United States v. Western Shore Lumber Co.

The United States appeals from an adverse judgment entered in the court below adjudging the appellee entitled to recover, as refunds, moneys collected from it under the capital stock tax act for the fiscal years ending June 30, 1933, 1934, 1935, and 1936. The complaint filed in the court below alleged that the action was one to recover taxes in the nature of capital stock taxes for the years above enumerated, allegedly illegally and erroneously assessed and collected. Issue was joined on the question whether the plaintiff was “doing business” within the intendment of the taxing acts, and trial was had to the court, without jury, resulting in the judgment above referred to. The trial court made findings of fact, upon which we draw for our statement resorting, at times, to quotation therefrom.

The plaintiff, Western Shore Lumber Company, was organized in 1905 for the purpose of acquiring certain timber land lying in San Mateo and Santa Cruz Counties, California. Its organizers believed at the time that a railroad was intending to build a branch line through the area acquired, but this did not come to pass and the plaintiff never engaged in active or intensive lumbering operations.…