Appellant's theory is that when Belsky joined Pinkus in a partnership he effected such a sale or exchange as to become liable for a commission. Blackstone's definition of "sale or exchange" is still followed, as evidenced by the opinion in Helvering v. Nebraska Bridge Supply Lumber Co., 115 F.2d 288, 290 (CCA 8c): "When used together, the words 'sale or exchange' comprehend a 'transmutation of property from one man to another in consideration of some price or recompense in value.' 2 Blackstone Comm. 446." The two basic elements of this definition are (1) a transfer of property from one person to another; and (2) a valuable recompense.
Soon after Hammel, the Supreme Court rendered a decision, the relevance of which to the recourse-nonrecourse "sale or exchange" issue was aptly explained by the Seventh Circuit: In Helvering v. Nebraska Bridge Supply Lumber Co., 312 U.S. 666, 61 S.Ct. 827, 85 L.Ed. 1111 (per curiam), the rationale of Hammel was extended. The taxpayer in Nebraska Bridge Supply owned property on which the real estate taxes were delinquent. The delinquency created no personal liability.
311 U.S. at 510, 61 S.Ct. at 371. In Helvering v. Nebraska Bridge Supply Lumber Co., 312 U.S. 666, 61 S.Ct. 827, 85 L.Ed. 1111 ( per curiam), the rationale of Hammel was extended. The taxpayer in Nebraska Bridge Supply owned property on which the real estate taxes were delinquent. The delinquency created no personal liability.
liquidations to be computed upon the same basis as in case of sales of the stock, * * *" and that that Court used similar language in Hellmich v. Hellman, 276 U.S. 233, 237, 48 S.Ct. 244, 72 L.Ed. 544, 56 A.L.R. 379; and the petitioner argues that Congress in defining a "personal holding company" and referring to "dividends" and "gains from the sale of stock or securities" was using the terms in a broad sense to identify the kind of income which should distinguish such a company for the purpose of the imposition of the surtax; that, since the legal effect for purposes of taxation of the gain received from the liquidation of its subsidiary was the same as though the respondent had sold the stock, the gain must be considered as having arisen from a sale of the stock both under the applicable regulation and the statute; and that when used in a taxing statute the word "sale" may be entitled to a broad meaning. Helvering v. Hammel, 311 U.S. 504, 61 S.Ct. 368, 85 L.Ed. 303, 131 A.L.R. 1481; Helvering v. Nebraska Bridge Supply Lumber Co., 312 U.S. 666, 61 S.Ct. 827, 85 L.Ed. 1111, reversing 8 Cir., 115 F.2d 288. There is, no doubt, much force in the petitioner's contentions. The reasoning of the Board in the Nebraska Bridge Supply Lumber Co. case, 40 B.T.A. 40, which this Court affirmed and the Supreme Court reversed, was substantially that which led the Board to disagree with the Commissioner in the instant case.
An involuntary sale or exchange is within the scope of the statute as certainly as is a voluntary bargain. Helvering v. Hammel, 311 U.S. 504, 61 S.Ct. 368, 85 L.Ed. 303, 131 A.L.R. 1481; Electro-Chemical Engraving Co., Inc., v. Commissioner, 311 U.S. 513, 61 S.Ct. 372, 85 L.Ed. 308; Helvering v. Nebraska Bridge Supply Lumber Co., 312 U.S. 666, 61 S.Ct. 827, 85 L.Ed. 1111, reversing 8 Cir., 115 F.2d 288; Helvering v. Jones, 8 Cir., 120 F.2d 828; Commissioner v. Peterman, 9 Cir., 118 F.2d 973; Welch v. Street, 1 Cir., 116 F.2d 953. In support of the third contention counsel argue that since the forfeiture occurred because the taxpayer was unable to pay, the situation is analogous to a loss by fire, storm or theft.
However, the point is no longer open. In Helvering v. Nebraska Bridge Supply Lumber Co., 8 Cir., 115 F.2d 288, which disclosed a situation almost exactly on all fours with the case at bar, the circuit court of appeals affirmed a ruling of the Board that the loss was an ordinary loss and not a loss from the sale of a capital asset. This case, however, was reversed per curiam in Helvering v. Nebraska Bridge Supply Lumber Co., 61 S.Ct. 827, 85 L.Ed. ___, decided by the Supreme Court on April 1, 1941, upon the authority of the Hammel case.
Cf. Helvering v. Flaccus Leather Co., 313 U.S. 247; Fairbanks v. United States, 306 U.S. 436. In Helvering v. Hammel, 311 U.S. 504; Electro-Chemical Engraving Co. v. Commissioner, 311 U.S. 513; Helvering v. Nebraska Bridge Supply Lumber Co., 312 U.S. 666, on which petitioners rely, we held as matter of law that losses resulting from a sale were not to be denied the benefits of the capital losses provisions because the sale was a forced or involuntary one, as upon foreclosure. Those cases are no aid to petitioners here.
It means at all times, a contract between parties, to give and to pass rights of property for money, which the buyer pays or promises to pay to the seller for the thing bought and sold." Williamson v. Berry, 49 U.S. 495, 544, 8 How. 508, 558 [ 12 L.Ed. 1170] (1850); Union Stock-Yards Transit Co. v. Western Land Cattle Co., 59 F. 49, 53 (C.A. 7, 1893); Helvering v. Nebraska Bridge Supply Lumber Co., 115 F.2d 288, 290 (C.A. 8, 1940). Brief for Appellant at 23 n. 8.
The orders were merely passed on for acceptance and filling. Helvering v. Nebraska Bridge Supply Lumber Co., 8 Cir., 115 F.2d 288, 290; Commissioner of Internal Revenue v. Freihofer, 3 Cir., 102 F.2d 787, 790. The statute includes within the term retail dealers in liquors one who "offers for sale."
This Court, however, has recognized that in determining the purpose and coverage of a taxing statute, legislative history may not safely be ignored and must be considered, and that the language of such an act cannot always be accorded its ordinary meaning. In Helvering v. Rebsamen Motors, Inc., 8 Cir., 128 F.2d 584, 587, this Court, in referring to the decision in Helvering v. Nebraska Bridge Supply Lbr. Co., 115 F.2d 288 (reversed by the Supreme Court, 312 U.S. 666, 61 S.Ct. 827, 85 L.Ed. 1111) construing a taxing act said: "We followed the rule that the use by a legislative body of words having definite meanings creates no ambiguity and that such words are to be taken and understood in their plain, ordinary and popular sense.