[Download] "Brown v. Commissioner of Internal Revenue" by Fifth Circuit Circuit Court Of Appeals # Book PDF Kindle ePub Free
eBook details
- Title: Brown v. Commissioner of Internal Revenue
- Author : Fifth Circuit Circuit Court Of Appeals
- Release Date : January 19, 1934
- Genre: Law,Books,Professional & Technical,
- Pages : * pages
- Size : 58 KB
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On Motion for Rehearing. Our opinion in this case is not in conflict with those in Peavy-Wilson Lumber Co. v. Commissioner (C.C.A.) 51 F.2d 163, and Peavy-Byrnes Lumber Co. v. Commissioner (C.C.A.) 69 F.2d 712. The question in the cited cases was as to the invested capital of the purchasers of timber and the date at which the investment was made and to be valued. It was held that the timber contract, somewhat similar to the one here involved, was not a purchase and sale of the standing timber at its date, but only on the date when the company's capital stock was issued for it, on the exercise of an option to that effect in the seller. In exercising the option the seller surrendered its right to profits under the timber cutting contract and became a stockholder. In the first opinion we said: ""The Peavy-Byrnes Company did not become the owner of the timber until July 28, 1913, when it paid for it in stock. The Krause & Managan Company upon the exercise of its option to take the stock surrendered its interest in the contract, and thereafter became only a stockholder. * * * We are of opinion that the board erred in failing to accept July 28, 1913, as the date for ascertaining the value of the timber received by the Peavy-Byrnes Company in exchange for its capital stock."" Peavy-Wilson Lumber Co. v. Com'r (C.C.A.) 51 F.2d 163, 165. In the present case we hold similarly that the timber contract was not originally a purchase and sale of the standing timber. But here the issuance of the corporate stock is on a very different basis, for it represents no new contract arising out of an option, but it was in pursuance of an absolute promise in the original contract, a part of the payment for timber already cut, just as the money paid was. It gave the corporation no new or different right in the standing timber.