T-956-84
T-957-84
Gerald Armstrong (Plaintiff)
v.
The Queen (Defendant)
Trial Division, Rouleau J.—Toronto, April 16;
Ottawa, August 8, 1985.
Income tax — Income calculation — Income or capital gain
— Appeal against Minister's reassessment determining pro
ceeds from sale of horse constituting business income —
Plaintiff in construction business, racing horses as hobby —
Horse bought through corporation in 1978, having lucrative,
winning record — Following crippling injury, horse sold for
stud — Accountants preparing 1981 return, classifying horse
as "inventory", declaring one-half proceeds as taxable capital
gain — Defendant contending plaintiff having secondary inten
tion to sell for profit, making sale adventure in nature of trade
and taxable as income — Horse not inventory in sense of
property held in course of business, for resale — Circum
stances surrounding sale not retroactively converting property
held as capital into something of trading nature — Possibility
of resale for profit not operating motivation for plaintiff's
acquisition — High risk of horse racing not preventing dispo
sition of property qualifying as capital transaction — Evidence
not establishing existence of secondary intention — Income
Tax Act, S.C. 1970-71-72, c. 63, ss. 3 (as am. by S.C.
1977-78, c. 1, s. 1; c. 42, s. 1), 9, 38 (as am. by S.C. 1977-78, c.
42, s. 2), 39(1)(a) (as am. by S.C. 1974-75-76, c. 26, s. 15; c.
50, s. 48; 1976-77, c. 4, s. 9; 1977-78, c. 1, s. 16; c. 42, s. 3;
1980-81-82-83, c. 48, s. 16), 40(1)(a), 54(b), 248(1) (as am. by
S.C. 1979, c. 5, s. 66).
The plaintiff has been primarily involved in residential con
struction and land development. Having gained an interest in
horses, he started by purchasing and selling, through his corpo
rations, quarter horses. The horses were trained by himself or
his family and raced competitively but never for gain. In the
early seventies, the plaintiff began acquiring thoroughbreds for
racing and thus, in 1978, purchased "Stone Manor". The horse
ran several times in Canada and the United States winning
important stakes races and collecting substantial purses. Fol
lowing a crippling injury, the horse was sold for stud at a price
of $270,000. The accounting firm that prepared the plaintiff's
1981 tax return, described the horse as "inventory" declaring
on its disposition a capital gain. In 1983, the Minister of
National Revenue reassessed the plaintiff, reclassifying the
proceeds from the sale as business income. The plaintiff main
tains that the disposition constituted sale of capital property.
The defendant contends that the plaintiff had a secondary
speculative intention to resell the horse for a profit making the
transaction an adventure in the nature of trade fully taxable as
business income.
Held, the appeal should be allowed.
The description of Stone Manor as "inventory" cannot be
regarded as providing any indication as to the intentions of the
plaintiff. The evidence indicates that, in substance, Stone
Manor was not an item of inventory in the sense of property
held in the ordinary course of business for resale.
Furthermore, it cannot be inferred from the use of the word
"inventory", from the plaintiffs connection with corporations
trading in horses and from the high risk nature of horse racing
that the plaintiff had a secondary intention to sell his horse for
a profit. At the moment of purchase, the plaintiffs operating
motivation was not the possibility of resale for a profit. The fact
that the circumstances surrounding the sale, that is, the horse's
injury and its winning record, made its sale attractive for stud
purposes, does not transform retroactively a capital transaction
into an adventure in the nature of trade. The evidence does not
establish that the purchase of Stone Manor was intended to be
a business venture. The plaintiff bought and sold horses as a
hobby. The highly speculative nature of horse racing does not
mean that disposition of a horse can never qualify as a capital
transaction.
The notion of secondary intention was nowhere enshrined in
the Income Tax Act. It referred merely to a practical approach
for determining certain questions that arise in "trading cases".
The notion of secondary intention should be used cautiously so
as not to artificially characterize receipts which are properly
capital gain as income.
CASES JUDICIALLY CONSIDERED
APPLIED:
Californian Copper Syndicate v. Harris (1904), 5 T.C.
159 (Exch.); Racine v. Ministre du Revenu National,
[1965] 2 Ex.C.R. 338; 65 DTC 5098.
REFERRED TO:
Sanders v. M.N.R. (1954), 54 DTC 203 (T.A.B.); Ster
ling Trust, Limited v. Commissioners of Inland Revenue
(1925), 12 T.C. 868 (Eng. C.A.); Glenboig Union Fire-
clay Company, Limited v. Commissioners of Inland
Revenue (1922), 12 T.C. 427 (Ct. of Sess.); Bead Real-
ties Ltd. v. M.N.R. (1971), 71 DTC 5453 (F.C.T.D.);
Hiwako Investments Ltd. v. The Queen (1978), 78 DTC
6281 (F.C.A.); Simmons (as liquidator of Lionel Sim-
mons Properties Ltd) v Inland Revenue Comrs, [1980] 2
All ER 798 (H.L.); M.N.R. v. Taylor, J.A. (1956), 56
DTC 1125 (Ex. Ct.); Regal Heights Ltd. v. Minister of
National Revenue, [1960] S.C.R. 902; 60 DTC 1270;
Irrigation Industries Limited v. The Minister of National
Revenue, [1962] S.C.R. 346; 62 DTC 1131; Golden
(G.W.) Construction Ltd. v. Minister of National Reve
nue, [1967] S.C.R. 302; 67 DTC 5080; Pierce Investment
Corp. v. M.N.R. (1974), 74 DTC 6608 (F.C.T.D.); Ken-
sington Land Developments Ltd. v. The Queen (1979), 79
DTC 5283 (F.C.A.); Watts Estate et al. v. The Queen
(1984), 84 DTC 6564 (F.C.T.D.).
COUNSEL:
David C. Nathanson, Q.C. for plaintiff.
Robert W. McMechan for defendant.
SOLICITORS:
McDonald & Hayden, Toronto, for plaintiff.
Deputy Attorney General of Canada for
defendant.
The following are the reasons for judgment
rendered in English by
ROULEAU J.: Both cases were tried on common
evidence and were the subject of identical argu
ment. File T-957-84 was the matter argued and
any decision rendered is applicable to file
T-956-84.
The issue is to determine whether the purchase
of a yearling thoroughbred horse named "Stone
Manor", and the sale, some three years after
purchase, was a capital disposition or "an adven
ture in the nature of trade".
The essential facts are as follows:
The plaintiff, a resident of the Town of Stouff-
ville in the Regional Municipality of York, during
most of his lifetime has been primarily involved in
residential construction and land development. In
1978, accompanied by a thoroughbred horse train
er, he attended yearling sales at an auction in
Lexington, Kentucky, at which time he purchased
a yearling called "Stone Manor" for $28,000 U.S.
Stone Manor began its racing career in 1979 and
won purses totalling $41,858 and realized a net
profit after expenses of $26,852. During the 1980
racing season, it earned $230,708 in purses; yield
ing after expenses $98,877.25. In 1981, prior to
the end of its racing career, it earned $5,507.50;
after deducting expenses there was an operating
loss for the year of $19,354.33. In late 1981,
because of a crippling injury that could have
resulted in the horse being destroyed, it was retired
from racing and sold for $270,000 to a New York
State purchaser who intended to use Stone Manor
for stud purposes. This value was arrived at
because of its success as a racehorse.
In computing his income for the 1981 taxation
year, the plaintiff included as a taxable capital
gain one-half of the sum realized by him from the
sale of Stone Manor after taking into account the
adjusted cost base. In October 1983, the Minister
of National Revenue reassessed, increasing the
liability to tax for the period by $72,912.16. In
reassessing the Minister treated Stone Manor as
though the horse had been purchased and sold by
the plaintiff in the ordinary course of a business
and described the plaintiffs proceeds of disposition
of Stone Manor as "reclassified as business
income". It is with this reassessment that the
plaintiff takes issue.
The plaintiff Gerald Armstrong was born on a
farm in the Montreal area and remained there
until approximately 18 years of age; moved to
Toronto, began working with construction firms,
and became adept at house building. In 1956 he
constructed his first house in the Metropolitan
Toronto area. He subsequently became a volume
home builder, constructing some 1,000 units a year
in Toronto, Ajax, Oshawa and surrounding areas.
He was the chief executive officer, principal share
holder and driving force behind some three or four
home and land development corporations. Between
1975 and 1979 the plaintiffs companies had gross
annual sales of between $20,000,000 and
$40,000,000. In the fall of 1980 they went into
receivership; this he attributes to the recession.
Since September, 1982 he has been the president
of Victoria Wood Development Corporation which
is also in house building and land development.
Having previously acquired a farm property in
the Breckin, Ontario area, his interest in riding,
developed during his youth, led him toward the
purchase of quarter horses. Starting in 1960 and
continuing over the next 15 years, through two of
his corporations, he purchased and sold approxi
mately 100 quarter horses. His two children
enjoyed riding and developed a keen interest in
showing horses. The majority of the quarter
horses, purchased in the United States, were
trained by himself, his children or employees; they
were taken to shows and raced competitively with
other owners of quarter horses, never for gain, only
for ribbons and other similar prizes. During the
years that the plaintiff was buying and selling
quarter horses, there was no pari mutuel waging in
Canada on this type of racing. It should also be
noted that he also raised some beef cattle and
corn. An ancillary advantage to having horses and
cattle on vacant land intended for development,
was lower municipal assessment. The farms would
be used for this purpose until they became apt for
sale or development. Though the farm operations
were essentially run by the plaintiff's son from
1980 on, counsel for the defendant tried to show
that the plaintiff was intimately involved in run
ning this business. The proof of his alleged involve
ment is the continued practice by the plaintiff of
signing important farm documents.
The plaintiff was originally interested in riding
and showing horses; his wife, on the other hand,
found her enjoyment in thoroughbred racing. In
the early 1970's, through his corporations, he
began acquiring thoroughbreds, mostly in claiming
races at Ontario tracks. They were of the cheaper
variety and ran for claiming prices between $3,000
and $20,000. Testimony indicates that he would
have claimed and sold from 15 to 20 horses during
this period.
At the time he purchased Stone Manor, it was
approximately 18 months old. The horse, as is the
custom in thoroughbred racing, turned two years
old on the first of January 1979 and, in the spring
of that year, commenced training. After realizing
that he had an exceptionally fast horse, the plain
tiff moved the animal from a public stable to a
better trainer who could realize the potential of
this animal. The horse ran three times in Canada
in 1979 and once in the United States; in Septem-
ber of that year the horse was put to pasture and
rested for the winter. In early 1980 the horse was
taken to Florida for training and brought back to
Ontario where his career as a three-year old began
in the spring of 1980; as a three-year old he won
important stake races in Ontario, Michigan and
Ohio. In the late summer or early fall of 1980, the
horse ran in Toronto and was not as successful.
The plaintiff was advised by his trainer that the
horse was developing a bowed tendon; he was
advised "to go easy with it" and rest it through the
fall and winter of 1980 and the spring of 1981.
They attempted to bring the horse back to the
races in 1981 but, after a second poor showing, he
was advised by the trainer that the horse was not
fit and that if he ran it any further it would end up
with bowed tendons, quite a common injury of
racing thoroughbreds. In the fall of 1981, a group
from New York State was interested in acquiring
the horse for breeding purposes. Because of its
success they offered and paid the sum of $270,000.
The plaintiff testified that he did not keep the
horse because he did not have facilities for breed
ing, that he was in horse racing for the fun of
racing horses, not to raise them since his farm was
not equipped for a breeding operation, that this
was a hobby and that he happened to get lucky
with Stone Manor.
In the spring of 1981, he attended the offices of
an accounting firm to have his 1980 taxation
return prepared and filed. In one of the schedules
attached to his declaration, Exhibit 1, there is a
handwritten, crudely drafted statement indicating
at the top "Race horse activities, farming income
1980 for George Armstrong". At the very top
there are the words "Inventory-1 horse Stone
Manor; cost: $28,000 U.S.". It then describes the
purses won which amounted to $230,708.15,
expenses incurred $131,830.90, showing a net from
the operation of $98,872.25. This last amount was
reported as income. In his tax return for the
taxation year 1981, Schedule 2 indicated the dis-
position of Stone Manor and declared a capital
gain.
Both Mr. Armstrong's accountant and the plain
tiff testified on the issue of the use of the word
"inventory". In cross-examination as well as in
examination in chief they advised the Court that
the word "inventory" was used for lack of a better
expression.
The position of the plaintiff is that the sale of
Stone Manor was a sale of a capital property
producing proceeds of disposition which are only
taxable as capital gains and not as income. He
relies inter alia on sections 3 [as am. by S.C.
1977-78, c. 1, s. 1; c. 42, s. 1], 9, 38 [as am. by
S.C. 1977-78, c. 42, s. 2], 39(1)(a) [as am. by S.C.
1974-75-76, c. 26, s. 15; c. 50, s. 48; 1976-77, c. 4,
s. 9; 1977-78, c. 1, s. 16; c. 42, s. 3; 1980-81-82-83,
c. 48, s. 16], 40(1)(a), 54(b) and 248(1) [as am.
by S.C. 1979, c. 5, s. 66] of the Income Tax Act
[S.C. 1970-71-72, c. 63]. It is contended that there
was never any intention ("primary" or "second-
ary") to enter into the business of trading in horses
for profit.
The defendant on the other hand, argues that
the sale of Stone Manor resulted in a profit from a
business or an adventure in the nature of trade
which is fully taxable as income. The defendant
relies, inter alia, on sections 3, 9 and 248(1) of the
Act. The phrase "adventure in the nature of trade"
is drawn from the extended definition of "busi-
ness" found in subsection 248(1). While admitting
that Stone Manor was acquired to be kept and
raced, the main contention of the defendant is that
the plaintiff had a speculative intention of selling
Stone Manor for a profit. This secondary intention
is said to impart to the sale the characteristics of
an adventure in the nature of trade making the
proceeds fully taxable as income.
Though downplayed by the defendant in argu
ment, considerable attention at trial was devoted
to the implications of the description of the horse
as "inventory" in the plaintiff's 1981 tax return. It
is alleged by the defendant that this provides an
indication that the plaintiff was engaged in the
business of buying and selling racehorses with the
result that the excess of the price over costs should
be regarded as profit from that business and taxed
as income. I do not draw such an inference. The
definition of "inventory" in subsection 248(1) is
too broad to be of any great help and only defines
the term for the purposes of the Act and not for
the interpretation of the intent of a taxpayer. It is
well established that a taxpayer can neither
increase nor decrease his tax liability by the inten
tional or erroneous use of magic words in his
accounts. The words used may be indicative of the
nature of a transaction. However, in the final
analysis the task for this Court is to decide on the
actual nature of the transaction and the substance
of the matter on the basis of all the facts and
circumstances. See Sanders v. M.N.R. (1954), 54
DTC 203 (T.A.B.), at page 204; Sterling Trust,
Limited v. Commissioners of Inland Revenue
(1925), 12 T.C. 868 (Eng. C.A.) per Pollock,
M.R. at page 882 and per Atkin L.J. at page 888;
and, Glenboig Union Fireclay Company, Limited
v. Commissioners of Inland Revenue (1922), 12
T.C. 427 (Ct. of Sess.) per Lord President Clyde
at page 450. On the basis of the evidence, it is my
view that in substance Stone Manor was not an
item of inventory in the sense of a property held in
the ordinary course of business for resale.
This brings me to the more general question of
secondary intention. The defendant urges me to
infer, from the description of Stone Manor as
"inventory", from the plaintiff's connection with
corporations trading in horses and from the
speculative or high-risk nature of the purchase of
racehorses, that the plaintiff had, from the outset,
a secondary intention of turning his horse to profit.
I think the evidence and the law lead to the
opposite conclusion, and it is on this basis that I
must decide. As Lord Justice Clerk so aptly said in
deciding whether the gain from the sale of certain
shares amounted to a profit from a business tax
able as income or was merely a (then) untaxable
capital gain in the case of Californian Copper
Syndicate v. Harris (1904), 5 T.C. 159 (Exch.), at
page 166:
What is the line which separates the two classes of cases may
be difficult to define, and each case must be considered accord
ing to its facts; the question to be determined being—Is the
sum of gain that has been made a mere enhancement of value
by realising a security, or is it a gain made in an operation of
business in carrying out a scheme for profit-making?
The case of Racine v. Ministre du Revenu Na
tional, [1965] 2 Ex.C.R. 338; 65 DTC 5098 is
useful for its treatment of the notion of a second
ary intention to sell a property (in that case a
business) for profit which converts a transaction or
series of transactions into an adventure in the
nature of trade. At page 348 Ex.C.R.; 5103 DTC
of the unofficial translation (see page 5111 DTC
in the original French text) Noël J. said:
In examining this question whether the appellants had, at the
time of the purchase, what has sometimes been called a
"secondary intention" of reselling the commercial enterprise if
circumstances made that desirable, it is important to consider
what this idea involves. It is not, in fact, sufficient to find
merely that if a purchaser had stopped to think at the moment
of the purchase, he would be obliged to admit that if at the
conclusion of the purchase an attractive offer were made to him
he would resell it, for every person buying a house for his
family, a painting for his house, machinery for his business or a
building for his factory would be obliged to admit, if this person
were honest and if the transaction were not based exclusively on
a sentimental attachment, that if he were offered a sufficiently
high price a moment after the purchase, he would resell. Thus,
it appears that the fact alone that a person buying a property
with the aim of using it as capital could be induced to resell it if
a sufficiently high price were offered to him, is not sufficient to
change an acquisition of capital into an adventure in the nature
of trade. In fact, this is not what must be understood by a
"secondary intention" if one wants to utilize this term.
To give to a transaction which involves the acquisition of
capital the double character of also being at the same time an
adventure in the nature of trade, the purchaser must have in his
mind, at the moment of the purchase, the possibility of reselling
as an operating motivation for the acquisition; that is to say
that he must have had in mind that upon a certain type of
circumstances arising he had hopes of being able to resell it at a
profit instead of using the thing purchased for purposes of
capital. Generally speaking, a decision that such a motivation
exists will have to be based on inferences flowing from circum
stances surrounding the transaction rather than on direct evi
dence of what the purchaser had in mind.
See also: Bead Realties Ltd. v. M.N.R. (1971), 71
DTC 5453 (F.C.T.D.) per Walsh J.; Hiwako
Investments Ltd. v. The Queen (1978), 78 DTC
6281 (F.C.A.); and Simmons (as liquidator of
Lionel Simmons Properties Ltd) v Inland Revenue
Comrs, [ 1980] 2 All ER 798 (H.L.) per Lord
Wilberforce especially at the bottom of page 802.
A common thread running through these cases is
that circumstances which force the sale of a prop-
erty or make such a sale attractive (in this case the
horse's injury combined with its winning record
making it valuable for stud) do not have the effect
of retroactively converting a property held to pro
duce income and as a capital property into some
thing of a trading nature.
Upon evaluation of all of the evidence and cir
cumstances I am not prepared to find that, at the
moment of purchase of Stone Manor, the possibili
ty of resale for profit was an operating motivation
of the plaintiffs acquisition. I am satisfied that
there was no secondary intention in buying Stone
Manor to sell him for a profit rather than keep
him for racing. The evidence is to the contrary. He
was carefully chosen as a good racehorse, he was
trained and in fact raced. A good income derived
from the purses won. The sale was motivated by an
unfortunate and unforeseeable leg injury which
brought his racing career to an abrupt end. It has
not been demonstrated to my satisfaction that the
plaintiffs connection with corporations trading in
horses (mostly quarter horses) coloured his person
al acquisition of a racing thoroughbred so as to
make the notion of secondary intention applicable
in this case. A taxpayer's connection with real
estate buying and selling operations has not lead to
the conclusion in other cases that the gain from
the sale of property must be viewed as income:
Racine v. Ministre du Revenu National, supra at
page 351 Ex.C.R., in translation at page 5104
DTC and in the original French text at page 5113
DTC; and, Bead Realties Ltd. v. M.N.R., supra at
page 5454. This is surely all the more so when, as
in the case at bar, the property sold was bought for
the purposes of pursuing a hobby.
It is certainly true that an isolated transaction
may be characterized as "an adventure in the
nature of trade" so that any resulting profit is
taxable as income: M.N.R. v. Taylor, J.A. (1956),
56 DTC 1125 (Ex. Ct.), at page 1138. However, in
the case at bar there is no evidence whatsoever
that the plaintiff intended the purchase of Stone
Manor to be a business venture. He had no breed
ing operation on any of his farms and there was
not even any evidence of breeding of quarter
horses by the corporations which had bought and
sold such horses. If anything his conduct was
characteristic of someone who had a hobby. I am
not convinced that signing documents related to
the farm operations in general made the running
and eventual sale of Stone Manor into a business
venture for the plaintiff. He enjoyed riding, show
ing and racing horses. There is no evidence before
me that any profit was ever before made through
this hobby which would indicate a secondary
intention of selling the horse for profit. The plain
tiff was a land developer and house builder. His
corporations were conducting $20 to $40 million of
business per year when he bought Stone Manor.
Even after his building corporations went into
receivership he did not turn his energies to the
horse breeding business despite Stone Manor's
value as demonstrated by its eventual sale for
$270,000. Instead, in 1982, he returned to the land
development and house building business and
became president of the Victoria Wood Develop
ment Corporation.
The key element of the defendant's argument
seemed to be that because the purchase of horses
for racing is highly speculative, with little assur
ance of winnings, Stone Manor must have been
bought with a view to eventual sale and not as an
income producing asset. This is said to make the
present case different from other cases where a
secondary intention is not found. I must say I
cannot really follow or endorse this line of argu
ment. On such logic every person who purchases
property to pursue a hobby is, for income tax
purposes, in the business of buying and selling that
type of property. It is true there was no assurance
of success. However, there are many other highly
speculative purchases one can make, for example
of paintings, without such a characteristic being
determinative of the intention of the buyer. It
seems to me that the defendant's theory amounts
to saying that the plaintiff bought something
which he could not expect to produce income, but
which he at the same time expected to sell for a
considerable profit. This theory makes no sense in
the present context. In the case of the racehorse,
increased value at the time of sale can only come
from its income producing capacity and potential
or a record of winnings which makes it valuable
for breeding. Thus, absence of expectation of
income will also exclude expectation of a high
resale value. This is perhaps different from cases
of land purchase where the land may have almost
no income producing capacity but can still be
expected to fetch a handsome price upon resale.
Statements about the effects of a purchase being
speculative in nature on the characterization of the
gain from the eventual sale which are found in
Regal Heights Ltd. v. Minister of National Reve
nue, [ 1960] S.C.R. 902; 60 DTC 1270, at pages
905-907 S.C.R.; 1272-1273 DTC appear to sup
port the defendant. On the other hand the later
decision of the Supreme Court in Irrigation
Industries Limited v. The Minister of National
Revenue, [1962] S.C.R. 346; 62 DTC 1131 sug
gests at pages 349-352 S.C.R.; 1132-1133 DTC
that a high level of risk does not mean that the
disposition of a property can never be considered a
capital transaction.
In conclusion I would like to briefly return to
the question of secondary intention. The notion of
secondary intention is nowhere enshrined in the
Income Tax Act. As the Chief Justice of the
Federal Court stated in Hiwako Investments Ltd.
v. The Queen, supra at page 6285 the term
"secondary intention":
... does no . more than refer to a practical approach for
determining certain questions that arise in connection with
"trading cases" but there is no principle of law that is repre
sented by this tag. The three principal, if not the only, sources
of income are businesses, property and offices or employments
(section 3). Except in very exceptional cases, a gain on the
purchase and re-sale of property must have as its source a
"business" within the meaning of that term as extended by
section 139 [now section 248(1)].
The purchase and eventual sale of Stone Manor
was neither a business nor an adventure in the
nature of trade.
An ahistorical and entirely positivist approach
to the use of cases decided before the 1971 tax
reform may create the risk of arbitrary distortions
in the interpretation and application of the Income
Tax Act. One cannot ignore the fact that cases like
M.N.R. v. Taylor, J.A., supra; Regal Heights Ltd.
v. Minister of National Revenue, supra; Golden
(G. W.) Construction Ltd. v. Minister of National
Revenue, [1967] S.C.R. 302; 67 DTC 5080; Pierce
Investment Corp. v. M.N.R. (1974), 74 DTC 6608
(F.C.T.D.); Kensington Land Developments Ltd.
v. The Queen (1979), 79 DTC 5283 (F.C.A); and,
Watts Estate et al. v. The Queen (1984), 84 DTC
6564 (F.C.T.D.), all cited by the defendant, were
decided in respect of taxation years when failure
by the courts to find that the amount in dispute
was income would have freed the taxpayer from all
tax liability. Such was not the case after 1971, at
least until the 1985 federal budget. Capital gains
were taxable and Parliament, in its wisdom, set the
tax rate at one-half of that on income. In this
historical and statutory context, the notion of
secondary intention should be used cautiously so as
not to artificially characterize receipts which are
properly capital gain as income.
For all of these reasons the appeal is allowed
and the plaintiff will be entitled to his costs.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.