
    GOODYEAR TIRE & RUBBER CO. v. THE UNITED STATES
    [No. D-793.
    Decided March 23, 1925]
    
      On the Proofs
    
    
      internal Revenue; tax on capital stock. — See Griba It. It. Go. case, ante, p. 272.
    
      The Reporter’s statement of the case:
    
      Messrs. George Rublee and Spencer Gordon for the plaintiff. Covington, Burling c& Rublee were on the brief.
    
      Mr. Roscoe R. Koch, with whom was Mr. Assistant Attorney General 'William J. Donovan, for the defendant.
    The following are the facts as found by the court:
    I. The plaintiff, The Goodyear Tire & Rubber Company, is a corporation organized under the laws of the State of Ohio.
    II. The Goodyear Tire & Rubber Company was reorganized pursuant to the laws of the State of Ohio by certificate of reorganization filed May 12, ”1921, and recorded in volume 265, page 583, of the Records of Incorporation of the State of Ohio. Prior to said reorganization the authorized common capital stock of the company was 1,000,000 shares of the par value of one dollar per share, of which 610,475 shares were outstanding. The said certificate of reorganization provided that the authorized common stock should be 1,500,000 shares without nominal or par value and that in place of the outstanding shares of common stock there should be issued to the holders thereof, for each one share thereof, one share of the nonpar common stock of the reorganized corporation. During the period from May 23, 1921, until June 16, 1922, 534,849 shares of the nonpar common stock of the reorganized corporation were issued in place of the outstanding shares of common par stock as provided in said certificate of reorganization in the following manner: Holders of the outstanding par common stock assenting to a certain plan and agreement of reorganization dated February 1, 1921, under which the reorganization was effected, assigned their stock to certain voting trustees (created by a certain voting trust agreement made pursuant to said plan and agreement of reorganization), and deposited the certificates for such par common stock duly indorsed for transfer with the Union Trust Company of Cleveland, Ohio, as agent for said voting trustees. Said Union Trust Company, which also acted as transfer agent of the Goodyear Tire & Rubber Company in pursuance of authority conferred upon it by said Goodyear Tire & Rubber Company, then exchanged such par common stock certificates for certificates for an equal number of shares of nonpar stock, which were issued in the name of the Union Trust Company as agent for said voting trustees. The Union Trust Company, duly authorized thereunto by said voting trustees, then issued and delivered to each of said assenting stockholders a voting trust certificate or certificates representing a number of shares of nonpar common stock equal to the number of shares of par common stock represented by the certificates previously deposited as aforesaid by said stockholder. All of said acts were done in pursuance of the plan and agreement of reorganization dated February 1, 1921.
    III.By Treasury Decision 3289, dated February 21, 1922, the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, amended a certain article 4 (h) of Regulations 40 (revised), relating to the stamp tax on issues, sales, and transfers of stock, and sales of products for future delivery, promulgated by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, to read as follows:
    “Art. 4 (h). The issue of certificates of stock upon reorganization of a corporation not expressly provided for in article 4 (1) is subject to tax as follows: Preferred stock issued in place of common, or vice versa, or one kind of preferred stock issued in place of another kind of preferred stock, or one kind of common stock issued in place of another kind of common stock, or stock without par value issued in place of stock with par value, or vice versa, is subject to tax on the entire issue.”
    Pursuant to this regulation, the Commissioner of Internal Revenue took the position under the facts stated in paragraph 2 of this stipulation, that a stamp tax was due upon “ stock without par value issued in place of stock with par value,” and proposed a tax as follows:
    514,620 shares common of no par value issued to the voting trustees prior to January 1, 1922, at 5 cents per share- $25,731.00
    20,229 shares common of no par value issued to the voting trustees subsequent to December 31, 1921, at 1 cent per share- 202. 29
    25, 933. 29
    IV. The tax, amounting to $25,933.29, was paid on or about August 29, 1922, by the purchase and cancellation of stamps by the plaintiff, under protest and duress and to avoid the imposition of penalties. On or about May 2, 1924, the plaintiff filed a claim for refund of said sum of $25,-933.29, and the same was rejected by the Commissioner of Internal Revenue on or about August 15, 1924.
    V. No part of said sum of $25,933.29, so collected by the United States, has been repaid to the plaintiff.
    
      The court decided that plaintiff was entitled to recover.
   MEMORANDUM BY THE COURT

The defendant concedes that this case can not be distinguished under the facts from the case of the Guba R. R. Co., 272.  