United States of America, Appellant, v. George Wood and Cora M. Wood, Appellees, 352 F.2d 522 (5th Cir. 1965)

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US Court of Appeals for the Fifth Circuit - 352 F.2d 522 (5th Cir. 1965) November 15, 1965

Appeal from the United States District Court for the Northern District of Alabama, Seybourne H. Lynne, Judge.

Macon L. Weaver, U. S. Atty., Birmingham, Ala., Louis F. Oberdorfer, Asst. Atty. Gen., Lee A. Jackson, Norman Wolfe, Thomas Stapleton, Donald W. Williamson, Attys. Dept. of Justice, Washington, D. C., Richard M. Roberts, Acting Asst. Atty. Gen., Harry Baum, Atty., Dept. of Justice, Washington, D. C., E. Ray Acton, Asst. U. S. Atty., of counsel, for appellant.

E. M. Friend, Jr., Harold I. Apolinsky, Birmingham, Ala., Sirote, Permutt, Friend & Friedman, Birmingham, Ala., for appellees.

Before MARIS,*  RIVES and BELL, Circuit Judges.

PER CURIAM:

In directing a verdict for the taxpayers, the district court recognized that it was deciding directly contrary to the opinion and decision of the Sixth Circuit in Key Homes, Inc. v. Commissioner of Internal Revenue, 6 Cir. 1959, 271 F.2d 280. George Wood owned 50% of the stock of Bama Homes. The district court reasoned that the present controversy is not controlled by Commissioner of Internal Revenue v. Hansen, 1959, 360 U.S. 446, 79 S. Ct. 1270, 3 L. Ed. 2d 1360, because Bama Homes had no contractual guaranty obligation to the financial institution. We do not agree.

As we read the contract (record pp. 122-124), Bama Homes agreed to make a "deposit" of "additional security" with the financial institution in consideration of the granting of a mortgage loan to the purchaser-mortgagor. We agree with the decision of the Sixth Circuit in Key Homes, Inc. v. Commissioner of Internal Revenue, supra.

The judgment of the district court is therefore

Reversed.

 *

Of the Third Circuit, sitting by designation

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