Anglim

The facts in this case, as stipulated by the parties and found by the lower court, are undisputed. The appellant taxpayer, the Emporium Capwell Company, a California corporation, and the Emporium Cap-well Corporation, a Delaware corporation, in accordance with the laws of the States of California and Delaware, respectively, on December 22, 1939 entered into an agreement of merger whereby the Emporium Capwell Corporation was extinguished and the Emporium Capwell Company became the surviving corporation.

In order to effect this merger the laws of both states required a meeting of all the stockholders and approval of at least two-thirds. A majority of the board of directors also had to approve the merger agreement, and the agreement had to be filed with the Secretary of State after proper acknowledgment and approval of the stockholders.

The Emporium Capwell Corporation [the Delaware corporation] was the owner of 412,853 shares of the common stock of the Emporium Capwell Company [the California corporation] for which the Delaware corporation held one stock certificate and in addition had 412,853 shares of its, own common stock outstanding, and also 7,-147 shares of treasury stock.…