The Texota Corporation was incorporated in 1931 under the laws of the State of Texas. Its charter authorized the issuance of 750 shares of no par value stock divided into equal parts of Class A and Class B shares. On April 5, 1934, R. G. Trippett and A. H. Meadows jointly acquired a majority of the Class B shares and thereafter caused themselves tó be elected directors of the corporation. Later they held a directors meeting and elected themselves president and secretary-treasurer respectively of Texota Corporation. In the meantime three producing oil wells had been drilled on the oil and gas lease owned by the corporation.
There was much dissension among the stockholders of the corporation and on December 17, 1934, after many offers and counter offers had passed, Trippett and Meadows sent a telegram to the “opposition stockholders” offering to buy their shares of Class A and Class B stock. The offer was accepted by the “opposition stockholders” on December 19, 1934, and the stock was purchased through the Peoples National Bank of Tyler, Texas. Trippett and Meadows thus became owners of all the capital stock of Texota Corporation. They intended to later liquidate the corporation.
On December 19, 1934, through one S. A. Cochran, a broker, Trippett and Meadows learned that Rancho Oil Company was interested in purchasing the oil and gas lease owned by Texota, and that it was willing to pay $180,000 for the lease if an additional well was drilled. Through Cochran a meeting between the Rancho representative and Trippett and Meadows was arranged for December 20th. The meeting was held and the terms of the sale were agreed upon. It was agreed that Rancho Oil Company would pay $165,000, this being the $180,000 less a $5,000 broker’s commission, and $10,000, the cost of drilling an additional well.
On December 31, 1934, the stock which had been forwarded to the Peoples National Bank was paid for with money borrowed from that bank by Trippett and Meadows. On the same day all certificates of stock of Texota Corporation were can-celled and two new certificates, one for all the Class A stock and one for all the Class *765B stock, were issued in the name of Meadows, for himself and Trippett. These new certificates were pledged to the hank as security for the Trippett and Meadows loan.
After Trippett and Meadows had agreed to buy the stock, they had their lawyers prepare a paper for the liquidation of Texota Corporation. This instrument, which was a consent of stockholders to liquidate the corporation, was signed on December 27, 1934, by Meadows as sole stockholder, and was certified to by the president and secretary of the corporation. In some manner this paper went to the files of Rancho Oil Company instead of to the files of the Secretary of State. Never having been filed in the office of the Secretary of State the paper was without legal effect.
On January 5, 1935, Texota Corporation executed a conveyance of its oil and gas lease to Meadows for a recited consideration of “$10.00 and other valuable considerations”. As a matter of fact no consideration actually passed from Meadows to the corporation. On the same day Meadows assigned the oil and gas lease to Rancho Oil Company, and attached to the assignment a draft for $165,000 which was paid on January 7, 1935. On the day the draft was paid the notes made by Trippett and Meadows to the Peoples National Bank for the money borrowed to purchase the stock were paid in full. Texota Corporation was formally dissolved on August 14, 1936, by the filing of a consent to dissolution with the Secretary of State. Texota Corporation wound up its business affairs sometime in 1935 and distributed the remainder of its assets to Trippett and Meadows.
The Commissioner determined that Texota Corporation realized a profit from the sale of the oil and gas lease to Rancho Oil Company, and determined deficiencies in income and excess profits taxes for the tax year ending July 31, 1935, in the respective amounts of $20,773.61 and $7,223.-96. On petitions of Texota Corporation, Trippett, and" Meadows, the Board of Tax Appeals entered decisions sustaining the deficiencies and holding Trippett and Meadows liable for the taxes as transferees of the dissolved corporation. Trippett et al. v. Commissioner, 41 B.T.A. 1254.
In his letter notifying Texota Corporation of the assessment of the deficiencies asserted against it, the Commissioner stated that he had found that there had been “no liquidating dividend declared or paid by the corporation prior to the sale” of the oil and gas lease, and that the sale to Rancho was a sale by Texota Corporation which resulted in profit to it and not to the individual stockholders. The determination of the Commissioner is prima facie correct and the burden is on the taxpayer to prove that his determination was erroneous. Welch v. Helvering, 290 U.S. 111, 54 S.Ct. 8, 78 L.Ed. 212; Lucas v. Kansas City Structural Steel Co., 281 U.S. 264, 50 S.Ct. 263, 74 L.Ed. 848; Burnet v. Houston, 283 U.S. 223, 51 S.Ct. 413, 75 L.Ed. 991; Brown v. Commissioner, 5 Cir., 22 F.2d 797.
Trippett and Meadows were officers and directors of Texota Corporation. The oil and gas lease belonged to the corporation and not to Trippett and Meadows. The oil and gas lease had not been distributed to the stockholders when the contract of sale was entered into or when it was consummated, and since Trippett and Meadows, as officers and directors of the corporation, could not legally contract for the sale of the lease except as agents for the corporation, it necessarily follows that the sale contract was the contract of Texota Corporation, and that the profit resulting from the sale was profit of the corporation and properly taxable to it. MacQueen Co. v. Commissioner, 3 Cir., 67 F.2d 857; Taylor Oil & Gas Co. v. Commissioner, 5 Cir., 47 F.2d 108; Hellebush v. Commissioner, 6 Cir., 65 F.2d 902; Burnet v. Lexington Ice & Coal Co., 4 Cir., 62 F.2d 906.
Petitioners would seek to escape payment of the taxes for the reason that the corporation adopted a resolution on January 5, 1935, authorizing the president to transfer and convey its oil and gas lease to A. H. Meadows “upon such terms and for such consideration as to the President may seem proper * * *.” To hold that the transfer of the lease to Meadows was a distribution in liquidation of the corporation would be to hold such distribution accomplished by intendment. Moreover, Trippett and Meadows had no right to deal with the corporate property as their own. Texota Corporation had not been dissolved or liquidated and they could only act as its agents. Cf. MacQueen v. Commissioner, 3 Cir., 67 F.2d 857.
The Board, upon the facts before it, properly found that the Commissioner’s *766finding that the sale contract was the contract of Texota Corporation was not overborne, and that the profit realized from the sale of the lease was taxable to it. Affirmed.