Lewis Co v. Commissioner of Internal Revenue

Decision Date17 May 1937
Docket NumberNo. 743,743
PartiesA. A. LEWIS & CO. et al. v. COMMISSIONER OF INTERNAL REVENUE
CourtU.S. Supreme Court

Mr. Franz W. Castle, of Chicago, Ill., for petitioners.

Mr. Andrew D. Sharpe, of Washington, D.C., for respondent.

Mr. Justice SUTHERLAND delivered the opinion of the Court.

On January 3, 1934, the Commissioner of Internal Revenue assessed a deficiency of income taxes for the year 1931 against petitioners in the sum of $512.30. The Board of Tax Appeals, upon petition and after hearing, determined that there was no deficiency. Upon review, the court below, without opinion, reversed the decision of the Board of Tax Appeals.

The case involves the relations of petitioners under a declaration of trust and an agreement attached thereto. And the question for decision is whether the trust constitutes an association, to be taxed as a corporation, within the meaning of section 701(a)(2) of the Revenue Act of 1928, 26 U.S.C.A. § 1696(3), which provides that, when used in the act, 'The term 'corporation' includes associations, joint-stock companies, and insurance companies.' The commissioner, whose action was affirmed by the lower court, ruled that upon the facts stated below there was a taxable 'association' within the reach of this statutory provision. The Board of Tax Appeals held to the contrary.

Minerva S. Melidones, hereafter called the grantor, in 1925, in order to subdivide and sell a tract of land which she owned, made the declaration of trust here in question, placing the title in the predecessor of the Central Republic Trust Company, as trustee for the use and benefit of herself and A. A. Lewis, both of whom signed the instrument as beneficiaries. The trustee was given power to deal with the real estate so far as the public was concerned, but was to do so only in accordance with the agreement attached to the trust instrument. That agreement, bearing the same date as the declaration of trust, was executed by the grantor, Lewis and the trustee. The grantor, by the agreement, appointed Lewis, an experienced real estate operator, as exclusive selling agent and as 'manager of the trust created by said deed in trust and trust agreement aforesaid'; and was given 'such powers and duties in connection with the administration of the trust as may be necessary to facilitate the sale of the said land.' He was authorized to exercise management and control of the property for the purposes of sale at his own expense to employ a sales organization; to enter into contracts with purchasers as manager of the trust; and to request the trustee to execute deeds and other necessary instruments. Contracts were to be made, and title was to be conveyed by the trustee to purchasers, upon Lewis' written directions. He was to receive as sole compensation for his services commissions based upon the price for which the lots in the subdivision were sold. The trustee was to collect and distribute payments after the initial payment; but was to have nothing to do with the sales of lots or negotiations relating thereto.

The grantor subsequently assigned her beneficial interest in the trust to Benjamin Schwartz, to which his estate has succeeded as sole beneficiary. The trust instrument provides that transferrable certificates may be issued by the trustee; but none was ever issued.

If it were not for the declaration of trust, we should have here the simple case of an appointment by a land owner of an agent to subdivide the land and sell it, receiving as compensation for his services a fixed percentage of the payments made by...

To continue reading

Request your trial
93 cases
  • Rummel v. Estelle
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • December 20, 1978
    ... ... by commissioner sentence to advance ... of ... ...
  • Russell v. Gregoire
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • September 4, 1997
    ... ... sanctions carry the 'sting of punishment.' " Department of Revenue v ... Page 1093 ... Kurth Ranch, 511 U.S. 767, 777 n. 14, 114 S.Ct ... ...
  • Gluckstern v. Sutton
    • United States
    • Maryland Court of Appeals
    • September 1, 1988
    ... ... a parole does have the force of law, and is not a discretionary internal policy of the Institutional Board of Review. The requirement is ... State, 16 Md.App. 371, 297 A.2d 299 (1972); Lewis v. Warden, 16 Md.App. 339, 296 A.2d 428 (1972); Bigley and Fleming v ... ...
  • People v. District Court
    • United States
    • Colorado Supreme Court
    • June 29, 1992
    ... ... Zaragoza v. Director of Dept. of Revenue, 702 P.2d 274 (Colo.1985) ... Page 215 ... ; French, 19 Colo. at ... Lewis, 381 Mass. 411, 409 N.E.2d 771, 775 (1980) (ex post facto prohibition ... ...
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT