Court Opinion

ID: 4479353
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:13:37.306651+00
Date Added: 2024-06-11T15:03:32.328134
License: Public Domain

Raum, J., concurring: We have before us a cynical transaction of highly doubtful morality. It is difficult to believe that the Illinois laws providing for the creation of the charitable organization here involved were ever intended to generate property interests in the hands of these petitioners which could be the subject of traffic for gain. The privilege of serving the charitable institution embodied in the so-called certificates of membership was not a property right susceptible of being bartered in the market place like shares of corporate stock. Such “certificates” were wholly unlike certificates of corporate stock which reflect a property interest in the corporate enterprise and an equity in its assets. Petitioners had no property rights whatever with respect to the charity, and they simply relinquished their memberships in circumstances assuring the acceptance of others as members in their place. Whether the large sums of money involved were paid merely for the privilege of obtaining lucrative association with the charity in the practice of medicine or whether the so-called purchasers intended in some undisclosed manner to benefit privately or otherwise from the assets or substantial surplus of the charity are matters upon which it is not necessary to speculate. The point is that petitioners had no property rights to sell within the meaning of the capital gains provisions. Not everything that is “sold” is “property” within the meaning of these provisions. As was stated in this connection in Miller v. Commissioner, 299 F. 2d 706 (C.A. 2, 1962), affirming 35 T.C. 631, “many things can be sold which are not ‘property’ in any sense of the word. One can sell his time and experience, for instance, or, if one is dishonest, one can sell his vote; but we would suppose that no one would seriously contend that the subject matter of such sales is ‘property’ as that word is ordinarily understood.” Similar considerations are pertinent here. No part of the profit realized in this case was attributable to the sale of a “capital asset,” a term which must be “narrowly” construed. Corn Products Co. v. Commissioner, 350 U.S. 46, 52. The entire gain was ordinary income, and not capital gain. A contrary view would make sweet indeed the uses of charity. Tietjens and Withey, JJ., agree with this concurring opinion.