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…
1Opinion of the Court
*381OPINION.
Yan Fossan :
The only issue for our determination is whether or not petitioner is entitled to a credit under section 26 (c) (1) of the Revenue Act of 19361 for purposes of the surtax on undistributed profits. Petitioner contends that it was restricted in payment of dividends in the taxable year because of limitations imposed by its charter and by the agreement set forth in the minutes of the shareholders’ meeting held January 19, 1934. It maintains that the shareholders’ resolution was a written contract executed by petitioner within the purview of the statute. Respondent’s position is…
2Cases cited2 opinions
- Helvering v. Northwest Steel Rolling Mills, Inc.Supreme Court of the United States · 1940
- Crane-Johnson Co. v. HelveringSupreme Court of the United States · 1940
3Cited by2 opinions
- Mills v. CommissionerCourt of Appeals for the Fifth Circuit · 1942
- Caroline Mills v. CommissionerUnited States Board of Tax Appeals · 1941