Court Opinion

ID: 6890347
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:39:41.498234+00
Date Added: 2024-06-11T16:05:49.358660
License: Public Domain

HUTCHESON, Circuit Judge
(dissenting).
I dissent from the conclusion of the majority that the Taxpayer is not entitled to the credit it claimed. I particularly dissent from the reasoning on which that conclusion was based. As I understand the opinion; it is bottomed on a dictum contained in an opinion of the Supreme Court which decided an entirely different question arising on an entirely different set of facts-from that presented here. I recognize, of course, that the rule of stare decisis binds us to follow that court in respect of things decided by it. I know of no rule of stare “dictis” which binds us to follow it in respect of things merely said by it. Indeed, I understand the rule as established in our law to be quite the contrary. It is true that some of the federal courts, the Sixth Circuit in a modified, the First Circuit1 in an all out way, have, in the role of crystal gazers, laid claim to a prescience, indeed a clairvoyance as to judicial things to come, commonly not supposed to be required equipment for the task of judging. Other courts, notably the Third Circuit,2 the Court of Claims,3 and the Second Circuit,4 following the established rule that what is decided, not what is said by the Supreme Court, binds, ■ have taken a different view of their obligation to foretell what next that court may decide. All that was decided in the Northwest Steel Mills case was that to entitle to the credit there must be a written contract executed by the corporation which expressly deals with the payment of dividends and that there was no such contract exhibited but only a statute prohibiting deficit corporations from paying dividends.5 There is no question here of a prohibitory law. What prevents the payment of dividends here is an express and binding contract evidenced by the stock certificates completely and entirely forbidding the payment of dividends. It is settled in this circuit6 and in the Supreme Court,7 as we said of a companion section in American Liberty Pipe Line Co. v. Commissioner, S Cir., 143 F.2d 873, 874: “* * wherever this section and its companion, the dividends paid credit section, have been up for decision, the courts have made it plain, as well where such construction advantaged, as where it disadvantaged, the taxpayer, that the statute is plainly and clearly written, and that it must be applied as written. It may not be enlarged or restricted by a construction which, under the guise of giving effect to its supposed intent and purpose, adds to or takes away from its terms.”
The application of that principle of construction here leaves in no doubt, I think; that the taxpayer was entitled to the credit that he claimed, and that the judgment of the Tax Court was wrong. I dissent from its affirmance.

 In Elliott Addressing Machine Co. v. Commissioner, 1 Cir., 131 F.2d 700, 702, that court, without explaining how the Supreme Court could, without legislating, have gone farther than the specified facts of the case entitled them to go, said: “From our reading of Helvering v. Northwest Steel Mills, 311 U.S. 46, 61 S.Ct. 109, 85 L.E'd. 29, we are of the opinion that the court intended to go farther than the specific facts in that case.”

 Lehigh Structural Steel Co. v. Commissioner, 3 Cir., 127 F.2d 67; Budd International Corporation v. Commissioner, 3 Cir., 143 F.2d 784, certiorari denied, 65 S.Ct. 562.

 Rex Hanover Mills v. United States, Ct.Cl., 53 F.Supp. 235.

 Monarch Theatres v. Helvering, 2 Cir., 137 F.2d 588, 590. In that ease the court said: “The often quoted language of Mr. Justice Black in Helvering v. Northwest Steel Rolling Mills * * * was used discursively and by way of example; it is not to be understood as laying down absolute doctrine.”

 The Court said: “What prohibited respondent from distributing dividends was not the provision of an executed written contract expressly dealing with the payment of dividends. On the contrary, what prohibited respondent from paying dividends was a valid law of the State of Washington.” 311 U.S. at page 52, 61 S. Ct. at page 113, 85 L.Ed. 29.

 Sabine Co. v. Commissioner, 5 Cir., 128 F.2d 945.

 Helvering v. Credit Alliance Co., 316 U.S. 107, 62 S.Ct. 989, 86 L.Ed. 1307.