*388OPINION.
Lansdon:The four issues involved in this proceeding will be discussed and decided in the order in which they are set forth in our preliminary statement, supra. The evidence discloses that the petitioner set apart 25 per cent of the total monthly receipts from the sale of burial lots as a fund for the perpetual care of such lots; that salesmen employed by the petitioner were instructed to call the attention of all purchasers of lots to the provision for perpetual care; that each deed conveying title to burial lots sold by the petitioner contained a perpetual care guaranty; that 25 per cent of all receipts from the sale of burial lots was transferred to the perpetual care fund at the end of each month; that the perpetual care' fund was deposited in a special bank account designated as “ Trust Fund for Perpetual Care ”; that the principal amount of such fund was invested in income-producing securities and was maintained inviolate for the purpose for which it was set apart.
The Board has decided the following cases involving similar questions — Los Angeles Cemetery Association, 2 B. T. A. 495; *389Greenwood Cemetery Association, 2 B. T. A. 910; Springdale Cemetery Association, 3 B. T. A. 223; and Metairie Cemetery Association. 4 B. T. A. 903 — all, except that of the Springdale Association, in favor of the petitioners.
The Springdale Cemetery Association case was decided in favor of the respondent. It differed from the instant case in the following particulars. The Springdale “ corporation’s by-laws contained no provisions for appropriating any part of the receipts from the sale of lots as such perpetual care fund, and no resolution to that effect was passed by the directors.” In the instant case such a resolution was duly passed by the directors. The Springdale Cemetery certificates of purchase covering each lot sold contained the following:
The Association will clean and keep in proper order, tlio surface of, and the walks belonging to, the above lot, without further charge, during the existence of said Cemetery.
This was hardly equivalent to an agreement for perpetual care. Such agreements usually extend also to the care of shrubbery and trees, the stones which mark the graves, and such markings as may be used to indicate the boundaries of the lots. Each of the Inglewood Cemetery deeds of conveyance of lots contains the following:
Said lot is granted with right to the grantee to perpetual care thereof by and at the expense of said Cemetery Association.
But if possible, a clearer and more pronounced difference lies in the fact that the officials and other salesmen of the Inglewood Association were instructed by those in charge to assure all purchasers and prospective purchasers of lots that 25 per cent of the purchase price would go into a fund for the perpetual care of the lots, and such assurance was given. We are of the opinion that this promise did not vary the terms of the written contract between the owners of the cemetery and the purchasers of its burial lots, but made the assurance as to its meaning doubly sure to both. It was in the nature of a perpetual reminder of the meaning of the contract. However, admitting for the sake of a more complete examination of the facts, and only for that purpose, that the writings did not constitute a contract for the creation of a perpetual care fund of 25 per cent of the monies received for burial lots, then, and in such case, the parol agreement, not being in contravention of the writings, would itself become an enforceable agreement. In our opinion in the case of Metairie Cemetery Association, supra, at pages 909 and 910, we said:
The great weight of authority is to the effect that the statute of frauds does not extend to trusis of personal property and that such trusts may be created and proved by parole. Chew v. Brumagen, 13 Wall. 497; Allen v. Withrow, 110 U. S. 119; Trubey v. Pease, 240 Ill. 513; 88 N. E. 1005; Coyne v. Supreme *390Conclave, 106 Md. 54; 66 Atl. 704; Bork v. Martin, 132 N. Y. 280; 30 N. E. 584; Pittman v. Pittman, 107 N. C. 159; 12 S. E. 61.
There is no conflict in the evidence here with respect to the contracts. The evidence is that at the time the contracts were entered into it was agreed that the money would be held in trust for the specific purposes of the contract. This being true, we are of the opinion that a valid trust was created by parole in those contracts where there was no specific provision to that effect. The only reason that certain of the contracts contained that express provision was the fact that those lot owners insisted upon the agreement being included in writing in the contract. The same agreement, however, was actually made with all of the lot owners verbally.
The funds received by the taxpayer from the lot owners having been received in trust for the specific purpose of caring for and maintaining burial places gave rise to no taxable income to the taxpayer. See Appeal of Los Angeles Cemetery Association, supra.
A marked difference between the Springdale case and this is found in the laws of the States within which the two cemeteries are located. The Springdale Cemetery was governed by the laws of Illinois. We stated in our opinion in that case that:
The taxpayer voluntarily set up a reserve based on an estimate, but there is lacking the clear evidence necessary to establish a trust. So far as the record shows, the directors might at any time reduce the fund or perhaps wipe it out, without restraint, their liability, if any, being one for breach of covenant or contract.
In the instant case the association is governed by the laws of the State of California. As we said in our opinion in the case of the Los Angeles Cemetery Association, supra, at pages 496 and 497:
Regarding contracts between cemetery corporations and lot owners, the statute provides as follows:
“Any cemetery corporation or association under contract for the perpetual care of a certain lot or lots in the cemetery of said corporation or association, is hereby expressly forbidden to use the funds received for the perpetual care of any lot or lots under such contract or contracts, for any other purpose than to provide the perpetual care mentioned in said contract, and it shall be the duty of the board of directors or board of trustees of a cemetery corporation or association receiving funds from perpetual care contracts to invest or reinvest such funds in bonds of the United States or the State of California, or in first mortgages on real estate, or in centrally located income producing improved real estate in any city or city and county in this State. (Civil Code, see. 617.)”
We are clearly of the opinion that the purchase price of the burial lots in the Inglewood Cemetery was in each instance paid to the association under a contract, one condition of which required that a certain fixed percentage thereof should be used for the perpetual care of the lots purchased; that under the laws of California the association was expressly forbidden to use it for any other purpose, and that this constituted the amounts so received a trust fund from the very instant they passed into the hands of the association.
Having determined that 25 per cent of the amo'unts received from the sale of burial lots becomes a trust fund for the perpetual care of *391such lots from the date of payment by the purchaser, it follows that issues 1 and 2 must be determined in favor of the petitioner. The additions to the principal of the trust fund were not income to the petitioner, and therefore can not be included in Statutory invested capital as earned surplus. The income received from the investment of the trust fund can not properly be used for any purpose except perpetual care of burial lots sold by the petitioner. We are of the opinion that, like the principal amount of such fund, the interest thereon is not income, but is a liability for which the petitioner must account to the beneficiaries of the trust created by its acts and policies. In the instant proceeding, however, there is no evidence to enable us to identify this income, as it was used for corporate purposes, including the care of burial lots under the guaranty made to purchasers. The determination of the Commissioner as to this point, therefore, is not disturbed. Greenwood Cemetery Association, supra.
The parties agree that at March 1, 1913, the improved lands of the petitioner had a value of 41.65 cents per square foot, and that the cost of converting unimproved cemetery acreage into improved burial lots was 10 cents per square foot. Nelying on this stipulation, the petitioner contends that the value of its unimproved cemetery acreage at March 1, 1913, was 31.65 cents per square foot. The Commissioner denies such value and has determined a value about one-tenth as great, or about $1,500 per acre.
In support of its contention for a high value at March 1, 1913, the petitioner adduced evidence that at that date restrictive ordinances of the City of Los Angeles, the City of Inglewood, and the County of Los Angeles, had been enacted and were then in effect, which assured it against competition thereafter. We are also asked to take notice of the great growth in population of the Los Angeles metropolitan district between 1906 and 1913, and the consequent rapid increase in the value of land. The Commissioner rejects the basis of value employed by the petitioner, and has determined that such unimproved acreage had a value of not more than $1,500 per acre at the basic date. We believe that the fair market value or price of this land lies somewhere between these very widely separated extremes, and have fixed the value of the petitioner’s unimproved acreage of cemetery lands at March 1, 1913, at 15 cents per square foot.
Judgment will be entered on HO days’ notice, under Rule 50.
Murdock, Phillips, Smith and Trammell concur in the result only.