MUNGER, District Judge.
The question presented in this case is whether the plaintiff in error is entitled to recover from the defendant collector of internal revenue an amount paid by the plaintiff in error under protest under the Revenue Acts of 1917 (40 Stat. 300) and 1918 (40 Stat. 1057). The plaintiff was a corporation engaged in business at St. Louis, Mo., and made a return for its fiscal year beginning March 1, 1917, and ending February 28, 1918. The amount of the taxes assessable for the 10 months of 1917 depends on the proper construction of section 209 of the act of 1917 (Comp. St. § 6336 3/8j), which reads as follows:
"Sec. 209. That in the case of a trade or business having no invested capital or not more than a nominal capital there shall be levied, assessed, collected and paid, in addition to the taxes under existing law and under this act, in lieu of the tax imposed by section two hundred and one, a tax equivalent to eight per centum of the net income of such trade or business in excess of the following deductions: In the case of a domestic corporation $3,000, and in the case of a domestic partnership or a citizen or resident of the United States $6,000; in the case of all other trades or business, no deduction."
The amount of the taxes assessable for the two months of 1918 depends on the proper construction of portions of the Revenue Act of 1918 as follows:
"Sec. 200. That when used in this title * * * The term `personal service corporation' means a corporation whose income is to be ascribed primarily to the activities of the principal owners or stockholders who are themselves regularly engaged in the active conduct of the affairs of the corporation and in which capital (whether invested or borrowed) is not a material income-producing factor." Comp. St. § 6336 1/8a.
"Sec. 205. (a) That if a taxpayer makes return for a fiscal year beginning in 1917 and ending in 1918, his tax under this title for the first taxable year shall be the sum of: (1) The same proportion of a tax for the entire period computed under title 1 of the Revenue Act of 1916 as amended by the Revenue Act of 1917 and under title 1 of the Revenue Act of 1917, which the portion of such period falling within the calendar year 1917 is of the entire period; and (2) the same proportion of a tax for the entire period computed under this title at the rates for the calendar year 1918 which the portion of such period falling within the calendar year 1918 is of the entire period: Provided, that in the case of a personal service corporation the amount to be paid shall be only that specified in clause (1)." Comp. St. § 6336 1/8d(a).
"Sec. 231. That the following organizations shall be exempt from taxation under this title —
* * * * * * * *
"(14) Personal service corporations." Comp. St. § 6336 1/8o.
"Sec. 304. (a) That the corporations enumerated in section 231 shall, to the extent that they are exempt from income tax under title 11, be exempt from taxation under this title." Comp. St. § 6336 7/16c(a).
"Sec. 335. (a) That if a corporation (other than a personal service corporation) makes return for a fiscal year beginning in 1917 and ending in 1918, the tax for the first taxable year under this title shall be the sum of: (1) The same proportion of a tax for the entire period computed under title 11 of the Revenue Act of 1917 which the portion of such period falling within the calendar year 1917 is of the entire period; and (2) the same proportion of a tax for the entire period computed under this title at the rates specified in subdivision (a) of section 301 which the portion of such period falling within the calendar year 1918 is of the entire period." Comp. St. § 6336 7/16n(a).
The parties made a written stipulation waiving a jury trial. The court made findings and thereupon entered judgment dismissing the action. The assignment of errors alleges error because the court found certain facts, because of certain declarations of law, and in failing to render a judgment for the plaintiff. These assignments present no reviewable question, except the question whether the judgment is supported by the findings which were made. Tatum v. Davis (C. C. A.) 283 F. 948, 949; Allen v. Cartan & Jeffrey Co. (C. C. A.) 7 F.(2d) 21, 22; Denver Live Stock Commission Co. v. Lee (C. C. A.) 18 F.(2d) 11, 14.
From these findings it appears that the plaintiff corporation was engaged in business at St. Louis, Mo., during the period in question, dealing in grains, flour, bran and related commodities. Its stockholders were regularly engaged in the active conduct of its affairs. It had a paid-in invested capital on March 1, 1917, of $35,607.69. This capital was increased in October, 1917, to $50,000, and at the end of the fiscal year it was $66,784.33. Some of this capital was invested in securities but the remainder consisted of cash on deposit in the bank, and the bank balances varied during the year from $10,000 to $30,000. The corporation's gross income for the year was a little over $83,000 and its expenses somewhat exceeded $46,000. The findings show the nature of the plaintiff's business, and divide it into three classes as follows:
"Class A Brokerage. This class embraced those transactions where the plaintiff disclosed the names of the buyer and seller. It arranged sales by bringing the buyer and seller together. The seller, upon shipment of the commodity, would draw a draft on the buyer and when the same was paid, or at the end of the month, the seller would pay the plaintiff its commission. The capital employed in this class of business was merely incidental.
"Class B Brokerage. This class embraced those transactions where the plaintiff did not disclose the names of the buyer and seller. It would locate a buyer and then a seller, or vice versa. The company would then order the shipment in its name from the seller. The seller would draw a draft on the plaintiff. When that draft reached the plaintiff's bank a messenger would deliver same to plaintiff's office. Before the close of banking hours plaintiff would give the bank its check in payment of the seller's draft. Plaintiff would then draw a draft on the buyer, attaching bill of lading thereto. This draft on the buyer included plaintiff's profit and when paid by the buyer this profit was automatically reflected to plaintiff's credit at its bank. This class of business required the use of plaintiff's invested capital and substantial capital was in fact so used."
Class C. (1) Consignment and (2) Jobbing.
"(1) Consignment. This represented those transactions where a shipper would consign commodities to the plaintiff and draw a draft on it for 80 per cent. or 90 per cent. of the value of the consignment. The plaintiff would pay the draft. It then disposed of the commodity to the best advantage, collected from the buyer, and remitted the balance of the value of the consignment, if any, to the shipper, less a fixed commission.
"(2) Jobbing. This represented transactions where the plaintiff purchased the...
