Powell

This action was brought to recover the amount paid by one Powell to Vierhus, then a Collector of Internal Revenue and Henricksen, an Acting Collector of Internal Revenue, as a tax, alleged to be illegally exacted.

Alaska Dredging Company, hereafter called the taxpayer, was incorporated in Washington on March 8, 1902. Prior to March 1, 1913, it acquired title to five mining claims and seven-eighths interest 1 in another. On June 3, 1908, it entered into an agreement with Wonder Dredging Company, a Delaware corporation, hereafter called Wonder, by which it agreed to sell to Wonder, two claims and a half interest in another for 2,400 shares of $10 par stock in Wonder, and one-third of all gold recovered from the property so sold until the taxpayer had received $200,000. In 1911, Nome Consolidated Dredging Company succeeded to the interest of Wonder in the contract mentioned.

Apparently the contract was rescinded thereafter, because on November 12, 1915, taxpayer entered into an agreement to sell all six claims to Nome Holding Company, a Washington corporation, for $219,664 payable in specified installments. This agreement was apparently rescinded because on July 11, 1918, taxpayer…