108 F.2d 665 (6th Cir. 1940), 7995, Ohio Farmers Indemnity Co. v. Commissioner of Internal Revenue

Docket Nº:7995.
Citation:108 F.2d 665
Party Name:OHIO FARMERS INDEMNITY CO. v. COMMISSIONER OF INTERNAL REVENUE.
Case Date:January 15, 1940
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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Page 665

108 F.2d 665 (6th Cir. 1940)

OHIO FARMERS INDEMNITY CO.

v.

COMMISSIONER OF INTERNAL

REVENUE.

No. 7995.

United States Court of Appeals, Sixth Circuit.

January 15, 1940

Charles E. Curtis, of LeRoy, Ohio, for petitioner.

Edward H. Horton, Sp. Asst. to Atty. Gen. (James W. Morris, Asst. Atty. Gen., and Sewall Key and Edward H. Horton, Sp. Assts. to Atty. Gen. on the brief), for respondent.

Before HICKS, HAMILTON, and ARANT, Circuit Judges.

HAMILTON, Circuit Judge.

This appeal involves a deficiency in income taxes of $7,531.55 for the calendar year 1932 found by the Board of Tax Appeals to be due from the petitioner, Ohio Farmers Indemnity Company. The statute involved is the Revenue Act of 1932, Sections

Page 666

13(a), 141(e), 201(a), 204(a), 208(a), (c) (3), Ch. 209, 47 Stat. 169, 26 U.S.C.A. § 13(a), 141 note, 201(a), 204(a), 207(a), (c) (3).

The petitioner was organized in 1929 under the general corporation laws of the State of Ohio and authorized to conduct a general liability insurance business, the major portion of which was automobile insurance. It was authorized to issue 2,000 shares of common capital stock, all of which were subscribed at the time of organization by the Ohio Farmers Mutual Fire Insurance Company. One Thousand Nine Hundred Ninety-one shares were issued to it and at its direction the remaining nine were issued, one each to the nine directors of the Ohio Farmers Mutual Fire Insurance Company, who were also elected as directors of petitioner and reelected from time to time since its organization. The Ohio Farmers Mutual Fire Insurance Company is also an Ohio corporation, organized in 1848, its charter having been granted by a special act of the Legislature and it was, and is, authorized to conduct the business of fire insurance and its allied lines, excluding liability insurance. It has no capital stock and no shareholders and its directors are elected at an annual meeting, each policyholder being entitled to vote. Petitioner and the Ohio Farmers Mutual Fire Insurance Company conduct their businesses jointly, having the same officers, directors, employees, and agents and petitioner's business is generally conducted as though it were a department of the Ohio Farmers Mutual Fire Insurance Company. The companies issue joint policies on motor vehicles, the petitioner underwriting liability insurance and the Ohio Farmers Mutual...

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