(dissenting in part).
I concur in that part of the order affirming the decision of the Tax Court in No. 12,799, but I do not think the decision in No. 12,767 should be reversed. This court held in Helvering v. Northwest Bancorporation, 140 F.2d 958, “that the right to the exemption or credit under section 26(c) (1) must be found exclusively in the language of the contract and be demonstrated completely by it, and that Congress did not intend that any part of such a right could be pieced out of collateral material.” In construing § 26(c) (2) Judge Learned Hand, speaking for the Second Circuit Court of Appeals, said in Helvering v. Magnus Beck Brewing Co., 132 F.2d 379, 380, “ * * * we are to look to the contract alone; we must find that it gave the taxpayer no legal escape from making the payments out of ‘earnings and profits.’ ”
Under the statute the right to credits is conditioned upon express provisions of written contracts executed prior to May 1, 1936, and not upon implications and future contingencies. Looking to the contracts “alone” in this instance does not disclose such right. To work out a right to the credits claimed here one must consider the changing financial condition of the taxpayer in each succeeding taxable year. If it be found at any time that its debts are paid in full, dividends may be paid; if not, dividends may not be paid and credits may be taken. If the taxpayer may thus look beyond the contracts it may “escape” compliance with the law by merely failing to pay some part of its debts without regard to the amount of its income. In this way its earnings may be accumulated and the purpose of Congress defeated. This seems to be not only contrary to the intent *46of the Revenue Act but inconsistent with the decisions of the courts. See Commissioner v. Meridian & Thirteenth Realty Co., 7 Cir., 132 F.2d 182, 189; Helvering v. Northwest Steel Mills, 311 U.S. 46, 61 S.Ct. 109, 85 L.Ed. 29. In this situation I can find no “clear-cut mistake of law” in the decision of the Tax’ Court. Compare Dobson v. Commissioner, 320 U.S. 489, 502, 64 S.Ct. 239, 88 L.Ed. —.