dissenting: I am unable to agree with the majority in their disposition of this proceeding. The crucial question here is whether the Fairfield Corporation negotiated the sale and actually entered into a contract to sell the steamship Maine. If this was so and Fairfield transferred the Maine to Atlantic, which consummated the transaction, then the sale was that of Fairfield and Atlantic was a mere conduit of title. Commissioner v. Court Holding Gon supra, upon which the majority rely, would then be in point and the intermediate transfer could be disregarded as a “formal device” unnecessary to the consummation of the transaction. The rationale of that and other similar cases is that, when the stockholders take title after the corporation has bound itself to sell the property, they can do nothing but carry out the corporate obligations.
The situation in the instant case is entirely different from that involved in the Court Holding Co. case, supra. Early in 1040 one of the stockholders of Atlantic indicated that she would like to get her money out and at that time plans were made for the eventual liquidation of Atlantic. The evidence is clear that the parties had decided to transfer the assets of Fairfield, including the steamship Maine, to Atlantic in exchange for all of Fairfield’s outstanding capital stock. Atlantic was to sell the Maine. It was decided to put the above plan into effect at a formal meeting to be held September 10, 1940. In September Lewis, who was the owner of 51 percent of the outstanding capital stock of Atlantic, which in turn owned all the stock of Fairfield, asked Pendleton to see what kind of offer he could get for the Maine. Pendleton knew that any sale of the Maine would be made by Atlantic, not Fairfield. When the offer of $50 per deadweight ton was received on September 18,1940, Pendle-ton told Lambert that the price Avas right, but that nothing could be done until the vessel had been transferred to Atlantic and that he was not authorized to accept on behalf of Fairfield. While Lambert advised Rees that the offer was accepted, nowhere in the record does it appear that he had authority to bind Fairfield to such contract.
It is clear that Lewis’ activities were, and were intended to be, in behalf of Atlantic, and it was only on September 19, after the transfer of the Maine to Atlantic, that Lewis, as president of Atlantic, was authorized to conclude a contract for the sale of the Maine. Lambert’s action was thus, in effect, approved only by Atlantic and never by Fairfield. Fairfield was never under a contract to sell the Maine to the British Government. I think the profits from the sale in question are taxable only to Atlantic. The principle here is the same as in George T. Williams, 3 T. C. 1002, and Chisholm v. Commissioner, 79 Fed. (2d) 14, and I think a similar treatment should be here accorded. I respectfully dissent.
Van Fossan and Murdock, JJ., agree with this-dissent.