McLaughlin
Corp. of America v. McLaughlin
Opinion
Lead Opinion
Denman, J.
- This appeal is from a judgment in favor of appellee in a suit at law on two causes of action to recover amounts paid as documentary internal revenue stamp taxes, assessed and collected as upon transfers of rights to receive shares and of interests in corporate profits and accumulations under Title VIII (section 800 et seq.), Schedule A-3 of the Revenue Act of 1926, 44 Stat. 99 , 101.
FIRST CAUSE OF ACTION.
The case was heard below on an agreed statement of facts. From these it appears that appellant corporation was organized to be managed in coordination with the Bank of Italy and for the benefit of the persons who were stockholders of the latter. In 1917 the stock of appellant was offered for subscription exclusively to the stockholders of the Bank of Italy and subscribed for by them. The subscription agreement, however, was between these persons as individuals and the Corporation of America. *
On June 30, 1917, a trust agreement was entered into between A. P. Giannini and two others, as trustees, the first parties to the agreement, and the subscribers to appellant’s stock, as parties of the second part. All the subscribers signed the trust agreement. As provided by its…
Dissenting Opinion
Healy, J.
(dissenting).
I agree with the opinion of the court so far as it affirms the judgment below, but ■dissent from the reversal.
I think the case is not difficult of determination if attention be centered on certain basic facts. If we concentrate on the verbiage of the resolutions, subscription warrants and letters, we become lost in a confusion of terms, the precise legal implications of which seem not clearly to have been understood even by the participants.
While appellant was organized for the purpose of operating as an auxiliary to the Bank of Italy, there is nothing in its corporate setup to differentiate it from the ordinary corporation. Its articles or bylaws, so far as the fecord shows, contain no provision limiting the ownership of its stock to any particular group, or prohibiting the unrestricted circulation of its shares. There is nothing in these confining the issuance of shares to trustees, ■or authorizing that practice. Nowhere in the governing rules of the corporation itself does anything appear defining the duties or powers of trustees who might become the holders of its stock. Provisions and restrictions of this sort are to be found snly in contracts dehors the…