CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE THIRD CIRCUIT.
MR. JUSTICE McREYNOLDS delivered the opinion of the Court.
In the courts below these causes were heard together and one opinion here will suffice.
Respondent, The American Can Company, owned the entire capital stock of respondents Missouri Can Company and Detroit Can Company. All were incorporated under the laws of New Jersey and had their legal residences and principal offices therein. Their places of business were within the Second United States Internal Revenue District of New York. William H. Edwards, formerly Collector for that District, retired in 1921; Frank K. Bowers succeeded him. During Edwards' term he demanded and collected from these three corporations income and excess profits taxes for 1917 aggregating more than $5,200,000. Thereafter Collector Bowers exacted of them above $3,300,000 as additional income and excess profits taxes for the same year.
In January, 1926, respondents instituted actions against the United States in the District Court for New Jersey, as permitted under U.S. Code, Title 28, Sec. 41, par.
(Judicial Code, Sec. 24, par. 20; Revenue Act, Nov. 23, 1921, c. 136, Sec. 1310 (c), 42 Stat. 311; Revenue Act, February 24, 1925, c. 309, 43 Stat. 972). They sought to recover with interest more than $2,700,000 paid, as they alleged, to Edwards in excess of taxes properly assessable to them for 1917. Judgments against the United States for the amounts claimed were affirmed by the Circuit Court of Appeals, Third Circuit, March 5, 1929; and the matter is here upon certiorari.
They also sued Bowers, Collector, in the District Court, Southern District of New York, to recover the additional taxes for 1917 ($3,300,000) demanded by and paid to him. These suits involved the same questions as those presented in the causes now before us. Judgments went for Bowers, Collector. The Circuit Court of Appeals, Second Circuit, affirmed them November 4, 1929.
The opinions and judgments in the two Circuits upon the same facts are thus in direct conflict.
Pertinent provisions of the statutes and Treasury Regulations are printed in the margin.*fn*
The accounts of respondents were kept during 1917 not upon the basis of actual receipts and disbursements but upon the accrual ...