Central Trust Co. of New York v. Treat

• Decision Date: 10 June 1909
• Citation: 171 F. 301
• Parties: CENTRAL TRUST CO. OF NEW YORK v. TREAT, Collector.
• Court: U.S. District Court — Southern District of New York

171 F. 301

CENTRAL TRUST CO. OF NEW YORK v. TREAT, Collector.

United States Circuit Court, S.D. New York.

June 10, 1909

This is an action to recover $22,156 paid by the plaintiff under protest as a tax claimed by the defendant, a collector of internal revenue, to be due under War Revenue Act June 13 1898, c. 448, Sec. 2, 30 Stat. 448 (U.S. Comp. St. 1901, p 2286). The relevant parts of the section read as follows:

'Sec 2. That from and after July first, eighteen hundred and ninety-eight, special taxes shall be, and hereby are, imposed annually as follows, that is to say:

'(1) Bankers using or employing a capital not exceeding the sum of twenty-five thousand dollars shall pay fifty dollars; when using or employing a capital exceeding twenty-five thousand dollars, for every additional thousand dollars in excess of twenty-five thousand dollars, two dollars, and in estimating capital surplus shall be included. The amount of such annual tax shall in all cases be computed on the basis of capital and surplus for the preceding fiscal year. Every person, firm, or company, and every incorporated or other bank, having a place where credits are opened by the deposit or collection of money or currency, subject to be paid or remitted upon draft, check, or order, or where money is advanced or loaned on stocks, bonds, bullion, bills of exchange, or promissory notes, or where stocks, bonds, bullion, bills of exchange, or promissory notes are received for discount or sale, shall be a banker under this Act: Provided, that any savings bank having no capital stock, and whose business is confined to receiving deposits and loaning or investing the same for the benefit of its depositors, and which does no other business of banking, shall not be subject to this tax.'

The only matter in dispute is whether the tax is payable on $11,078,355.29, being accumulated and undivided profits resulting from the conducting of the business of complainant for many years.

Joline, Larkin & Rathbone, for plaintiff.

Henry L. Stimson, U.S. Atty., for defendant.

LACOMBE Circuit Judge (after stating the facts as above).

In view of former decisions in this circuit (Leather Manufacturers' Bank v. Treat (C.C.) 116 F. 774; Id. 128 F. 262, 62 C.C.A. 644) there would be no difficulty in finding that these accumulated undivided profits are either 'surplus' or 'capital.' In the case cited the plaintiff was a bank engaged solely in a...