Powers Mfg. Co. v. Commissioner of Internal Revenue

• Decision Date: 23 July 1929
• Docket Number: No. 8235.,8235.
• Citation: 34 F.2d 255
• Parties: POWERS MFG. CO. v. COMMISSIONER OF INTERNAL REVENUE.
• Court: U.S. Court of Appeals — Eighth Circuit

34 F.2d 255 (1929)

POWERS MFG. CO. v. COMMISSIONER OF INTERNAL REVENUE.

No. 8235.

Circuit Court of Appeals, Eighth Circuit.

July 23, 1929.

John T. Sullivan, of Waterloo, Iowa (Jeffery G. Sullivan, of Waterloo, Iowa, on the brief), for appellant.

Andrew D. Sharpe, Sp. Asst. to Atty. Gen. (Mabel Walker Willebrandt, Asst. Atty. Gen., Sewall Key, Sp. Asst. to Atty. Gen., and C. M. Charest, Gen. Counsel, Bureau of Internal Revenue, of Washington, D. C., on the brief), for appellee.

Before KENYON, Circuit Judge, and JOHNSON and McDERMOTT, District Judges.

JOHNSON, District Judge.

The only matters for consideration on this review are the claimed absence from the record of any substantial evidence supporting the findings of the Board of Tax Appeals. 7 B. T. A. 786.

It is settled law that this court must accept the findings of facts made by the board, where there is any substantial evidence to sustain them. Avery v. Commissioner of Internal Revenue (C. C. A.) 22 F.(2d) 6, 55 A. L. R. 1277; Royal Packing Co. v. Commissioner of Internal Revenue (C. C. A.) 22 F.(2d) 536; Mastin v. Commissioner of Internal Revenue (C. C. A.) 28 F.(2d) 748; Kendrick Coal & Dock Co. v. Commissioner of Internal Revenue (C. C. A.) 29 F.(2d) 559; Feeders' Supply Co. v. Commissioner of Internal Revenue (C. C. A.) 31 F.(2d) 274.

The matters decided adversely to petitioner are:

1. Couch Mills Company matter: Petitioner claims that the several advancements making up the account should have been allowed by the board as costs of merchandise. The board found that the advancements were loans by petitioner to the Couch Mills Company, a corporation. This finding is amply sustained by the evidence. Walter D. Couch, president of the Couch Mills Company, called as a witness by petitioner, testified:

"It was intended to pay that money back, because I recall a note was given for a part of it, and Powers did not want to let us have the money. He frequently requested payment and stated that he needed it. We were unable to pay because we didn't have it. There was none of the money ever paid back to the Powers Manufacturing Company. The debt was finally canceled by an issuance of stock."

"At the time in 1917, when the first advance was made by the Powers Manufacturing Company, the Couch Mills Company was engaged in erecting the buildings. It was not manufacturing goods at that time. The amounts advanced to the Couch Mills Company at the time was treated as a loan. They were carried as liabilities of the company."

L. J. Powers, president of petitioner Powers Manufacturing Company, testified:

"There was no understanding made with them, only we would put up the money and they would furnish the material and they hoped to give us that money back that they would make enough profit out of the handling of all these contracts to pay us that money back that we advanced. * * * We were to pay them for the material and they were to pay this money back."

No claim was made before the board, or is made here, for the deduction of these advancements as bad debts, or as the purchase price of worthless stock of the Couch Mills Company.

2. The second matter involves...