buckingham’s Executors, 5 How. 317, 341, said that it was not enough that a federal question had been presented to the state court but that “it must appear, by clear and necessary intendment, that the question must have been raised, and must have been decided, in order to induce the judgment.” In Brown v. Atwell, 92 U. S. 327, 329, the Court ruled that it must appear that the decision of a federal question “was necessary to the determination of the cause, and that it was actually decided, or that the judgment as rendered could not have been given without deciding it.”

We have at times vacated and remanded prior to our decision to take or deny or to note or dismiss a case, so that the record can be clarified. See Honeyman v. Hanan, 300 U. S. 14, 25-26.

But we know in this case that a federal question was presented and ruled upon. We know that a state question was also presented and ruled upon. Where arguably “the judgment of the state court rests on two grounds, one involving a federal question and the other not,” Lynch v. New York, 293 U. S. 52, 54, we do not take the case.

The ruling of the Supreme Court of California in the present case involving the revocation of a driver’s license without a hearing, was as follows:

“Petitioner relies on numerous recent cases in which the United States Supreme Court and this court have recognized that an individual is constitutionally entitled to a hearing prior to being deprived of a significant interest. (Goldberg v. Kelly (1970) 397 U. S. 254, 266; Sniadach v. Family Finance Corp. (1969) 395 U. S. 337, 342; Randone v. Appellate Department (1971) 5 Cal. 3d 536, 547.) This principle is applicable to a plethora of vital personal and property rights (see Randone v. Appellate Department, supra, 5 Cal. 3d 536, 548, fn. 8), but it has most frequently been applied in this state to invalidate statutes affording a creditor prejudgment remedies against a debtor without prior notice or hearing (see e. g., Blair v. Pitchess (1971) 5 Cal. 3d 258; McCallop v. Carberry (1970) 1 Cal. 3d 903; Cline v. Credit Bureau of Santa Clara Valley (1970) 1 Cal. 3d 908).
“The rule explicated in foregoing cases is applicable to the instant circumstances.” 7 Cal. 3d 792, 795, 499 P. 2d 979, 981.

It seems plain that the California Supreme Court decision rested on both federal and state grounds and therefore that the requisite showing of the presence of a controlling federal question which has been on the books since the first Judiciary Act, 1 Stat. 73, 85, has not been made.

The opinion of the Supreme Court of California written by Justice Mosk was agreed to by all. It makes clear that both state and federal grounds were the basis of the judgment. The International Court of Justice that has only a case or two a Term might be tempted to seek a larger docket. Ours is already large; and it hardly comports with the messages of distress which have emanated from here for us to seek to gather in more cases that from the beginning have been sparsely and discretely selected from the state domain. Cohens v. Virginia, 6 Wheat. 264, raised a storm of protest against federal intrusion on state rights that has not yet subsided. Minnesota v. National Tea Co., supra, taught me that it is wise to insist that cases taken from a state court be clearly decided on a federal ground and not, as here, on both state and federal grounds, save where the state and federal questions are so intertwined as to make the state ground not an independent matter. See Enterprise Irrigation District v. Canal Co., 243 U. S. 157, 163-165.

I would deny this petition for certiorari.

       On remand the Supreme Court of Minnesota said:
      “If we were in error, then assuredly the opportunity to be set aright should be cheerfully and thankfully accepted. Having so reexamined them, we conclude that our prior decision was right. There is no need of further discussion of the problems presented for the former opinion adequately covers the ground. We think that the section of the statute here involved (L. 1933, c. 213, § 2 [b], 3 Mason Minn. St. 1936 Supp. § 5887-2 [b]), is violative of the uniformity clause of our own constitution.” National Tea Co. v. State, 208 Minn. 607, 608, 294 N. W. 230, 231.

       Title 28 U. S. C. § 1257 presently provides as to certiorari:
      “Final judgments or decrees rendered by the highest court of a State in which a decision could be had, may be reviewed by the Supreme Court as follows:
      “(3) By writ of certiorari, where the validity of a treaty or statute of the United States is drawn in' question or where the validity of a State statute is drawn in question on the ground of its being repugnant to the Constitution, treaties or laws of the United States, or where any title, right, privilege or immunity is specially set up or claimed under the Constitution, treaties or statutes of, or commission held or authority exercised under, the United States.”


author: Me. Justice Blackmun

text:
    TILLMAN et al. v. WHEATON-HAVEN RECREATION ASSN., INC., et al.
    No. 71-1136.
    Argued November 15, 1972
    Decided February 27, 1973

      BlackmuN, J., delivered the opinion for a unanimous Court.

      Allison W. Brown, Jr., argued the cause for petitioners. With him on the briefs were Raymond W. Russell, Samuel A. Chaitovitz, Melvin L. Wulf, and Sanford Jay Rosen.

      Henry J. Noyes argued the cause and filed a brief for respondents Wheaton-Haven Recreation Assn., Inc., et al. John H. Mudd argued the cause for respondent E. Richard McIntyre. With him on the brief was H. Thomas Howell.

      Briefs of amici curiae urging reversal were filed by Solicitor General Griswold, Assistant Attorney General Norman, Deputy Solicitor General Wallace, William Bradford Reynolds, and John C. Hoyle for the United States; by Alfred H. Carter for Montgomery County, Maryland; and by Philip J. Tierney and George D. Solter for the Maryland Commission on Human Relations.

   Me. Justice Blackmun

delivered the opinion of the Court.

Wheaton-Haven Recreation Association, Inc., a nonprofit Maryland corporation, was organized in 1958 for the purpose of operating a swimming pool. After a membership drive to raise funds, the Association obtained zoning as a “community pool” and constructed its facility near Silver Spring, Maryland. The Association is essentially a single-function recreational club, furnishing only swimming and related amenities.

Membership is by family units, rather than individuals, and is limited to 325 families. This limit has been reached on at least one occasion. Membership is largely keyed to the geographical area within a three-quarter-mile radius of the pool. A resident (whether or not a homeowner) of that area requires no recommendation before he may apply for membership; the resident receives a preferential place on the waiting list if he applies when the membership is full; and the resident-member who is a homeowner and who sells his home and turns in his membership, confers on the purchaser of his property a first option on the vacancy created by his removal and resignation. A person residing outside the three-quarter-mile area may apply for membership only upon the recommendation of a member; he receives no preferential place on the waiting list if the membership is full; and if he becomes a member, he has no way of conferring an option upon the purchaser of his property. Beyond-the-area members may not exceed 30%■ of the total. Majority approval of those present at a meeting of the board of directors or of the general membership is required before an applicant is admitted as a member.

Only members and their guests are admitted to the pool. No one else may gain admission merely by payment of an entrance fee.

In the spring of 1968 petitioner, Harry C. Press, a Negro who had purchased from a nonmember a home within the geographical preference area, inquired about membership in Wheaton-Haven. At that time the Association had no Negro member. In November 1968 the general membership rejected a resolution that would have opened the way for Negro members. Dr. Press was never given an application form, and respondents concede that he was discouraged from applying because of his race.

In July 1968 petitioners Murray and Rosalind N. Tillman, who were husband and wife and members in good standing, brought petitioner Grace Rosner, a Negro, to the pool as their guest. Although Mrs. Rosner was admitted on that occasion, the guest policy was changed by the board of directors, at a special meeting the following day, to limit guests to relatives of members. Respondents concede that one reason for the adoption of this policy was to prevent members from having Negroes as guests at the pool. Under this new policy Mrs. Rosner thereafter was refused admission when the Tillmans sought to have her as their guest. In the fall of 1968 the membership, by resolution, reaffirmed the policy.

In October 1969 petitioners (Mr. and Mrs. Tillman, Dr. and Mrs. Press, and Mrs. Rosner) instituted this civil action against the Association and individuals who were its officers or directors, seeking damages and declaratory and injunctive relief, particularly under the Civil Rights Act of 1866, now 42 U. S. C. § 1982, the Civil Rights Act of 1870, now 42 U. S. C. § 1981, and Title II of the Civil Rights Act of 1964, 78 Stat. 243, 42 U. S. C. § 2000a, et seq. The District Court, in an unreported opinion, held that Wheaton-Haven was a private club and exempt from the nondiscrimination provisions of the statutes. It granted summary judgment for defendants. The Court of Appeals affirmed, one judge dissenting. 451 F.2d 1211 (CA4 1971). It later denied rehearing en banc over two dissents, id., at 1225. We granted certiorari, 406 U. S. 916 (1972), to review the case in the light of Sullivan v. Little Hunting Park, 396 U. S. 229 (1969).

I

In Jones v. Alfred H. Mayer Co., 392 U. S. 409 (1968), this Court, after a detailed review of the legislative history of 42 U. S. C. § 1982, id., at 422-437, held that the statute reaches beyond state action and is not confined to officially sanctioned segregation. The Court subsequently applied § 1982 in Sullivan to private racial discrimination practiced by a nonstock corporation organized to operate a community park and playground facilities, including a swimming pool, for residents of a designated area. The Presses contend that their § 1982 claim is controlled by Sullivan. We agree.

A. The Court of Appeals held that § 1982 would not apply to the Presses because membership rights in Wheaton-Haven could neither be leased nor transferred incident to the acquisition of property. 451 F. 2d, at 1216-1217. In Sullivan, the Court concluded that the right to enjoy a membership share in the corporation, assigned by a property owner as part of a leasehold he was granting, constituted a right “to . . . lease . . . property” protected by § 1982. 396 U. S., at 236-237. The Court of Appeals distinguished property-linked membership shares in Sullivan from property-linked membership preferences in Wheaton-Haven by emphasizing the speculative nature of the benefits available to residents of the area around Wheaton-Haven. We conclude that the Court of Appeals erroneously characterized the property-linked preferences conferred by Wheaton-Haven’s bylaws.

Under the bylaws, a resident of the area within three-quarters of a mile from the pool receives the three preferences noted above: he is allowed to apply for membership without seeking a recommendation from a current member; he receives preference over others, except those with first options, when applying for a membership vacancy; and, if he is an owner-member, he is able to pass to his successor-in-title a first option to acquire the membership Wheaton-Haven purchases from him. If the membership is full, the preference-area resident is placed on the waiting list; other applicants, however, are required to reapply after those on the waiting list obtain memberships.

The Court of Appeals concluded, incorrectly it later appeared, that the membership had never been full, and that the option possibility, therefore, was “far too tenuous a thread to support a conclusion that there is a transfer of membership incident to the purchase of property.” 451 F. 2d, at 1217. Since the Presses had not purchased their area home from a member, the court found no transaction by which the Presses could have acquired a membership preference. 451 F. 2d, at 1217-1218, n. 14.

We differ from the Court of Appeals in our evaluation of the three rights obtained. The record indicates that the membership was full in the spring of 1968 but dropped, perhaps not unexpectedly in view of the season, in the fall of that year. We cannot be certain, either, that the membership would not have remained full in the absence of racial discrimination, or that the membership will never be full in the future. As was observed in dissent in the Court of Appeals:

“Several years from now it may well be that a white neighbor can sell his home at a considerably higher price than Dr. and Mrs. Press because the white owner will be able to assure his purchaser of an option for membership in Wheaton-Haven. Dr. and Mrs. Press, however, are denied this advantage.” 451 F. 2d, at 1223.

Similarly, the automatic waiting-list preference given to residents of the favored area may have affected the price paid by the Presses when they bought their home. Thus, the purchase price to them, like the rental paid by Freeman in Sullivan, may well reflect benefits dependent on residency in the preference area. For them, however, the right to acquire a home in the area is abridged and diluted.

When an organization links membership benefits to residency in a narrow geographical area, that decision infuses those benefits into the bundle of rights for which an individual pays when buying or leasing within the area. The mandate of 42 U. S. C. § 1982 then operates to guarantee a nonwhite resident, who purchases, leases, or holds this property, the same rights as are enjoyed by a white resident.

B. Respondents contend that even if 42 U. S. C. § 1982 applies, Wheaton-Haven nevertheless is exempt as a private club under § 201 (e) of the Civil Rights Act of 1964, 42 U. S. C. § 2000a (e), with a consequent implied narrowing effect upon the range and application of the older § 1982. In Sullivan we found it unnecessary to consider limits on § 1982 as applied to a truly private association because we found “no plan or purpose of exclusiveness” in Little Hunting Park. 396 U. S., at 236. But here, as there, membership “is open to every white person within the geographic area, there being no selective element other than race.” Ibid. The only restrictions are the stated maximum number of memberships and, as in Sullivan, id.., at 234, the requirement of formal board or membership approval. The structure and practices of Wheaton-Haven thus are indistinguishable from those of Little Hunting Park. We hold, as a consequence, that Wheaton-Haven is not a private club and that it is not necessary in this case to consider the issue of any implied limitation on the sweep of § 1982 when its application to a truly private club, within the meaning of § 2000a (e), is under consideration. Cf. Moose Lodge No. 107 v. Irvis, 407 U. S. 163 (1972); Daniel v. Paul, 395 U. S. 298 (1969).

II

Mrs. Rosner and the Tillmans, relying on 42 U. S. C. §§ 1981, 1982, and 2000a et seq., contend that Wheaton-Haven could not adopt a racially discriminatory policy toward guests. The District Court granted summary judgment for the respondents on these claims also, holding that Wheaton-Haven was a private club and exempt from all three statutes.

The operative language of both § 1981 and § 1982 is traceable to the Act of April 9, 1866, c. 31, § 1, 14 Stat. 27. Hurd v. Hodge, 334 U. S. 24, 30-31 n. 7 (1948). In light of the historical interrelationship between § 1981 and § 1982, we see no reason to construe these sections differently when applied, on these facts, to the claim of Wheaton-Haven that it is a private club. Consequently, our discussion and rejection of Wheaton-Haven’s claim that it is exempt from § 1982 disposes of the argument that Wheaton-Haven is exempt from § 1981. On remand the District Court will develop any necessary facts concerning the adoption of the guest policy and will evaluate the claims of the parties free of the misconception that Wheaton-Haven is exempt from §§ 1981, 1982, and 2000a.

The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings.

It is so ordered.

       Candy, ice cream, and soft drinks have been sold on the premises, but these were merely incidentals for the convenience of swimmers during the season. Aside from meetings of the board of directors and of the general membership, the premises apparently have been utilized only for pool-related activities.

       Wheaton-Haven presently charges an initiation fee of $375 and annual dues ranging from $50 to $60, depending on the number of persons in the family unit.

       The Association’s bylaws provide that “[m]embership shall be open to bona fide residents (whether or not home owners) of the area within a three-quarter mile radius of the pool,” and “may be extended” to others “who shall have been recommended ... by a member.”

       “All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property.” 42 U. S. C. § 1982.

       Under the Wheaton-Haven system, a within-the-area member selling his home may either retain his membership or seek to sell it back to the Association. If Wheaton-Haven is willing to purchase, it pays 80% of the initial cost if the membership is not full, and 90% if the membership is full. The purchaser of the member’s home then has a first option on the membership so released by the seller. The practical effect of this system is to prefer applicants who purchase from members over other applicants, particularly at a time when the membership is full.

       In the court’s per curiam statement responsive to the petition for rehearing, it described its earlier observation that the membership list had never been full as an “inadvertent misstatement . . . now corrected to reflect a full membership list in the spring of 1968.” 451 F. 2d 1211, 1225.

       The record reveals that a number of members withdrew when the present suit was filed. Tr. of Oral Arg. in District Court 15.

       “The provisions of this subchapter shall not apply to a private club or other establishment not in fact open to the public, except to the extent that the facilities of such establishment are made available to the customers or patrons of an establishment within the scope of subsection (b) of this section.” 42 U. S. C. § 2000a (e).

       Apparently one applicant was formally rejected during the preceding 12 years of Little Hunting Park’s operation. App. 127 and Brief for Petitioner 7, Sullivan v. Little Hunting Park, 396 U. S. 229 (1969). At Wheaton-Haven one applicant was formally rejected in the preceding 11 years.
      The Court of Appeals found it “inferable from Little Hunting Park’s organization and membership provisions that it was built by the same real estate developers who built the four subdivisions from which members were drawn, as an aid to the sale of homes.” 451 F. 2d, at 1215 n. 8. This inference may be erroneous. App. 24-36 and Tr. of Oral Arg. 24, 31-34, Sullivan v. Little Hunting Park, supra. In any event, Sullivan did not rest on any relationship between the club and real estate developers.

       “All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be ptirties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.”

       The Act of Apr. 9, 1866, § 1, read in part:
      “That all persons born in the United States ... of every race and color . . . shall have the same right, in every State and Territory in the United States, to make and enforce contracts, to sue, be parties, and give evidence, to inherit, purchase, lease, sell, hold, and convey real and personal property, and to full and equal benefit of all laws and proceedings for the security of person and property, as is enjoyed by white citizens, and shall be subject to like punishment, pains, and penalties, and to none other, any law, statute, ordinance, regulation, or custom, to the contrary notwithstanding.” 14 Stat. 27.
      The present codification of § 1981 is derived from Revised Statutes § 1977 (1874), which codified the Act of May 31, 1870, § 16, 16 Stat. 144. Although the 1866 Act rested only on the Thirteenth Amendment, United States v. Harris, 106 U. S. 629, 640 (1883);
        Civil Rights Cases, 109 U. S. 3, 22 (1883); United States v. Morris, 125 F. 322, 323 (ED Ark. 1903), and, indeed, was enacted before the Fourteenth Amendment was formally proposed, United States v. Price, 383 U. S. 787, 804 (1966); Hurd v. Hodge, 334 U. S. 24, 32 n. 11 (1948); Oyama v. California, 332 U. S. 633, 640 (1948); Civil Rights Cases, supra, 109 U. S., at 22, the 1870 Act was passed pursuant to the Fourteenth, and changes in wording may have reflected the language of the Fourteenth Amendment. See United States v. Wong Kim Ark, 169 U. S. 649, 695-696 (1898). The 1866 Act was re-enacted in 1870, and the predecessor of the present § 1981 was to be “enforced according to the provisions” of the 1866 Act. Act of May 31, 1870, § 18, 16 Stat. 144.

       Respondent McIntyre urges that the judgment in his favor should be affirmed as to him because he was merely a director of Wheaton-Haven and was later defeated in his bid for re-election to its board, and because, in his deposition, he stated that he opposed the Association’s exclusionary practices. Neither the District Court nor the Court of Appeals discussed Mr. McIntyre’s individual liability, and we find it inappropriate to attempt resolution of this issue on the present record.


author: Mr. Justice Powell

text:
    UNITED STATES v. BASYE et al.
    No. 71-1022.
    Argued December 11, 1972
    Decided February 27, 1973
    Powell, J., delivered the opinion of the Court, in which Burger, C. J., and Brennan, Stewart, White, Marshall, Blackmun, and Rehnquist, JJ., joined. Douglas, J., dissented.

      Solicitor General Griswold argued the cause for the United States. With him on the briefs were Assistant

      Attorney General Crampton, Richard B. Stone, Meyer Rothwacks, and Ernest J. Brown.

      Valentine Brookes argued the cause for respondents. With him on the brief were Leonard A. Marcussen, and Lawrence V. Brookes.

        George E. Link filed a brief for Kaiser Foundation Health Plan, Inc., as amicus curiae urging affirmance.

   Mr. Justice Powell

delivered the opinion of the Court.

This is a partnership income tax case brought here by the United States on a petition for writ of certiorari from the Court of Appeals for the Ninth Circuit. Respondents, physicians and partners in a medical partnership, filed suit in the District Court for the Northern District of California seeking the refund of income taxes previously paid pursuant to a deficiency assessed by the Commissioner of Internal Revenue. The case was heard on an agreed statement of facts and the District Court ruled in respondents’ favor. 295 F. Supp. 1289 (1968). The Government appealed to the Ninth Circuit and that court affirmed the lower court’s judgment. 450 F. 2d 109 (1971). We agreed to hear this case to consider whether, as the Government contends, the decision below is in conflict with precedents of this Court. 405 U. S. 1039 (1972). Because we find that the decision is incompatible with basic principles of income taxation as developed in our prior cases, we reverse.

I

Respondents, each of whom is a physician, are partners in a limited partnership known as Permanente Medical Group, which was organized in California in 1949. Associated with the partnership are over 200 partner physicians, as well as numerous nonpartner physicians and other employees. In 1959, Permanente entered into an agreement with Kaiser Foundation Health Plan, Inc., a nonprofit corporation providing prepaid medical care and hospital services to its dues-paying members.

Pursuant to the terms of the agreement, Permanente agreed to supply medical services for the 390,000 member-families, or about 900,000 individuals, in Kaiser’s Northern California Region which covers primarily the San Francisco Bay area. In exchange for those services, Kaiser agreed to pay the partnership a “base compensation” composed of two elements. First, Kaiser undertook to pay directly to the partnership a sum each month computed on the basis of the total number of members enrolled in the health program. That number was multiplied by a stated fee, which originally was set at a little over $2.60. The second item of compensation — and the one that has occasioned the present dispute — called for the creation of a program, funded entirely by Kaiser, to pay retirement benefits to Permanente’s partner and non-partner physicians.

The pertinent compensation provision of the agreement did not itself establish the details of the retirement program; it simply obligated Kaiser to make contributions to such a program in the event that the parties might thereafter agree to adopt one. As might be expected, a separate trust agreement establishing the contemplated plan soon was executed by Permanente, Kaiser, and the Bank of America Trust and Sayings Association, acting as trustee. Under this agreement Kaiser agreed to make payments to the trust at a predetermined rate, initially pegged at 12 cents per health plan member per month. Additionally, Kaiser made a flat payment of $200,000 to start the fund and agreed that its pro rata payment obligation would be retroactive to the date of the signing of the medical service agreement.

The beneficiaries of the trust were all partner and nonpartner physicians who had completed at least two years of continuous service with the partnership and who elected to participate. The trust maintained a separate tentative account for each beneficiary. As periodic payments were received from Kaiser, the funds were allocated among these accounts pursuant to a complicated formula designed to take into consideration on a relative basis each participant's compensation level, length of service, and age. No physician was eligible to receive the amounts in his tentative account prior to retirement, and retirement established entitlement only if the participant had rendered at least 15 years of continuous service or 10 years of continuous service and had attained age 65. Prior to such time, however, the trust agreement explicitly provided that no interest in any tentative account was to be regarded as having vested in any particular beneficiary. The agreement also provided for the forfeiture of any physician's interest and its redistribution among the remaining participants if he were to terminate his relationship with Permanente prior to retirement. A similar forfeiture and redistribution also would occur if, after retirement, a physician were to render professional services for any hospital or health plan other than one operated by Kaiser. The trust agreement further stipulated that a retired physician’s right to receive benefits would cease if he were to refuse any reasonable request to render consultative services to any Kaiser-operated health plan.

The agreement provided that the plan would continue irrespective either of changes in the partnership’s personnel or of alterations in its organizational structure. The plan would survive any reorganization of the partnership so long as at least 50% of the plan’s participants remained associated with the reorganized entity. In the event of dissolution or of a nonqualifying reorganization, all of the amounts in the trust were to be divided among the participants entitled thereto in amounts governed by each participant’s tentative account. Under no circumstances, however, could payments from Kaiser to the trust be recouped by Kaiser: once compensation was paid into the trust it was thereafter committed exclusively to the benefit of Permanente’s participating physicians.

Upon the retirement of any partner or eligible non-partner physician, if he had satisfied each of the requirements for participation, the amount that had accumulated in his tentative account over the years would be applied to the purchase of a retirement income contract. While the program thus provided obvious benefits to Permanente’s physicans, it also served Kaiser’s interests. By providing attractive deferred benefits for Permanente’s staff of professionals, the retirement plan was designed to “create an incentive” for physicians to remain with Permanente and thus “insure” that Kaiser would have a “stable and reliable group of physicians.”

During the years from the plan’s inception until its discontinuance in 1963, Kaiser paid a total of more than $2,000,000 into the trust. Permanente, however, did not report these payments as income in its partnership returns. Nor did the individual partners include these payments in the computations of their distributive shares of the partnership’s taxable income. The Commissioner assessed deficiencies against each partner-respondent for his distributive share of the amount paid by Kaiser. Respondents, after paying the assessments under protest, filed these consolidated suits for refund.

The Commissioner premised his assessment on the conclusion that Kaiser’s payments to the trust constituted a form of compensation to the partnership for the services it rendered and therefore was income to the partnership. And, notwithstanding the deflection of those payments to the retirement trust and their current unavailability to the partners, the partners were still taxable on their distributive shares of that compensation. Both the District Court and the Court of Appeals disagreed. They held that the payments to the fund were not income to the partnership because it did not receive them and never had a “right to receive” them. 295 F. Supp., at 1292-1294; 450 F. 2d, at 114-115. They reasoned that the partnership, as an entity, should be disregarded and that each partner should be treated simply as a potential beneficiary of his tentative share of the retirement fund. Viewed in this light, no presently taxable income could be attributed to these cash basis taxpayers because of the contingent and forfeitable nature of the fund allocations. 295 F. Supp., at 1294-1296 ; 450 F. 2d, at 112.

We hold that the courts below erred and that respondents were properly taxable on the partnership’s retirement fund income. This conclusion rests on two familiar principles of income taxation, first, that income is taxed to the party who earns it and that liability may not be avoided through an anticipatory assignment of that income, and, second, that partners are taxable on their distributive or proportionate shares of current partnership income irrespective of whether that income is actually distributed to them. The ensuing discussion is simply an application of those principles to the facts of the present case.

II

Section 703 of the Internal Revenue Code of 1954, insofar as pertinent here, prescribes that “[t]he taxable income of a partnership shall be computed in the same manner as in the case of an individual.” 26 U. S. C. §703 (a). Thus, while the partnership itself pays no taxes, 26 U. S. C. § 701, it must report the income it generates and such income must be calculated in largely the same manner as an individual computes his personal income. For this purpose, then, the partnership is regarded as an independently recognizable entity apart from the aggregate of its partners. Once its income is ascertained and reported, its existence may be disregarded since each partner must pay a tax on a portion of the total income as if the partnership were merely an agent or conduit through which the income passed.

In determining any partner’s income, it is first necessary to compute the gross income of the partnership. One of the major sources of gross income, as defined in § 61 (a)(1) of the Code, is “ [compensation for services, including fees, commissions, and similar items.” 26 U. S. C. §61 (a)(1). There can be no question that Kaiser’s payments to the retirement trust were compensation for services rendered by the partnership under the medical service agreement. These payments constituted an integral part of the employment arrangement. The agreement itself called for two forms of “base compensation” to be paid in exchange for services rendered— direct per-member, per-month payments to the partnership and other, similarly computed, payments to the trust. Nor was the receipt of these payments contingent upon any condition other than continuation of the contractual relationship and the performance of the prescribed medical services. Payments to the trust, much like the direct payments to the partnership, were not forfeitable by the partnership or recoverable by Kaiser upon the happening of any contingency.

Yet the courts below, focusing on the fact that the retirement fund payments were never actually received by the partnership but were contributed directly to the trust, found that the payments were not includable as income in the partnership’s returns. The view of tax accountability upon which this conclusion rests is incompatible with a foundational rule, which this Court has described as “the-first principle of income taxation: that income must be taxed to him who earns it.” Commissioner v. Culbertson, 337 U. S. 733, 739-740 (1949). The entity earning the income — whether a partnership or an individual taxpayer — cannot avoid taxation by entering into a contractual arrangement whereby that income is diverted to some other person or entity. Such arrangements, known to the tax law as “anticipatory assignments of income,” have frequently been held ineffective as means of avoiding tax liability. The seminal precedent, written over 40 years ago, is Mr. Justice Holmes’ opinion for a unanimous Court in Lucas v. Earl, 281 U. S. 111 (1930). There the taxpayer entered into a contract with his wife whereby she became entitled to one-half of any income he might earn in the future. On the belief that a taxpayer was accountable only for income actually received by him, the husband thereafter reported only half of his income. The Court, unwilling to accept that a reasonable construction of the tax laws permitted such easy deflection of income tax liability, held that the taxpayer was responsible for the entire amount of his income.

The basis for the Court’s ruling is explicit and controls the case before us today:

“[T]his case is not to be decided by attenuated subtleties. It turns on the import and reasonable construction of the taxing act. There is no doubt that the statute could tax salaries to those who earned them and provide that the tax could not be escaped by anticipatory arrangements and contracts however skilfully devised to prevent the salary when paid from vesting even for a second in the man who earned it. That seems to us the import of the statute before us and we think that no distinction can be taken according to the motives leading to the arrangement by which the fruits are attributed to a different tree from that on which they grew.” Id., at 114-115.

The principle of Lacas v. Earl, that he who earns income may not avoid taxation through anticipatory arrangements no matter how clever or subtle, has been repeatedly invoked by this Court and stands today as a cornerstone of our graduated income tax system. See, e. g., Commissioner v. Harmon, 323 U. S. 44 (1944); United States v. Joliet & Chicago R. Co., 315 U. S. 44 (1942); Helvering v. Eubank, 311 U. S. 122 (1940); Burnet v. Leininger, 285 U. S. 136 (1932). And, of course, that principle applies with equal force in assessing partnership income.

Permanente’s agreement with Kaiser, whereby a portion of the partnership compensation was deflected to the retirement fund, is certainly within the ambit of Lucas v. Earl. The partnership earned the income and, as a result of arm’s-length bargaining with Kaiser, was responsible for its diversion into the trust fund. The Court of Appeals found the Lucas principle inapplicable because Permanente “never had the right itself to receive the payments made into the trust as current income.” 450 F. 2d, at 114. In support of this assertion, the court relied on language in the agreed statement of facts stipulating that “[t]he payments . . . were paid solely to fund the retirement plan, and were not otherwise available to [Permanente] . . . .” Ibid. Emphasizing that the fund was created to serve Kaiser’s interest in a stable source of qualified, experienced physicians, the court found that Permanente could not have received that income except in the form in which it was received.

The court’s reasoning seems to be that, before the partnership could be found to have received income, there must be proof that “Permanente agreed to accept less direct compensation from Kaiser in exchange for the retirement plan payments.” Id., at 114-115. Apart from the inherent difficulty of adducing such evidence, we know of no authority imposing this burden upon the Government. Nor do we believe that the guiding principle of Lucas v. Earl may be so easily circumvented. Kaiser’s motives for making payments are irrelevant to the determination whether those amounts may fairly be viewed as compensation for services rendered. Neither does Kaiser’s apparent insistence upon payment to the trust deprive the agreed contributions of their character as compensation. The Government need not prove that the taxpayer had complete and unrestricted power to designate the manner and form in which his income is received. We may assume, especially in view of the relatively unfavorable tax status of self-employed persons with respect to the tax treatment of retirement plans, that many partnerships would eagerly accept conditions similar to those prescribed by this trust in consideration for tax-deferral benefits of the sort suggested here. We think it clear, however, that the tax laws permit no such easy road to tax avoidance or deferment. Despite the novelty and ingenuity of this arrangement, Permanente's “base compensation” in the form of payments to a retirement fund was income to the partnership and should have been reported as such.

III

Since the retirement fund payments should have been reported as income to the partnership, along with other income received from Kaiser, the individual partners should have included their shares of that income in their individual returns. 26 U. S. C. §§ 61 (a)(13), 702, 704. For it is axiomatic that each partner must pay taxes on his distributive share of the partnership's income without regard to whether that amount is actually distributed to him. Heiner v. Mellon, 304 U. S. 271 (1938), decided under a predecessor to the current partnership provisions of the Code, articulates the salient proposition. After concluding that “distributive” share means the “proportionate” share as determined by the partnership agreement, id., at 280, the Court stated:

“The tax is thus imposed upon the partner’s proportionate share of the net income of the partnership, and the fact that it may not be currently distributable, whether by agreement of the parties or by operation of law, is not material.” Id., at 281.

New principles of partnership taxation are more firmly established than that no matter the reason for nondistri-bution each partner must pay taxes on his distributive share. Treas. Reg. § 1.702-1, 26 CFR § 1.702-1 (1972). See, e. g., Hulbert v. Commissioner, 227 F. 2d 399 (CA7 1955); Bell v. Commissioner, 219 F. 2d 442 (CA5 1955); Stewart v. United States, 263 F. Supp. 451 (SDNY 1967); Freudmann v. Commissioner, 10 T. C. 775 (1948); S. Surrey & W. Warren, Federal Income Taxation 1115 (1960) ; 6 J. Mertens, Law of Federal Income Taxation §§ 35.01, 35.22 (1968); A. Willis, On Partnership Taxation § 5.01 (1971).

The courts below reasoned to the contrary, holding that the partners here were not properly taxable on the amounts contributed to the retirement fund. This view, apparently, was based on the assumption that each partner’s distributive share prior to retirement was too contingent and unascertainable to constitute presently recognizable income. It is true that no partner knew with certainty exactly how much he would ultimately receive or whether he would in fact be entitled to receive anything. But the existence of conditions upon the actual receipt by a partner of income fully earned by the partnership is irrelevant in determining the amount of tax due from him. The fact that the courts below placed such emphasis on this factor suggests the basic misapprehension under which they labored in this case. Rather than being viewed as responsible contributors to the partnership’s total income, respondent-partners were seen only as contingent beneficiaries of the trust. In some measure, this misplaced focus on the considerations of uncertainty and forfeitability may be a consequence of the erroneous manner in which the Commissioner originally assessed the partners’ deficiencies. The Commissioner divided Kaiser’s trust fund payments into two categories: (1) payments earmarked for the tentative accounts of nonpartner physicians; and (2) those allotted to partner physicians. The payments to the trust for the former category of nonpartner physicians were correctly counted as income to the partners in accord with the distributive-share formula as established in the partnership agreement. The latter payments to the tentative accounts of the individual partners, however, were improperly allocated to each partner pursuant to the complex formula in the retirement plan itself, just as if that agreement operated as an amendment to the partnership agreement. 295 F. Supp., at 1292.

The Solicitor General, alluding to this miscomputation during oral argument, suggested that this error “may be what threw the court below off the track.” It should be clear that the contingent and unascertainable nature of each partner's share under the retirement trust is irrelevant to the computation of his distributive share. The partnership had received as income a definite sum which was not subject to diminution or forfeiture. Only its ultimate disposition among the employees and partners remained uncertain. For purposes of income tax computation it made no difference that some partners might have elected not to participate in the retirement program or that, for any number of reasons, they might not ultimately receive any of the trust's benefits. Indeed, as the Government suggests, the result would be quite the same if the “potential beneficiaries included no partners at all, but were children, relatives, or other objects of the partnership's largesse.” The sole operative consideration is that the income had been received by the partnership, not what disposition might have been effected once the funds were received.

IV

In summary, we find this case controlled by familiar and long-settled principles of income and partnership taxation. There being no doubt about the character of the payments as compensation, or about their actual receipt, the partnership was obligated to report them as income presently received. Likewise, each partner was responsible for his distributive share of that income. We, therefore, reverse the judgments and remand the case with directions that judgments be entered for the United States.

It is so ordered.

Mr. Justice Douglas dissents.

       Technically, the married respondents’ spouses are also parties because they filed joint income tax returns for the years in question here. Any reference to respondents in this opinion, however, refers only to the partner physicians.

       The pertinent portion of the Kaiser-Permanente medical service contract states:
      “Article H

        “Base Compensation to Medical Group

      “As base compensation to [Permanente] for Medical Services to be provided by [Permanente] hereunder, [Kaiser] shall pay to [Permanente] the amounts specified in this Article H.

        “Section Provision for Savings and Retirement Program for Physicians.

      “In the event that [Permanente] establishes a savings and retirement plan or other deferred compensation plan approved by [Kaiser], [Kaiser] will pay, in addition to all other sums payable by [Kaiser] under this Agreement, the contributions required under such plan to the extent that such contributions exceed amounts, if any, contributed by Physicians

       The trust agreement states:
      “The tentative accounts and suspended tentative accounts provided for Participants hereunder are solely for the purpose of facilitating record keeping and necessary computations, and confer no rights in the trust fund upon the individuals for whom they are established. . . .”

       If, however, termination were occasioned by death or permanent disability, the trust agreement provided for receipt of such amounts as had accumulated in that physician’s tentative account. Additionally, if, after his termination for reasons of disability prior to retirement, a physician should reassociate with some affiliated medical group his rights as a participant would not be forfeited.

       The agreed statement of facts filed by the parties in the District Court states:
      “The primary purpose of the retirement plan was to create an incentive for physicians to remain with [Permanente] . . . and thus to insure [Kaiser] that it would have a stable and reliable group of physicians providing medical services to its members with a minimum, of turn-over. . . .”

       The Court of Appeals purported not to decide, as the District Court had, whether the partnership should be viewed as an “entity” or as a “conduit.” 450 F. 2d 109, 113 n. 5, and 115. Yet, its analysis indicates that it found it proper to disregard the partnership as a separate entity. After explaining its view that Permanente never had a right to receive the payments, the Court of Appeals stated: “When the transaction is viewed in this light, the partnership becomes a mere agent contracting on behalf of its members for payments to the trust for their ultimate benefit, rather than a principal which itself realizes taxable income.” Id., at 115 (emphasis supplied).

       Each respondent reported his income for the years in question on the cash basis. The partnership reported its taxable receipts under the accrual method.

       There has been a great deal of discussion in the briefs and in the lower court opinions with respect to whether a partnership is to be viewed as an “entity” or as a “conduit.” We find ourselves in agreement with the Solicitor General's remark during oral argument when he suggested that “[i]t seems odd that we should still be discussing such things in 1972.” Tr. of Oral Arg. 14. The legislative history indicates, and the commentators agree, that partnerships are entities for purposes of calculating and filing informational returns but that they are conduits through which the taxpaying obligation passes to the individual partners in accord with their distributive shares. See, e. g., H. R. Rep. No. 1337, 83d Cong., 2d Sess., 65-66 (1954); S. Rep. No. 1622, 83d Cong., 2d Sess., 89-90 (1954); 6 J. Mertens, Law of Federal Income Taxation § 35.01 (1968); S. Surrey & W. Warren, Federal Income Taxation 1115-1116 (1960); Jackson, Johnson, Surrey, Tenen & Warren, The Internal Revenue Code of 1954: Partnerships, 54 Col. L. Rev. 1183 (1954).

       The agreed statement of facts states that the contracting parties were “separate organizations independently contracting with one another at arms’ length.”

       See n. 5, supra.

       Respondents do not contend that such payments were gifts or some other type of nontaxable contribution. See Commissioner v. LoBue, 351 U. S. 243 (1956); Bingler v. Johnson, 394 U. S. 741 (1969).

       Disparities have long existed between the tax treatment of pension plans for corporate employees and the treatment of similar plans for the self-employed and for members of partnerships. S. Surrey & W. Warren, supra, n. 8, at 598-599. In 1962, Congress endeavored to ameliorate these differences by enacting corrective legislation, Pub. L. 87-792, 76 Stat. 809. While that legislation, commonly known as H. R. 10 or the Jenkins-Keogh Bill, provided some relief, it fell far short of affording a parity of treatment for professionals and other self-employed individuals. Internal Revenue Code of 1954, § 404. For a detailed review of the intricate provisions of the applicable statute and for a close comparison of the present differences, see Grayck, Tax Qualified Retirement Plans for Professional Practitioners: A Comparison of the Self-Employed Individuals Tax Requirement Act of 1962 and the Professional Association, 63 Col. L. Rev. 415 (1963); Note, Federal Tax Policy and Retirement Benefits — A New Approach, 59 Geo. L. J. 1299 (1971); Note, Tax Parity for Self-Employed Retirement Plans, 58 Va. L. Rev. 338 (1972).

       Respondents contend in this Court that this case is controlled by Commissioner v. First Security Bank of Utah, 405 U. S. 394 (1972), decided last Term. We held there that the Commissioner could not properly allocate income to one of a controlled group of corporations under 26 U. S. C. § 482 where that corporation could not have received that income as a matter of law. The “assignment-of-ineome doctrine” could have no application in that peculiar circumstance because the taxpayer had no legal right to receive the income in question. Id., at 403-404. In essence, that case involved a deflection of income imposed by law, not an assignment arrived at by the consensual agreement of two parties acting at arm’s length as we have in the present case. See n. 5, supra.

       Revenue Act of 1918, §218 (a), 40 Stat. 1070:
      “There shall be included in computing the net income of each partner his distributive share, whether distributed or not, of the net income of the partnership for the taxable year . . . .”
      Other predecessor statutes -contained similar explicit indications that a partner’s distributive share was to be computed without reference to actual distribution. See Income Tax Act of 1913, § II D, 38 Stat. 169 (“whether divided or otherwise”); Revenue Act of 1938, § 182, 52 Stat. 521 (“whether or not distribution is made to hira”). Nothing in the legislative history suggests that any substantive change was intended by the deletion of this phrase from the 1954 Code revisions. See H. R. Rep. No. 1337, 83d Cong., 2d Sess., 65 (1954); S. Rep. No. 1622, 83d Cong., 2d Sess., 89 (1954).

       The regulation states as follows :
      “Each partner is required to take into account separately in his return his distributive share, whether or not distributed, of each class or item of partnership income . . . .”

       These amounts would be divided equally among the partners pursuant to the partnership agreement’s stipulation that all income above each partner’s drawing account “shall be distributed equally.”

       Tr. of Oral Arg. 13-14. As the Solicitor General has also pointed out, the parties have, by stipulation in their agreed statement of facts, foreseen that recomputations might be necessary in light of the ultimate resolution of this controversy and have taken precautions to assure that any necessary reallocations may be handled expeditiously. Agreed Statement of Facts ¶24, App. 87-88.

       Brief for United States 21. For this reason, the cases relied on by the Court of Appeals, 450 F. 2d, at 113, which have held that payments made into deferred compensation programs having contingent and forfeitable features are not taxable until received, are inapposite. Schaefer v. Bowers, 50 F. 2d 689 (CA2 1931); Perkins v. Commissioner, 8 T. C. 1051 (1947); Robertson v. Commissioner, 6 T. C. 1060 (1946). Indeed, the Government notes, possibly as a consequence of these cases, that the Commissioner has not sought to tax the nonpartner physicians on their contingent accounts under the retirement plan. Brief for United States 21.