dissenting: The contract between petitioner American Range Lines, Inc., and the American Liberty Steamship Corporation, which initiated the business relationship between the parties, repeatedly referred to that relationship as a “joint venture.” This contract is set out in full as an exhibit to the stipulation of facts herein and, as such, is incorporated in the findings of fact. The parties to the contract agreed that one of the contracting parties, American Range Lines, Inc., should modify its structure and bylaws in such a way that each of the other two contracting parties would have exactly equal control therein and that this corporation as modified should be the agency through which the joint venture should be administered. The parties to the agreement banded together to carry out a definite project. They agreed to share all profits and losses and agreed that when the specific project was completed American Liberty Steamship Corporation would surrender all interest in American Range Lines, Inc. (renamed American Range-Liberty Lines, Inc.) and that all accumulated capital would be divided between petitioner and American Liberty Steamship Corporation.
This enterprise was called a joint venture by its participants; it had all the essential characteristics of a joint venture; and I disagree with the majority view that it was not a joint venture.
The case of First Mechanics Bank of Trenton v. Commissioner, 91 Fed. (2d) 275, containing facts practically on all fours with those at bar, comes to a conclusion differing from that of the majority opinion herein, and 1 believe correctly states the law. In the First Mechanics Bank case the Commissioner contended that the money received by the taxpayer in settlement with the taxpayer’s coventurer was merely money paid by the corporation created to carry out the joint venture as compensation for anticipated wages. The court therein held that the money received in settlement was capital gain from a joint venture. In the case at bar the Commissioner contends, under almost identical circumstances, that the money received by the taxpayer in the settlement represented in part dividends and in part ordinary income. The reasoning in the First Mechanics Bank case would seem to require the petitioner’s income to be taxed as capital gains.