dissenting: Much of the discussion of the problems presented by this case appears to me to be in a never-never land. The basic principles to be considered in a proper analysis of the matter in controversy were set forth in Morrissey v. Commissioner, 296 U.S. 344. The decisions in the field up to the time of that case had been regarded as “ ‘seemingly in a hopeless state of confusion,’ ” 296 U.S. at p. 347, and the Supreme Court granted petitions for certiorari in Morrissey and three other separate cases,1 with the obvious purpose of clarifying the situation. Its opinions in all four of these cases, considering the problem in the light of four different sets of facts, laid down the basic principles which should be controlling here. And I do not understand that even a single member of this Court would hold that, measured by those principles, a result opposite to that reached by the majority would not be called for.
The decision of the majority is based upon (1) a conclusion that only two of four criteria described in the regulations support corporate classification here, and (2) the mechanical application of a supposed rigid numerical requirement that more than half of the criteria must be satisfied. It refuses to find that certain corporate characteristics, other than the four, are also present in this case; and it concludes that since, in its view, only two of the four criteria support corporate classification, neither organization here in controversy can be treated as a corporation, notwithstanding that as a whole each may sufficiently resemble a corporation to be so classified within the Morrissey doctrine. I do not think that any such simplistic, and obviously erroneous, result is required by the regulations.
As Judge Simpson’s dissenting opinion points out, there is ample room within the structure of the regulations to reach a result in consonance with the principles laid down in Morrissey. A hospitable reading of those regulations — with a view to bringing the result within the principles of Morrissey upon which the regulations were based — would lead to a correct disposition of this case. As is made abundantly plain in Judge Simpson’s opinion, such a reading of the regulations would make clear not only that at least three of the four criteria are satisifed here but also that “other characteristics” in addition support corporate classification. Thus, even if a mechanical numerical test were applied, as was done by the majority, a result compatible with Morrissey would be attained, without even considering the possibility that the regulations might be invalid if they required a conclusion in conflict with the controlling decision of the Supreme Court in Morrissey, as suggested in the dissenting opinions of Judges Drennen and Quealy. Certainly, it should not be necessary to await future clarifying modifications of the regulations before a result in conformity with the principles of a Supreme Court opinion can be reached.
Drennen and Simpson, JJ., agree with this dissent.Swanson v. Commissioner, 296 U.S. 362; Helvering v. Combs, 296 U.S. 365; Helvering v. Coleman-Gilbert, 296 U.S. 369.