Caroline Mills v. Commissioner
United States Board of Tax Appeals
Committees representing bondholders and shareholders of petitioner entered into an oral agreement that the bondholders would not foreclose on a deed of trust and that the shareholders would not pay dividends until past due bond interest had been paid. At a shareholders' meeting a resolution in which the agreement was recited was adopted. The minutes of the shareholders' meeting were approved by the board of directors of petitioner.
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Committees representing bondholders and shareholders of petitioner entered into an oral agreement that the bondholders would not foreclose on a deed of trust and that the shareholders would not pay dividends until past due bond interest had been paid. At a shareholders' meeting a resolution in which the agreement was recited was adopted. The minutes of the shareholders' meeting were approved by the board of directors of petitioner. Held, the minutes of the meeting of the shareholders did not constitute a "written contract executed by the corporation" and petitioner is not entitled to a credit…
1Dissent
Tyson,
dissenting: I agree with the majority opinion in its holding that petitioner’s charter is not a contract restricting the payment of dividends within the purview of section 26 (c) (1) of the Revenue Act of 1936.
However, I disagree with the holding in that opinion that the resolution adopted at the stockholders’ meeting and thereafter approved by the board of directors did not constitute a written contract executed by petitioner restricting the payment of dividends under the cited section.
The majority opinion predicates its latter holding primarily upon the conclusion that the agreement…
2Cases cited9 opinions
- Lafean v. American Caramel Co.Supreme Court of Pennsylvania · 1921
- Beach & Clarridge Co. v. American Steam Gauge & Valve Manufacturing Co.Massachusetts Supreme Judicial Court · 1909
- Alabama Lime & Stone Co. v. AdamsSupreme Court of Alabama · 1928
- Sotter v. Coatesville Boiler WorksSupreme Court of Pennsylvania · 1917
- Altavista Cotton Mills, Inc. v. LaneSupreme Court of Virginia · 1922
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