Continental Oil Co. v. Commissioner

Black,

dissenting: I dissent from the views of the majority opinion wherein it is held that the statute of limitations- bars the assessment and collection of the taxes due by the Mutual Refining and Producing Company and the Northwestern Oil Refining Company.

Both of these corporations were Wyoming corporations. Mutual Refining and Producing Company was dissolved January 12, 1921, and Northwestern Refining and Producing Company was dissolved April 7, 1922.

Section 5441, Wyoming Compiled Statutes, prescribes how the affairs of a dissolved Wyoming corporation shall be wound up, and has been fully cited in the majority opinion. Under this statute, it is specifically provided that, “ Unless the legislature or some court of competent jurisdiction shall appoint some other person or persons to wind up the affairs of a dissolved corporation, the Board of Trustees or Directors of the corporation or the managers of the corporate affairs, by whatever name known, acting last before the time of their dissolution shall be the trustees of the creditors and stock*334holders of the corporation dissolved and shall have power to settle the affairs of the same, etc.” (Italics supplied.)

The waivers of the two Wyoming corporations in question were signed by the respective corporations by A. Herning, as secretary, under the seals of the respective corporations. It has been stipulated by the parties that “A. Herning,” by whom the above mentioned waivers were signed as secretary of said corporations, “ was at the time he signed said waivers the person authorized by law to execute said waivers on behalf of the said corporation, provided that any officer, director or stockholder of said corporation was authorized by law to execute said waivers on behalf of said corporations.”

It seems to me that the above cited stipulation is conclusive as to the validity of the waivers.

The statute of Wyoming clearly authorizing the managers of the corporate affairs, by whatever name known, acting last before the dissolution, to wind up the affairs of the corporation, and it having been stipulated that if any officer of the corporation had such authority, Herning, secretary, was the one, it seems to me there is no room for doubt as to his authority to sign the waivers, Charles D. Jaffee, 18 B. T. A. 372; affd., 45 Fed. (2d) 679. The court in Charles D. Jafee, supra, in affirming the decision of this Board and upholding the waivers signed by Charles D. Jaffee, as treasurer of the dissolved corporation, but where evidence was lacking of any specific authority from the board of directors of the dissolved corporation to Charles D. Jaffee, to sign said waivers, said:

* * * After Jaffee signed these waivers the liquidating agents affixed the corporate seal to them. They acquiesced in what he had done without protest or objection. The corporation got whatever benefit might result from a more careful audit by the bureau and the corporation, together with its board of directors, received whatever advantage was thereby to be gained. When the first waiver was signed the government gave up the right it then had to assess the 1919 taxes within the statutory period and when the last waivers were signed it gave up the right it then had to assdss the 1919 taxes within the statutory period and when the last waivers were signed it gave up the right it then had to assess the 1920 taxes before the limitation of the statute had run. The board of directors could not, as it-did, turn over its tax matters to agents authorized to handle them and by shutting its eyes avoid the consequences of what the agent did, learned or acquiesced in within the scope of its authority.

Beyond question an agent duly authorized to handle federal tax matters was authorized to execute waivers in furtherance of such business (compare Liberty Baking Co. v. Heiner, 37 Fed. (2d) 703) and notice to it that Charles D. Jaffee had executed the waivers was shown when it appeared that after he signed them the waivers were sent to the tax agents who had the corporate seal and attached it to them. Under such circumstances, of course, notice to the agents was notice to the principal. Jefferson County National Bank v. Dewey et al, 197 N. Y. L. 14; Armstrong v. Ashley, 204 U. S. 272; Smith et al v. Ayer et al., 101 U. S. 320; and the signing of these waivers by Jaffee was not *335only thus acquiesced in (see U. S. v. Kemp, 12 Fed. (2d) 7) by the board of directors through its agent but the agents actually participated in the execution of which his signing was a part. The waivers are as valid as though executed by the board of directors.

In view of the above cited authority, I think the holding of the majority opinion in the instant case, to the effect that the waivers signed by A. Herning, secretary of the two Wyoming corporations, are invalid, is wrong. In my judgment the waivers signed for and on behalf of the two Wyoming corporations were valid and the statute of limitations has not tolled as to these two corporations.

Smith, ÁRUNdell, and Muedock agree with this dissent.