dissenting: I am unable to agree to the holding of the majority that Gladys M. Harmon was not a member of the partnership of Kuhlmann & Harmon Machine Shop, the name of which was later changed to Kuhlmann & Harmon Machine Tool Co. This holding of the majority is based upon an ultimate finding of fact which reads as follows:
The partnership here in question was formed July 1, 1942, with an intent on the part of Jack D. Harmon and his copartners, in good faith and acting with a business purpose, that he join together with them in the present conduct of the enterprise. Jack D. Harmon was a partner in the operation of the business in 1942,1943, and 1944.
No such intent existed as to Gladys M. Harmon, either on her part or on the part of her copartners. Gladys M. Harmon was not a partner in the operation of the business in 1942,1943, and 1944.
I agree with the conclusion in the above finding that Jack D. Harmon was a partner, but I do not agree that Gladys M. Harmon was not a partner. How, in the face of the findings of fact which preceded it, the majority could make a finding that there was no intent that Gladys should be a partner is more than I can see. It seems to me that it is a finding which is wholly unjustified by the facts. To use the language of the United States Court of Appeals for the District of Columbia in the recent case of Wenig v. Commissioner, decided July 18, 1949, reversing a memorandum opinion of the Tax Court:
We neither question nor depart from the findings of basic facts as made by the Tax Court. But we think its conclusions are not within the realm of legitimate inference from the record as a whole or from the specific facts found. * * *
Such is my view in the instant case. I do not comprehend the logic of the finding that Mrg, Harmon was not a member of the partnership. She signed the very same partnership agreements that the other members signed. When the business was finally incorporated on or about September 30, 1945, she received her portion of the corporate shares, which was 166, thus clearly indicating that her interest was recognized from the time of the first partnership in 1942 until the business was incorporated in 1945. It is true that Mrs. Harmon did not contribute any capital which “originated with her” as that phrase was used by some prior to the Supreme Court’s decision in Commissioner v. Culbertson, 337 U. S. 733. But the Supreme Court made it clear in the Culbertson case that the contribution of so-called “original capital” is not necessary in order for one to become a member of a partnership. On that point, the Supreme Court said:
Tbe Tax Court’s isolation of “original capital” as an essential of membership in a family partnership also indicates an erroneous reading of the Tower opinion. We did not say that the donee of an intra-family gift could never become a partner through investment of the capital in the family partnership, any more than we said that all family trusts are invalid for tax purposes in Helvering v. Clifford, supra. The facts may indicate on the contrary that the amount thus contributed and the income therefrom should be considered the property of the donee for tax, as well as general law purposes. * * *
In the instant case the findings of fact of the majority contain the following paragraph:
On July 1, 1942, the effective date of the partnership agreement, Grover F. Kuhlmann and William F. Harmon assigned in equal parts to Daisie E. Kuhl-mann, Gladys M. Harmon, Frederick Kuhlmann and Jack D. Harmon all their right, title and interest in a certain account receivable in the sum of $44,330.12, due the assignors as of July 1, 1942, from Boeing Airplane Company, Wichita, Kansas. As of the same date Grover F. Kuhlmann and William F. Harmon gave to each of their respective sons and wives the sum of $8,351.30 in the form of a personal check in that amount delivered to each of them. Grover F. Kuhlmann and William F. Harmon paid gift taxes on these transfers, The four recipients of these gifts immediately contributed them to the partnership as their capital contributions, so that as of July 1,1942, the capital account appeared as follows:
Total G. P. Kuhl-mann Daisie E. Kublmann Frederick Kuhlmann W. F. Harmon Gladys M. Harmon Jack D. Harmon
$158,790.27 $40,670.83 $19,433.83 $19,433.83 $40,384.12 $19,433.83 $19,433.83
If the foregoing facts, taken in connection with other undisputed facts in the record, do not make Gladys a member of the partnership, then I fail to understand the meaning of the Supreme Court’s decision in the Culberston case. It is my view that the facts of the instant case clearly show that it was the intention of all the parties who signed the partnership agreement that Gladys M. Harmon should become a member of the partnership, that thereafter she was recognized as a partner in the business and did, in fact, become a member, and there is no reason to hold that she was not a partner if the Supreme Court’s decision in the Culbertson case is to be given effect.
I, therefore, dissent from the majority opinion wherein it holds that Mrs. Harmon was not a partner.
Van Fossan, J., agrees with this dissent.