-36-
13, 1953; Wichita Terminal Elevator Co. v. Commissioner, 6 T.C.
at 1165.
Petitioner contended at trial and contends on brief that it
could not have admitted that it paid Zerbini to represent Zeve as
well as itself, because “Respondent filed no requests for
admissions in this action”. As we explained at trial, when
respondent offered petitioner’s trial memorandum into evidence,
although petitioner’s statements in the trial memorandum are not
“admissions” in the sense of Rule 90, Tax Court Rules of Practice
and Procedure, those statements are “admissions” in the sense of
Fed. R. Evid. 801(d)(2). Those statements are not excludable as
hearsay, they are relevant, and they may be received into
evidence unless they are excludable for some other reason.
Petitioner has not shown another reason for exclusion. We
received the statements and have described supra their effect on
our analysis.
We conclude from the foregoing that it is more likely than
not that petitioner’s payment of $3,000 to Zerbini was to secure
Zerbini’s representation of both Zeve and petitioner. We have so
found.
Petitioner did not follow the procedure prescribed by its
articles of incorporation for indemnifying an officer. Thus, the
net effect of the transaction was that petitioner paid a private
expense of Zeve. We conclude that this constitutes an inurement
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