Garbutt Oil Co. v. United States

This suit is to recover an overpayment of income taxes for the year ending 1919. The appellee pleaded the statute of limitations. Judgment was entered for the appel-lee March 10, 1936, and reversal is sought.

A trial by jury was waived and the court made findings of fact and conclusions, as required by statute, and found in substance that the appellant is a California corporation; that on October 3, 1907, it leased certain oil land and later oil was discovered thereon and thereafter appellant’s sole business was the production and distribution of oil from this property. On April 10, 1911, appellant’s board of directors adopted a resolution to the effect that all oil produced by it after January 1, 1911, should be assigned to appellant’s lessors to the extent of their royalty interest and to appellant’s stockholders to the extent of their holdings of stock “prorata in kind,” so long as the stockholder should pay calls for money necessary to cover all expenses of appellant. All oil produced thereafter by the appellant from the date supra throughout the year 1919 was, pursuant to this arrangement, distributed in kind, respectively, to the lessors and the stockholders of appellant to…