Court Opinion

ID: 4495810
Source: CourtListenerOpinion
Date Created: 2020-01-23 18:14:31.663534+00
Date Added: 2024-06-11T15:04:03.038132
License: Public Domain

TRAmmell,
dissenting: I dissent from the majority view in this case. In my opinion, the $100,000 was received by the petitioner in 1925. In the instrument, whether it be called an option or a sale contract, receipt of consideration was acknowledged. The certificates of deposit were taken out of the bank by the petitioner and put in his personal safe deposit box. He had the sole possession thereof; all that remained for him to do was to endorse them, which He could have done at any moment. Where a man owns practically all the stock in a corporation, is its president and entirely in control of its management, as in this case, if his endorsement of the certificate is necessary to constitute the receipt thereof as income to him, such person can determine when and to what extent he receives income by merely endorsing certificates or a portion of them in different years. In my opinion, the law does not permit this. What he received was of value to him and represented a consideration payable to him, and it was so understood by all the officers of the corporation. Otherwise there was no consideration for the agreement. Had the petitioner come into court in 1925 to set the agreement aside for lack of consideration, undoubtedly the court would have held that the consideration had been duly paid and received by him. It is not necessary to rely upon the doctrine of constructive receipt, but even on that theory I think to all intents and purposes the consideration, the equivalent of cash, was received in 1925.
It is not necessary for the majority opinion to discuss the question of estoppel, taking the view that the consideration was received in 1926; however, it does become necessary to discuss it if it was *182received in 1925. I do not believe that this doctrine applies in this case. The transaction involving receipt of this money was subject to investigation by the Bureau of Internal Revenue long prior to the expiration of the statute of limitations for 1925. However, based on that investigation, the Commissioner determined that the amount was received in 1926. The petitioner at no time represented that the money was received in 1926. The record does not disclose that any misrepresentation of fact was made. The amount was not reported in 1925 by the petitioner, on the theory that the transaction was a sale and that no taxable income was received in that year. The position of the petitioner is not inconsistent with his position throughout. The taxpayer contended that it was not income at all and has always so contended, but says that if it was income it was income in 1925. All the facts appear to have been as fully before the Bureau of Internal Revenue before the statute of limitations expired in 1925 as they are at the present time and, in my opinion, the rule of estoppel does not apply.
McMahoN agrees with this dissent.