Camp Concrete Rock Company v. United States, Civ. No. 357.

• Decision Date: 23 May 1959
• Docket Number: Civ. No. 357.
• Citation: 181 F. Supp. 806
• Parties: CAMP CONCRETE ROCK COMPANY, a corporation, Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — Southern District of Florida

181 F. Supp. 806

CAMP CONCRETE ROCK COMPANY, a corporation, Plaintiff, v. UNITED STATES of America, Defendant.

Civ. No. 357.

United States District Court S. D. Florida, Ocala Division.

May 23, 1959.

Green & Bryant, Ocala, Fla., for plaintiff.

James L. Guilmartin, U. S. Atty., Miami, Fla., Edith House, Asst. U. S. Atty., Jacksonville, Fla., and Herbert L. Awe, Atty., Dept. of Justice, Washington, D. C., for the United States.

SIMPSON, District Judge.

This case was tried before the Court, without a jury, upon issues adequately set forth in the pre-trial order, which is incorporated herein by reference. In a considerable measure, the facts were stipulated. Since the other evidence at the trial consisted of the testimony of a managing officer of plaintiff, that of an officer of an affiliated company, and documentary exhibits (no live witnesses being called by the Government), the facts are not in serious dispute. Upon the stipulated facts, the evidence at the trial, and upon briefs and proposed findings submitted by the parties subsequent to the trial, the Court now makes the following

Findings of Fact

1. The plaintiff is a corporation organized under the laws of the State of Florida, with principal place of business at Ocala, Florida.

2. During the years 1951, 1952 and 1953, the plaintiff was engaged in the business of mining and crushing stone. For each of these years, the plaintiff filed its federal corporation income tax return on Form 1120, United States Treasury Department.

3. The plaintiff filed its income tax return for the year 1951 on March 4, 1952, and, in that return, claimed a depletion deduction in the amount of $173,117.43 and showed a tax due in the amount of $222,836.78. The taxpayer filed its first amended return for the year 1951 on June 3, 1952, and this return disclosed a claimed depletion deduction in the amount of $193,254.51, and tax due in the amount of $196,647.61. On this second return, this depletion was computed as being 10% of the total gross income of the Florida Crushed Stone Company, which the plaintiff contended was its agent. The plaintiff filed another amended return for the year 1951 on August 3, 1953, in which it claimed a depletion deduction in the amount of $96,627.26 and a tax due in the amount of $274,809.58. On August 14, 1954, the taxpayer made an additional payment of tax in the amount of $84,610.33. The taxpayer filed a claim for refund for the year 1951 in the amount of $8,159.64 on January 4, 1956, and this claim was rejected by the Commissioner of Internal Revenue on September 24, 1956.

4. For the calendar year 1952, the taxpayer filed its income tax return on March 14, 1953. The petitioner filed an amended return for this year on August 3, 1953, which return disclosed a net income in the amount of $286,358.24 and tax due in the amount of $141,713.13. This tax was $50,875.22 more than that shown on the original return. The taxpayer paid $50,875.22 plus interest of $1,144.69, a total of $52,019.91, on August 13, 1953. On March 21, 1955, the plaintiff paid additional tax for the year 1952 in the amount of $7,587.64 plus interest of $754.50, or a total of $8,342.14. On January 4, 1956, the plaintiff filed a claim for refund in the amount of $7,703.85, which claim was rejected on September 24, 1956.

5. For the taxable year 1953, the plaintiff filed its income tax return, Form 1120, on March 16, 1954. On May 26, 1955, the plaintiff paid additional tax in the amount of $14,899.27 plus interest of $896.40, a total of $15,795.67. The taxpayer filed a claim for refund, Form 843, in the amount of $10,252.50 on January 4, 1956, which claim was rejected by the Commissioner of Internal Revenue on September 24, 1956.

6. This action was commenced on March 1, 1957.

7. The Florida Crushed Stone Company sold all of plaintiff's products, mined natural limestone rock, and all the products of an independent third company producing the same commodity as Camp Concrete Rock Company, William P. McDonald Company of Lakeland, Florida. Florida was owned one-half by Camp, one-half by McDonald, with each company having two members of a 4-member Board of Directors, and neither having control. Florida was also the sales representative for another concern, Victor Chemical Corporation, whose product, slag, was handled differently, both physically and on its books, than the products of Camp and McDonald.

8. Camp mined and stored its lime rock at its mine. Florida had no trucks, nor stockpiles of rock, and never received delivery. When an order was placed with Florida for rock, Camp or McDonald was notified, and the order filled by loading on railroad cars or trucks for delivery to the purchaser from Florida. The rock was shipped f. o. b. Camp's plant, the customer being shown on the bill of lading as consignee, Florida as consignor. The price paid Camp was based on the selling price by grade received by Florida. Florida collected from the customer and remitted to Camp, less Florida's agreed commission and selling costs. Payment was made to Camp by Florida regardless of collection from the customer. The commissions charged and collected in 1951, 1952 and 1953 were as follows:

                Selling Price            Income to
                                          Florida
                $2.00 and over per ton   20¢ per ton
                Under $2.00 per ton      15¢ per ton
                

There was no written agreement between the two companies, Camp and Florida,...