Opinion · Supreme Court of the United States

Crane-Johnson Co. v. Helvering

61 S. Ct. 114

Type
Opinion
Court
Supreme Court of the United States
Jurisdiction
Federal
Date
1940-11-12
Topic
general

Mr. Justice Black delivered the opinion of the Court. Because of a previously existing deficit, petitioner corporation was prohibited by state law 1 from distributing as dividends its profits earned in 1936. Notwithstanding this state prohibition, the Commissioner held respondent liable under the 1936 Revenue Act 2 for surtax on undistributed profits. The Board of Tax Appeals sustained *55 the Commissioner, 3 and the Circuit Court of Appeals affirmed. 4 On a similar state of facts the Court of Appeals for the Ninth Circuit held undistributed profits exempt from surtax. 5 We granted certiorari in both cases to resolve this conflict. 6 The legal questions here presented are in all respects the same as those presented in Helvering v.

Citator

Cited by
32 opinions
CRANE-JOHNSON CO.v. HELVERING,311 U.S. 54(1940)
61 S.Ct. 114
CRANE-JOHNSON COMPANYv. HELVERING, COMMISSIONER OF INTERNAL REVENUE.
CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE EIGHTH CIRCUIT.
No. 8.
Argued October 23, 1940.
Decided November 12, 1940.
Decided on the authority ofHelveringv.Northwest SteelRolling Mills, ante, p. 46.105 F.2d 740, affirmed.
CERTIORARI,309 U.S. 692, to review the affirmance of a
decision of the Board of Tax Appeals,38 B.T.A. 1355, which
sustained the Commissioner's determination of a tax deficiency.
Mr. John E. Hughesfor petitioner.MR. Richard H. Demuth, with whomSolicitor General Biddle,Assistant Attorney General Clark, andMr. Sewall KeyandMissHelen R. Carlosswere on the brief, for respondent.

By leave of Court,Mr. Thomas H. Remingtonfiled a brief on behalf of Bastian Brothers Company, asamicus curiae, in support of petitioner.
MR. JUSTICE BLACK delivered the opinion of the Court.
Because of a previously existing deficit, petitioner corporation was prohibited by state law1from distributing as dividends its profits earned in 1936. Notwithstanding this state prohibition, the Commissioner held respondent liable under the 1936 Revenue Act2for surtax on undistributed profits. The Board of Tax Appeals sustainedPage 55the Commissioner,3and the Circuit Court of Appeals affirmed.4On a similar state of facts the Court of Appeals for the Ninth Circuit held undistributed profits exempt from surtax.5We granted certiorari in both cases to resolve this conflict.6The legal questions here presented are in all respects the same as those presented inHelveringv.NorthwestSteel Rolling Mills, ante, p. 46, and on the authority of that case the decision below isAffirmed.
  1. Page 54 "The directors of corporations must not make dividends except from the surplus profits arising from the business thereof . . ." N.D. Comp. Laws (Supp. 1925) § 4543. ↩
  2. Page 5449 Stat. 1648, 1655. ↩
  3. Page 5538 B.T.A. 1355. ↩
  4. Page 55105 F.2d 740. ↩
  5. Page 55Northwest Steel Rolling Millsv.Commissioner,110 F.2d 286. ↩
  6. Page 55309 U.S. 692;post, p. 629. ↩