California Electric Power Co. v. United States

This is an action to recover the sum of $4,549.51, alleged to have been erroneously exacted from the plaintiff, under Section 1802(a) of the Internal Revenue Code, Title 26 U.S.C.A., prior to the amendment of 1947, as a documentary stamp tax upon a certain issue of stock by plaintiff. The question for decision is whether the entire issue or only a part thereof of plaintiff’s new preferred stock constituted an original issue within the meaning of Section 1802 (a). The facts were stipulated and are substantially as follows:

Prior to the time of the recapitalization in June of 1941, plaintiff’s capital stock consisted of 105,023 preferred shares, each having a par value of $100, and 84,683 common shares, each having a value of $10. The stamp tax due on this stock had been paid. On June 20, 1941, the certificate of incorporation was amended to provide that each of the outstanding shares of old preferred stock were to be automatically converted into % share of $3 cumulative preferred stock of a par value of $50 each, and six shares of common stock of a par value of $10 each. This amendment was to be effective June 30, 1941. This change did not affect the proportionate interests of the…