Welch

This is a suit to recover for overpayment of federal income tax collected for the calendar year 1926.. By reason of admissions made in the answer of. the defendant and the stipulation of facts filed by the parties, the sole question to be determined is as to the validity and effect of a certain settlement and adjustment agreement alleged to have been entered into by the plaintiff and approved by the Commissioner of Internal Revenue pursuant to the provisions of section 606 of the Revenue Act of 1928 (26 USCA § 2606 and note). This agreement is of date January 29, 1929, and appears to have been signed on the part of the taxpayer by A. W. Morton as vice president. The defendant admits that the amount of $26,491.43 was overpaid and that plaintiff is entitled to recover the same unless the agreement above mentioned foreclosed that right. The contention on the defendant’s behalf is that the agreement was regularly entered into with full power on the part of the person executing the same for the plaintiff, and hence is, under the statute, a conclusive determination of the correctness of the amount of the tax.

The Merchants’ National Trust & Savings Bank had prior to October 8, 1926,…