BYRNE, District Judge.
' These are appeals from a judgment denying relief to plaintiffs below, who are seeking to recover approximately $17,000,000 from the reorganized The Western Pacific Railroad Company, defendant and appellee.1 Appellants are The Western Pacific Railroad Corporation (hereinafter sometimes referred to as “Corporation”), its receiver, and three of its preferred stockholders, who intervened to assert Corporation’s claims.
Appellant Corporation, from 1916 until the events which gave rise to this litigation, owned all of the capital stock of The Western Pacific Railroad Company, an operating railroad company. The operating company became financially distressed during the “depression of the early thirties” and in 1935 it filed a petition under Section 77 of the Bankruptcy Act, 11 U.S.C.A. § 205. The court, in that year, placed its affairs in the hands of trustees. In 1939 the Interstate Commerce Commission approved (233 I. C, C. 409) a proposed plan of reorganization, which was thereafter submitted to and approved by the district court in 1940. In re Western Pac. R. Co., 34 F.Supp. 493. In the plan it was determined, inter alia, that the capital stock of the subsidiary, owned by Corporation, was without equity or value and therefore was not entitled to participate in the plan. Appeals followed and, after a contrary holding by this court, 124 F.2d 136, the Supreme Court considered and rejected the contention of Corporation that it should have the right to participate in the plan because of increased earnings of the debtor while in reorganization, and affirmed the [998] district court on March 15, 1945.2 Thereafter the plan of reorganization was submitted to the creditors in accordance with the statutory requirement, 11 U.S.C.A. § 205, sub. e, and, following their approval, was confirmed on October 11, 1943 by the district court. On April 30, 1944, with the approval of the court, Corporation transferred all of its stock in the subsidiary to the reorganization committee and this stock was later cancelled. On December 31, 1944, the trustees turned the railroad properties over to the reorganized company, The Western, Pacific Railroad Company, appellee here.
This litigation involves a dispute about taxes and tax savings for the years 1942, 1943 and the first four months of 1944, a period during which the railroad properties were controlled and operated by the trustees of the bankruptcy court.
During the years in which Corporation was the owner of all the outstanding stock of the pre-reorganization, The Western Pacific Railroad Company, including the years the trustees of the bankruptcy court had possession and control of the railroad properties, Corporation followed the practice of filing, consolidated income tax returns in which it reported the earnings of the operating company as well as other affiliated companies.
During the year 1942 the operating company, under the control of the court’s trustees, had substantial net earnings. On May 15, 1943, a consolidated return for the calendar year 1942, showing tax liability of $4,201,821.54, was filed by Corporation in behalf of all members of the affiliated group. Corporation, not having had any net earnings during 1942, did not pay any part of the tax.
On July 1'5, 1944 a consolidated income and excess profits tax return for the calendar year 1943, showing no taxable income, was filed by Corporation in behalf of all members of the affiliated group. The operating company, under the management of the trustees, again made substantial net earnings in 1943, but the loss sustained by Corporation 'by reason of the declaration of worthlessness of its stock3 in the operating company (which 'had cost Corporation $75,-000,000) was utilized as an offset in the consolidated return and thus resulted in a net loss and no tax obligation for any of the affiliated group. In addition, part of the loss was “carried back” to 19424 and a claim for refund of the taxes paid under the consolidated return for 1942 was filed with the Commissioner by Corporation on March 9, 1945. A consolidated return in behalf of the affiliated group was filed on June 15, 1945, by Corporation for the first four months of 1944. No tax liability was shown by this return by reason of the “carry forward” 5 of an unused portion of the loss arising from the declaration of the worthlessness of the stock of the subsidiary company owned by Corporation.
The validity of the stock loss offsets was questioned by the Commissioner of Internal Revenue, and after negotiations a tax settlement was made with the Commissioner on August 13, 1947 whereby, in consideration of the withdrawal of the claim for refund of 1942 taxes, the Commissioner accepted and approved the returns for the calendar year 1943 and first four months of 1944. Except for the offset of the capital stock loss of Corporation, the net earnings of the subsidiaries for 1943 and the first four months of 1944 would have required the payment of some $17,000,000 in income and excess profits taxes.
This suit in equity was instituted October 10, 1946 by Corporation, alleging “consolidated income tax returns were filed by the plaintiff for itself and its affiliates which reported a deductible loss by the plaintiff in an amount sufficient to eliminate all taxable income for the group as a whole” for the periods in question and praying that the [999] rights and interests of the plaintiff and the defendants 'be fixed and determined. A complaint in intervention was filed by three stockholders of Corporation on April 7, 1947. The principal difference between the original complaint and the complaint in intervention is the allegations in the latter pertaining tp “duality” or interlocking management and “domination” of the parent by the subsidiary. It is alleged that various directors, officers and counsel of Corporation acted as directors, officers and counsel of the subsidiary with the result that the subsidiary dominated and controlled Corporation ; that said officers caused Corporation to file consolidated tax returns when Corporation had “no duty or obligation whatsoever so to do”. Corporation filed an answer to the complaint in intervention in which it denied “on its own behalf and on behalf of its officers and directors all allegations * * * of doinination and control of the plaintiff, its officers and directors” by the subsidiaries and affiliates, but six months later Corporation filed a supplemental bill of complaint alleging a “duality of control” and, though falling short of intervenors’ allegation of “domination”, it alleges “at the special instance and request of the defendants and the trustees in the reorganization proceedings acting for the defendants the plaintiff, however, consented to the filing on its behalf of consolidated * * * tax returns with defendants” for the tax periods in question. It is further alleged that plaintiff “does not aver that in so conducting themselves” the officers acting for both corporations “were aware of wrong-doing or consciously disregarded the interests of plaintiff”. There is no assertion of actual fraud or specific acts of deceit nor would the record support any such assertion. Corporation’s claim appears to rest on constructive fraud presumed from the intercorporate relationship which it asserts deprived it of its independence and caused it to suffer -a loss.
The appellants emphasize that Corporation maintained its offices jointly with those of its subsidiaries and the trustees in New York; that Corporation’s officers, who handled the tax transactions, were also employees of the subsidiaries and trustees, and their salaries and the expenses of the office were jointly paid; that because of its impoverished financial condition, Corporation was incapable, as of June 1, 1943, of paying salaries or office expenses and thereafter the subsidiaries paid all of the salaries and office expenses. Appellants refer to this as “duality of management” which they contend created a fiduciary relationship and the subsidiaries’ duty to deal fairly with Corporation.
Many of the cases cited by appellants deal with the duties of trustees, agents and partners and with the granting of restitution for violation of their duties. Clarity of reasoning has suffered because of the failure to distinguish between the several varieties of fiduciaries, and the duties imposed on each. Although all trustees are fiduciaries, all fiduciaries are not necessarily trustees.
“A person in a fiduciary relation to another is under a duty to act for the benefit of the other as to matters within the scope of the relation. Fiduciary relations include among others the relation of trustee and beneficiary, guardian and ward, agent and principal, attorney and client * * *. The directors and officers of a corporation are also fiduciaries, as are receivers, and executors and administrators. The scope of the transactions affected by the relation and the extent of the duties imposed are not identical in all fiduciary relations * * Restatement of Restitution, Section 190, comment “a”, (emphasis added.)
As stated by Professor Scott in 49 Harvard Law Review at page 521: “In some relations the fiduciary element is more intense than in others; it is peculiarly intense in the case of a trust * * (emphasis added.)
Appellants place a great measure of reliance on the case of Commercial National Bank in Shreveport v. Parsons, 5 Cir., 144 F.2d 231, 236. That case is- distinguishable from the case before us in that the fiduciary relationship arose out of a contract which imposed the duties of a trustee upon the “new bank”. The court decided the case on the established rule that a trustee owes the duty of absolute fidelity to the trust estate and may not profit by dealing with it. We [1000] know of no better way to point up the distinction than to use the words of the court cited and emphasized by appellant’s brief: “The credit thus obtained by the new bank was a profit derived from the trust property as effectively as .if it had been paid that much in cash.” (emphasis added.)
Cases which deal with trustees, agents and partners are not controlling here as there is no contention that the subsidiary was a trustee, agent or partner. It is appellants’ contention that the subsidiary dominated Corporation through the dual officers. If this be true, then a fiduciary relationship existed, but the duties imposed were not those of a trustee. While a trustee may not deal with the trust estate and thereby make a profit, affiliated corporations are usually associated for the very purpo.se of dealing with each other for profit, e. g., manufacturing and sales companies; railroads and their subsidiary short line companies. Even the corporation which dominates its subsidiary, with the resultant fiduciary relationship, properly deals with its affiliate for profit as long as there is no overreaching or unfairness.
Whether or not a fiduciary relationship exists, and the extent of the duties imposed, depends upon the particular field of substantive law involved. We must look to the law of corporations to determine whether the subsidiary stood in a fiduciary relation to Corporation. The mere fact of officers^ and directors in common does not create such a fiduciary relationship. There is nothing insidious about duality of management and control as such. It is very common in the realm of business, particularly in the situation of parent and subsidiary, as here. At times business convenience requires such relationship. The officers and directors who occupy this dual position are fiduciaries to both companies and owe a duty of loyalty to each. Thus they cannot favor the interests of one corporation while sacrificing or betraying those of the other. If they do so, they must respond in damages for their tortious conduct or account for any benefits derived through their breach of duty.
But rules relating to the individual officers do not reach the point involved in, this case. Here we must determine whether the subsidiary corporation stood in a fiduciary relation to the parent corporation. There are several orthodox ways in which one corporation may become a fiduciary in relation to another corporation, e. g., it may hold property in trust for the other, or it may become an agent for the other. Fiduciary duties also arise where one corporation dominates the other. Consolidated Rock Products Co. v. Du Bois, 312 U.S. 510, 61 S.Ct. 675, 85 L.Ed. 982. Although the presence of common officers and directors does not in itself create a domination or a fiduciary relationship between the corporations, it does subject dealings between them to judicial scrutiny as to their fairness and reasonableness to ascertain if domination exists,- and if so,, whether it has resulted in overreaching which will raise a .presumption of constructive fraud.
■There obviously existed an interlocking management between Corporation and the subsidiaries. But this -situation was not of the subsidiary’s making. On the, contrary, it was created -by Corporation, whose stockholders elected its Board of Directors, who appointed its officers. ■ Since plaintiff Corporation owned 100% of the stock of the subsidiary, it elected all of the directors of the subsidiary, which, in turn, appointed its officers. After the subsidiary was reorganized it was no longer controlled by Corporation but by the trustees appointed by the bankruptcy . court.6 Corporation continued in office the same directors who, in turn, continued to employ the same officers. This was not unnatural since Corporation continued to own all the capital stock of the subsidiary long after it had been divested of control of the subsidiary by reason of the reorganization.
If it be assumed that the advent of the trustees into the affiliation and the increased prosperity of the subsidiary result[1001] ed in control of the affairs of Corporation so as to raise fiduciary obligations, the scope and extent of the subsidiary’s obligations would be to deal fairly with Corporation. A corporation can only act through its officers and agents. It follows that if there was domination and unfairness it was exercised through the dual officers who forsook their obligations to Corporation, by which they were appointed, and served the purposes of the subsidiary. Although the arguments of appellants are exceedingly general, it is apparent that they assign three particulars wherein the dual officers failed in their obligations to Corporation, resulting in unfairness: (1) They filed consolidated returns; (2) they failed to exact an agreement from the subsidiary requiring payment of money to Corporation as a condition to their consent to file consolidated returns; (3) they should have resigned and allowed the appointment of successors who would have exacted such an agreement from the subsidiary. We shall discuss these three particulars seriatim.
The consolidated returns were filed by Corporation as the parent, for itself and its subsidiaries. Appellants contend that the subsidiaries causedCorporation to file consolidated returns when it had “no duty or obligation whatsoever so to do”. The filing of these returns was in exact conformity with the practice followed since 1916. Beginning in 1927 Michael J. Curry, first as treasurer and after February 1, 1942 as president of Corporation, supervised preparation of consolidated returns, signed and filed them. In each year the consolidated tax liability was distributed pro rata to those members of the group who had taxable incomes without allocating any tax to a company showing a loss or paying such company tribute for the tax “saved” by the use of its loss in the returns. Mr. Curry supervised preparation of a tentative tax return for 1942, and on March 15, 1943, signed and filed it and arranged for an extension of time until May 15, 1943, to file the final return. On March 23, 1943, F. C. Nicodemus, Jr., who was counsel for Corporation at the time and appears on the pleadings and briefs in this case as present counsel for appellants, suggested by letter7
8 to Mr. Schumacher, one of the trustees of the operating company, that he be authorized to employ Messrs. Whitman, Ransom, Coulson & Goetz, tax experts, to advise him on tax matters. This was done. Mr. Polk of this firm continued to advise with the officers of the group through the periods here in question. Mr. Polk reviewed the tax situation with Mr. Curry and Mr. Nicodemus and on May 20, 1943*, prepared a detailed written report9 addressed to Mr. Curry and circulated to Mr. Schumacher and Mr. Nicodemus. The report reviewed the tax advantages of consolidated returns and suggested the possibility that, under the recently enacted amendment to Section 23 (g) of the Internal Revenue Code, the loss of Corporation, upon a determination that its stock in the subsidiary was worthless, might constitute under a consolidated return, an offset to income of other group members. A consolidated return reporting the loss of Corporation as an offset to group income was prepared in the joint New York office, signed by Mr. Curry, and filed by him on July 15, 1944. The return reported no tax owing. Substantially the same procedure was followed for the “carry back” claim for refund March 9, 1945, as well as the consolidated tax return for the first four months of 1944, which was filed July 15, 1945.
It hardly seems conceivable that Corporation could complain because consolidated returns were filed. Not only was it in accordance with past practice of the group and under the supervision of Corporation’s president, as in former years, but it was done under the guidance of the independent tax experts employed upon the suggestion of the General Counsel for Cor[1002] poration, who represents appellants in the present proceeding. As' the trial court stated10 “ * * * when everybody was, as they were in this case, acting completely in the open in the matter, nobody was concealing anything from anyone else, the element of fraud or deception, of the kind that you refer to, is absent * * *. Everybody knew that consolidated returns were being filed * * *. Everybody knew that these attorneys were being employed to file this consolidated return. It was all done right out in the open.” At the time of trial plaintiff intervenors appeared to agree with these observations of the trial court,11 but on this appeal they infer that there was something sinister about the filing of the consolidated returns.
It is interesting to note the reactions of appellants to observations in the opinion of the trial court12 to the effect that the Commissioner erred in allowing the tax deduction in question. They vehemently argue that the filing of the consolidated returns and the use of plaintiff’s loss to offset .defendant’s income was proper under the tax law and regulations. It is also interesting to note that the compromise of the tax claim between the Bureau of Internal Revenue and Corporation acting through its attorney-in-fact, James K. Polk, occurred after this action was commenced on October 10, 1946, and after the filing of the complaint in intervention on April 7, 1947; that no effort was made to invoke the power of the court to enjoin the officers of Corporation from continuing in their efforts to have the Bureau accept the consolidated returns as filed; that nothing was done to revoke Polk’s power-of-attorney to represent Corporation in the proceedings before the Bureau; that Polk, as attorney-in-fact for Corporation, made an offer of settlement of tax liability for 1942, 1943 and the first four months of 1944 by letter of May 19, 1947, to the Internal Revenue Bureau; that a stipulation (hereafter discussed) was entered into between counsel in this case approving the ■settlement of the returns with the Government; that Corporation’s Board of Directors adopted a resolution approving and ratifying the offer of settlement August 13, 1947.
The conclusion is inescapable that Corporation’s officers, when they filed consolidated returns, did not violate any obligation but, on the contrary, were conforming with the -policy and directions of Corporation.
Appellants suggest that Corporation was under no obligation to file consolidated returns; that it could have demanded that the subsidiaries enter into an agreement [1003] to pay it a sum of money as a prerequisite to its consent to filing such returns; that inasmuch as its officers did not exact such an agreement, they failed in their obligation to Corporation and are chargeable with an “unfair” omission to be imputed to the subsidiary by reason of the supposed domination.
Section 141(a) of the Internal Revenue Code grants the ¡privilege of filing consolidated returns upon the condition that all members of the affiliated group consent to the regulations prescribed by the Commissioner under the authority of subsection (b) of the same section. Regulation 104, Section 23.12 provides that the consolidated return shall be made by the parent corporation. Under the Regulations, the parent corporation is the agent for the entire group, and (except in unusual circumstances) all dealings with the Commissioner are handled by the parent.
Appellants argue that consolidated returns were designed solely for the benefit of the parent corporation. The argument is not sound. The Code and Regulations recognize that the benefit of consolidated returns is for all corporations in the group. Any subsidiary in the group, as well as the. parent, may prevent the filing of consolidated returns if the filing is detrimental or contrary to the interests of such corporation. Appellants assert that in the usual case the tax saving which a subsidiary effects will inure to the parent by way of increasing the value of its stock or by way of dividends. This is quite true in the usual case. But it does not mean that this result must follow, nor does it follow that, because the value of a parent’s equity in a subsidiary corporation is increased by reason of benefits flowing to the subsidiary’s preferred stockholders and creditors, it may receive the benefits direct, regardless of the rights of the subsidiary’s preferred stockholders, creditors and minority common stockholders.
The appellants and jntervenors contend that the tax laws require “economic unity” for the filing of consolidated returns. This is incorrect. The Regulations suggest procedure in cases where a subsidiary has left the affiliated group. Regulation 104, Section 23.12(e). Thus, the regulations specifically envision situations where economic unity shall cease and yet permit the filing of consolidated returns. If, by the time the returns are filed the affiliation has ceased to exist, any benefits to the subsidiary obviously cannot inure to the ¡parent. That is precisely the situation in the case at bar. In the tax periods involved there was an affiliated group. When the returns and the claim for refund were filed, affiliation no longer existed. Therefore, the benefit of the consolidated return could not accrue to the parent corporation. If the assertion of appellants that consolidated returns “are not permitted for the benefit of the subsidiaries” were literally true, then there would be no lawsuit here because consolidated returns could not have been filed in the first instance.
Appellants cite three decisions of the Securities and Exchange Commission in ¡support of their view that the rationale of the tax laws requires that any benefits resulting from the tax laws should go to the parent.13 These decisions do not support this contention of appellants. These companies were seeking the approval of the Commission to alteration of inter-company agreements respecting income taxes. All three decisions show a decided viewpoint that the tax savings from consolidated returns shall not be paid over to the parent if this would in any way endanger the position of the creditors of the subsidiary. They also make clear that a company. whose loss was utilized for the benefit of the group does not have a right to compensation from those who benefited. In the Cities Service case, supra, the Commission said; “ * * * we think it should be observed that in the ordinary case the fact that one subsidiary contributes a particular income deduction to a [1004] Consolidated return does not in itself entitle that subsidiary to the benefits of the reduced taxes resulting from the deduction. Where the reductions are possible from filing a consolidated return, they ordinarily are due to a number of factors contributed by the various members of the consolidated group, including, among others, earnings, and excess profits tax credits, as well as income deductions.” (emphasis added.)
There is nothing in the Code or Regulations that compels the conclusion that a tax saving must or should inure to the benefit of the parent company or of the company which has sustained the loss that makes possible the tax saving.
Assuming, as we have, that the subsidiary dominated Corporation through control of the dual officers, it did not abuse its supposed dominant position because the officers and directors common to both corporations did not sacrifice Corporation’s interests to those of the subsidiary. When the Supreme Court decided that Corporation could not participate in the increased earnings of the operating company while in reorganization, Corporation suffered a severe loss. Since it had no income, there was no possible way for it to achieve any tax advantage to offset the loss. But its affiliate did have use for the loss and the group was entitled, under the tax law, to make use of that means of tax savings. The dual officers owed fiduciary duties to both corporations to promote the interests of both and to obtain for each what it was entitled to under the tax laws. Under this state of facts these officers had a positive duty to make use of the loss as they did, that is, to offset the income of members of the affiliated group with deductible losses of other members. If the positions of the corporations were reversed and the subsidiary had a loss and the parent had income, the officers would have been obliged to file consolidated returns to enable Corporation to make use of the loss. Indeed, this very thing had occurred in previous years of the affiliation and Corporation had effected substantial tax savings (Def. Ex. 46) by reason of filing consolidated returns. The record is clear that on none of these occasions was tribute paid to a subsidiary which had suffered a loss. The officers would have been derelict in their duty to the subsidiary had they failed to file consolidated returns. Their duty to Corporation required only that they not sacrifice its interests and' did not require them to exact tribute for following the practice of the past twenty-five years. After the transaction Corporation was in exactly the same position that it was in before the subsidiary had effected the tax saving allowed by the tax laws.
However, it is contended that the subsidiary should have notified the Corporation’s stockholders and directors of the filing of consolidated returns so that independent directors and officers could have been put in charge of Corporation’s interests to make a bargain with the subsidiaries and obtain compensation as a prerequisite to filing consolidated returns. There are several things wrong with this argument. The most obvious is that the entire transaction was open and above board. Many persons 'having an interest in Corporation, including stockholders and counsel, were fully aware of the situation. They chose not to act. They apparently preferred to permit the transaction to stand, intending thereafter to bargain for a share in the tax savings. They made no effort to inject themselves into the tax settlement with the government. But all this assumes that it would have been proper for Corporation to 'have made such a bargain. The Corporation was the sole owner of the subsidiary’s capital stock. As such it was under a duty to deal fairly with the subsidiary having full regard for' the interests of the creditors and holders of other securities. Consolidated Rock Products Co. v. DuBois, 312 U.S. 510, 522, 61 S.Ct. 675, 85 L.Ed. 982. It owed a duty not to require its subsidiary to forego a legitimate tax saving and could not bargain to perform its duty. A parent company is not acting in the best interests of its subsidiary when it seeks to appropriate to itself an advantage which the tax laws give the subsidiary.
Plaintiff argues that it was a "complete stranger” to defendant when the consolidated return was filed July 15, [1005]*10051944, because the affiliation terminated on April 30, 1944, when its stockholdings were transferred to the reorganization committee. A tax return is an historical document relating to the past. This return related to a period when the affiliation existed. All fiduciary duties with respect to matters arising during the relationship continue during the winding up period, and are “as sacred and inviolable after as before the expiration of its term”.14 It would be ridiculous to say that a fiduciary who performs an act winding up matters which relate to the affiliation period may exact payment merely because the relationship has technically terminated. If Corporation had required tribute as a condition of its cooperation, then it would have been acting with less than the required standard of fairness to the subsidiary’s creditors. Equity will not permit a recovery as a substitute for a bargain which would have been unfair.
The record is barren of evidence to support the contention that Corporation was dominated by the subsidiary, or that there was a breach of any duty owed to Corporation. As the trial court stated, “The so-called ‘duality of control,’ much discussed and emphasized, is not important”. [85 F.Supp. 875.]
Appellants contend that they have a special claim to the 1942 tax saving. They rely upon a pretrial stipulation and order. The proposed settlement of tax liability with the government provided that the returns for 1942, 1943 and first four months of 1944 were to be approved as filed, and that the claim for refund of 1942 taxes was to be rejected. Intervenors applied to the court below for an order restraining the consummation of the settlement on the theory that the rejection of the 1942 refund claim might be prejudicial to the position of Corporation in this litigation. The parties entered into a stipulation providing that for purposes of litigátion the 1942 refund claim, diminished in proportion to the diminution of the entir-. tax saving, should be deemed to have been allowed and “paid to the plaintiff as the agent for the affiliated group * * (emphasis added.) The pretrial order confirmed the stipulation.
The trial court did not make formal findings of fact and conclusions of law, but relied upon section 52(a), F.R. C.P., 28 U.S.C., which provides in part: “* * & if an opinion or memorandum of decision is filed, it will be sufficient if the findings of fact and conclusions of law appear therein. * * * ” Findings of fact and conclusions of law are intended to aid appellate courts by affording them a clear understanding of the basis of the decision below. Findings are not a jurisdictional requirement of appeal which this court may not waive. Even in cases where there are no findings, if the record is so clear that the court does not need them, it may waive the defect on the ground that the error is not substantial in the particular case.15
In the instant case the trial court’s opinion discloses adequately the issues of fact which were before the court and the court’s findings thereon.
The trial court, in a note appended to its opinion, stated that “Inasmuch as there is little factual dispute” the opinion would serve as findings of fact and conclusions of law, but “counsel, if they wish, may submit findings * * All parties elected not to submit additional or more detailed findings except that the appellants proposed findings .with respect to the above stipulation and pretrial order, and also a conclusion of law to the effect that the defendant should pay to the plaintiff the sum of $3,385,290. These proposed findings and conclusions, which were inconsistent with those embodied in the opinion, were rejected by the trial court.
[1006] Appellants argue that the court below concluded that it should leave the parties where it found them and that Corporation is therefore entitled to the assumed avails of the reduced refund claim.
The stipulation and pretrial order were entered into and made for the purpose of protecting the position of Corporation in relation to the refund claims only if it should be found entitled to the refund. The court found it zvas not entitled to it. Appellants’ position is no stronger with respect to the refund for 1942 taxes paid by the subsidiaries than it is with respect to the 1943 and 1944 savings of the subsidiaries. It is true that the government requires consolidated returns be filed in the name of the parent and that refunds are paid to the parent, but where such refunds are paid, the parent holds the refund as agent or trustee for the benefit of the affiliate which has overpaid.16
In their brief appellant-intervenors allude to the losses they sustained as stockholders and imply that they have an equitable right to compensation apart from that of Corporation. To believe this would be to misapprehend their position. A corporation is a legal entity separate and distinct from its stockholders and benefits to the latter flow from the rights of the corporation. If this were not true these intervenors could not hope to gain by this proceeding as they sustained no loss by reason of Corporation being barred from participation in the reorganization plan. Their pleadings, as well as a stipulation filed in this suit, show that they acquired their stock after Corporation’s stock in the subsidiary had been declared worthless. Defendants offered to prove at the trial that intervenors purchased their stock for less than one cent on the dollar. The offered evidence was properly excluded as irrelevant by the trial court. The fact, if it be a fact, that any or all of the present stockholders of Corporation acquired their stock as a speculation while the corporation was in the process of liquidation and its “stock was of trifling value” (page 11, intervenors’ opening brief), is irrelevant to the issues here. Corporation is an entity and the issue is whether or not it is entitled to recover $17,000,000 from the successor of its former subsidiary. If it prevails its stockholders are entitled to reap the benefit, regardless of when they became such, or how “trifling” a sum they paid for their stock. The intervenors recognized this when they filed their complaint in intervention to assert Corporation’s claims.
We have examined the other authorities cited by appellants and find nothing contrary to our holding here. Appellants cite Southern Pacific Company v. Bogert, 250 U.S. 483, 492, 39 S.Ct. 533, 63 L.Ed. 1099. That case was not concerned with the question of fiduciary relationship between parent and subsidiary. Rather, it was concerned with the fiduciary duty owed 'bj1' the holders of the majority of the stock of a corporation to the minority stockholders. The case holds that a parent company has a fiduciary duty to any minority stockholders of the subsidiary.
Also cited is North American Co. v. S. E. C., 327 U.S. 686, 693, 66 S.Ct. 785, 90 L.Ed. 945. That case is not in point either. The court was not concerned with any question of fiduciary relationships. Rather it was concerned with the validity of the so-called “utility 'holding company death sentence” provision of the Public Utility Holding Company Act, 15 U.S.C.A. § 79 et seq.
The judgment is affirmed.