Court Opinion

ID: 9639510
Source: CourtListenerOpinion
Date Created: 2023-08-22 16:21:10.265067+00
Date Added: 2024-06-11T18:10:19.401798
License: Public Domain

HANEY, Circuit Judge
(dissenting).
Respondent reported her income on a cash basis. The stock dividend should have been declared in the return for the year in which she received it. She “received!’ the stock dividend when it was made “unqualifiedly” subject to her demand. Treasury Regulations 74, art 333.
*733As was said in Avery v. Commissioner, 292 U.S. 210, 214, 54 S.Ct. 674, 676, 78 L.Ed. 1216: “When a dividend unqualifiedly becomes subject to a taxpayer’s demand is essentially a question of fact.”
The Board found that the stock dividend was received by respondent in 1928. This finding must be sustained if there is any substantial evidence to support it. Helvering v. Rankin, 295 U.S. 123, 55 S.Ct. 732, 79 L.Ed. 1343; Burnet v. Leininger, 285 U.S. 136, 52 S.Ct. 345, 76 L.Ed. 665; Phillips v. Commissioner, 283 U.S. 589, 51 S.Ct. 608, 75 L.Ed. 1289.
I am unable to find any evidence to support the finding, and therefore dissent.
The resolutions did not convey the stock. The wording indicates that it would be transferred at some future time. That no conveyances were made by the resolutions is conclusively shown by the fact that the stock was to be distributed to the stockholders who were shown as such on the records nearly a month and a half later, There could be no conveyance without some one to whom it could be made. The resolutions merely gave authority to convey the stock at some future time.
The book entries, of course, conveyed nothine
The cash dividend indicates nothing other than that the books of the Bank of America N. A. showed that respondent was the owner of stock in the bank. However, the record owner may be entirely different from the actual owner.
The stipulated facts disclose no other evidence tending to show a conveyance, and therefore the finding should not be sustained.
It is quite possible that the evidence might show that respondent received the stock in 1928, but, other than the stipulated facts, there is nothing to show it. It seems to me that the determining factor, in the absence of a conveyance, is when the corporation divested itself of control over the stock. It might have divested itself of control upon assignment of the certificates and delivery to the transfer agent. The facts do not show whether the corporations did or did not assign the certificates. It might have divested itself of control over the stock upon delivery of the new certificates to the trustee, or the evidence might show that corporations were not divested of their control over the certificates until the actual certificates were physically received by the stockholders. Since there is no evidence concerning any of these particulars, I believe the finding of the Board is unsupported by the evidence, and that the decision of the Board should be reversed,