United States v. Leslie Salt Company

This is a suit to recover taxes exacted under 26 U.S.C.A. §§ 1800 and 1801.

Section 1801 in material part provides : “Corporate securities. On all bonds, debentures, or certificates of indebtedness issued by any corporation, and all instruments, however termed, issued by any corporation with interest coupons or in registered form, known generally as corporate securities, on each $100 of face value or fraction thereof, 11 cents. * * *”

The transactions in question were two loans negotiated by the taxpayer in 1949 with insurance companies in amounts of $1,000,000 and $3,000,000, evidenced in each instance by a nonnegotiable promissory note for the full amount maturing in 15 years. Underlying each note was an agreement on the part of the borrower containing restrictions designed for the protection of the lender. No interest coupons were attached to the instruments. They were not on vellum or parchment nor were they engraved, and the trial court found that they were not issued in registered form. The latter finding was not protested in the government’s opening brief or in the oral argument of its counsel. The court held that the instruments were not of the type designated by the…