U.S. Supreme Court
Bailey v. Railroad Company, 106 U.S. 109 (1882)
Bailey v. Railroad Company
Decided November 6, 1882
106 U.S. 109
The court, in 89 U. S. 22 wall. 604, when this case was then before it, passed upon the character and effect of certain certificates therein described, which were issued by a railroad company pursuant to a resolution passed by the board of directors, Dec. 19, 1868, declaring that each stockholder was entitled to eighty percent of his capital stock, the earnings which the company, with a view to increase its traffic, had thitherto expended in constructing and equipping its road and in purchasing property. The Court adheres to its former ruling that the certificates were dividends in scrip, within the meaning of sec. 122 of the Act of June 30, 1864, c. 173, as amended by the Act of July 13, 1866, c. 184, but further holds that the company could show what were its earnings from Sept. 1, 1862, to Dec. 19, 1868, when the income tax law was in force, as its earnings during any other period were not subject to the tax in question.
The facts are stated in the opinion of the Court.