*1707 The respondent has failed to show that the petitioners are liable as transferees of the assets of the taxpayer.
*19 The Commissioner notified these petitioners that he proposed to assess the following liabilities against them as transferees of the assets of Metro Pictures Corporation, Boston, Mass., for income and profits taxes due from the latter in the amounts of $10,336.87 and $19,964.41 for the years 1917 and 1920, respectively:
| Petitioner | Docket No. | Amount |
| American Feature Film Company | 27623 | $30,301.28 |
| Maurice Tobey | 27624 | 3,787.66 |
| Edward A. Golden | 27625 | 13,635.58 |
| Louis Rosenberg | 27626 | 3,030.13 |
| David Stoneman | 27627 | 3,030.13 |
| Albert A. Ginsberg | 27628 | 2,525.11 |
| Nathan A. Ginsberg | 27629 | 1,262.54 |
| David A. Lourie | 27630 | 3,030.13 |
At Docket No. 4437 this Board redetermined the deficiency of Metro Pictures Corporation of New England for 1917 to be $6,162.48. No appeal was taken within the time allowed.
These cases were consolidated. The petitioners offered no evidence.
FINDINGS OF FACT.
The American*1708 Feature Film Company is a Massachusetts corporation which has its principal place of business in Boston. The other petitioners are individuals. David A. Lourie resides at Roxbury, Mass. The Metro Pictures Corporation of New England, the taxpayer, was a Massachusetts corporation which was dissolved on June 6, 1920.
On June 26, 1920, the Metro Pictures Corporation, a New York corporation, Metro Pictures Corporation of New England, and American Feature Film Company entered into an agreement. In this agreement the first named corporation is referred to as "Metro," the second as "Exchange," and the last as "Owner." The agreement recites that Metro, having the exclusive right to distribute certain pictures throughout the world, had granted the New England rights to Exchange on March 24, 1915; Exchange had leased certain pictures under the contract; Exchange had sold and transferred to Owner all of its rights in such pictures "by deed executed simultaneously herewith"; and Owner owned certain accessories and had leased certain premises useful and necessary in connection with distributing the pictures.
The contract further provided that Owner sold to Metro its right, title and interest*1709 in and to the above mentioned pictures and property in consideration of Metro assuming certain indebtedness for deposits made by exhibitors, canceling debts owed Metro by Exchange and Owner, and paying to Owner $148,579.42 in stock of Loew, Inc., *20 at $30 per share and 20 per cent of receipts on contracts already made with exhibitors.
The contract was carried out in accordance with its terms.
On September 3, 1920, at the direction of Metro of New York, Loew, Inc., issued to the American Feature Film Company certificates for 4,952 shares of Loew, Inc., stock. Part of the above stock was transferred by the American Feature Film Company as follows:
| Transferee | Date | Number of shares |
| David A Lourie | Sept. 18, 1920 | 500 |
| Maurice Tobey | do | 600 |
| David Stoneman | do | 552 |
| Nathan Ginserg | Sept. 20, 1920 | 100 |
| Albert A. Ginsberg | do | 400 |
| Louis Rosenberg | do | 300 |
| Sept. 18, 20 | ||
| Strangers to this proceeding | Oct. 16, 1920 | 2,400 |
The value of a share of this stock on various dates is shown below:
| September 3, 1920 | $20.37 1/2 |
| September 18, 1920 | 21.43 1/2 |
| September 20, 1920 | 21.75 |
In 1920 the same individuals owned the stock of the*1710 two corporations, Metro Pictures Corporation of New England and American Feature Film Company, and each owned the same proportion of the one as he owned of the other. The individual petitioners herein were all stockholders of these two companies in 1920.
The Commissioner assessed the taxes in controversy against the taxpayer, Metro Pictures Corporation of New England, on April 23, 1923. These taxes had not been paid up to May 18, 1931. Distraint warrants were returned without finding any goods of the taxpayer.
OPINION.
MURDOCK: Section 602 of the Revenue Act of 1928 amends Title IX of the Revenue Act of 1924 as amended by adding a provision that, in transferee proceedings before the Board, the burden of proof shall be upon the Commissioner to show that a petitioner is liable as a transferee of property of a taxpayer. In these cases the counsel for the Commissioner has submitted certain proof for the purpose of sustaining this burden. The only question is, Has he succeeded? He argues that the Metro Pictures Corporation of New England, the taxpayer, by the agreement of June 26, 1920, sold all of its assets to Metro of New York in exchange for Loew, Inc., stock and then*1711 distributed this stock in complete liquidation to the *21 petitioners, its stockholders. One fatal defect in this argument is that it is not supported by the facts in evidence.
The respondent suggests no reason why the American Feature Film Company should receive any share in a distribution of the assets of the taxpayer. Although there is a statement in the respondent's brief that Golden received 300 shares of the Loew, Inc., stock on September 20, 1920, that fact does not appear from the evidence. @ Golden was one of the respondent's witnesses, and he was permitted to make a number of loose answers, some of which are contradicted by more reliable documentary evidence. One such statement was that he, as owner of 45 per cent of the American Feature Film Company stock, received 45 per cent of the Loew, Inc., stock. We might assume that he received some of the latter stock, but we still would not know the value of what he received at the time he received it. Cf. ; ; *1712 ; .
The taxpayer and the American Feature Film Company seem to have been closely associated, but there is no evidence of bad faith in any of the transactions material hereto. Cf. . We do not know what the latter paid for the former's rights in the leased films, but we can not assume that the transfer was without adequate consideration. The evidence does not disclose whether or not the taxpayer had any other assets or what was done with any that it might have had. But it clearly appears that the Loew, Inc., stock was delivered to the American Feature Film Company as part consideration for the transfer by it of certain of its assets to Metro of New York and all but 100 shares of the stock was distributed by the American Feature Film Company to various persons, including some of the individual petitioners. All of these petitioners were stockholders of American Feature Film Company. There is no justification for inferring from this state of facts that the distribution was of the assets of the taxpayer, to its stockholders, *1713 and in complete liquidation. Even if the distribution had been made by the taxpayer, we could not hold that it was thereby left insolvent. It never paid the tax and it did dissolve, but these facts do not prove insolvency immediately after the alleged distribution. Cf. ; ; .
Judgment of no transferee liability will be entered in each proceeding.