Alabama Asphaltic Limestone Co. v. Commissioner

Disney,

dissenting: I agree with all that Mr. Murdock has said in his dissent. In addition, even if we assume reorganization and the applicability of section 112 (b) (4), in spite of the fact that the section applies only where the exchange is solely for stock or securities, and such was not the case here, we would still be under the necessity of considering the modification of section 112 (b) (4) by section 112 (d). Under section 112 (d) it is necessary to inquire whether the corporation receiving “other property or money” distributes it in pursuance of the plan of reorganization. If such distribution does not take place, gain is recognized not in excess of the money and value of other property received. This whole question the majority opinion does not consider, though money was in fact received, a dividend paid *339only to nonassenting creditors, administration costs and receiver’s certificate and preferred paid claims. In addition, there was an obligation to pay A. Iselin & Co. $40,000, apparently on behalf of the old corporation. I think we should have considered the application of United States v. Hendler, 303 U. S. 564, to these obligations and therefore should have considered adjustment of base under section 112 (d), and that without examination of such questions the case is not completely disposed of, even on the theory that there was reorganization, with which I disagree. I therefore dissent.

Mellott agrees with the views expressed in both of the above d issents.