Commissioner v. Richfield Oil Co.

This is a petition to review a decision of the United States Board of Tax Appeals. The facts as found by the Board are substantially as follows: The Richfield Oil Company and the Olinda Gasoline Company are California corporations, with their principal offices at Los Angeles. The Olinda Company was a producing company, organized in 1913. The Richfield Company was a distributing company, organized shortly before the Olinda Company. The Olinda Company was promoted and organized by J. P. Vordermark, who was a practical and experienced gasoline man. The stock of the Olinda Company was issued to him and his associates for leases and for cash. Por business reasons, the 94 shares to which he became entitled were issued one share to him and 93 shares to Miss R. E. Harper, who later became his wife. The remaining 406 shares became the property of the stockholders of the Richfield Company, with the exception of 5 shares acquired by one Sawyer. The Richfield Company furnished four of the directors of the Olinda Company, and Vordermark, the fifth director became president and general manager from the time of its organization until 1925, at a salary of from $150 to $200 per month. By contract…