Opinion ID: 2605808
Heading Depth: 1
Heading Rank: 3

Heading: background claim to standard oil of new jersey stock

Text: Between the years 1948 and 1963, Standard Oil of Indiana declared certain dividends to its stockholders, payable in shares of stock of Standard Oil of New Jersey. Standard Oil of Indiana had acquired these shares in 1932 when it transferred certain of its foreign properties to Standard Oil of New Jersey. When paying on the dividends, Standard Oil of Indiana had designated that the value of distribution be of dividends in kind, payable in Standard Oil of New Jersey stock. The distribution was charged against the earned surplus of Standard Oil of Indiana. The dividends were not denominated as a return of capital. In every year in which such a dividend was paid, Standard Oil of Indiana sent notices to all stockholders receiving the dividends advising them to treat the dividends as income for the taxable year in which they were received. Standard Oil Company of Indiana had sufficient earnings and earned surplus against which such charge was made. There is no evidence of record demonstrating that the stock dividend, in kind, of Standard of New Jersey, declared to the owners of Standard Oil Company of Indiana impinged upon the capital of Standard of Indiana, or amounted to a partial liquidation of Standard of Indiana. Further, the distribution of the stock dividend in kind of Standard Oil Company of New Jersey does not appear to have been made by Standard Oil Company of Indiana pursuant to a court decree or final administrative order by a government agency ordering distribution of the particular assets. In Margaret Hewlett's estate, 18,298 shares of Standard Oil of New Jersey were attributable to dividends taken by Margaret Hewlett as income on the trust, the corpus of which was originally the 12,000 shares of Standard Oil of Indiana.