FOUNDERS GENERAL CORP. V. HOEY, 300 U. S. 268 (1937)

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U.S. Supreme Court

Founders General Corp. v. Hoey, 300 U.S. 268 (1937)

Founders General Corp. v. Hoey

No. 398

Argued January 8, 11, 1937

Decided March 1, 1937*

300 U.S. 268


1. Where the certificates for corporate shares subscribed for by A are, by his direction and for his own convenience, issued to B, his nominee and agent for this purpose, there is a transfer from A to B of the "right to receive" the certificates which is taxable under § 800, Schedule A-3, of the Revenue Act of 1926, although the arrangements between A and B were such that, as against A, B could not have compelled issuance of the certificates to himself and acquires no.beneficial interest in the securities, and has no part in the management or disposal of them. P. 300 U. S. 273.

2. A new corporation took over the assets of an old one and agreed to issue its shares to the old stockholders, but, in pursuance of an irrevocable agreement and power of attorney previously executed by the stockholders, portions of their new allotments, pro rata, were issued directly to their attorney for purposes of sale. Held that there was a taxable transfer, from stockholders to attorney, of the "right to receive" shares, under § 800, Schedule A-3 of the Revenue Act of 1926. Raybestos-Manhattan, Inc. v. United States, 296 U. S. 60. P. 300 U. S. 274.

3. A taxpayer whose transaction is within a taxing statute cannot be relieved upon the ground that, by adopting another form of dealing, he could have achieved his ultimate purpose and avoided the statute. P. 300 U. S. 275.

84 F.2d 976 affirmed.

84 F.2d 908 reversed.

83 Ct.Cls. 593, 15 F.Supp. 70, reversed.

Certiorari, 299 U.S. 534, 531, to review judgments in suits for the recovery of moneys alleged to have been wrongfully exacted as taxes on stock transfers, and as

Page 300 U. S. 269

interest and penalties. In No. 398, the judgment of the District Court (12 F.Supp. 290) dismissing the complaint was affirmed by the court below. In No. 331, a recovery in the District Court was affirmed by the court below. In No. 330, there was a judgment for the taxpayer in the Court of Claims.

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