dissenting: The historic process of the common law sometimes described as “pricking out the line” calls for zealous alertness on the part of courts to recognize and seize upon sets of facts which, though superficially repetitious and similar, are actually novel and opposite. That seems to me a lesson we are failing to apply here.
The underlying issue of principle in such cases as the present is solely one of public policy. See Heininger v. Commissioner, 320 U. S. 467. Unless a policy can be ascertained which condemns petitioner’s conduct and hence requires that the disputed amounts be included in petitioner’s gross income or be denied as a deduction, their treatment as ordinary business items is proper. Heininger. v. Commissioner, supra. But it is difficult to perceive where petitioner’s actions fell short of the highest degree of conscientious and painstaking compliance with morals as well as law.
In Hecht Co. v. Bowles, 321 U. S. 321, the opinion points out that “there is no doubt, however, of petitioner’s good faith and diligence.” The facts would amply warrant an identical finding here. In the Hecht Co. case it further appeared, as it does here, that “Petitioner undertook to make repayment of all overcharges brought to light by the investigation in case of customers who could be identified. It proposed to contribute the remaining amount of such overcharges to . some local charity,” rather than as here to the Government itself. Under those circumstances “The District Court concluded that the issuance of an injunction * * * would be ‘unjust’ to petitioner and not ‘in the public interest.’ ” Its refusal was sustained by the highest Court.
A similar approach serves if we deal with the issue as one of precedent rather than of principle. The cases apparently thought to be those marking out the line to be followed here are readily seen to fall upon the opposite side. In neither was there any such factor as that appearing from the stipulation before us that “Petitioner computed the selling price of its merchandise in accordance with the method prescribed by the Maximum Price Kegulations * * In fact, in the Garibaldi & Cuneo case1 the opinion takes pains to point out “that they [the violations] could have been avoided by the exercise of reasonable care.”
Nor was there in either of those cases such a voluntary disclosure by petitioner as we have here, made as soon as the unavoidable violations had been discovered and under circumstances where one suspects the violations could and probably would have escaped discovery or at least prosecution. See Hecht Co. v. Bowles, supra. The language of the Scioto2 case is that “The petitioner was charged with violation of the price ceilings fixed by OPA and, under threat of a suit for treble damages and revocation of its slaughtering license, it agreed to pay * * Certainly that approach is not admissible here.
Finally, we know that an embezzler violating both the moral and the legal code is not chargeable with the enjoyed proceeds of his wrongdoing. Commissioner v. Wilcox, 327 U. S. 404. But this petitioner, conforming in every respect to the highest standards of decent conduct, is to be taxed upon income which it does not claim and has refused to retain. From the conclusion that any such inconsistency is required, I respectfully dissent.
ARundell, Van Fossan, Leech, Hakron, and Kern, JJ., agree with this dissent.T. C. 440.
9 T. C. 439.