Court Opinion

ID: 9643195
Source: CourtListenerOpinion
Date Created: 2023-08-22 20:21:30.423172+00
Date Added: 2024-06-11T18:10:58.039320
License: Public Domain

JONES, Circuit Judge,
(dissenting).
The partners of N. W. Ayer & Son, of whom the present plaintiff was one, became the owners, in like proportional interests, of the whole of the capital stock of a corporation known as N. W. Ayer & Son, Inc., which, as stipulated at the trial below, “received the property formerly held by the partnership”. The trial court found that “On May 21, 1929, the partners formed a corporation, to which they conveyed the partnership assets, taking stock in proportion to their respective interests in the partnership.” This finding is neither assigned for error nor is it otherwise complained of.
On the basis of the finding thus made, the court below concluded, as a matter of law, that the plaintiff partner, upon sale of his stock interest in the corporation in 1934, could tack on the period of time during which he had held his partnership interest to the period during which he had held his stock interest in the successor corporation, for the purpose of determining the percentage of capital gain subject to tax under § 117(a) and (c) of the Revenue Act of 1934, 26 U.S.C.A. Int.Rev.Acts, p. 707.
The majority of this court, while conceding the validity of the rule of law which the court below applied, deny any basis in fact for the rule’s applicability to the instant case on the ground that, under the stipulated facts, it may be that the assets of the partnership were first divided among and transferred to the partners individual*156ly according to their respective interests and that the several partners, as the individual owners of the specific property which constituted the erstwhile assets of the partnership, then transferred such assets to the corporation. This assumption appears to me to be wholly gratuitous in the light of the facts found by the trial court. But, even if the assumption were a permissible inference, it was never more than an inference and by no means an exclusive one. In such a circumstance, the case should be returned to the court below for more revealing proofs to the end that the matter might be decided upon no less than what were the actual facts which, presumably, the parties had undertaken to stipulate. The fact that the parties essayed to stipulate the material facts makes it plainly evident that what they intended to submit for court adjudication was the controverted question of law involved and not a dispute of fact. However, I think that the learned judge of the District Court correctly applied the pertinent law to a factual situation which he competently found and which is not disputed. I should, therefore, affirm the judgment.