Opinion ID: 1551069
Heading Depth: 1
Heading Rank: 6

Heading: Increase of Burroughs Stock.

Text: The Buroughs stock came in two ways. The first was by exchange of 4,200 shares of that stock for 420 shares in the Arithmometer Company. In 1905 the Burroughs Company was organized to succeed the Arithmometer Company and exchanged its shares for those of the latter. Obviously, this exchange made no change in the legal status of the shares in any respect here involved. It was a mere exchange or displacement. The 420 shares were clearly corpus coming from the estate of Ehrhardt D. Franz and anything for which they were exchanged would merely take the place of such shares. If there was an increase in value through the exchange, a fact not shown, it would not change the aspect that it was an increase in capital value and not of an income earned by capital. The remainder and, by far, the greater amount of Burroughs stock came, after this exchange, in the form of stock dividends. That stock dividends are part of the corpus and not income therefrom or thereon is settled by authority which is binding upon us (McDonald v. Maxwell, 274 U. S. 91, 97, 47 S. Ct. 497, 71 L. Ed. 942; Gibbons v. Mahon, 136 U. S. 549, 10 S. Ct. 1057, 34 L. Ed. 525, and Brown v. Wisconsin Syndicate, 19 F. [2d] 198, this court) and the same rule prevails in Missouri (Hayes v. St. Louis Union Trust Co. [Mo. Sup.] 298 S. W. 91).