and construed anything given or furnished to an employee, in addition to his salary, as items to be included in gross income.
This question has been passed upon by several courts. In the Second Circuit, in Diamond v. Sturr, 221 F.2d 264, the United States Court of Appeals felt that the rule of convenience of the employer rule had been applied for such a long period that the new regulation should not offset the old regulation which had attained the status of law by long continued use.
In the Third Circuit, in the case of Saunders v. Commissioner of Internal Revenue, 215 F.2d 768, Judge Biggs of the Court of Appeals for the Circuit, outlined the judicial history of the convenience of the employer rule and arrived at the conclusion that the cash allowance of $ 70 per month in lieu of meals to be furnished State troopers was not evident compensation for services rendered the State, but was an arrangement for the benefit and convenience of the State of New Jersey.
In spite of certain apparent conflicts in the classification and listing in various departments of the State, the question to be decided is whether the housing and maintenance furnished the plaintiffs herein are evidently part of compensation for service rendered and are not primarily for the benefit and convenience of the State as employer.
Because of the requirements established for each of the positions held by the plaintiffs, by the employing State, notably that they be available at all times, it would appear that the maintenance afforded them was to the end that there might be better care and more efficient service rendered by the plaintiffs in the performance of unique and vital services in the hospitals to which they were assigned. True it is that economic advantage might very well result from the situation which obtains for all three of the individuals involved. And that economic advantage varies in kind and degree with the nature of their several employments. That does not affect the principle involved. There is no inherent contradiction between the existence of such economic advantage and the coexistence of the more important convenience to the State and in these cases the unfortunates who are its wards.
The rule established by the Court of Appeals of this Circuit in the Saunders case, supra, seems appropriately applicable to the instant cases.
There will be judgment for the plaintiffs.
This opinion may serve as findings of fact and conclusions of law.
Let an appropriate order be entered.
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