Little Miami Co v. United States

• Decision Date: 16 April 1883
• Citation: 27 L.Ed. 724,108 U.S. 277,2 S.Ct. 627
• Parties: LITTLE MIAMI & C. & X. R. CO. v. UNITED STATES
• Court: U.S. Supreme Court

108 U.S. 277

2 S.Ct. 627

27 L.Ed. 724

LITTLE MIAMI & C. & X. R. CO. v. UNITED STATES.

April 16, 1883.

Wm. M. Ramsey, for plaintiff in error.

Sol. Gen. Phillips, for defendant in error.

WAITH, C. J.

This was a suit begun by the United States on the twenty-ninth of March, 1875, to recover of the Little Miami & Columbus & Xenia Railroad Company a tax of 5 per centum on alleged profits of the company 'carried to the account of any fund or used in construction,' provided for by the act of June 30, 1864, c. 173, § 122, (13 St. 284,) amended by the act of July 13, 1866, c. 184, (14 St. 139.) A jury was waived and the trial had by the court. The case comes here on a finding of facts. From this finding it appears 'that during the period covered by the petition, viz., from the first day of July, 1864, to the thirtieth day of November, 1869, inclusive, the defendant, in good faith, regularly made returns of earnings, profits, income, and gains, and of profits carried to the account of any fund, or used for construction, arising or accruing to it during said period, intended and believed by it to embrace all such profits, incomes, and gains, and all such profits carried to the account of any fund, or used for construction, which by law it was bound to return; which returns were received and accepted, and for the amount of which assessments from time to time were made of the taxes payable thereon, which taxes were regularly paid by it to the officer lawfully authorized by law to collect the same.' In addition to this it also appears 'that over and above the amount so returned, on which taxes were paid as aforesaid, the defendant did in fact make additional earnings, which by it were carried to the account of some fund, or used for constructon during said period, amounting in all to the sum of $168,707.22, on which no tax has been paid.' The finding also shows that during the year 1869 the defendant carried to the debit of profit and loss on its books various items, amounting in all to $184,395.06. In this way the books show no profits between July 1, 1864, and November 30 1869, beyond the amount on which taxes were paid in the regular course of business. Of the sum so charged up, one item of $51,155.44 was for loss and depreciation on book-accounts and other choses in action, acquired by the company prior to July 1, 1864, and which had been standing on the books until 1869 at their par value; another item of $22,000 was for the depreciation in the value of bonds purchased after July 1, 1864; another item of $106,014.62 was for the depreciaton in value of what was known as the 'street-connection track;' and another item of $5,225 was for losses on a purchase in 1867 of shares of capital stock in a cotton-press company. Upon these facts, so found, the company claimed that, in ascertaining the amount of profits liable to taxation, there should be deducted from the earnings, during the period for which the tax was claimed, these...