*2478 1. Where the stockholders took the steps essential to effect the surrender of the charter of a corporation organized under the law of the State of Louisiana, the corporation thereupon was dissolved, even though other requirements of the statute, which were merely directory, were not complied with.
2. Under the statutes of Louisiana the only persons competent to act on behalf of a dissolved corporation in winding up its affairs are the liquidators.
3. Purported waivers signed on behalf of a dissolved Louisiana corporation by its former president, who was not one of the liquidators, are not valid to extend the time within which assessment and collection of taxes against the corporation may be made.
4. Where one of two surviving liquidators of a dissolved Louisiana corporation signed a purported waiver as a witness, there is no presumption that the liquidators acquiesced in the execution of that waiver or others subsequently executed and the burden is upon respondent to show that the waivers were valid in order to establish an exception to the running of the statute of limitations. Jonathan Godfrey,18 B.T.A. 775">18 B.T.A. 775.
5. Respondent has failed to show that*2479 the powers of the original liquidators were modified, changed, or denied under any construction that could be put upon section 30(a) of Act 267 of the General Assembly of the State of Louisiana, 1914.
6. Where there was no intended deception on the part of the petitioner in giving information to the respondent, and where the respondent had adequate means of ascertaining the names of the liquidators of the dissolved Louisiana corporation, the petitioner is not estopped to deny the validity of the purported waivers.
7. Assessment and collection of any taxes against the dissolved Louisiana corporation are barred by the statute of limitations and its liability has been extinguished by section 1106 of the Revenue Act of 1926.
8. Assessment and collection of the taxes of the dissolved Louisiana corporation against and from petitioner as transferee are also barred by the statute of limitations and its liability has been extinguished. Phil Gleichman,17 B.T.A. 147">17 B.T.A. 147, followed.
*30 These are proceedings, duly*2480 consolidated for hearing and decision, for the redetermination of the petitioner's liability as transferee of the assets of the New Orleans Naval Stores Co., Inc. The respondent determined that the petitioner was liable for deficiencies in income and profits taxes of the New Orleans Naval Stores Co. as follows:
*31
| Docket No. | Year | Deficiency |
| 30567 | Fiscal year ended Jan. 31, 1920 | $ 203,298.00 |
| 30567 | Period Feb. 1 to July 15, 1920 | 39,840.21 |
| 32053 | Fiscal year ended Jan. 31, 1919 | 7,443.93 |
| 35787 | Fiscal year ended Jan. 31, 1921 | 73,565.37 |
At the hearing the respondent admitted that assessment and collection of the deficiency in tax for the fiscal year ended January 31, 1919, covered by Docket No. 32053, are barred by the statute of limitations and that there is, therefore, no liability on the part of the petitioner.
Under each of Dockets Nos. 30567 and 35787 the petitioner contends that the assessment and collection of any amount claimed by the respondent to be due from the petitioner as the transferee of the assets of the New Orleans Naval Stores Co., Inc., are barred by the statute of limitations.
In each docket there are also numerous*2481 assignments of error relating to the constitutionality of section 280 of the Revenue Act of 1926 and to the tax liability of the New Orleans Naval Stores Co., Inc.
In each docket the petitioner filed a motion to confine the hearing in the first instance to the question of the statute of limitations. These motions have been granted.
At the hearing the respondent was granted leave to amend his answer under each of Docket Nos. 30567 and 35787, to affirmatively allege that waivers were filed on April 3, 1925, December 10, 1925, and March 10, 1926, extending the time for assessment of taxes against the New Orleans Naval Stores Co., Inc.
At the hearing the respondent was allowed to further amend his answer under both Dockets Nos. 30567 and 35787, to allege that the petitioner is estopped to set up the bar of the statute of limitations against assessment and collection of the deficiencies proposed against petitioner, as transferee of the New Orleans Naval Stores Co., Inc., for the fiscal years ended January 31, 1920, and January 31, 1921.
FINDINGS OF FACT.
The petitioner is a corporation organized and existing under the laws of the State of Louisiana, with principal office*2482 at New Orleans.
On or about May 15, 1920, the petitioner, the name of which at that time was Gillican-Chipley Co., Inc., filed in its own name a tax return for the fiscal year ended January 31, 1920, in which it consolidated its income and invested capital with that of the New Orleans Naval Stores Co., Inc., with which it was believed the petitioner was affiliated. On or about May 18, 1922, an amended return *32 was filed. On or about May 17, 1921, a similar consolidated return was filed for the fiscal year ended January 31, 1921. Thereafter the New Orleans Naval Stores Co., Inc., and the petitioner were informed that the respondent had adjusted the returns and had held that the two corporations were to be treated as consolidated as of and after July 15, 1920, and as separate corporations during the period and fiscal year preceding that date.
Under date of June 22, 1927, there was mailed to petitioner by the respondent a letter proposing for assessment against the petitioner the amount of $243,138.21, stating that this constituted petitioner's liability as a transferee of the assets of the New Orleans Naval Stores Co. of New Orleans, La., for income and excess-profits*2483 taxes due from the New Orleans Naval Stores Co. for the fiscal year ended January 31, 1920, in the amount of $203,298 and for the period February 1, 1920, to July 15, 1920, in the amount of $39,840.21. Under date of December 29, 1927, the respondent mailed petitioner a letter proposing for assessment in the same manner an amount of $73,565.37, for income and profits taxes due from the New Orleans Naval Stores Co. for the fiscal year ended January 31, 1921. None of these asserted deficiencies in tax has been assessed against either the New Orleans Naval Stores Co., Inc., or the petitioner.
On August 16, 1920, a meeting of the stockholders of the New Orleans Naval Stores Co., Inc., was held for the purpose of dissolving the company. The minutes of the meeting showed that it was resolved that the company cease to do business as and from September 1, 1920. J. A. Taylor, L. V. Pringle and G. F. Mason were appointed liquidators of the affairs of the corporation "with full power and authority, by majority vote, to transfer, convey for cash, as well as to convert the property, choses in action, and all assets of the corporation into cash and to pay off and to discharge all of its debts, *2484 liabilities and obligations, and after duly discharging such debts, liabilities and obligations, to divide the remainder of the assets of the corporation among the stockholders pro rata with their several holdings of stock." The liquidators were "vested and clothed with full authority to do any and all acts and things necessary and requisite to wind up the affairs of the New Orleans Naval Stores Co., Inc."
The minutes of this meeting showed that there were outstanding 3,000 shares of capital stock of the New Orleans Naval Stores Co., Inc., of which amount the following number of shares were represented at the meeting:
*33
| Shares | |
| Walter B. Gillican by proxy to J. A. Taylor | 1,038.3621 |
| L. V. Pringle, in person | 1 |
| J. A. Taylor, in person | 1 |
| D. J. Herrin by proxy to J. A. Taylor | 3.9146 |
| G. F. Mason, in person | 2 |
| J. A. Taylor, trustee | 1,950.4865 |
| Total | 2,996.7632 |
A copy of the minutes of this meeting was filed with the Secretary of State of the State of Louisiana on October 28, 1920.
On June 13, 1929, the following certificate was issued by the Secretary of State of the State of Louisiana.
STATE OF LOUISIANA
I, the undersigned SECRETARY OF*2485 STATE, of the State of Louisiana, do hereby certify that a certified copy of minutes of a meeting of the stockholders of the NEW ORLEANS NAVAL STORES COMPANY, INC., of New Orleans, Louisiana, held on the sixteenth day of August, 1920, showing that a resolution was adopted dissolving the affairs of the company and appointing liquidators, signed by the Chairman and Secretary, duly acknowledged, and containing a list of the officers and directors, was filed in this office on the twenty-eighth day of October, 1920, and recorded in book "Record of Charters" No. 100, folio , and the corporation stands dissolved.
Given under my signature, authenticated with the impress of my Seal of office at the City of Baton Rouge this 13th day of June, A.D. 1929.
(Signed) JAMES J. BURLEY,
Secretary of State.
The petitioner, on October 28, 1920, owned all the stock of the New Orleans Naval Stores Co., Inc., except five shares, and took over all the assets of that company. On its books petitioner credited the parties who owned the other five shares of stock with the value of such stock.
W. B. Gillican was president of the New Orleans Naval Stores Co., Inc., for a number of years prior to*2486 its dissolution. He is president of the petitioner and was such during the existence of the New Orleans Naval Stores Co., Inc., and since its dissolution. He owned at least 90 per cent of the stock of petitioner.
G. F. Mason was secretary-treasurer of the petitioner prior to and after the dissolution of the New Orleans Naval Stores Co., Inc.
On or about February 1, 1926, John Edwards, an internal revenue agent, proceeded to the office of the petitioner, which was located in the Whitney Central Building, New Orleans, to make an investigation of the records of the New Orleans Naval Stores Co., Inc., for the fiscal years ended January 31, 1919 and 1920, and the period February 1 to July 15, 1920. At that time he came in contact with Phillip Devlin, who was the auditor of the petitioner, and also with R. V. Whittaker, who was the auditor of the various companies *34 included in the group of interests owned by the petitioner. At the office of the petitioner on the 14th floor of the Whitney Central Building, he found a complete set of books of the New Orleans Naval Stores Co., Inc., for each year which he had under consideration. W. B. Gillican, the president of petitioner, *2487 and Phillip Devlin, the auditor, referred the agent to R. V. Whittaker as to all questions of tax liability of the New Orleans Naval Stores Co., Inc. Gillican represented Whittaker as being a certified public accountant employed by the petitioner. Whittaker's office was on the sixth floor of the Whitney Central Building. G. F. Mason's office was on the 14th floor of the Whitney Central Building, and during his investigation the agent came in contact with him every day. L. V. Pringle also, apparently, had offices in the same building, but the agent, during his investigation, did not discuss any tax matters with either Mason or Pringle. Edwards discussed with Whittaker questions of inventories of New Orleans Naval Stores Co., Inc., and also the question of appreciation of stocks in other companies held by the New Orleans Naval Stores Co., Inc. They came to an agreement as to the appreciation of stock.
At some time later Edwards made another investigation covering the tax liability of the New Orleans Naval Stores Co., Inc., for the period July 15, 1920, to January 31, 1921. The report of this investigation was incorporated with that covering the investigation of the petitioner.
*2488 On or about March 4, 1926, Edwards went to Whittaker to secure a waiver with regard to taxes due from the New Orleans Naval Stores Co., Inc. Edwards' superior officer had instructed him to have the liquidators of the New Orleans Naval Stores Co., Inc., sign the waiver. Whittaker told him that the proper parties to sign the waiver in such case were the liquidators, but that no liquidators had been appointed by the New Orleans Naval Stores Co., Inc. He informed Edwards that the proper party to sign, therefore, was the president of the company. Whittaker, therefore, obtained the signature of W. B. Gillican upon the waiver. Thereafter, in the cases of the other waivers, the same procedure was followed. At this time Edwards did not know that L. V. Pringle, J. A. Taylor, and G. F. Mason had been appointed as liquidators. He knew that he could find the names of the liquidators, if any, from the minute books of the corporation or from the records of the Secretary of State, but the minute books could not be found and it was not until July 8, 1929, that he examined the records of the Secretary of State. Edwards did not discuss with Pringle, Mason, or Taylor the question of waivers. *2489 Taylor died in the latter part of 1923 or the early part of 1924, and Mason died in the latter part of 1928. L. V. Pringle now lives in Biloxi, Miss.
*35 R. V. Whittaker was retained in his own name as accountant by the petitioner in the latter part of 1923. At this time he was a member of the firm of R. V. Whittaker & Co. This firm had been instructed by W. B. Gillican to act for the petitioner and, since the petitioner was affiliated with the New Orleans Naval Stores Co., Inc., this authority also applied to that company. J. P. Ward, an accountant, who was a member of the firm of R. V. Whittaker & Co., also discussed with Revenue Agent Edwards, on or about March 4, 1926, the tax liability of the New Orleans Naval Stores Co., Inc., for the years 1919, 1920, and 1921. At the time of this discussion the respondent had not tried to hold petitioner responsible for the taxes of the New Orleans Naval Stores Co., Inc. Any services performed by Whittaker following his discussion of the tax liability of the New Orleans Naval Stores Co., Inc., with Revenue Agent Edwards in 1926 were performed at the request of W. B. Gillican and because the petitioner was involved. Whittaker*2490 became vice president of the petitioner in the latter part of 1926.
In the latter part of 1921 Whittaker had been employed by the petitioner, but he was then an employee of C. G. Robinson & Co. He was not a member of that firm. He was never employed by the New Orleans Naval Stores Co., Inc., during its existence, nor was he employed after its dissolution by its liquidators to do any work for the dissolved corporation. He never discussed with Pringle, Taylor, or Mason any questions regarding the income-tax liability of the New Orleans Naval Stores Co., Inc., nor did he know until some time in the year 1929 that they were the liquidators of that company. He was never an officer in the New Orleans Naval Stores Co., Inc., nor was he ever authorized by the petitioner to waive the statute of limitations on behalf of the petitioner or any of its affiliated companies. The following letters were written by Whittaker:
NEW ORLEANS, LA.,
December 18th, 1926.
COMMISSIONER OF INTERNAL REVENUE,
Washington, D.C.
DEAR SIR: Replying to yours of November 12th, symbols IT:CR:G-2 LCT, wherein you request that Waivers be signed for the New Orleans Naval Stores Company for the period*2491 ended January 31, 1920, and July 15th, 1920.
In this connection wish to advise that the Charter of the New Orleans Naval Stores Company has been surrendered and the Corporation liquidated, in accordance with advice to you under previous date. We, therefore, do not see how we can give you a Waiver which would be binding inasmuch as no Liquidator was appointed and we will be pleased to have your suggestion along these lines, and oblige.
Yours very truly,
R. V. WHITTAKER AND COMPANY,(Signed) R. V. WHITTAKER,
Attorney for Taxpayer.
*36 NEW ORLEANS, LA.,
April 25, 1927.
Mr. W. E. LOGAN,
Internal Revenue Agent, New Orleans, La.
DEAR SIR: Subsequent to our Protest of January 19, 1927, we have attempted to take off a Trial Balance of the books of these Companies as of July 15, 1920. So far, we have been unable to secure a Trial Balance, which may have been occasioned by missing ledger sheets or incorrect datings on entries made to the general ledgers. It is now our opinion that, in order to secure a Trial Balance from the books, it would be necessary to reconstruct or check all postings from date of last closing.
Very truly yours,
(Signed) *2492 R. V. WHITTAKER, Agent,
New Orleans Naval Stores Co.
NEW ORLEANS, LA.,
April 27, 1927.
Mr. MILLER,
Revenue Agent in Charge, New Orleans, La.
DEAR SIR: Mr. W. E. Logan, Internal Revenue Agent, has discussed with us the Protest which was recently filed in Re: New Orleans Naval Stores Company.
We do not wish to make any comment on this Report at this time.
Very truly yours,
(Signed) R. V. WHITTAKER,
Agent.
Whittaker was not authorized by a written power of attorney to sign the above letter dated December 18, 1926, as attorney for the taxpayer. However, W. B. Gillican, former president of the New Orleans Naval Stores Co., Inc., orally authorized him to sign it. Such authority was not given prior to the dissolution of the New Orleans Naval Stores Co., Inc., in 1920.
Under date of May 9, 1924, Phillip Devlin, who was an auditor employed by, but was not an officer of, the petitioner, wrote the following letter to the respondent:
NEW ORLEANS, LA.,
May 9, 1924.
COMMISSIONER OF INTERNAL REVENUE,
Washington, D.C.
DEAR SIR: Referring to your two letters of May 6th - File IT:NR:G-HD-2 - we are enclosing herewith Income and Profit*2493 Tax Waiver on the Gillican-Chipley Company, Inc. The waiver requested on the New Orleans Naval Stores Company cannot be executed, for the reason that the New Orleans Naval Stores Company has been dissolved for a number of years past. It will be, however, entirely satisfactory to us to have any additional taxes found, assessed against the Gillican-Chipley Company, Inc.
Very truly yours,
GILLICAN-CHIPLEY COMPANY,
(Signed) PHILLIP DEVLIN, Auditor.
*37 Under date of August 30, 1924, the following letter was written to the respondent:
NEW ORLEANS, LA.,
August 30, 1924.
COMMISSIONER OF INTERNAL REVENUE,
Washington, D.C.
DEAR SIR: We have yours of the 27th, your file IT:CR:G-2 OAC, with reference to waivers which we were unable to furnish for the New Orleans Naval Stores Company, for the fiscal year ended January 31, 1919.
This will confirm our former letter by our Auditor, that this company will assume any tax liability found due in the above case for the year involved.
Yours very truly,
SOUTHWESTERN INVESTMENT COMPANY,
(Formerly Gillican-Chipley Co., Inc.),
W. B. GILLICAN, President.
G. F. MASON, Secretary-Treasurer.
The following*2494 instrument in writing was executed on November 8, 1921:
STATE OF LOUISIANA,
Parish of Orleans:
KNOW ALL MEN BY THESE PRESENTS, that NEW ORLEANS NAVAL STORES CO., INC., has made constituted, and by these presents does make, constitute and appoint C. G. ROBINSON or C. G. ROBINSON & COMPANY, or any of its representatives (New Orleans, Louisiana), true, sufficient and lawful attorneys for it and in its name, place and stead to discuss with the proper authorities all matters of income and excess profit, franchise or corporation tax or assessment, and to adjust any differences that may arise, and to do and perform all acts as fully as though the New Orleans Naval Stores Co., Inc., or its duly authorized officers were, if present, able to do, giving and granting unto its said Attorney full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully, to all intents and purposes, as it might or could do if personally present, with full power of substitution and revocation, hereby ratifying and confirming all that its said attorney or substitute shall lawfully do or cause to be done by the virtue*2495 hereof.
IN WITNESS WHEREOF We have hereunto set our hand at New Orleans, Louisiana, the eighth day of November in the year one thousand nine hundred twenty-one.
Signed and delivered in the presence of
BUCKNER CHIPLEY
R. V. WHITTAKERNEW ORLEANS NAVAL STORES CO. INC.,
W. B. GILLICAN.BEFORE ME, HENRY G. BURCH, A Notary Public in and for said State and Parish, on this date personally appeared by W. B. Gillican to me known to be the identical person whose name subscribed to the foregoing instrument and acknowledged to me, Notary, in the presence of and witness, that he executed the same, and that it was his own free and voluntary act, for the uses, purposes and considerations therein expressed.
WITNESS my official signature and seal, on this the eighth day of November A.D. 1921.
WITNESS:
HENRY G. BURCH,
Notary Public.
*38 Later, as vice president of the petitioner R. V. Whittaker instructed the respondent, in a letter, to cancel this power of attorney.
The following instruments in writing were filed with the respondent:
APRIL 3, 1925.
INCOME AND PROFITS TAX WAIVER
(For taxable year ended prior to March 1, 1921.)
In pursuance*2496 of the provisions of existing Internal Revenue Laws - New Orleans Naval Stores Company, a taxpayer of New Orleans, La. and the Commissioner of Internal Revenue hereby waive the time prescribed by law for making any assessment of the amount of income, excess-profits, or war-profits taxes due under any return made by or on behalf of said taxpayer for the fiscal years ended January 31, 1920 and 1921. Under existing revenue acts, or under prior revenue acts. This waiver of the time for making any assessment as aforesaid shall remain in effect until December 31, 1925, and shall then expire except that if a notice of a deficiency in tax is sent to said taxpayer by registered mail before said date and (1) no appeal is filed therefrom with the United States Board of Tax Appeals then said date shall be extended sixty days, or (2) if an appeal is filed with said Board then said date shall be extended by the number of days between the date of mailing of said notice of deficiency and the date of final decision by said Board.
Attest:
NEW ORLEANS NAVAL STORES CO., INC.
Taxpayer.
By W. B. GILLICAN, President.
D. H. BLAIR, Commissioner.
G. F. MASON,Secretary.
*2497 [SEAL:]
If this waiver is executed on behalf of a corporation, it must be signed by such officer or officers of the corporation as are empowered under the laws of the State in which the corporation is located to sign for the corporation, in addition to which, the seal, if any, of the corporation must be affixed.
This waiver bears the seal of the New Orleans Naval Stores Co., Inc.
INCOME AND PROFITS TAX WAIVER.
(For Taxable Years Ended Prior to January 1, 1922.)
DEC. 10, 1925.
In pursuance of the provisions of existing Internal Revenue Laws, New Orleans Naval Stores Co., a taxpayer of New Orleans, La., and the Commissioner of Internal Revenue hereby waive the time prescribed by law for making any assessment of the amount of income, excess-profits, or war-profits taxes due under any return made by or on behalf of said taxpayer for the year (or years) ended December 31, 1920 and Dec. 31, 1921, under existing revenue acts, or under prior revenue acts.
*39 This waiver of the time for making assessment as aforesaid shall remain in effect until December 31, 1926, and shall then expire except that if a notice of a deficiency in tax is sent to said taxpayer by registered*2498 mail before said date and (1) no appeal is filed therefrom with the United States Board of Tax Appeals then said date shall be extended sixty days, or (2) if an appeal is filed with said Board then said date shall be extended by the number of days between the date of mailing of said notice of deficiency and the date of final decision by said Board. This waiver is signed by the taxpayer with the distinct understanding that in the event overassessment has been made, such overassessment will be refunded to taxpayer.
NEW ORLEANS NAVAL STORES CO.
Taxpayer.
By W. B. GILLICAN.
D. H. BLAIR, Commissioner.
If this waiver is executed on behalf of a corporation, it must be signed by such officer or officers of the corporation as are empowered under the laws of the State in which the corporation is located to sign for the corporation, in addition to which, the seal, if any, of the corporation must be affixed.
This waiver does not bear the seal of the New Orleans Naval Stores Co., Inc.
INCOME AND PROFITS TAX WAIVER
For Taxable Years ended Prior to January 1, 1922.
NEW ORLEANS, March 10, 1926.
In pursuance of the provisions of existing Internal Revenue Laws New*2499 Orleans Naval Stores Co., a taxpayer of New Orleans, La., and the Commissioner of Internal Revenue hereby waive the time prescribed by law for making any assessment of the amount of income, excess-profits, or war profits taxes due under any return made by or on behalf of said taxpayer for the years ended January 31, 1920 and period Feb. 1, 1920 to July 15, 1920 - and period July 16, 1920 to January 31, 1921 - under existing revenue acts, or under prior revenue acts.
This waiver of the time for making any assessment as aforesaid shall remain in effect until December 31, 1926, and shall then expire except that if a notice of a deficiency in tax is sent to said taxpayer by registered mail before said date and (1) no appeal is filed therefrom with the United States Board of Tax Appeals then said date shall be extended sixty days, or (2) if an appeal is filed with said Board then said date shall be extended by the number of days between the date of mailing of said notice of deficiency and the date of final decision by said Board.
NEW ORLEANS NAVAL STORES CO.,
Taxpayer.
By: W. B. GILLICAN.
D. H. BLAIR, Commissioner.
If this waiver is executed on behalf of a corporation, *2500 it must be signed by such officer or officers of the corporation as are empowered under the laws of the State in which the corporation is located to sign for the corporation, in addition to which, the seal, if any, of the corporation must be affixed.
This waiver bears the seal of the New Orleans Naval Stores Co., Inc.
*40 There have been two companies bearing the name of "The New Orleans Naval Stores Company." The one involved in this proceeding is a Louisiana corporation, while the other is a Delaware corporation. The latter was organized by May 1, 1921. There is no connection whatever between the two corporations. The Delaware corporation is not the successor to the Louisiana corporation and it did not receive its assets.
The books of account of the New Orleans Naval Stores Company, Inc., show no action whatsoever by the liquidators of that company. Its assets were transferred on its books to the petitioner as of January 31, 1921, but the books do not show who performed this act.
The records of the New Orleans Naval Stores Co., Inc., showed that it had no assets against which the Government might proceed for the collection of any tax found due from it.
*2501 OPINION.
MCMAHON: The hearing of these proceedings was limited, by order, to the question of the statute of limitations.
At the hearing the respondent admitted that assessment and collection of the deficiency in taxes for the fiscal year ended January 31, 1919, covered by Docket No. 32053 are barred by the statute of limitations. Judgment, therefore, will be entered that there is no liability on the part of the petitioner for that year.
There remains, for consideration, the question whether or not the liability of petitioner for the income and profits taxes of the New Orleans Naval Stores Co., Inc., for the fiscal year ended January 31, 1920, and the period February 1, 1920, to July 15, 1920, included under Docket No. 30567, and for the fiscal year ended January 31, 1921, included under Docket No. 35787, is barred by the statute of limitations from assessment and collection.
The evidence discloses that on August 16, 1920, a meeting of the stockholders of the New Orleans Naval Stores Co., Inc., was held for the purpose of dissolving the company. Practically all of the outstanding stock of the company was represented at this meeting. It was resolved that the company cease*2502 to do business as and from September 1, 1920. J. A. Taylor, L. V. Pringle, and G. F. Mason were appointed liquidators of the affairs of the corporation and were authorized to act by a majority vote. A copy of the minutes of this meeting was filed with the Secretary of State of the State of Louisiana on October 28, 1920. The petitioner, as principal stockholder, took over the assets of the New Orleans Naval Stores Co., Inc., on January 31, 1921.
The return of the New Orleans Naval Stores Co., Inc., for the fiscal year ended January 31, 1920, was filed on or about May 15, *41 1920, and its return for the fiscal year ended January 31, 1921, was filed on or about May 17, 1921.
Section 277 of the Revenue Act of 1924 provides:
(a) Except as provided in section 278 and in subdivision (b) of section 274 and in subdivision (b) of section 279 -
(1) The amount of income, excess-profits, and war-profits taxes imposed by the Revenue Act of 1921, and by such Act as amended, for the taxable year 1921 and succeeding taxable years, and the amount of income taxes imposed by this Act, shall be assessed within four years after the return was filed, and no proceedings in court for the*2503 collection of such taxes shall be begun after the expiration of such period.
(2) The amount of income, excess-profits, and war-profits taxes imposed by the Act entitled "An Act to provide revenue, equalize duties, and encourage the industries of the United States, and for other purposes," approved August 5, 1909, the Act entitled "An Act to reduce tariff duties and to provide revenue for the Government, and for other purposes," approved October 3, 1913, the Revenue Act of 1916, the Revenue Act of 1917, the Revenue Act of 1918, and by any such Act as amended, shall be assessed within five years after the return was filed, and no proceeding in court for the collection of such taxes shall be begun after the expiration of such period.
Section 278(c) and (d) of the Revenue Act of 1924 provides:
(c) Where both the Commissioner and the taxpayer have consented in writing to the assessment of the tax after the time prescribed in section 277 for its assessment of the tax may be assessed at any time prior to the expiration of the period agreed upon.
(d) Where the assessment of the tax is made within the period prescribed in section 277 or in this section, such tax may be collected*2504 by distraint or by a proceeding in court, begun within six years after the assessment of the tax. Nothing in this Act shall be construed as preventing the beginning, without assessment, of a proceeding in court for the collection of the tax at any time before the expiration of the period within which an assessment may be made.
It is clear that, under the above provisions of the Revenue Act of 1924, the time within which assessment and collection of any taxes against and from the New Orleans Naval Stores Co., Inc., for the fiscal year ended January 31, 1920, might be made, expired on or about May 15, 1925, while the time with regard to the fiscal year ended January 31, 1921, expired on or about May 17, 1925, unless the time was extended by consents in writing referred to in section 278(c) above.
The petitioner had made a prima facie case by showing that the time provided in the revenue acts for the assessment and collection of taxes against and from the New Orleans Naval Stores Co., Inc., had expired at the time the notices were sent by the respondent. The burden then shifts to the respondent to establish that there is an exception to the running of the statute. *2505 ; ; and .
*42 In , we stated:
The return of the taxpayer corporation for the year 1918 was filed not later than July 22, 1919. The assessment of $83,682.40 was made on November 10, 1925, more than five years thereafter. These facts are prima facie evidence in support of the petitioners' pleaded allegation of error that the assessment was made after the taxpayer corporation's liability for additional tax for the year 1918 had been tolled by the statute of limitations. In these circumstances the respondent must prove that the agreements which he pleads and upon which he relies were actually entered into by the parties and that such agreements are valid and effect an extension of the statutory period within which he has authority to assess. ; ; *2506 . The agreements were introduced as evidence by the petitioner, and are included in our findings of fact. It remains only to determine whether such agreements were properly executed by the corporation or its agents legally authorized to bind it by their acts.
The respondent submitted in evidence three written instruments which purported to be consents in writing to later assessments of taxes.
On April 3, 1925, an instrument in writing signed "New Orleans Naval Stores Co., Inc., taxpayer, by W. B. Gillican, President" and "D. H. Blair, Commissioner," was executed purporting to waive the time prescribed by law for making any assessment of the amount of income, excess-profits or war-profits taxes due under any return made by or on behalf of the New Orleans Naval Stores Co., for the fiscal years ended January 31, 1920 and 1921. This waiver provided that it should remain in effect until December 31, 1925.
Under date of December 10, 1925, an instrument in writing signed "New Orleans Naval Stores Co., taxpayer, by W. B. Gillican, President" and "D. H. Blair, Commissioner" was executed purporting to waive the time prescribed*2507 by law for making any assessment of the amount of income, excess-profits or war-profits taxes due under any return made by or on behalf of the New Orleans Naval Stores Co. for the years ended December 31, 1920, and December 31, 1921. This waiver provides that it should remain in effect until December 31, 1926.
On March 10, 1926, an instrument in writing signed "New Orleans Naval Stores Co., taxpayer, by W. B. Gillican," and "D. H. Blair, Commissioner" was executed purporting to waive the time prescribed by law for making any assessment of the amount of income, excess-profits or war-profits taxes due under any return made by or on behalf of the New Orleans Naval Stores Co. for the years ended January 31, 1920, and period February 1, 1920, to July 16, 1920, and period July 16, 1920, to January 31, 1921. This waiver provided that it should remain in effect until December 31, 1926.
It will be noted that the instruments in writing were signed by W. B. Gillican, as president of the New Orleans Naval Stores Co., *43 several years after the stockholders of that company had voted for dissolution. Our primary question is whether Gilican, under the law of Louisiana, had authority*2508 to bind the New Orleans Naval Stores Co., Inc., by these instruments.
Act 267 of the General Assembly of the State of Louisiana, 1914, provides:
DISSOLUTION. Sec. 28. That whenever in the judgment of the Board of Directors it shall be deemed advisable, and for the benefit of such corporation, that it should be dissolved, the Board within ten days after the adoption of a resolution to that effect, by a majority of the whole board, at any meeting called for that purpose, of which meeting each director shall have received at least three days' notice shall cause notice of the adoption of such resolution to be mailed to each stockholder, together with a notice of a meeting of the stockholders to be held at the office of the corporation, to take action upon the resolution so adopted by the Board of Directors. The meeting of the stockholders shall be held at any hour fixed by the Board of Directors, between the hours of 10 o'clock in the forenoon and 3 in the afternoon of the day so named. On the day so appointed the meeting may, by consent of the majority in interest of the stockholders present, be adjourned from time to time, and if, at any meeting original or adjourned, two-thirds*2509 in interest of all the stockholders of the corporation shall vote that a dissolution shall take place, a certified copy of such resolution, signed by the presiding officer and secretary of the meeting, shall be filed in the office of the Secretary of State, together with a list of the names and residences of the directors and officers, certified to by the president and secretary of the corporation. Thereupon, the Secretary of State, when satisfied by due proof that the requirements aforesaid have been complied with, shall issue a certificate that the foregoing documents have been filed. The corporation shall then stand dissolved and the board shall publish a notice of said dissolution not less than 3 times in a paper published in the parish of the corporation's domicile, and the corporation shall proceed to settle up and adjust its business and affairs.
Whenever all the stockholders shall consent, in writing, to a dissolution, no meeting or notice thereof shall be necessary; but on filing such consent in the office of the Secretary of State, he shall forthwith issue his certificate, and thereupon the matter shall be proceeded with as if the dissolution had taken place at a meeting*2510 called for the purpose.
* * *
LIQUIDATION. Sec. 30. Be it further enacted, etc., That a corporation dissolved under this act shall be extinct in all respects as if its corporate existence had expired by limitation of its charter.
All corporations, whether they expire by limitation or are otherwise dissolved, shall be continued as bodies corporate for the purpose of prosecuting and defending suits by or against them, and of enabling them to liquidate their affairs, to dispose of and convey their property and to divide their capital but not for the purpose of continuing the business for which they were established.
(a) Upon the dissolution in any manner of any corporation the stockholders shall elect from among their number one or more liquidators (which liquidators, if required by the holders of not less than twenty-five per cent, of its stock, shall furnish bond not greater than the appraised value of the assets), with full power to settle its affairs, collect the outstanding debts, sell and convey *44 the property, pay its debts and divide the remaining money and property among the stockholders. They shall have power to meet and act under the by-laws of the corporation*2511 and under regulations to be made by a majority of said liquidators; to fix the price and prescribe the terms and conditions of the sale of such property and the manner in which the sale shall be made, and take notes and bonds, secured by mortgage or otherwise, for part of the purchase price for all or any part of said property; provided, however, that the rights here conferred upon the liquidators may be modified, changed or denied by a majority of the shares of the capital stock of the corporation.
(b) The liquidators shall have authority to sue for and recover the debts and property in the name of the corporation, and may be sued by the same name, and citation may be served upon any one of them, and they shall be liable in solido to any creditor or stockholder for the moneys and property of the corporation which shall come to their hands or possessions as such liquidators, and for the proper application and distribution thereof.
(c) Where any corporation shall be dissolved in any manner whatever, any court of competent jurisdiction, may, at any time, on application of any creditor, or stockholder, and for good reasons shown, order that the liquidators so appointed by the stockholders, *2512 shall qualify as judicial liquidators, and liquidate the affairs of said corporation under the orders and decrees of the court, and upon the failure or refusal of said liquidators so to do, the court may appoint one or more persons to be the receivers, of such corporation, to take charge of the estate and effects thereof, and to liquidate and settle the business and affairs of the company with such powers and duties as the court, by its orders and decrees, from time to time, may grant or impose.
DEFINITIONS. Sec. 31.* * *
A "Creditor" of a corporation is one who has a right by law to demand either presently, or upon some future contingency the fulfillment of any obligation or contract, not arising from an offense or quasi offense.
* * *
The evidence shows that the New Orleans Naval Stores Co., Inc., has complied with all the requirements of the above statute for its dissolution except the publication of notice in a paper. There is no evidence showing whether or not this was done, nor was there any evidence to show that the Secretary of State of the State of Louisiana issued, previous to June 13, 1929, a certificate showing that the documents required to be filed had*2513 been filed. However, these requirements were merely directory and are not necessary to the dissolution of the company.
In 14(A), Corpus Juris, sec. 3753, p. 1129, it is said:
Where the statute prescribes the steps to be taken by the stockholders, those steps must of course be followed by stockholders proceeding under the statute, and the facts showing compliance and essential to the exercise of jurisdiction must appear on the record of the court in order to sustain a decree of dissolution. But it is necessary to discriminate between those steps which are made by the statute essential to effect the surrender and other collateral steps which are merely directory; if all steps essential to effect the surrender are taken, a dissolution will be allowed even though other requirements merely directory are not complied with.
*45 In , it was held that where the essential steps for the surrender of the charter are taken in compliance with the statute, except the publication of notice, the surrender is effectual.
In the case of *2514 ; , the Supreme Court of Appeals of West Virginia held that a resolution by the stockholders of a joint-stock company to discontinue its business, under section 58, chapter 53, code 1891, operates as a voluntary surrender of the corporate franchise, and the dissolution of the corporation. The section of the statute referred to authorized stockholders in a general meeting, by resolution of the majority of the capital stock voting for it, to discontinue business.
We conclude that the New Orleans Naval Stores Co., Inc., was dissolved on October 28, 1920, when the required papers were filed with the Secretary of State of the State of Louisiana. Neither party presses this issue.
Neither of the parties involved in this proceeding has cited any case decided by the courts of Louisiana involving the question of the powers of corporations after dissolution, or the powers of its officers or liquidators under the Louisiana act, nor have we been able to find any such case.
The petitioner cited the case of *2515 , which was decided in 1867 and in which the Supreme Court of Louisiana stated:
If, as held by the plaintiff, the corporation still has vitality, and retains its capacity to sue and be sued, there would seem to be an anomoly growing out of the existence, at the same time, of a corporation and commissioners to liquidate its affairs, both having the power to control its assets, and equally in the power to exercise all of its rights of acting in courts of justice. But no such anomoly we apprehend exists.
In that case a banking corporation was in liquidation under an order of General Banks which was issued during the military occupation of New Orleans by the Federal armies. Under this order all of the property, assets and affairs of the banking corporation were placed under the control and management of commissioners of liquidation as provided for by law in insolvencies of individuals.
Another case cited by petitioner is ; *2516 48 Sou. 780. In that case it was held that where all of the property of a Louisiana corporation has been sold and its affairs are being liquidated by the board of directors, the president of the corporation is not authorized to bring a suit on behalf of the corporation. This case was decided in 1909, which was prior to the passage of Act 267 of Louisiana, invoked in this proceeding, but we deem it authority to the effect that, after the dissolution of a corporation, the only persons who may act on its behalf are those charged with the duty of winding up its affairs.
*46 Under this Act (267), parts of which we have set forth hereinbefore, the only persons competent to act on behalf of the New Orleans Naval Stores Co., Inc., in winding up its affairs after dissolution were the liquidators.
In , we had under consideration a somewhat similar situation. In that case the law of Connecticut, which is somewhat similar to the law of Louisiana, was involved. We held that where a corporation was dissolved in accordance with the state law, which places its affairs in the hands of its directors, as liquidating trustees, its president, *2517 who was also one of the liquidating directors, had no authority to bind the corporation by signing a waiver of the statute of limitations. See also .
As previously stated, the instruments in writing which respondent has introduced in evidence and which purport to be waivers of the statute of limitations are signed by W. B. Gillican as president of the New Orleans Naval Stores Co., Inc. At the time these instruments were executed the New Orleans Naval Stores Co., Inc., had long since been dissolved and two of the liquidators of the New Orleans Naval Stores Co., Inc., Mason and Pringle, were alive. It is true that the name of Mason, one of the liquidators, appears upon the instrument dated April 3, 1925, but only as a witness. The respondent contends that this fact is proof that Mason consented and agreed to the execution of the consents in the manner and form executed. Respondent further contends that, in the absence of any protests or objections on the part of the other liquidator, the presumption is raised that such other liquidator acquiesced in the action of Mason. We are not favorably impressed with this view and can*2518 not accept it.
Respondent further contends that, under the authority of section 30(a) of Act 267 of the Legislature of Louisiana, which we have set forth above, the powers of the liquidators were denied, modified or changed, after the liquidators were appointed, and that the purported waivers are valid. The petitioner advances the contention that the Legislature of Louisiana, in enacting the above section, merely intended to say that when a liquidator or liquidators are appointed it is not absolutely necessary that they be vested with each and every one of the powers enumerated in the section, but that those powers might be modified, changed or denied, and that such modification, change or denial must be set forth in the act of appointment at the time of dissolution. Respondent contended that this may be done subsequently and without formal action by the *47 stockholders. The question as to whether the powers of the liquidators may be at any time informally modified, changed or denied, is not free from doubt and we do not attempt to decide it since, in our view of the case, it is not necessary.
After a careful consideration of all the facts presented in the proceeding, *2519 we are of the opinion that the respondent has failed to show that the powers of the liquidators were modified, changed or denied or that W. B. Gillican was qualified in any manner to sign waivers of the statute of limitations on behalf of the New Orleans Naval Stores Co., Inc. He has, therefore, failed to establish that the alleged waivers relied upon by him are valid.
The respondent also contends that the petitioner is estopped to deny the validity of the consents here involved since it, by its officers, agents or employees intentionally deceived the respondent in the premises and thereby caused him to withhold assessments in reliance upon the consents.
In section 131, page 1129, of volume 21, Corpus Juris, there is set forth the following, which is well supported by authority:
As a corollary to the proposition that the party setting up an estoppel must have acted in reliance upon the conduct or representations of the party sought to be estopped, it is as a general rule essential that the former should not only have been destitute of knowledge of the real facts as to the matter in controversy, but should have also have been without convenient or ready means of acquiring such*2520 knowledge. One relying on an estoppel must have exercised such reasonable diligence as the circumstances of the case require. If he conducts himself with a careless indifference to means of information reasonably at hand or ignores highly suspicious circumstances which should warn him of danger or loss he cannot invoke the doctrine of estoppel. [Citing among other Federal cases, , certiorari denied;
In , the Supreme Court stated with regard to the doctrine of equitable estoppel:
* * * For the application of that doctrine there must generally be some intended deception in the conduct or declaration of the party to be estopped, or such gross negligence on his part as to amount to constructive fraud, by which another has been misled to his injury. "In all this class of cases", says Story, "the doctrine proceeds upon the ground of constructive fraud or of gross negligence, which, in effect, implies fraud. And, therefore, when the circumstances of the case repel any such inference, although there may be some*2521 degree of negligence, yet courts of equity will not grant relief. It has been accordingly laid down by a very learned judge that the cases on this subject go to this result only, that there must be positive fraud or concealment, or negligence so gross as to amount to constructive fraud." 1 Story's Eq. 391.
*48 In , the question of estoppel arose in certain suits in admiralty. The court stated:
Estoppel may be invoked where conduct or statements have positively a party and are acted upon by him in good faith, to his prejudice. Where the conditions are known to the parties, or they both have the same means of ascertaining the truth, and where they are under a duty to ascertain the truth, there can be no estoppel. See , .
Gillican signed the consents as president of the New Orleans Naval Stores Co., and did not represent himself to be a liquidator. It is true that R. V. Whittaker, a public accountant employed by petitioner, represented to the internal*2522 revenue agent at the time such agent requested waivers, that there were no liquidators of the New Orleans Naval Stores Co., Inc., but this does not constitute such a misrepresentation as will work an estoppel against the petitioner. Whittaker was not acting in bad faith, since he did not know at the time that there were any liquidators. The agent, himself, testified that he knew at the time that by consulting the records of the Secretary of State of the State of Louisiana he could have learned whether or not there were liquidators. As a matter of fact, the petitioner, as early as May 9, 1924, informed the respondent by letter that the New Orleans Naval Stores Co., Inc., had been dissolved. At the time the respondent requested waivers he knew that the New Orleans Naval Stores Co., Inc., had been dissolved and he was not misled in any way by the petitioner. He had ample means of ascertaining the names of the liquidators, but apparently did not avail himself of such means. We conclude that the facts do not establish any estoppel against the petitioner.
The notices of the respondent of the proposals to assess the petitioner were written on June 22, 1927, and December 29, 1927. *2523 Over two years prior to those dates the statute of limitations had run against assessment and collection with regard to the New Orleans Naval Stores Co., Inc., and its liability was extinguished by section 1106 of the Revenue Act of 1926. At the time the notices were sent to petitioner assessment and collection of the taxes against and from it as transferee were also barred by the statute of limitations and its liability was extinguished. ; ; and .
Reviewed by the Board.
Judgment will be entered for the petitioner.
SMITH and BLACK dissent.