Court Opinion

ID: 9448940
Source: CourtListenerOpinion
Date Created: 2023-08-03 23:50:26.106646+00
Date Added: 2024-06-11T17:31:37.298678
License: Public Domain

WHITAKER, Judge
(dissenting).
I respectfully dissent from the opinion of the majority. Under the terms of the merger of Cortland Equipment Lessors, Incorporated, into plaintiff, Safeway Stores, Incorporated, plaintiff assumed all obligations and liabilities of Cortland. It, therefore, assumed Cortland’s liability on the debentures. The corporate existence of Cortland ceased when the merger was consummated, and plaintiff, by the terms of the merger became primarily, indeed solely, liable on the debentures which had been issued by Cortland. Cf. Koppers Co., Inc. v. United States, 134 F.Supp. 290, 133 Ct.Cl. 22. It seems to me to follow from this that the debentures issued by Safeway after the merger were not evidence of a new obligation of Safeway; it was already primarily responsible on the debentures issued by Cortland. The debentures issued by Safeway were merely in lieu of, to take the place of, obligations on which it was already primarily liable. The terms of the Safeway debentures were identical with the terms of the Cortland debentures, including the maturity dates of the two. The debentures issued by Safeway, therefore, it seems to me, cannot be a “new issue”.
Had there been no merger and had Cortland continued in existence and, under these circumstances, had Safeway issued its debentures in substitution for the Cortland debentures, I would agree that this was a new issue and subject to the stamp tax. But, after the merger Cortland ceased to exist and plaintiff became primarily liable on the Cortland debentures. The debentures it issued, therefore, it seems to me, were not a new issue, but merely evidence, in a different form, of an obligation on which Safeway was already primarily liable.
For this reason I respectfully dissent.
LARAMORE, Judge, joins in the foregoing dissent.