*1017 Held that on the receipt in 1928 of certain property in settlement of pending litigation petitioner received income.
*14 This proceeding was brought for the redetermination of a deficiency in income tax for the year 1928 amounting to $59,475.24. The controversy concerns the respondent's inclusion of the sum of $456,405 in the petitioner's income for that year, this amount being the value of certain property transferred to the petitioner in settlement of a suit in equity.
The facts were stipulated. From the stipulation and the exhibits attached thereto we find the following pertinent facts.
FINDINGS OF FACT.
The petitioner was and still is a corporation duly organized under the laws of the State of New Jersey and was and still is a public carrier for hire engaged in the transportation of passengers and freight in interstate and intrastate commerce.
*15 From 1908 to July 1, 1921, Henry L. Joyce was a responsible and trusted officer of the petitioner, namely, the manager of its marine department. *1018 As such manager Joyce had charge of the petitioner's marine operations and water front property in and around New York Harbor. The petitioner delegated to Joyce large discretion in the control of its marine department. He acted for the petitioner in all matters concerning marine operations and water front properties and his superior officers relied upon his judgment and representations with respect thereto. During the period of Federal control of the petitioner, namely, from December 28, 1917, to February 29, 1920, Joyce was an employee of the United States.
While acting as manager of the petitioner's marine department, Joyce, without the knowledge of the petitioner or any of its offcers and in breach of the trust reposed in him, engaged in numerous business enterprises adverse to the interests of the petitioner and to that end, together with one Harry B. James, organized or caused to be organized several corporations, namely, the Railroad Stevedoring Corporation, the Boat Repairing Corporation and the Victory Steamship Co. These activities came to the attention of the Interstate Commerce Commission and that commission investigated.
On or about March 1, 1926, the petitioner*1019 commenced an action in equity against Joyce and the Victory Steamship Co. in the United States District Court for the Southern District of New York. The purpose of this suit was to secure an accounting of the profits mentioned in the complaint in which Joyce had a pecuniary interest or to recover damages sustained by the petitioner by reason of the transactions set out in the complaint, whichever should prove greater. The action was predicated on the theory that Joyce and James had entered into a conspiracy to defraud the petitioner; that while Joyce was manager of the petitioner's marine department, vested with wide discretion in the control of the department and relied on by the petitioner in matters concerning the department he, without the knowledge of the petitioner or of its officers, had a secret pecuniary interest in the Interstate Lighterage & Transportation Co., the Railroad Stevedoring Corporation, the Boat Repairing Corporation and the Victory Steamship Co., and that he directed the operations of these companies; that, acting as an officer, an employee of the petitioner, Joyce had negotiated certain contracts and leases between these companies and the petitioner and had*1020 recommended their execution by the petitioner; that each of the four corporations referred to became a willing instrumentality and coconspirator in carrying out the plan and purpose of the alleged conspiracy; that as a result the companies in which Joyce had a pecuniary interest made large and secret profits to which the petitioner was entitled for the reason *16 that Joyce, in his secret dealings with such companies, had acted in breach of trust. It was also contended that the petitioner had been damaged by Joyce's dealings with some of these corporations because excessive rates had been charged against the petitioner, unnecessary equipment had been supplied to it, work for it was duplicated and property belonging to the petitioner, including docking facilities, cranes, derricks, lighters, and other vessels and equipment, had been used by some of the corporations which Joyce controlled to their and his profit, without authorization by the petitioner and without compensation therefor.
Joyce and the Victory Steamship Co., his codefendant in the equity action, denied the alleged conspiracy and liability. The Interstate Lighterage & Transportation Co., the Railroad Stevedoring*1021 Corporation and the Boat Repairing Corporation were not made parties to the petitioner's action in suit in equity for the reason, as stated in the bill of complaint, that since these three corporations, as well as the petitioner, were New Jersey corporations they could not be made parties defendant without ousting the jurisdiction of the United States District Court. It also appears that the Interstate Lighterage & Transportation Co. had become insolvent before the commencement of the suit.
The United States of America also commenced as action in equity in the United States District Court for the Southern District of New York against Joyce, the Railroad Stevedoring Corporation and the Boat Repairing Corporation, which action was based on Joyce's business activities during the period of Federal control. The petitioner's equity suit and the action brought by the United States were referred together to Wallace Macfarlane as special master to take the proofs of the parties and to make separate reports to the court of his findings of fact and conclusions of law.
At the hearing before the special master it was established that at the times mentioned in the complaint Joyce and James, *1022 the latter being dead at the time of the suit, had owned all of the stock of the Railroad Stevedoring Corporation, the Boat Repairing Corporation and the Victory Steamship Co. It was also established that Joyce had a stock interest in the Interstate Lighterage & Transportation Co. and that the corporations just named were, respectively, parties from time to time to contracts with the petitioner. Joyce did not deny that in the negotiation and supervision of the several contracts and leases mentioned in the complaint he acted for the petitioner. It appeared also by the proof that in respect to the execution and performance of these contracts and leases the petitioner reposed trust in Joyce and that during the times set out in the complaint the several corporations referred to were under the direct control and supervision of Joyce and James.
*17 The petitioner claimed both damages and an accounting for profits in respect to the contracts negotiated by Joyce with the Interstate Lighterage & Transportation Co. and the Railroad Stevedoring Corporation. With respect to the Boat Repairing Corporation it claimed only an accounting by Joyce for profits. In relation to the petitioner's*1023 claim against the Victory Steamship Co. it appears that the petitioner had a lease on Pier No. 80, North River, New York City, granted to it by the city of New York. For a number of years the petitioner had granted to the United States steel Products Co. the use of this pier at a rental of $123 per day. In November 1917, the Victory Steamship Co., which was one of the devices used by Joyce to conceal his dual transactions with plaintiff, offered through Joyce, to lease the pier from the petitioner and Joyce recommended to the petitioner the execution of a lease at a rental of $178 per day. Such lease was executed. It also appears that at the time Joyce made the offer in behalf of the Victory Steamship Co., namely, in November 1917, no such corporation as the Victory Steamship Co. had been incorporated and none was incorporated until July 1918.
At the hearing before the special master evidence was offered tending to prove the following facts with respect to profits and damages:
(a) That the liability of Joyce to the petitioner on account of profits, with interest, on account of the Railroad Stevedoring Corporation amounted to $567,989.04. This figure is made up of profits*1024 in the sum of $365,099.83 and interest at 6% from the end of each year in which such profits accrued, to and including December 31, 1927, amounting to $202,889.21. Damages on account of transactions by the petitioner with the Railroad Stevedoring Corporation were computed to be $405,565.61 or $406,767.77.
(b) Damages on account of transactions of the petitioner with the Interstate Lighterage and Transportation Company were computed to be $28,463.75.
(c) That the liability of Joyce for a fair proportion of the total profits disclosed by the books of the Boat Repairing Corporation on account of transactions had with the Railroad Company ranged from $68,327.68 to $85,468.08, which amounts do not take into consideration amounts reimbursed to petitioner by insurance or other companies amounting to $21,526.55.
(d) That the defendants Joyce and the Victory Steamship Company, Inc., were liable to the petitioner in the sum of $233,916.20 on account of profits realized in connection with a lease of Pier 80 to the Victory Steamship Company, Inc. In connection with this portion of its claim, the petitioner made no claim that it was damaged but contended that it was entitled to recover*1025 all of the profits earned by the said Victory Steamship Company, Inc., together with interest thereon.
While the suit was pending Joyce owned all of the stock of the Railroad Stevedoring Corporation, the Boat Repairing Corporation and the Victory Steamship Co.
After the evidence was introduced before Special Master Macfarlane and before briefs were filed the special master died. Thereupon, *18 in due course another special master was appointed by the court. Before evidence was presented at a hearing before the second special master and before any findings of fact had been made the attorneys for both the United States and the petitioner became convinced that it was probable that the full amount of any judgment recovered against Joyce would be uncollectible. Thereupon, settlements of both of the equity suits referred to were negotiated and effected concurrently and the suits were discontinued of record.
The settlement of the petitioner's suit against Joyce and the Victory Steamship Co. was effected as follows: The Boat Repairing Corporation, half the stock of which Joyce owned, was engaged in repairing boats in New York Harbor and in 1915, through Joyce, leased from*1026 the petitioner a certain water front property in Jersey City. Thereafter, namely, on October 15, 1919, the petitioner and the Director General of Railroads entered into a new agreement with the Boat Repairing Corporation by which in consideration of an annual rental of $9,960 the petitioner and the Director General of Railroads leased the water front property in Jersey City to the Boat Repairing Corporation for a period of 10 years from the date of the agreement. The Boat Repairing Corporation remained in possession of the water front property in Jersey City until September 1924, when, with the consent of the petitioner, it assigned the lease dated October 15, 1919, to the Communipaw Dry Dock Co. This company executed a chattel mortgage on the goods and chattels located on the leased premises in favor of the Boat Repairing Corporation in the sum of $550,000 with interest, at the same time executing as additional security to the Boat Repairing Corporation a supplemental mortgage on the lease. In settlement of the petitioner's equity suit Joyce, in June 1928, procured the surrender to the petitioner by the Communipaw Dry Dock Co. of the lease of the Jersey City water front property*1027 and at the same time procured the execution by the Communipaw Dry Dock Co. of a bill of sale whereby that corporation transferred to the petitioner certain structures and equipment located on the surrendered water front property. As a part of this transaction the Boat Repairing Corporation satisfied the mortgages above referred to and it appears from the minutes of a meeting of the directors of the Communipaw Dry Dock Co. that part of the consideration to be received by that company for its surrender of the lease and its execution of the bill of sale referred to was the sum of $50,000 in cash. The only consideration passing from the petitioner in the settlement transaction was the discontinuance of its equity suit and the execution and delivery of releases, respectively, in favor of Joyce, the Victory Steamship Co., the Railroad Stevedoring Corporation and the Boat Repairing Corporation.
*19 The value of the property received by the petitioner in settlement of the equity suit was $456,405. In its income tax return for 1928 the petitioner did not report the value of the property so received as income, but did disclose the receipt of the property. Upon audit the respondent*1028 included the value in petitioner's income for 1928, thus creating the deficiencies in controversy.
The Victory Steamship Co. and the Railroad Stevedoring Corporation paid to the United States income taxes each year on account of profits involved in said equity suit and the total of such income taxes was greater than the amount of the deficiency in income taxes involved in this proceeding.
At no time prior to 1928 did the petitioner know the amount of money due it on account of the transactions hereinbefore mentioned and the full amount of damage suffered by it on account of the acts of Henry L. Joyce, Harry B. James and the aforementioned corporations has never been definitely determined. The petitioner did not know until May or June 1928, that it would not be able to collect the full amount of any judgment it might obtain against Henry L. Joyce or the Victory Steamship Co., or the results of the entry of a judgment against these parties. At the time of the settlement of the suit the Victory Steamship Co. had abandoned its agreement with the petitioner for the use and occupation of Pier 80, North River, New York City, and all of the stock of that company pany was at that time*1029 owned by Henry L. Joyce.
The petitioner, in its income tax returns filed with the Commissioner of Internal Revenue, did not, during any year from 1913 to date, deduct as a loss the amount of any damage suffered by it on account of transactions before mentioned. The petitioner, however, did deduct as operating expenses the amounts paid to the Railroad Stevedoring Corporation and the Boat Repairing Corporation on account of services performed for the petitioner. The total amount paid by the petitioner to the Railroad Stevedoring Corporation was $1,126,416.71. The amount paid by the petitioner to the Boat Repairing Corporation was approximately $481,632. These payments were made, deducted and allowed in income tax returns for the years in which the services were performed.
OPINION.
VAN FOSSAN: The question for consideration is whether or not the value of the property received by the petitioner in settlement of its equity suit against Joyce and the Victory Steamship Co. constitutes taxable income for the year 1928.
The petitioner contends that whatever of value was received by it in settlement of the equity suit was not taxable income within *33 the intent of the*1030 Sixteenth Amendment. In support of this contention the petitioner cites the definition of income adopted by the Supreme Court in Eisner v. Macomber,252 U.S. 189, and argues that what it received in settlement was not a gain derived from capital or labor or both combined, nor a profit gained through the sale or conversion of capital assets. An analysis of the facts in the situation fails to sustain petitioner's contention.
In the equity suit involved in this proceeding the petitioner sought an accounting for profits or for damages, whichever should prove to be the greater. The facts show that the evidence in the hearings before the first special master tended to prove a larger amount of profits than of damages. It is clear too from the facts and from the bill of complaint in the equity suit, a copy of which was made a part of the stipulation of facts, that the suit of the petitioner against Joyce and the Victory Steamship Co. was not a suit to collect damages for a loss of profits. Nowhere in the bill of complaint or in the evidence before this Board is there any indication that the petitioner sought reparation for profits which Joyce's conduct prevented*1031 it from earning during the years in which he was manager of the petitioner's marine department.
The petitioner's claim of a right to an accounting for profits is based on the well established doctrine that an agent is precluded by his relationship with his principal, voluntarily assumed, from taking advantage of his principal for his own benefit and from dealing with the latter's property and interests in any other capacity than as an agent who is bound to subordinate his own interest to that of his principal. As a necessary consequence of this doctrine it is well settled that if an agent is disloyal to his principal in his dealings with the latter's property or with third parties on his principal's behalf, consequently deriving profits, he may not keep the profits thus acquired as against his principal, but in respect thereto becomes a trustee for his principal, who at his election may compel an accounting. Robertson v. Chapman,152 U.S. 673; United States v. Carter,217 U.S. 286; Sandoval v. Randolph,222 U.S. 161; *1032 Essex Trust Co. v. Enright,214 Mass. 507; 102 N.E. 441; Hogle v. Meyering,161 Mich. 472; 126 N.W. 1063. As held in Jackson v. Smith,254 U.S. 586, on which the petitioner relies, in such case the law makes a fiduciary accountable for all the profits obtained even though no damage to the principal be proved. Magruder v. Drury,235 U.S. 106. It follows that when the petitioner's equity action against Joyce and the Victory Steamship Co. was settled before its determination by the court, whatever was received by the petitioner in such settlement was received in lieu of profits and, therefore, represented the profits claimed by the petitioner from defendants *21 on account of the various transactions enumerated in the bill of complaint.
It is, of course, true, as insisted by the petitioner in its brief, that not everything of value received by a taxpayer is income. But the s0-called "donation" cases cited by the petitioner, such as *1033 Edwards v. Cuba R.R. Co.,268 U.S. 628, Aransas Compress Co.,8 B.T.A. 155; Great Northern Ry. Co.,8 B.T.A. 225; Midland Valley R.R. Co.,19 B.T.A. 423, and others of similar import, are not applicable to the facts of the present proceeding. The profits, if any, from the transactions in volved in the equity suits in no way constituted reimbursement for capital expenditures or contributions to capital as did the subsidies paid by the Cuban Government in Edwards v. Cuba RR. Co., supra, nor were the profits in question here in any sense donations. The allegations of fact from which the petitioner derived the right, if any, to compel Joyce to account for profits were that he was in the employ of the petitioner as a trusted agent; that in conjunction with an outsider as his partner in his scheme and by means of corporate alleged secret profits were linked inextricably with the petitioner's him, he used his employment by and his position with the petitioner together with the petitioner's facilities and floating and other equipment for making secret profits. The contracts and leases entered into*1034 by the petitioner, which were a necessary part of Joyce's alleged unauthorized operations, were executed by the petitioner in the ordinary course of its business operations for its business purposes; and under these contracts the petitioner paid out as expenses and deducted from income for the year in which paid the total sum of $1,608,048.71. It is our opinion, therefore, that in fact Joyce's alleged secret profits were linked inextricably with the petitioner's business operations and with Joyce's employment by the petitioner. These facts are basic to the petitioner's alleged right to the accounting in the equity suit. It follows that the profits sought in the equity suit were at least partially derived from the employment of the petitioner's capital and labor and there is nothing in the facts from which we can determine what part, if any, of the profits sought was not so derived. Therefore, in view of the broad definition of gross income set out in section 213(a) of the Revenue Act of 1926, as including gains or profits and income from any source whatever, and in view of the definition laid down in *1035 Eisner v. Macomber, supra, we find nothing in the facts relating to the question now under consideration essentially distinguishing this proceeding on principle from the cases in which it has been held that funds recovered by the taxpayer as a result of a suit must be included in taxable income. Banta Refrigerator Co.,15 B.T.A. 1038; Armstrong Knitting Mills,19 B.T.A. 318; Buffalo Union Furnace Co.,23 B.T.A. 439; Sly Mfg. Co.,24 B.T.A. 65; Sanford v. Brooks,282 U.S. 359.
*22 The petitioner also contends that the profits realized by the Joyce corporations belonged to the petitioner when earned and that the income taxes due thereon were actually paid by the several corporations; and that in any event any tax due on account thereof was barred by the statute of limitations prior to 1928.
It was stipulated that the Victory Steamship Co. and the Railroad Stevedoring Corporation, whose operations and profits were involved in the petitioner's equity suit, paid income taxes each year on account of such profits and that the total income taxes so paid were greater than*1036 the deficiency in question in this proceeding. There is no evidence that the other two corporations whose profits were involved in the equity suit paid any income taxes thereon. However, whether the latter two corporations did or did not pay income taxes on the profits involved in the equity suit is of no importance here, for the reason that we can not hold in this proceeding that the petitioner was entitled to the profits when earned by these corporations. In this connection it is to be observed that by their answers, which were attached to and made a part of the stipulation of facts herein, Joyce and the Victory Steamship Co. deny any liability to the petitioner for the profits involved in the equity suit. That suit did not proceed to a judicial determination and a compromise settlement of a suit at law or in equity before a final judgment or decree is not tantamount to a judicial determination. The facts before us indicate the nature of the equity suit and disclose the basic principles involved therein. But the facts adduced by the defendant in the hearing before the first special master or which might have been introduced by the defendant at a hearing before the second special*1037 master are not before us and we, therefore, can not determine here what the United States District Court might have decided with respect to the merits of the equity action had the case proceeded to a final decree.
Moreover, the law applicable to the allegations of the bill of complaint, as set forth in the various cases hereinbefore cited, is to the effect that in such case the principal may compel an accounting for profits and that the defendants are liable therefor when proved. Neither in Jackson v. Smith, supra, nor in Porter v. Woodruff,36 N.J. Eq. 174, on both of which the petitioner relies, is anything held by the court from which a basis may be inferred for holding that profits of an undetermined amount, the right to which is in dispute, are taxable in any other year than that in which their amount is ascertained and that amount is reduced to possession by the taxpayer. The fact that the liability of Joyce for the profits was in dispute distinguishes this case from cases cited by the petitioner. At the time the Joyce corporations received the profits involved in the *23 equity suit they received them under a claim of right*1038 with no restriction as to their disposition. The corporations were, therefore, required to include such profits in their income tax returns for the years in which earned, even though it might thereafter be decreed that Joyce and these corporations were liable for them to the petitioner. North American Oil Consolidated v. Burnet,286 U.S. 417; Board v. Commissioner, 51 Fed.(2d) 73. Such payment of taxes, therefore, was made by these corporations on their own behalf and not on the petitioner's account. Moreover, there is no evidence in this proceeding to support the petitioner's contention that the payments made by the several corporations were paid out of the petitioner's funds. Even though Joyce and the corporations were accountable to the petitioner for profits made as charged in the bill of complaint in the equity suit, nevertheless it may not be assumed without proof that these corporations did no other business than that referred to in the bill of complaint in the equity suit.
Not until 1928 did the petitioner have any knowledge of what, if any, amount of the profits claimed would be received by it. Therefore, it could not report*1039 and was not required to report before that time any amount of income represented by the profits claimed, North American Oil Consolidated v. Burnet, supra, and since the amount receivable was ascertained, realized and reduced to possession when the settlement was made in 1928, whatever was so received must be included in the petitioner's income for that year. Burnet v. Logan,283 U.S. 404.
The petitioner also contends that "if a tax be assessable on account of receipt of title to the dock property in 1928, it should be assessed, not on the value of the physical property, but merely on the purely nominal value of the paper title received in 1928 for petitioner was the owner of the said structures since they were placed on the land." In support of this last contention the petitioner reiterates the facts hereinbefore referred to, namely, that the Boat Repairing Corporation was organized and controlled by Joyce and James; that the petitioner was unaware of Joyce's interest in that corporation; that Joyce purported to act for the petitioner in negotiating with the Boat Repairing Corporation the leases of the water front property in Jersey City*1040 referred to in the findings of fact, the last of which was executed and delivered in 1919; and that the petitioner was still unaware of Joyce's relations with the Boat Repairing Corporation when it consented to the assignment to the Communipaw Dry Dock Co. of the lease executed in 1919. The lease assigned to the Communipaw Dry Dock Co. is that surrendered to the petitioner upon the settlement of the equity suit. On these facts the petitioner argues that the lease was void for the reason *24 that Joyce, the petitioner's agent, in leasing the property, could not become interested as lessee of the property either personally or through a third person, citing Cowenhoven v. Hannah (New Jersey Court of Errors and Appeals), 147 Atl. 434, and further argues that because the lease was void the structures and equipment placed on the leased land became the petitioner's property immediately when so placed.
As authority for its contention that the lease was void the petitioner cites Porter v. Woodruff, supra. In that case the court, referring to instances in which an agent acts in a dual capacity without the knowledge of the principal, stated*1041 that in such cases the courts "do not pause to speculate concerning the merits of the transaction * * * but they at once pronounce the transaction void * * *." It is our opinion that it may not be held because of the quoted statement of the court in Porter v. Woodruff, supra, that the lease to the Boat Repairing Corporation was a nullity upon its execution. On the facts stated, although the dual capacity in which Joyce acted was unlawful, the lease could not be avoided by the Boat Repairing Corporation. That corporation certainly was bound by it so long as the petitioner elected to hold the corporation to the terms of the lease. The lease could only be avoided by the petitioner, which was the lessor. It was, therefore, voidable but not an absolute nullity. And it is our opinion that the statement quoted from Porter v. Woodruff, supra, is not inconsistent with this view. Where an agent purports to sell or lease his principal's property and, without the knowledge of his principal, adopts a dual capacity and himself becomes the purchaser or lessee, or where in such case he sells or leases his principal's property to a third person for his*1042 own benefit, the principal may have rescission of the sale or lease and secure the return of the property, Robertson v. Chapman,152 U.S. 673; Rich v. Black,173 Pa. 92; 33 Atl. 880; Breedlove v. Holton,143 Wash. 343; 255 Pac. 132, or at his election may accept the situation and compel an accounting for any profits the agent has made. Robertson v. Chapman, supra;Moore v. Petty,135 Fed. 668; Atlantic Transportation & Pine Tar Co. v. Rosin & Turpentine Export Co.,247 Fed. 618; Porter v. Woodruff, supra.In the present proceeding it appears that, upon discovery of the alleged disloyalty of Joyce, its agent, and of his interest in the Boat Repairing Corporation, the petitioner accepted the situation in respect to the lease of the water front property to the Boat Repairing Corporation and elected to bring suit to compel an accounting for all profits made by Joyce in connection with leases and contracts entered into by the petitioner with the Boat Repairing Corporation and the other Joyce corporations, including*1043 the lease of the water front property which, *25 in 1924, with the consent of the petitioner had been assigned to the Communipaw Dry Dock Co. The latter does not appear to have been associated with Joyce or the corporations in which he was interested.
The equity suit was begun in March 1926. At that time the petitioner had knowledge of Joyce's alleged duplicity. The petitioner did not, however, then disaffirm the lease but, on the contrary, from the date of the petitioner's discovery of Joyce's dual capacity until the date of the settlement of the equity action in June 1928, the Communipaw Dry Dock Co. was allowed to remain in undisturbed possession of the water front property. It is, therefore, a fair assumption that during a period of at least more than two years after the discovery of Joyce's alleged duplicity the petitioner continued to receive and accept from the Communipaw Dry Dock Co. rental for the water front property in Jersey City at the annual rate of $9,600 as provided by the assigned lease. It is our opinion, therefore, that, having elected to sue for an accounting for profits instead of for rescission of the lease and having, with full knowledge of existing*1044 conditions, elected to accept benefits under the lease, the petitioner may not now assert that the lease could be avoided. Truslow v. Parkersburg,61 W.Va. 628; 57 S.E. 51; Gordon v. Beck,196 Cal. 768; 239 Pac. 309. City of Findlay v. Pertz,66 Fed. 427.
The petitioner also asserts that in any event the dock structures and equipment placed on the leased water front property were erected and purchased out of money belonging to it. It is our opinion that there is no evidence sustaining this contention. It is not shown that the only business engaged in for profit by the Boat Repairing Corporation was that involved in the equity suit. At the most the petitioner contends only that it was entitled to profits connected with or growing out of Joyce's fiduciary relations with the petitioner and the petitioner's contracts with the Joyce corporations.
Even if we should assume the correctness of the petitioner's contention that any tax assessable should not be assessed on the value of the property transferred to it in settlement of the equity suit, but only on the nominal value of the paper title*1045 to that property, still the petitioner could not prevail in this proceeding. The unencumbered title to the property and undisputed possession thereof undoubtedly has some value to the petitioner's business. What that value is, is not proved in this proceeding and, therefore, even on the petitioner's own theory in this respect the presumption in favor of the respondent's determination has not been overcome.
Decision will be entered for the respondent.