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family relationships prior to and during the years at issue.43
Mme. Koo is, and was during and preceding the years at issue,
petitioner's mother-in-law. Thus, she would ordinarily be
expected to favor him. In fact, the record discloses that she
did favor him with respect to various business transactions.44
The failure of a party to call as a witness a relative who would
ordinarily be expected to favor that party suggests that that
relative's testimony would be unfavorable. See Steiner v.
Commissioner, 350 F.2d 217, 222-223 (7th Cir. 1965), affg. T.C.
Memo. 1963-128; Stoumen v. Commissioner, 208 F.2d 903, 907 (3d
Cir. 1953), affg. a Memorandum Opinion of this Court dated Mar.
13, 1953.
On the present record, we find that Mme. Koo was within
petitioner's power to produce for purposes of the adverse in-
43 Petitioner's relationships with his mother-in-law Mme. Koo
contrast sharply with his relationships with his mother and
siblings, which both he and his brother, Henry Gaw, testified
were hostile. Union Bank records also indicate that that bank
understood that there was disunity among members of S.C. Gaw's
family following his death and that each member of that family
was responsible for his or her own activities.
44 By way of illustration, petitioner testified that he became
managing director of Pioneer in 1973 at Mme. Koo's behest and
that he was able to borrow from, and give guarantees for more
than what he was worth to, banks in Hong Kong because those banks
knew that Mme. Koo would honor his obligations if the need arose.
Documentary evidence in the record shows Mme. Koo's involvement
in transactions with respect to the pledges of cash deposits by
Double Wealth and Forward for certain of the loans at issue,
e.g., her signature on documents of Double Wealth and Forward
connected with the pledge of those corporations' deposits as
security for those loans.
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