"The plaintiff was in the business of buying and selling cattle. During the period in question he was the sole owner of the business. He was not obliged to keep on hand a stock of cattle in order to carry out the purposes of the business, but he seems to have arranged his purchases of cattle and his sales thereof in such a manner that deliveries were made directly from the cattle men or producers to the wholesale butchers who ultimately consumed them. The busy season ran from the middle of the year until the end of October or middle of November.
"The plaintiff made contracts for the sale of the cattle between himself as the seller and certain purchasers in New York, Philadelphia, and to a smaller extent in Baltimore. He bought the cattle from the producers through certain agents who traveled throughout the country and came in personal contact with the producers. Deliveries as said above were made through these agents from the place where the cattle were grown to the places of business where they were slaughtered.
"About twenty per cent. of the business was, according to the plaintiff's recollection, done in Baltimore, of which one-half approximately was on commission. The other one-half involved goods which the plaintiff bought and sold as he did with his other customers in other cities. A considerable part of the Baltimore sales was paid for in cash, but not all of them, some credit being extended by the plaintiff.
"The plaintiff was particularly fortunate, according to his recollection, in making collections from his Philadelphia and New York customers, and the larger part of his Baltimore customers, at or before the time when he was obliged to honor the drafts sent him by his agents who bought the cattle for him. According to the plaintiff's recollection, this was the case with the larger part of his business. He did not attempt to produce evidence in detail to substantiate the accuracy of his memory, but it was probably supported by the facts, for the business was done on a comparatively small amount of money. The gross sales were $2,864,000, the profits $180,295.93 and the money employed less than $80,000. It is nevertheless true that a substantial part of his sales was made on credit, for his accounts show that throughout the year, and particularly during the busy part of the year, there were large amounts of accounts receivable due and owing him on his books.
"The question of fact to determine is what capital the plaintiff employed, and whether it may be said that this amount was not more than nominal capital. It may be noted in passing that the plaintiff carried on his books a sum of money approximately $38,000, which represented certain investments derived by him from the estate of his father, which were not employed in the operation of the business. They were carried on the books of the business as a matter of convenience, since it was a one-man concern. The Court finds that this sum of money was not actually used in the business so far as it can determine from the evidence produced. * * *
"There is a stipulation in the case wherein the plaintiff admits that he used at least $12,000 a year as invested capital, and it is also agreed that if there should be included the earnings made by the plaintiff during the year, the amount of the invested capital was $23,320.13. It is obvious from a copy of a monthly balance sheet that has been introduced in evidence that the earnings of the business were used to some extent in the operation thereof during the year. It is, perhaps, difficult to ascertain precisely how much of the earnings was used, but certainly they were all available for use.
"The burden of proof is on the plaintiff in a matter of this sort, it seems to the Court, so that for the purposes of decision it seems more reasonable to the court to adopt the figure of $23,000 as that of the invested capital than the sum of $12,000, which the plaintiff concedes. The stipulation of the parties also suggests that if the amount of $100,000 withdrawn from the ordinary running accounts of the business on November 2nd, were considered as remaining in the business during the balance of the year, then the invested capital averaged throughout should be $38,000 a year. * * *
"* * * During all of this period, especially in the busy season, there were substantial amounts of money due and owing to the business. The accounts receivable were $42,131.66 on June 30th, and $142,440.06 on September 30th, and the average of the accounts receivable throughout the period must have been in excess of $60,000. These moneys were owed to the business in the way in which accounts receivable are usually due and owing to a mercantile business, and this is an ordinary attribute of a business which requires capital, namely the fact that the owner or merchant must wait upon the conveniences of his customers for the payment for their bills to a greater or lesser extent."
