Court Opinion

ID: 4489172
Source: CourtListenerOpinion
Date Created: 2020-01-17 22:01:42.256198+00
Date Added: 2024-06-11T15:03:54.221821
License: Public Domain

Murdock,
dissenting; I dissent from the prevailing opinion in this case, which holds that, since the parties to the agreement of December 22 did not intend that title to one-half of the stock should pass in the year 1920, therefore, one-half of the profit was not taxable in that year. This opinion also states that the fact that Hedrick did deliver the stock to Tribou in 1920, and in the same year received a check for $68,125 in payment- for the stock from Tribou, does not affect the case. I can not agree with this reasoning. The method used by the petitioner in keeping his books and making his income-tax return has not been shown. The case of John A. Brander cited is not in point. If the petitioner used some accrual method, then it seems to me the Commissioner’s determination is correct, for upon the delivery of the stock to Tribou under the circumstances stated, a right to receive the agreed purchase price would immediately accrue to the petitioner. It does not appear that he ever repudiated Hed-rick’s act in delivering the stock and receiving the check in 1920. On the contrary, he apparently ratified this act. It will be noted that this act was not in accordance with the agreement of the parties and therefore the original intent of the parties would make no difference because their agreement was not carried out. Furthermore, *264even if the petitioner used the cash method of keeping his books and reporting his income, since as I say, he apparently ratified Hedrick’s unnoticed act, it might be that he received the equivalent of cash in the year 1920, but it is not necessary to discuss this question in a dissenting opinion.
Smith agrees with this dissent.