This action was brought by the United States Government to compel the application of rental sums, due semi-annually by the Western Union Telegraph Company, as lessee, to the Northwestern Telegraph Company, as lessor, to the payment of the lessor's income tax indebtedness for the years 1927-1941. In a prior suit between the same parties for application of other rental sums, due under the same lease, to the lessor's income tax liability for the years 1917-1922, it was determined by the Circuit Court of Appeals of the Second Circuit that the government could not reach these rentals because by the terms of the lease they were payable to the lessor's stockholders rather than to the lessor. This prior judgment was held to be res judicata in the second suit, notwithstanding the decision had been overruled by the same court which rendered it. United States v. Western Union Telegraph Co., (S.D. N.Y. 1943) 52 F. Supp. 553.
RES JUDICATA-FEDERAL INCOME TAX CASES-EFFECT OF PAST DECISION AS TO LIABILITY FOR FUTURE YEARS,
Mich. L. Rev.
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