(DOWNLOAD) "Jewel Tea Co. v. United States" by Second Circuit Circuit Court Of Appeals # Book PDF Kindle ePub Free
eBook details
- Title: Jewel Tea Co. v. United States
- Author : Second Circuit Circuit Court Of Appeals
- Release Date : January 07, 1937
- Genre: Law,Books,Professional & Technical,
- Pages : * pages
- Size : 54 KB
Description
This is an appeal from a judgment for the defendant in an action under the Tucker Act (24 Stat. 505) to recover income taxes, erroneously collected. The question is whether the plaintiff was right, under section 23 (f) of the Revenue Act of 1928, (26 U.S.C.A. § 23 (f) and note), in deducting in the year 1929 the premiums paid by it upon the redemption of what remained outstanding of its preferred shares. These had been issued -- to a par value of $4,000,000 -- for cash and property, under an agreement which provided that the company should each year acquire $120,000 of them "out of the surplus profits of the Company, if sufficient, after all cumulated and defaulted dividends (if any) upon said Preferred Stock shall have been paid, or set apart." This was to be accomplished either by redeeming them at $125 or by buying in the market at no more than that price. This provision was cumulative; that is to say, if the profits were not enough in one year, the deficit should be made up whenever they became so. The company might also redeem the whole or any part of the issue at its pleasure at the same price. It must accumulate an earned surplus of $500,000 above all obligations before paying any dividend on the common shares, and of one million dollars before paying more than six per cent. "Upon any dissolution, liquidation, merger or consolidation, * * * whether voluntary or involuntary (except in the event of insolvency or bankruptcy), or upon any distribution of capital" the preferred shareholders were to receive $125 for each share and all past dividends. "In the event of any dissolution or liquidation * * * by reason of its insolvency or bankruptcy," they should be preferred as to past dividends, and receive the par of their shares. They were to have no right to vote until two quarterly payments of dividends were in arrears, when the sole voting power, though only to elect directors or to change the by-laws, went to them until the arrears were paid. The case involves the premiums paid by the company upon the purchase in the market of 5,381 shares between July 15, 1929 and February 12, 1929, and upon the voluntary redemption of the whole remainder of the issue, 20,219 shares, on April first of that year. No question is made as to the purchase of that part of the 5,381 shares bought before January 1, 1929.
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