Opinion
It is hereby stipulated and agreed by and between the parties hereto, through their respective counsel of record, that in addition to the facts admitted by the pleadings the following facts are true and may be found as true facts herein by the Court.
1. On the second day of July, 1937, plaintiff declared a dividend to its stockholders of shares of stock of Bank of America National Trust and Savings Association, a national banking association. The resolution of the board of directors of plaintiff declaring said dividend was in words and figures as follows:
'Resolved that, subject to approval by the stockholders of this Corporation of the program to be submitted to the special meeting of stockholders called to be held July 10, 1937, this Corporation distribute to its stockholders shares of the capital stock of the par value of $12.50 per share of Bank of America N. T. & S. A., on the basis of one share of such capital stock of Bank of America N. T. & S. A. for each ten shares of capital stock without par value of this Corporation outstanding, and that such distribution be made on July 31, 1937, to holders of capital stock of this Corporation of record at the close of business July 15, 1937.'
Said resolution and the payment of said dividend were approved by the stockholders of the plaintiff corporation on July 10, 1937. Prior to July 31, 1937, plaintiff delivered to the transfer agent of the Bank of America National Trust and Savings Association thirty-eight (38) certificates of stock representing 4,986,184 shares of stock of Bank of America National Trust and Savings Association as follows:
1 Certificate representing 24 shares of stock;
1 Certificate representing 276 shares of stock;
1 Certificate representing 8 shares of stock;
1 Certificate representing 14 shares of stock;
2 Certificates representing 20 shares of stock each;
7 Certificates representing 4 shares of stock each;
4 Certificates representing 2 shares of stock each;
3 Certificates representing 10 shares of stock each;
1 Certificate representing 42 shares of stock;
9 Certificates representing 80 shares of stock each;
1 Certificate representing 6 shares of stock;
1 Certificate representing 320 shares of stock;
3 Certificates representing 120 shares of stock each;
1 Certificate representing 176 shares of stock; 1 Certificate representing 166 shares of stock; and
1 Certificate representing 3,983,966 shares of stock.
Plaintiff instructed said transfer agent to issue new certificates of stock to the shareholders of plaintiff in accordance with the dividend resolution of July 2, 1937. On or about July 31, 1937, pursuant to said dividend resolution of July 2, 1937 and the instructions of plaintiff, stock certificates representing 2,237,962 shares of stock of Bank of America National Trust and Savings Association were issued and delivered to the stockholders of plaintiff.
2. If under the provisions of title VIII, Section 800, Schedule A-- 3 of the Revenue Act of 1926, as amended by Section 723(a) of the Revenue Act of 1932, 26 U.S.C.A.Int.Rev.Acts, pages 284, 290; Section 212, Act of June 16, 1933, ch. 90, 48 Stat. 206; Resolution of June 28, 1935, ch. 333, 49 Stat. 431, 39 U.S.C.A. § 280 note; Act of June 29, 1936, ch. 865, 49 Stat. 2029, 26 U.S.C.A.Int.Rev.Acts, page 291; Resolution of June 29, 1937, ch. 402, 50 Stat. 358, 39 U.S.C.A. § 280 note, the tax on the transfer of said 2,237,962 shares of stock of Bank of America National Trust and Savings Association by plaintiff to the stockholders of plaintiff should have been computed upon the basis of the par or face value of the stock certificates which were surrendered by plaintiff, the correct tax on said transfer was $11,790.28. If said tax should have been computed upon the basis of the par or face value of the stock certificates of Bank of America National Trust and Savings Association which were issued and delivered to the stockholders of plaintiff, the correct tax on said transfer was $14,871.82.
3. On the fourth day of January, 1937, plaintiff declared a dividend to its stockholders of shares of stock of Bancamerica-Blair Corporation. The resolution of the Board of Directors of plaintiff declaring said dividend was in words and figures as follows:
'Resolved, that out of the Earned Surplus of the corporation, a dividend of 1/50th of a share of Capital Stock of the par value of $1 per share of Bancamerica-Blair Corporation, a New York corporation, for each share of the issued and outstanding Capital Stock of this corporation be, and the same hereby is, declared upon the issued and outstanding shares of the Capital Stock of this Corporation, such dividend to be payable January 30, 1937 to stockholders of record at the close of business January 15, 1937.'
Prior to January 30, 1937 plaintiff delivered to the Transfer Agent of the Bancamerica-Blair Corporation three certificates of stock of Bancamerica-Blair Corporation representing 211,836 shares, 100,000 shares and 150,000 shares respectively. Plaintiff instructed said Transfer Agent to issue new certificates to the stockholders of plaintiff in accordance with said dividend resolution of January 4, 1937. On or about January 30, 1937, pursuant to said dividend resolution of January 4, 1937, stock certificates representing 403,756 shares of stock of Bancamerica-Blair Corporation were issued and delivered to stockholders of plaintiff.
4. If, under the provisions of Title VIII, Section 800, Schedule A-- 3 of the Revenue Act of 1926, as amended by Section 723 of the Revenue Act of 1932; Section 212, Act of June 16, 1933, ch. 90, 48 Stat. 206; Resolution of June 28, 1935, ch. 333, 49 Stat. 431; Act of June 29, 1936, ch. 865, 49 Stat. 2029, the tax on the transfer of said 403,756 shares of stock of Bancamerica-Blair Corporation by plaintiff to the stockholders of plaintiff should have been computed on the basis of the par or face value of the stock certificates which were surrendered by plaintiff, the correct tax on said transfer was $161.56. If the tax on said transfer should have been computed on the basis of the par or face value of the stock certificates which were issued and delivered to the stockholders of plaintiff, the correct tax on said transfer was $3,048.60.
SAMES, District Judge.
This case has been submitted heretofore and taken under advisement. The facts herein have been stipulated, reduced to writing and filed of record. The Court finds that the transfer of stock upon which a tax is imposed under Title VIII, Section 800 of the Revenue Act of 1926, 26 U.S.C.A.Int.Rev.Acts, page 284, contemplates a transferor and a transferee. In this case the transferor is the Transamerica Corporation; the transferees are the various stockholders of the Transamerica Corporation to whom stock certificates in the form of a stock dividend were issued as outlined in the Stipulation of Facts. Each transfer or issue of stock to a transferee constitutes a separate transaction and is taxable as such under the statute. The value or denomination of the certificates surrendered to effect the transfer does not determine the tax, but the denomination of certificates issued to each transferee is the basis therefor.
It is accordingly ordered that judgment be entered for the defendant and that the plaintiff take nothing by this action.