Court Opinion

ID: 6889593
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:38:00.290744+00
Date Added: 2024-06-11T16:05:48.469771
License: Public Domain

BIGGS, Circuit Judge
(concurring in part and dissenting in part).
Though adhering to the views expressed by this court in Lehigh Structural Steel Co. v. Commissioner, 127 F.2d 67, and Eljer Co. v. Commissioner, 134 F.2d 251, I must dissent in part from the conclusions reached by the majority. The Tax Court found that the petitioner possessed the financial ability to set aside the sum of “$7,336.10” in addition to the $55,308.65 expended by it during 1937, which would have freed the petitioner of the contract restrictions against paying dividends on its common stock. Whether or not the petitioner possessed that financial ability was strictly a question of fact and its determination was peculiarly within the province of the Tax Court. Dobson v. Commissioner, 320 U.S. 489, 64 S.Ct. 239; Elmhurst Cemetery Co. v. Commissioner, 300 U.S. 37, 57 S.Ct. 324, 81 L.Ed. 491. *618Cf. Commissioner v. Oswego Falls Corp., 2 Cir., 137 F.2d 173, 176. This court substitutes its judgment for that of the Tax Court in determining that question. In my opinion this constitutes error.
■ I should be in favor of affirming the decision of the Tax Court were it not for the fact, clearly apparent from the record, that the tribunal committed error in finding that only the sum of $7,336.10 was required to be expended or set aside by the petitioner for the purchase or retirement of its preferred stock in order to fulfill its contract. The additional amount required was not $7,336.10 but $11,056.79. The decision should be reversed and the cause remanded in order that the tax tribunal may determine whether the petitioner was financially able to make the additional payment or to set aside the larger sum referred to. The difference in amounts may not be treated as immaterial. See Auto Interurban Co. v. Commissioner, 40 B. T. A. 161; Trianon Hotel Co. v. Commissioner, 44 B. T. A. 1073, 1081; Kilby Steel Co. v. Commissioner, 41 B. T. A. 1237.