(dissenting in part).
I concur in the view of the court that plaintiffs have capacity to bring this suit. I agree with the court’s opinion to the extent that it holds plaintiffs are entitled to recover under § 16(b) for the profits realized on the 6,058 shares of Western Missouri stock acquired in March 1960 which were not turned over to the Trust Fund, and I also agree that plaintiffs are entitled to the 700 per share in dividends paid on the 6,058 shares.
I dissent from the portion of the opinion which in disagreement with the trial court determines that the 25,942 shares of stock acquired in March 1960 and turned over to the Trust Fund were purchases within the meaning of § 16(b). In Blau v. Max Factor & Co., 9 Cir., 842 F.2d 304, 306-307, the court states:
“The statutory definitions of ‘purchase’ and ‘sale’ are exceedingly general. They are given specificity by measuring questioned transactions against the purpose of section 16 (b). Thus, a transaction is held to be a ‘purchase’ within section 16(b) ‘if in any way it lends itself to the accomplishment of what the statute is designed to prevent.’ Blau v. Lehman, 286 F.2d 786, 792 (2d Cir. 1960), aff’d 368 U.S. 403, 82 S.Ct. 451, 7 L.Ed.2d 403 (1962). See also Park & Tilford v. Schulte, 160 F.2d 984 (2d Cir. 1947). On the other hand, to avoid purposeless harshness, a transaction is held not to be a section 16(b) ‘purchase’ if it ‘was not one that could have lent itself to the practices which Section 16(b) was enacted to prevent.’ Ferraiolo V. Newman, 259 F.2d 342, 346 (6th Cir. 1958). See also Roberts v. Eaton, 212 F.2d 82, 85-86 (2d Cir. 1954); Shaw v. Dreyfus, 172 F.2d 140, 142 (2d Cir. 1949). Cf. Blau v. Mission Corp., 212 F.2d 77, 80 (2d Cir. 1954) (‘sale’); Falco v. Donner Foundation, 208 F.2d 600, 604, 40 A.L.R.2d 1340 (2d Cir. 1953).”
I agree with the foregoing statement.
For the reasons pointed out by Judge Nordbye in his opinion reported at 231 F.Supp. 456, the facts in our present case do not present a situation which lends itself to the accomplishment of an objective § 16(b) is designed to prevent.
Judge Nordbye found: “The undeniable fact is that the 25,942 shares which passed into the holdings of the Trust Fund were simply handled by GambleSkogmo as a conduit for the purpose of enabling the Trust Fund to place among its assets this number of shares which had been purchased * * 231 F.Supp. 456, 461. Upon the basis of such finding, Judge Nordbye states:
“The purpose of the Act is to provide that an insider engaging in so-called short swing trading must disgorge any profits he may have made when the stock was bought and sold during a six-month period. Under the circumstances here, the Court is not required to adopt some fiction in order to put teeth into the law. This transfer of stock by an insider to the Trust Fund is not an example of short swing trading. The Court will not adopt a construction of the statute which would simply result in a windfall to these plaintiffs and require the defendant to account for alleged profits on a stock transaction which did not inure to it.” 231 F.Supp. 456, 461.
The court’s finding is supported by substantial evidence.1
*746The trust agreement authorizes payment of contributions due in the form of Western Missouri stock. On January 15, 1960, the Gamble-Skogmo executive committee, as reflected by its minutes, approved the purchase of 32,000 shares of Western Missouri stock “for the purpose of contributing the same, or so many shares thereof as are necessary, to the Trustees of the Company’s Profit-Sharing-Stock Bonus Trust Fund in satisfaction of the Company’s contribution to that trust fund for 1959.”
It is stipulated that at the time the executive committee took the foregoing action, 32,000 shares was the best estimate available as to the number of shares needed to cover the contribution. On January 21, the 32,000 shares were purchased through a broker. They were paid for and received in street names endorsed in blank on January 27, 1960. The exact amount of the contribution was not definitely ascertained until sometime between January 21 and January 28. On January 28, 1960, 25,942 shares of the 32,000 shares just acquired were transferred to the trust fund in satisfaction of the 1959 contribution due. It is well-established that courts look to the substance as well as to the form of transactions. See Rheem Mfg. Co. v. Rheem, 9 Cir., 295 F.2d 473, 476.
In my view, Judge Nordbye very clearly points out in his reported decision the reasons why the transaction here involved in no way defeats the purpose which § 16(b) was designed to prevent.
I do not question the validity of the decisions relied upon by the majority as applied to the facts of such cases. A number of such cases point to the rule as being a harsh one but one that is required to effect the purposes of the Act. Under the facts of this case, no strained construction of the word “purchase” is needed to prevent realization of insider profits. I would affirm upon the basis of Judge Nordbye’s well-reasoned and supported opinion.
. The Securities and Exchange Commission in its amicus curiae brief states:
“Judge Nordbye’s conclusion that ap-pellee acted as a ‘conduit’ for the purpose of making the purchase for the trust fund appears to be without support in the record. The fact of appellee’s purchase of an additional 6,058 shares at a time when the amount of its outstanding obligation was determined suggests doubt as to tbe validity of the determination that it acted merely as a ‘conduit.’ If, however, appellee had, in fact, confined its activities in connection with the questioned transactions to acting solely as agent for the trust fund, the trial court’s result might have been reached without endangering the principles which we feel must not be impaired.”