dissenting: I find myself unable to agree with the majority opinion. I think a closer scrutiny of the case will show nothing more than an awkward attempt between two honest but uninformed men, acting under poor advice, to sever the joint ownership of property which their toil had built up, in a way to leave each in possession and ownership of his own part. A superficial view of the case shows only the method used by them; a deeper view discloses the true intent and purpose to do that which no statute ever intended or attempted to tax.
*871The stock of the corporation was beld in equal moieties by Wood and Iverson. Personal differences between the two stockholders made their separation advisable. But separation of the property, principally standing trees, was not a simple matter like- dividing personal property between two individuals. Standing timber is real estate and is partitioned like land. Value for sawmill purposes of a tract of timber may be materially lessened by a division; and a quick sale for partition of such a large holding, estimated at two hundred million feet, could not reasonably have been made without much sacrifice of value. Trees severed from the land and manufactured into lumber become personal property. Considering the situation as the evidence pictures it to me, the natural thing for the two men, in their perplexity, to have done was to convert enough of their assets into liquid form to compensate one of them for his interest, leaving the other to proceed with the remaining assets as he might see fit. This is what I understand the two men undertook to do. Wood’s interest in the corporate property was adjudged between them to be one half the book value of the assets, or $560,000. If he received that much out of the assets, he should no longer claim an interest in the corporation or its property. Iverson had no money with which to buy Wood’s stock and in that way retain the whole property for himself, and he never agreed to undertake to do so, as will appear when the contract is held and considered by its four corners. Iverson was willing to and did agree to cause the corporation to convert timber into lumber and it into money to be distributed through him to Wood until Wood’s interest should be thereby wholly withdrawn from the corporation and Iverson should be, in the process, left the owner, through his stock in the corporation, of its remaining assets. Iverson further agreed that he would forego all dividends or distributions to himself by the corporation till Wood was paid for his interest in the property. The installment payments were by the contract to be measured by, and contingent upon, the amount of timber cut and sold from the corporation’s holdings. Incidentally, $3 per thousand feet for the stumpage of two hundred million feet of timber held by the corporation would approximate Wood’s interest' as calculated. If, however, it was intended, as the majority opinion seems to hold, that Iverson, under the contract, was to receive one half of the assets of the corporation thus converted into lumber by way of dividends to himself, and with the cash derived from the sale thereof purchase Wood’s stock in the corporation, in the end Iverson would have had twice as many shares of stock in the corporation, but the corporation would have had only one half as much assets and Iverson’s 100,000 shares of stock would have been of a value no greater than his 50,000 before the deal.
*872The Board had a very similar case before it in George Youell, 18 B.T.A. 599. There Youell and Garretson were the sole stockholders, each owning 500 shares, of the Pacific Fruit & Produce Co. Personal differences arose between the stockholders and they desired to separate. Neither had the money with which to buy out the other. Some employees were willing to buy Garretson’s stock on terms that he would not accept. Youell relied on the employees to purchase the stock later, and entered into a contract with Garretson wherein he agreed to purchase from Garretson, and Garretson agreed to sell to Youell, Garretson’s stock at the price of $272,168.32. Garretson endorsed his stock and placed it in escrow with a bank. The Pacific Fruit & Produce Co. declared a dividend out of surplus accumulated after March 1, 1913, of cash and property to Garretson and Youell in equal amounts; and under the direction of Youell his dividend of more than $65,000 was delivered toi Gar-retson as part payment for the stock. Youell then gave Garretson his promissory note for the balance of the purchase money for the stock. The notes were later paid and the stock released from the escrow. In an opinion reviewed by the Board, without a dissent, we held Youell was not taxable on his dividend. This result was arrived at solely by looking through the taxable form of the transaction to the true intent and purpose of the parties.
Arundell and McMahon agree with this dissent.