dissenting: The issue before us is one of fact,1 — Did the' decedent and others perform such acts that she acquired the property by gift or otherwise, and owned it when she died? Once the facets are ascertained, there will be no difficulty in applying appropriate principles of law. It is our function to ascertain the facts.
In this forum the burden of proof rests upon petitioners. Respondent determined by his notice of deficiency that this property belonged to decedent when she died. All facts necessary to reach the opposite conclusion must be proved here, and if there is a material failure of such proof the respondent must prevail. Burnet v. Houston, 283 U. S. 223; Reinecke v. Spalding, 280 U. S. 227; United States v. Anderson, 269 U. S. 422.
In 1934 these petitioners made their oath to the fact that the property which is the subject of this proceeding belonged to decedent when she died and was part of her estate.
*77Petitioners are here making a claim which is palpably inconsistent with that solemn statement. But the latter is not contradicted by anything that appears in this record. The majority may assume that it is explained away by the reformation decree. But that clearly is no more than an hypothesis. Petitioners did not take the stand. They did not testify that their statement was erroneous. They did not explain the error if there was one. They did not produce a single witness. There is accordingly not a scintilla of evidentiary justification for making that assumption.
But, even if that were the proffered explanation, it would not suffice without more. For all we know decedent’s title may have rested on a transaction totally distinct from the assignment which was reformed in the state court. If that is not true petitioners could presumably have shown it. But merely producing the decree of reformation accomplishes nothing, since the result is purely a negative pregnant. It meets the respondent’s presumptively correct determination, the petitioners’ statement under oath, and the circumstantial proof,2 to the effect that Mrs. Rhodes owned this property on January 22, 1934, by the claim that she did not get the property on July 30, 1925. The former present the issue here, whatever the state court may justifiably have felt its more limited function to be. Certainly we need not assume, although I recognize that the majority does, that those considerations would have been appropriate or relevant if presented to that court. Cf. Pepper v. Litton, 308 U. S. 295. It seems to me to follow that the reformation decree is of no benefit to petitioners in seeking to persuade us that their own verified admission and the facts appearing from the documents produced, to say nothing of respondent’s determination, should be overthrown.
If the second judgment, the decree of distribution, is relied upon,3 it affords petitioners no greater comfort. That decree was entered, as the proceeding which engendered it was commenced, by agreement *78of all the interested parties.4 No issues were raised by the pleadings.5 There was no real dispute among the “litigants”,6 no substantial difference in their property rights under either hypothesis.7 This Board has consistently held that a state court decree entered under such circumstances is not conclusive, particularly as to a question of fact.8 This principle was not thought to be impeached by Freuler v. Helvering, 291 U. S. 35.9 Indeed, that decision makes it clear that it does not apply to a case where “the proceeding in the state court was a collusive one — collusive in the sense that all the parties joined in a submission of the issues and sought a decision which would adversely affect the Government’s right to additional * * * tax”, supra, at p. 45.
Issues of fact are tendered by the parties.10 They can not be litigated unless they are, and they can not be decided unless they are litigated. It follows that an agreement of the parties to withhold factual issues, whether it be called collusive or not, must have the effect of precluding a decision. Under such circumstances there can be no adjudication which “settles the property rights”, no “judgment which *79fixed the rights.”11 It is the agreement,'not the decree, which has that effect, if anything has. Northern Pacific Railway Co. v. Boyd, 228 U. S. 482, 504. Since there was no decision of the factual issue in the state court proceeding because of the agreement, there is no excuse for abdicating our duty to determine the facts. The state court has not done it for us here, even if it could do so under other circumstances. Cf. Lyeth v. Hoey, 305 U. S. 188; First National Bank in Dallas v. Commissioner, 45 Fed. (2d) 509; certiorari denied, 283 U. S. 845.
The agreement was neither alleged in the pleadings nor mentioned in the decree. The effect upon the Government’s tax claim — apparently the only possible practical result of the litigation — was presumably not disclosed. Collusion is a harsh word and we should not be required to apply it. But the proceeding was unquestionably non-adversary, the result obviously a consent decree. It need not be characterized as fraudulent to be considered ineffectual. Northern Pacific Railway Co. v. Boyd, supra. Even if not collusive in the stricter sense, Lord v. Veazie, 49 U. S. 250, it meets the test laid down in Freuler v. Helvering, supra. From either standpoint that decree, like the other, utterly failed to overcome the factual preponderance of the present record. Fidelity & Columbia Trust Co. v. Lucas, 52 Fed. (2d) 298, 301; reversed on other grounds, 66 Fed. (2d) 116; Ford v. Commissioner, 51 Fed. (2d) 206, 207.
Under the circumstances, the least that should be required of petitioners is that they produce evidence, if they can, that these decrees were not entered by consent, and that the estate tax result was not their only purpose; or, in the alternative, that they accept their responsibility as litigants before this Board and furnish it with the primary evidence. Absent such a record, I am of the opinion that petitioners should not prevail because there is nothing before us to warrant the requisite finding of ultimate fact. That is not a technical matter, nor one depending upon an inadvertent omission or careless oversight. Failure to produce these petitioners and their equally interested brothers and sisters as witnesses can not but suggest that their testimony would be less than favorable.12 It furnishes inadequate support for ignoring the rule which places upon taxpayers the burden of proving necessary facts. Burnet v. Houston, supra. To relax that rule in such a case as this, without an unmistakable mandate in appellate court decisions, can not but result in depriving the tribunals established for that purpose, including this Board, of essential jurisdiction; and, what *80is of infinitely greater moment, in withdrawing from the administrative arm of the Federal Government the indispensable prerogative of maintaining its position in some judicial forum.
TTtt.t. and Disney agree with this dissent.This is demonstrated by the last finding of fact herein.
The documents introduced show that in December 1925 decedent swore that her children had “assigned to me all their joint and several interests in said estate so that I am now the sole individual person interested * * *”; that in the same month decedent received the full consideration for the redemption of part of the stock; that in April and December, 1926, the remaining stock was transferred into her name; that in 1933 she sold a part of the stock and retained the proceeds and at various times all or parts of it were deposited as coUateral to secure her loans; that some was so pledged when she died, and the remainder stood in her name; and that all is disposed of by her will. See Turnbull v. Payson, 95 U. S. 418, 421; Albrecht & Weaver, Inc., 9 B. T. A. 560.
Apparently that is petitioners’ real reliance for they did not take the position even in the state court that the reformation decree settled the ownership of the, property as of decedent’s death. The petition in the distribution action, filed after the reformation decree concludes:
“Whereforh, plaintiffs pray for a decree of this court determining the ownership of all of the property held in the name of Mamie D. Rhodes at the time of her death on January 22, 1934, as between the estate of said Mamie D. Rhodes on the one hand and the plaintiffs and defendants herein on the other, * * [Emphasis added.]
“Whereas, it is thought necessary that a suit be brought in the Circuit Court of the County of St. Louis, Missouri, for the purpose of determining the property owned by said Mamie D. Rhodes at the time of her death * * *.
“Now, Therefore, in consideration of the premises and for the purpose of finally determining and settling the rights of the parties hereto in and to the property mentioned in the last preceding paragraph hereof, * * * it is agreed as follows:
««$*#**
“2. The interest of said Mamie D. Rhodes and of the parties hereto in the real estate standing in the name of Mamie D. Rhodes at the time of her death shall belong to the parties hereto in equal shares.
*******
“4. The remaining 5,000 shares of said common stock of the International Shoe Company shall be divided equally among the four parties hereto, subject to the payment by each of his part of the said debt of $86,745.00 * * *.
i * * * * * *
“6. The above mentioned suit shall be brought by Hugh D. Rhodes and J. Jackson Rhodes individually and as executors of the estate of Mamie D. Rhodes, deceased. * * *.
“7. No party hereto shall hereafter assert that he is entitled to any greater share of the property herein referred to * * V’
The rights of lienors and vendees, who would otherwise have been necessary parties, Fowler v. Hart, 54 U. S. 373, 380, were not in issue. The children, by their agreement, had volunteered to observe interests in this respect which were actually inconsistent with their claims. The decree respected and enforced that protection.
“Moreover, the claimant in the Probate Court and the executor who filed no objections to the claim were one and the same party, a party situation which should not be permitted.” United States v. Mitchell, 74 Fed. (2d) 571, 574.
This probably accounts for the elusive character of the decree which merely directs distribution in the manner prayed for and makes no finding of ownership.
Guaranty State Bank of Greenville, Texas, 12 B. T. A. 543, 547; Edgar M. Carnrick, 21 B. T. A. 12, 23; Allie E. Nicholson, Executrix, 21 B. T. A. 795; Theodore C. Jackson, 32 B. T. A. 470, 481; First-Mechanics National Bank of Trenton et al., Executors, 40 B. T. A. 876; Lewis Spencer Morris, Trustee, 40 B. T. A. 988; cf. Edward T. Blair, 31 B. T. A. 1192.
Both the Jackson and Blair cases were decided after the Freuler case, and purport to follow it. They were written by the same Board Member and both were reviewed by the full Board. They can be reconciled only on one hypothesis, with which the Freuler case, the Blair case in the Supreme Court, 300 U. S. 5, affirming the Board, and Sharp v. Commissioner, 303 U. S. 624, are in complete accord. That is, that a decree entered without contest can not take the place of factual proof.
Schumacher v. Mehlberg et al., 96 Mo. App. 598; 70 S. W. 910; R. S. Missouri, 1929, sec. 932.
Freuler v. Helvering, supra, pp. 43, 46.
“The non-production of witnesses when procurable creates a presumption that their testimony, if procured, would be unfavorable.” Hamel, Practice and Evidence before the U. S. Board of Tax Appeals, sec. 252, citing Alexander v. Blackman, 26 App. D. C. 541; Evans v. Bell, 49 App. D. C. 238.