460 Opinion of the Court also Commissioner v. Falcon Co., 127 F. (2d) 277; United States v. Cummins Distilleries Corp., 166 F. (2d) 17; Acampo Winery & Distilleries, Inc. v. Commissioner, 7 T. C. 629. It is unnecessary for us to determine whether or not the plaintiff is entitled to the loss they claim upon the sale to McComas and Mayes of its remaining machinery and its real estate, since, if the sale of its transmission lines to TriCounty was not made by the corporation, it had no taxable income. Since we are of the opinion that it was not made by the plaintiff company, but by the stockholders, we do not consider whether or not the company is entitled to the deduction claimed for these losses. Judgment will be entered for the plaintiff in the sum of $19,698.18, plus interest, according to law, on $17,054.70 from October 15, 1943, and interest on $2,643.48 from December 16, 1943. HOWELL, Judge; LITTLETON, Judge; and JONES, Chief Judge, concur. MADDEN, Judge, dissenting: I am unable to agree with the court's decision. The object of the parties here, as in the case of Commissioner v. Court Holding Co., 324 U. S. 331, was to transfer certain tangible property from the plaintiff corporation, its owner, to the TriCounty Electric Membership Corporation. In the Court Holding Company case, the tax consequences of a direct sale were not at first known to the selling corporation, hence it proceeded, up to a point, with the negotiation, but, upon learning that taxes would be reduced by first dissolving the corporation and distributing the assets to the stockholders, who, in turn, would transfer them to the intended purchaser, it followed that course. The court held that the fact that the transfer was made by two steps instead of one, did not, in the circumstances, reduce the tax liability. The instant case involves the same two steps, taken for the same reason. The factual difference that here the plaintiff corporation knew from the outset what the tax consequences of a direct sale would be, instead of, as in Court Holding, learning them later, cannot be important. The corporation had not, in 838936-49- -36 Syllabus 113 C. Cls. that case, proceeded to the point of making a binding agreement of sale before it discovered the tax problem and changed the form of the transaction. Hence it could be said in that case, as well as in our case, that perhaps the corporation, or the stockholders who controlled it, would not have been willing to sell at all, unless they could keep the taxes which would result from the sale down to the level at which the form of the transaction was directed. My views as to how this and similar questions of taxation should be treated are expressed in the case of Benjamin Guinness v. United States, 109 C. Cls. 84, 106, certiorari denied, 334 U. S. 819. I do not discuss the plaintiff's claim for losses upon the sale of its remaining machinery and real estate, in view of the court's decision that there were no profits against which these losses could be set off. AMERICAN TRANSATLANTIC COMPANY v. THE [Congressional No. 17639. Decided May 2, 1949] Seizure of ships by Great Britain nominally belonging to American corporation; report to Congress.-In accordance with Resolution of the Senate (S. 265) May 22, 1930, referring to the Court of Claims Senate Bill 3396, making a grant of $15,000,000 to the American Transatlantic Company for the injury sustained by plaintiff as a result of the alleged illegal seizure and condemnation as prizes of war, by Great Britain, of three ships owned by plaintiff, findings of fact, conclusion of law and opinion are ordered certified to the Senate under the provisions of the statute (36 Stat. 1135); the Court deciding, as a matter of law, that the American Transatlantic Company does not, on the basis of the evidence presented to the Court, have any legal or equitable claim against the United States. Same; real ownership of ships was in either German or Danish national. The Court, on the evidence presented, concludes that the three ships, the Hocking, the Genesee and the Kankakee, nominally belonging to the plaintiff, an American corporation, were actually owned by Hugo Stinnes, a German national, and if not by Stinnes, then by Albert Jensen, a Danish national, and 484 Reporter's Statement of the Case that the exchange of notes between the United States and Great Same; seizure not in violation of international law.-The Court is of the impression that the seizure and condemnation by Great Britain of the three ships in question was not in violation of the rules of international law. Same; counterclaim for taxes barred by statute of limitations.-The Court holds that the counterclaim of the Government for unpaid income and excess profits taxes for the years 1918, 1919 and 1920 has, apparently, been barred by the statute of limitations. Internal Revenue Code, Sec. 276 (c). The Reporter's statement of the case: Mr. James J. Lenihan and Mr. Edgar Allan Poe for the plaintiffs. Mr. Donald B. MacGuineas, with whom was Mr. Assistant Attorney General H. G. Morison, for the defendant. The court made special findings of fact as follows: 1. On May 22, 1930, the Senate agreed to Senate Resolution 265 as follows: Resolved, That the bill (S. 3396) entitled "A bill for the relief of the American Transatlantic Company," now pending in the Senate, together with all the accompanying papers, be, and the same is hereby, referred to the Court of Claims, in pursuance of the provisions of an Act entitled "An Act to codify, revise, and amend the laws relating to the judiciary," approved March 3, 1911; and the said court shall proceed with the same in accordance with the provisions of such Act and report to the Senate in accordance therewith. Senate 3396 was introduced January 6, 1930, as follows: Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That there is hereby granted to the American Transatlantic Company, a corporation organized under the laws of the State of Delaware by American citizens, $15,000,000, for the injury sustained by said company to its business and property on account of an "Arrangement effected by exchange of notes between the United States and Great Britain for the disposal of Reporter's Statement of the Case 113 C. Cls. certain pecuniary claims arising out of the recent war," signed May 19, 1927 (Treaty Series 756, United States Government Printing Office, Washington, 1927), whereby the rights of said corporation to prosecute, through the intervention of the United States, its diplomatic claims against Great Britain, or to request international arbitration thereof, for reimbursement of the losses or damages sustained by said corporation growing out of the illegal seizure upon the high seas of its steamships Kankakee, Hocking, and Genessee, during the months of October and November 1915, by British men-of-war, while said vessels were engaged in neutral trade and lawfully flying the American flag, said illegal seizure being subsequently followed by the unlawful and wrongful condemnation of said vessels as prizes of war by a British prize court, were surrendered by the United States; the United States, in surrendering the rights of said corporation to prosecute its claims against the British Government, receiving in exchange a waiver from Great Britain of its right to receive from the United States a net cash payment on account of certain claims recognized by the United States as just and proper and also the right to prosecute other claims liability for which had not yet been formally admitted by the United States but which involved considerable amounts, in exchange for which the Government of the United States agreed that said waiver was intended for the satisfaction of those claims of American nationals which the United States regarded as meritorious and in which the claimants had exhausted their remedies in British courts, in which no legal remedy was open to them, or in respect of which for other reasons the equitable construction of the agreement called for a settlement; and that the Secretary of the Treasury be, and he is hereby, authorized and directed to pay, out of any money in the Treasury not otherwise appropriated, to the said American Transatlantic Company the sum of $15,000,000. 2. Legal title to the three vessels referred to in the bill was, in the fall of 1915, in the American Transatlantic Company, the plaintiff. The American Transatlantic Company was organized under the laws of the State of Delaware in March 1915 at the instigation of one Richard G. Wagner, formerly of Milwaukee, Wisconsin. Mr. Wagner, a native-born American citizen, was the son of one of two brothers who 484 Reporter's Statement of the Case came to America from Germany in 1853. Richard G. Wagner's father remained in the United States and later changed his name from Wagenknecht to Wagner. The other brother went to South America. Richard G. Wagner was engaged for some time in a steel business, but later, after selling out his steel business, which had been started by his father, he was interested as a stockholder and president of the Wisconsin Sugar Company, the Chippewa Sugar Company, and the U. S. Sugar Company, in Wisconsin. In 1913, because of financial reverses, Wagner sold most of his stock and thereafter ceased to be president of the companies. Thereafter his only connection with the sugar companies was as a minor stockholder in the Chippewa Sugar Company, which was at the time inactive. By the fall of 1914 Wagner had lost most of his capital and was in debt. In 1913 or 1914 he assigned his life insurance policy as security for notes given for his debts. In December 1914, while Wagner resided in Milwaukee, he received a cablegram dispatched to him from Copenhagen, Denmark. The cablegram was charged by the communication company to the Copenhagen Coal and Coke Company in Copenhagen, which company paid the bill and charged the amount thereof to its resident manager, Albert Jensen. The Copenhagen Coal and Coke Company was organized in about 1909. In 1914 its stock was owned about 95 percent by Hugo Stinnes of Mulheim, Germany. Jensen had been active in the organization of the company and, after 1910, when Stinnes acquired the majority of the stock, Jensen was its director and general manager. In addition to being manager of this company, Jensen also acted as agent for Stinnes in handling Stinnes' vessels arriving or departing from Copenhagen. 3. Hugo Stinnes was a German. He was married to Richard Wagner's cousin, a daughter of the Wagenknecht who had gone to South America. Hugo Stinnes had large interests in coal mines, coke ovens, and patented fuels. He was the director of many companies and carried on business under various names in Germany, Italy, Russia, Great Britain, and in the Scandinavian countries. He made his head |