(dissenting).
The plaintiff contends that $971,026 of the $4,250,000 which it paid for the candy business which it purchased, was paid for the right to step into the shoes of the seller, and thus get the privilege of obtaining sugar in a rationed market. It says that, since it was contemplated at the time of the purchase that rationing would continue only for some months, it was, in effect, paying that much more than the over-the-counter price of the sugar for the sugar that it would use during those months.
That contention seems to me to be founded upon a realistic view of the transaction. I would, therefore, let the case go to trial and give the plaintiff the opportunity to prove, if it could, its allegations.
The Tax Court case, Western Wine & Liquor Co., discussed in the opinion of the court, seems to me to be in point. There, in order to buy the whiskey which it wanted, the taxpayer had to buy shares of stock in a distillery, which it did not otherwise want. The Tax Court held that the taxpayer’s : loss on the shares represented a part of the cost of the whiskey. Here the taxpayer, in order to buy the sugar which it wanted, had to pay $971,026 more than the candy business which it purchased was otherwise worth to it. To be sure, the seller could not sell to it the privilege of buying rationed sugar. It had to acquire that privilege from the OPA. But, under the statutes, and the regulations of the OPA, it could not have gotten the privilege except by buying the going business, and it could get the privilege if it bought the going business. In reality, when the plaintiff decided to buy the business at the allegedly expanded price, it had decided that it could afford to expand, for sugar, during the remaining months of rationing, the price per pound which the seller of the sugar would charge it, plus $971,026.
The ease of Consolidated Freight Lines v. Commissioner, discussed in the opinion of the court, does not seem to me to have been rightly decided by the Circuit Court of Appeals. If, in fact, one has paid for a license or franchise, whether he has paid for it to a city or state, or to an owner of a business to which the right is appurtenant because of some “grandfather” provision in the applicable laws, he is out the money, and if, by reason of a change in the laws, he loses the monopoly granted by the license or franchise, I see no reason why his true status should not be recognized by the tax authorities.
WHITAKER, Judge, joins in the foregoing dissenting opinion.'