dissenting: The question is whether the petitioner’s proportionate part of the dividend declared by the corporation in 1922 was a cash dividend or a stock dividend. It is true that the stock had already been issued in 1920, but it was issued pursuant to and in accordance with an understanding previously had that it was to be paid for by the stockholders out of dividends to be declared by *442the corporation out of earned surplus existing or out of dividends to be declared out of subsequent earnings. The dividends here involved were declared out of subsequent earnings. I see no difference in principle between a case where the stock had already been issued and was to be paid for out of future dividends and a situation where there is a definite agreement and understanding that stock is to be issued for dividends declared. The real question to be determined is whether the stockholders actually received anything by way of earnings from the corporation which became separated from their capital. The stockholders, when the dividends were declared, had no option either to receive cash or stock. They had already received stock and under the prearranged plan were not actually to receive cash, but the dividends were to be and were merely applied on the stock subscription. They could be used for no other purpose. I think, under the circumstances, that such dividend was in effect' no more than a stock dividend and is not taxable. Following the principles of the cases of United States v. Mellon, 281 Fed. 645, and United States v. Davison, 9 Fed. (2d) 1022, wherein certiorari was denied by the Supreme Court, I can reach no other conclusion.