Court Opinion

ID: 6877961
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:10:36.383256+00
Date Added: 2024-06-11T16:05:31.892065
License: Public Domain

DICKINSON, District Judge
(dissenting).
This dissent is based upon the following considerations:
The contract of a Building and Loan Association with the subscribers to its stock, is, in effect, that the subscriber at his option, may change his status from that of a stockholder to that of a creditor. The option is exercised by a withdrawal notice. After that the former stockholder becomes a creditor. It is true that he cannot enforce the payment of what is due him, *466if the association is not in funds, but this inability to collect does not change his status. As debtor and creditor the Association and former stockholder may agree upon the payment of a less sum than that claimed, in satisfaction of the debt. The creditor suffers a loss of the difference. In like manner the parties may treat real estate or other property, as money, and the Association may convey or transfer it in satisfaction of the debt. In such case the gain or loss of the creditor is measured by the value of what he has received. The transaction in this respect does not differ from the like settlement by any other debtor and creditor. It may be that, if the Association is insolvent, the .transaction may be questioned by other creditors as in fraud of them. In the instant case the debtor has not been adjudged to be insolvent, and if a like settlement could be made with all its withdrawing stockholders, would not be. It is likewise true that if the conveyed real estate proves to have its book value, there would be no loss. The case has been ruled however on the agreed fact that there has been a loss and what it is. The only question is whether the taxpayer should be allowed for it in his tax return. This dissent is based on the proposition that he should. This is not a case of liquidation but the simple part payment of a debt.