Willcuts v. Milton Dairy Co., 275 U.S. 215 (1927)

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Willcuts v. Milton Dairy Company

No. 156

Argued October 6, 7, 1927
Decided November 21, 1927
275 U.S. 215

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

Syllabus

Under Revenue Act, 1918, Title III, providing that the "excess profits" credit of a domestic corporation should "consist of a specific exemption of $3,000 plus an amount equal to 8 percentum of the invested capital for the taxable year," (§ 312) and defining "invested capital," with certain exceptions, as the actual cash and cash value of other property bona fide paid in for stock or shares at the time of such payment, and "(3) [p]aid-in or earned surplus and undivided profits, not including surplus and undivided profits earned during the year." Held, that the term "undivided profits" is employed in its ordinary meaning of an excess in the aggregate value of the assets of a corporation over the sum of its liabilities, including capital stock, so that profits earned by a corporation which were insufficient to offset an impairment of its paid-in capital were not "undivided profits" to be included as "invested capital" in computing the excess profits credits allowed by the Act. P. 218.

8 F.2d 178 affirmed.

15 F.2d 814 reversed.

Certiorari, 273 U.S. 687, to a judgment of the circuit court of appeals which reversed a judgment of the district court in favor of the Collector in a suit brought by the dairy company to recover excess profits taxes.