Pann v. United States, 6135.

• Decision Date: 27 October 1930
• Docket Number: No. 6135.,6135.
• Citation: 44 F.2d 321
• Parties: PANN v. UNITED STATES.
• Court: U.S. Court of Appeals — Ninth Circuit

44 F.2d 321 (1930)

PANN v. UNITED STATES.

No. 6135.

Circuit Court of Appeals, Ninth Circuit.

October 27, 1930.

Frank G. Falloon and George B. Ross, both of Los Angeles, Cal., for appellant.

Samuel W. McNabb, U. S. Atty., and Harry Graham Balter, Asst. U. S. Atty., both of Los Angeles, Cal., and C. M. Charest, Gen. Counsel, Bureau of Internal Revenue, of Washington, D. C., and Alva C. Baird, Sp. Atty., Bureau of Internal Revenue, of Los Angeles, Cal., for the United States.

Before RUDKIN and WILBUR, Circuit Judges, and KERRIGAN, District Judge.

WILBUR, Circuit Judge.

This action was brought by the government against William P. Pann, Jane Doe Pann, and Helen Donald to collect income tax and excess profit tax, based upon the returns of the Angeles Brokerage Company, a corporation, amounting to $1,435.03. It is alleged that the corporation had ceased doing business and dissolved subsequent to December 31, 1919, and that upon the dissolution its property was sold and distributed among the defendants, stockholders, leaving the corporation without assets. The defendants joined in an answer admitting the incorporation of the Angeles Brokerage Company, alleging that the corporation never did any business and never functioned as a corporation and that it had lost its right to exist by virtue of noncompliance with certain laws of the state of California. It is admitted that defendants William P. Pann and Helen Donald were stockholders in the company, but denied that Elizabeth I. Pann, sued as Jane Doe Pann, ever held any stock in the corporation. It is denied that the stockholders ever received any of the corporate assets of the company. It is alleged that the defendant William P. Pann registered the corporate name as a fictitious name to be used by him in doing business, and that he did business under that name and made a mistake in filing income tax return on behalf of the corporation, and that the income returned was the income not of the corporation but of William P. Pann. Thus, the principal issue tendered by the answer was whether or not the corporation ever acquired or disposed of any assets whatever. The appellant testified that the corporation had no assets and that he now owned the assets which were listed by him as belonging to the corporation in his income tax returns. He testified that upon the organization of the company its 500 shares of stock were issued without consideration and he received 490 shares of the stock and defendant Donald 10 shares. Appellant, on October 11, 1919, as president of the Angeles Brokerage Company, made a financial statement to the Bank of Italy giving its assets as $76,780.57 and its liabilities as $44,646.40; made a similar statement as president showing assets of $118,416.77; made a corporation and excess profit tax return to the government February 28, 1918, showing an income of $12,076.11 and a capital of $9,995.32. This return...