
    F. W. MATTHIESSEN, JR., v. THE UNITED STATES
    [No. F-333.
    Decided April 16, 1928]
    
      On the Proofs
    
    
      Income tax; agreed distribution of shares of stock to residuary legatee; profit from sale by legatee. — Before the will of a decedent was probated and the executors qualified, the executors and trustees, to whom all personal property was bequeathed in trust., agreed among themselves that the plaintiff, who Was one of the residuary legatees as well as an executor and trustee, should receive certain shares of stock, which were immediately delivered to him. Thereafter the probate court ordered a distribution which was in accordance with the agreement and some time after that the said shares were transferred on the company’s hooks and later, on the same day that the necessary certificates of stock were issued, sold by the plaintiff. Held, (1) that title to the said shares passed to the plaintiff at the date of the agreement, and (2) that the taxable income of the plaintiff from the sale was the difference between the market price at said date and the price realized at the sale.
    
      The Reporter's statement of the case:
    
      Mr. M. F. Gallagher for tHe plaintiff. Messrs. E. B. Wilkinson and 8. M. Rinaker were on the briefs.
    
      Mr. Alexander H. McCormick, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant.
    
      The court made special findings of fact, as f ollowp:
    I. The plaintiff is and at all. times herein mentioned has been a citizen of the United. States and has at all times borne true allegiance to the Government of the United States and has never in any way voluntarily aided, abetted, or given encouragement to rebellion against said Government.
    The plaintiff is a resident of Triunfo, Ventura County, California, and so resided when the income taxes herein involved were paid, and is the sole and absolute owner of the claim herein involved, and has made no transfer or assignment of any part thereof.
    II. The plaintiff is one of the residuary legatees named in the will of F. W. Matthiessen, sr., a citizen of the United States, who died February 11, 1918, a resident of the city of La Salle, La Salle County, Illinois, leaving a last will and testament and certain codicils thereto, copies of which are attached to the petition as Exhibit A and made a part hereof by reference.
    Said will and codicils were admitted to probate in the probate court of La Salle County, Illinois, on March 21, 1918. Adele M. Blow and the plaintiff duly qualified as executors under said will and assumed the duties of such executors.
    III. The residuary legatees, the executors, and the trustees named in said will entered into an agreement on March 13, 1918, which said agreement was in words and figures. as follow^, to wit:
    We, Adele M. Blow and F. W. Matthiessen, jr., as executors of the last will and testament of Frederick W. Matthies-sen, deceased, and Eda Matthiessen, Adele M. Blow, and F. W. Matthiessen, jr., as trustees under said will, hereinafter referred 'to a,s first parties, hereby assign, set over, and deliver to Eda Matthiessen the bonds and securities listed in Schedule A hereto attached; to Adele M. Blow, the bonds and securities listed in Schedule B hereto attached; to F. W. Matthiessen, jr., the bonds and securities listed in Schedule C hereto attached; to Merchants Loan & Trust Company, trustee for Philip Matthiessen Chancellor, the bonds and securities listed in Schedule D hereto attached, subject to adjustment as to interest accrued up to February 11, 1918.
    We assign, set over, and deliver to Eda Matthiessen the stocks listed in Schedule E hereto attached; to Adele M. Blow, the stocks listed in Schedule F hereto attached; to F. W. Matthiessen, jr., the stocks listed in Schedule G hereto attached; to the Merchants Loan & Trust Company, trustee for Philip Matthiessen Chancellor, the stocks listed in Schedule -II hereto attached, reserving the right to impress the stocks of the Matthiessen and Hegeler Zinc Company, the La Salle and Bureau County B. B. Co., and the Western Clock Company with such trusty and conditions as we may hereafter designate.
    We assign, set over, and deliver to George P. Blow, general agent for the said trustees, Eda Matthiessen and to Adele M. Blow, F. W. Matthiessen, jr., and the Merchants Loan <9 Trust Company, trustee for Philip Matthiessen Chancellor, the sums ,set opposite their respective names in Schedule I to be at once received by them.
    We assign and set over to Eda Matthiessen, Adele M. Blow, F. W. Matthiessen, jr., and the Merchants Loan & Trust Co., trustee for Philip Matthiessen Chancellor, each one-fourth (%) of the balance of the cash in the estate of said Frederick W. Matthiessen, deceased.
    Said balance of ,said cash is transferred, as are also the bonds and securities in Schedule J hereto attached, to be devoted, so far as necessary, by the recipients thereof in equal parts to the payment of income taxes to become due June 15, 1918, Federal and State inheritance taxes, and income taxes to become due June 15, 1919.
    It is understood that the receipts given by the recipient of assets shall contain a refunding agreement, providing that they will refund pro rata to said executor,s sufficient to cover all estate liabilities.
    The first parties agree to execute such further instruments and writings as may be necessary to carry out any formalities connected with the transfers hereinabove made.
    (Signed) Adele M. Blow,
    
      “ F. W. MatthiesseN, Jr.,
    
      Executors of the Last Will and Testament • of Frederick W. Matthiessen, Deceased.
    
    (Signed) Eda Matthiessen,
    “ Adele M. Blow,
    “ F. W. Matthiessen,
    
      Trustees under said will.
    
    SCHEDULE A
    List of securities * * *.
    Beceived from Eda Matthiessen, Adele M. Blow, and F. W. Matthiessen, jr., as trustees, under the will of Frederick W. Matthiessen, deceased, and Adele M. Blow and F. W. Matthiessen, jr., as executors of said estate, a,11 the bonds set forth in pages one, two, three, and four of this Schedule A; each page being identified by my signature. I hereby agree to promptly meet any assessment called for by the executors of the estate for estate liabilities.
    Dated this thirteenth day of March, 1918, A. D.
    (Signed) Eda MatthiesseN.
    Schedule B
    List of securities * * *.
    Received from Eda Matthiessen, Adele M. Blow, and F. W. Matthiessen, jr., as trustees under the will of Frederick W. Matthiessen, deceased, and Adele M. Blow and F. W. Matthiessen, jr., as executors of said estate, all the bonds set forth in pages one, two, three, and four of this Schedule B; each page being identified by my signature. I hereby agree to promptly meet any assessment called for by the executors of the estate for estate liabilities.
    Dated this thirteenth day of March, 1918, A. D.
    (Signed) Adele M. Blow.
    Schedule C
    List of securities * * *.
    Received from Eda Matthiessen, Adele M. Blow, and F. W. Matthiessen, jr., as trustees under the will of Frederick W. Matthiessen, deceased, and Adele M. Blow and F. W. Matthiessen, jr., as executors of said estate, all the bonds set forth in pages one, two, three, and four of this Schedule C; each page being identified by my signature. I hereby agree to promptly meet any assessment called for by the executors of the estate for estate liabilities.
    Dated this thirteenth day of March, 1918, A. D.
    (Signed) F. W. MatthiesseN, Jr.
    Schedule D
    List of securities * * *.
    Received from Eda Matthiessen, Adele M. Blow, and F. W. Matthiessen, jr., ,as trustees under the will of Frederick W. Matthiessen, deceased, and Adele M. Blow and F. W. Matthiessen, jr., as executors of said estate, all the bonds set forth in pages one, two, three, and four of thjs Schedule D; each page being identified by my signature. I hereby agree to promptly meet any assessment cabled for by the executors of the estate for estate liabilities.
    Dated this thirteenth day of March, 1918, A. D.
    (Signed) The Merchants Loan & Trust Company,
    
      as Trustee for Philip M. Chancellor Under Will of Frederick W. MattMessen, Deceased.
    
    By Leon L. Loehr, Secretary.
    
    IV. On June 18,1918, an order was entered in the Probate Court of La Salle County, Illinois, authorizing the executors to distribute to the residuary legatees all of the stocks of a value of $2,182,000 owned by the decedent except the stock of the Matthiessen & Hegeler Zinc Co.
    V. On June 7, 1918, an order was entered in said probate court confirming and ratifying the distribution theretofore made to the residuary legatees of bonds in said estate of a value of $3,170,152.50.
    VI. On June 28, 1918, an order was entered by said probate court approving the distribution of the bonds.
    VII. Among the corporate stocks owned by the said decedent were 6,000 shares of preferred stock and 17,000 shares of the common stock of the Corn Products Refining Company, a corporation organized under the laws of New Jersey. On November 12, 1918, 1,500 shares of the preferred stock and 4,250 shares of the common stock were transferred on the books of the company from the name of F. W. Matthiessen, sr., to the name of F. W. Matthiessen, jr., the plaintiff, and certificates were issued to the latter. The certificates were received by the plaintiff on November 18, 1918, and on that date were sold by him on the New York Stock Exchange for the amount of $359,292.50, being $101%- per share for the preferred and $48.78% per share for the common stock.
    Prior to November 12, 1918, the said stock stood in the name of the decedent, F. W. Matthiessen, sr., upon the books of the Corn Products Refining Company, and the certificates of stock were in the joint possession, custody, and control of the executors of the estate, and the executors of the estate of F. W. Matthiessen, sr., deceased, collected and received all of the dividends therefrom paid prior to November 12, 1918.
    VIII. Pursuant to the provisions of an act of Congress approved February 24, 1919, entitled “An act to provide revenue, and for other purposes,” the above-named plaintiff, on or about the 15th day of March, 1919, filed with the collector of internal revenue for the sixth district of California, his income-tax return for the calendar year 1918.
    In said return the plaintiff did not include as income any gains on the sale of said Corn Products Refining Company stock referred to above.
    Subsequent to the filing of said return the Commissioner of Internal Revenue, upon additional information and facts, submitted to him, directed a review and audit to be made of the income of said plaintiff for the calendar year 1918, and as a result thereof the income as theretofore reported by the plaintiff in said return was corrected and determined to be $161,488.65; and thereafter the Commissioner of Internal Revenue, on the 15th day of January, 1925, pursuant to the provisions of section 250 of the revenue act of 1918, determined a deficiency in income taxes for the calendar year 1918 in the amount of $39,616.82, as follows:
    Block B_$12, 670. 55
    “ C_ 1,725.63
    “ D_ 89,226.55
    E
    7, 373. 75 ^
    1,168.70 O
    
    H_112,163.18
    I — Deductions_ 68, 289.78
    J_ 43, 873.40
    K (a) Div_117,815.25
    Revised income_ 161,488. 65
    Pers. ex_ $2, 000. 00
    Div_117,615.25
    119, 616. 25
    41, 873.40
    4, 000.00
    37, 873.40
    Normal tax at 6% on $4,000.00_'- 240. 00
    “ “ “ 12% “ 37,873.40_ 4,544.81
    Surtax_ 55, 943. 64
    .Total tax. 60, 728.45
    
      Tax paid at source- $144.48
    Tax liability_ 60, 583.97
    Tax assessed_$14, 231. 55
    6, 735. 60
    - 20,967.15
    Deficiency_ 39, 616. 82
    The basis of the commissioner’s determination of a deficiency in the amount of $39,616.82 was that the plaintiff had derived a profit from the sale of said Corn Products Refining Company stock by the difference between the value of said stock on February 11, 1918, the date of the death of the decedent, and the selling price on November 18,1918.
    IX. Pursuant to the provisions of section 279 (b) of the revenue act of 1924, the plaintiff duly appealed from the determination of said deficiency to the United States Board of Tax Appeals, which board, in a decision rendered on October 20, 1925, held that the plaintiff acquired said Corn Products Refining Company stock on March 13, 1918, the date of the agreement as stipulated in paragraph 3 hereof, and that he realized a profit based upon the difference between the market value of Said Corn Products Refining Company stock on March 13, 1918, and the amount for which he sold said stock on November 18, 1918; that the said board determined the deficiency to be $23,316.32, as follows:
    Net income, stipulated, exclusive of profit from sale of stock of Corn Products Refining Company, page 8, decision of Board of Tax Appeals_„_ $72, 725. 90
    Profit from sale of above stock, decision of Board of Tax Appeals: Selling price_$359,292. 50
    •Less:
    Market, 3/13/18, preferred- $144, 937. 50
    Market, 3/13/18, common_ 150,343. 75
    ' 295,281. 25
    - 64, Oil. 25
    _ 136, 737.15 Corrected net income.
    Less:
    117, 615.25 Dividends_
    2,000. 00 Personal exemption_
    - 119', 615. 25
    Income subject to normal tax_ 17,121.90
    
      Normal tax at 6% on $4,000.00_ $240. 00
    “ “ 12% on $13,121.90_ 1,574.63
    Surtax on $136,737.15_ 42,613.32
    Total_ 44,427.95
    Less tax paid at the source_ 144.48
    Tax liability_ 44,283. 47
    Previously assessed_ 20, 967.15
    Deficiency_ 23, 316. 32
    X. Thereupon the Commissioner of Internal Revenue, on or about the 3rd day of March, 1926, duly assessed taxes in the amount of $23,316.62, which duly appear on the commissioner’s special list No. 4, dated March 3, 1926, which said amount was paid to the collector of internal revenue at Los Angeles, in the State of California on March 23, 1926.
    XI. The findings of fact, decisions, and opinion of said Board of Tax Appeals appear in its official reports and are cited as Appeal of F. W. Matthiessen, jr., 2 B. T. A. 921.
    XII. The Commissioner of Internal Revenue assessed an additional income tax against the plaintiff for the year 1918 in the amount of $6,T35.60, appearing op the March, 1924, assessment list, the amount of which assessment was taken into consideration by said Commissioner of Internal Revenue in his determination of a deficiency in tax for the year 1918 of $39,616.82, and was used by the Board of Tax Appeals in its determination of a deficiency of $23,316.32; and said assessment of $6,135.60, together with' interest in the amount of $1,167.51, was duly paid by the plaintiff to the collector of internal revenue for the Sixth District of California on February 28, 1927.
    XIII. Exclusive of any profit from the sale of any Corn Products Refining Company stock, the plaintiff had no net income for the year 1918 subject to normal tax, and had income of $72,725.90 subject to surtax.
    XIY. The market value per share of Corn Products Refining Company stock at-the various dates involved in this case was as follows:
    
      
    
    
      XY. The liabilities of the estate of F. W. Mafthiessen, sr., deceased, for specific charitable legacies, expensed of funeral and of last illness, attorneys’ fees, expenses of administration, debts, and Federal estate tax (as finally determined) amounted to $2,692,111.29.
    XYI. On or about the 10th day of March, 1925, plaintiff filed with the collector of internal revenue for the first district of California a claim for refund in the amount of $4,266.36. On June 18, 1926, the Commissioner of Internal Revenue rejected said claim for refund in its' entirety.
    XVII. On or about ,the 25th day of March, 1926, the plaintiff filed with the collector of internal revenue for the first district of California a claim for refund in the amount of $23,316.32. On June 18, 1926, the Commissioner of Internal Revenue rejected said claim for refund in its entirety.
    The court decided that plaintiff was not entitled to recover.
   Booth, Judge,

delivered the opinion of the court:

The plaintiff sues to recover an alleged overpayment of income taxes assessed and collected by the Commissioner of Internal Revenue upon profits claimed to have accrued to the plaintiff by reason of the sale of certain corporate stock: bequeathed to him in the will of his deceased father. The facts in detail have been agreed upon and duly stipulated by the parties. The plaintiff’s father, a resident of La Salle, La Salle County, Illinois, died February 11, 1918. By the provisions of his will, probated March 21, 1918, the plaintiff became entitled to a one-fourth share in the residuary estate. Among the assets of the same were 6,000 shares' of preferred and 17,000 shares of common stock of the Corn Products Refining Company. The estate was a very large one and comprised numerous holdings of great value. The plaintiff and his two sisters received ,the entire estate in trust and were also appointed executors “ with power over the personal property.” By the terms of clause three of the will the plaintiff and his two sisters, the only surviving children of the testator, were directed at the end of one year after the probating of the will to divide the residuary estate into four parts, equal in value, and “by appropriate deed, deeds, assignments, or other means of conveyance convey one of such four equal parts ” to the plaintiff, and a like share to each of his sisters; the Merchants’ Loan & Trust Company of Chicago, Illinois, to receive in trust a one-fourth part, to hold and administer, for the benefit of the testator’s grandson during his minority.

On March 13, 1918, a little over a month after the death of the testator, and previous to the probating of the will, the plaintiff and his two sisters, acting as executors and trustees under said will, scheduled the assets of the estate into four equal parts, and by an instrument in writing, duly executed, set over, assigned, and delivered to each of the residuary legatees and devisees their one-fourth part of the residuary estate, • each legatee receipting therefor and expressly agreeing “ to promptly meet any assessment called for by the executors of the estate for estate liabilities.” Under this agreement the stock involved in this suit was equally divided, 1,500 shares of the preferred and 4,250 of the common stock being receipted for by the plaintiff, as appears from Schedule C.

Subsequent to the execution of the above agreement, June 18,1918, an order was entered by the probate court authorizing the executors to distribute to the residuary legatees all of the stocks of the testator, except certain ones with which we have no concern.

On November 12, 1918, the Corn Products Refining Company transferred on its. books to plaintiff 1,500 shares of preferred and 4,250 shares of common stock, issuing to him certificates therefor on November 18, 1918. On the same day, viz, November 18, 1918, the plaintiff sold his entire holdings in the corporation. In making up his tax return for the year 1918 he did not include therein any gain or profit upon the sale of said stock. The commissioner re-audited the plaintiff’s income-tax return, finally assessing an additional income tax of $39,616.82 against him, predicating his right to do so upon a contention that plaintiff acquired all of said stock upon the date of the death of the testator, and that the difference between the market value of the stock on that date and the date of sale measured the profits of the transaction. Plaintiff appealed to the Board of Tax Appeals, and that board, in a well-considered opinion, reduced plaintiff’s income-tax liability to $23,316.32. This amount the plaintiff paid, filed a claim for refund, which was denied, and hence this suit to recover the tax paid, with interest thereon.

The plaintiff’s argument is addressed exclusively to the date November 18, 1918. On this date it is insisted he became for the first time possessed of the absolute ownership and title to the stock, and having sold it immediately realized no profit from the sale. The defendant, on the other hand, sedulously contends that the date of the testator’s death determines title. The Board of Tax Appeals, in disagreement with both contentions, fixed March 13, 1918, the date of the contract heretofore set out, as the determinative date.

The applicable sections of the revenue act are sections 202 and 213 of the act of 1918, 40 Stat. 1057.

Section 213 provides in part as follows:

“ That for the purposes of this title (except as otherwise ■ provided in section 233) the term gross income ’—
“(a) Includes gains, profits, and income derived from salaries, wages, or compensation for personal service, * * * or sales, or dealings in property, whether real or personal, growing out of the ownership or use of or interest in such property; also from interest, rent, dividends, securities, or the transaction of any business carried on for gain or profit, or gains or profits and income derived from any source whatever, * * *; but
“ (b) Does not include the following items, which shall be exempt from taxation under this title:
$ ‡ * ❖
“(3) The value of property acquired by gift, bequest, devise, or descent (but the income from such property shall be included in gross income) * *

Section 202 (a) provides in part as follows:

“ That for the purpose of ascertaining the gain derived or loss sustained from the sale or other disposition of property, real, personal, or mixed, the basis shall be—
“(1) In the case of property acquired before March 1, 1913, the fair market price or value of such property as of that date; and
“(2) In the ease of property acquired on or after that ■date, the cost thereof.”

Paragraph (3) of section 213 is emphasized by both parties, and the word “ acquired ” is singled out, and much effort is devoted to it to give it a restricted and technical meaning in support of the various contentions. A large number of cases are cited pro and con respecting the title of a deceased person’s estate in the hands of his administrator or executor, and the time when a legatee becomes the owner of his legacy. In this case the court is in nowise concerned with the rights of creditors or the liabilities of executors to the same in the course of the administration and distribution of a testator’s estate. We are alone confronted with a revenue act imposing a tax upon income derived from a bequest and ascertaining the intent of Congress in enacting the provision of law. Manifestly it requires no more than a mere statement that a residuary legatee under a will acquires an interest in a residuary estate on the date of the death of the testator. It is likewise obvious that he may sell and dispose of the same if he chooses. Whether the legacy is ever received in kind is, of course, dependent upon prior bequests and priority claims against the estate fixed by law. Seemingly it is elementary that until the legatee receives his legacy in possession, vested with absolute control and dominion over it, capable of asserting ownership against all the world, the contingent interest vesting at the date of the death of the testator is not merged in fee simple title. The taxing act under review recognizes this legal status. The income from a deceased person’s estate is taxed in the hands of the administrator or executor, and a return must be made by these officials. If partial distribution of estate income has been properly made during the period of administration, it is to be charged to the beneficiary receiving the same and the executor credited with the amount distributed. Congress was fully aware of testate and intestate laws and the effect of death upon title to property descending by will. Surely it is a matter of no doubt that the executor’s title to the personal estate of the testator is súch that he may sell so much thereof as is necessary to discharge the legal obligations of the testator, and otherwise pass good title in executing the terms of the will as directed. He may institute actions at law to recover debts of the testator as well as actions for the recovery of personal property. We find, no decision of any court in the long list of cases cited which in any way modifies the long-established principle of law that the legal title to personal property vests in the personal representative of a deceased person, he being responsible under his bond for the faithful administration of the estate. It is difficult to conceive that Congress, in using the language “ the value of property acquired by * * * bequest,” intended to fix irrevocably a value at the date of the testator’s death when by the very nature of the event it was incapable of ascertainment,’ speculative, and dependent finally upon a course of legal proceedings which must be first observed before it may be fixed. United States v. Jones, 236 U. S. 106, 112.

“It hardly needs statement that personal property does not pass directly from a decedent to legatees or distributees, but goes primarily to the executor or administrator, who is to apply it, so far as may be necessary, in paying debts of the deceased and expenses.of administration, and is then to pass the residue, if any, to legatees or distributees. If the estate proves insolvent nothing is to pass to them. So in a practical sense their interests are contingent and uncertain until, in due course of administration, it is ascertained that a surplus remains after the debts and expenses are paid. Until that is done, it properly can not be said that legatees or distributees are certainly entitled to receive or enjoy any part of the property. The only right which can be said to vest in them at the time of the death is a right to demand and receive at some time in the future whatever may remain after paying the debts and expenses. But that this right Avas not intended to be taxed before there was an ascertained surplus or residue to which it could attach is inferable from the taxing act as a whole and especially from the provision whereby the rate of tax was made to depend upon the value of legacy or distributive share.”

The context of the statute indicates that Congress was dealing with a practical situation, employing language commonly used to reach estates in course of administration and at the same time providing for all the contingencies by which property in such a status might not escape taxation. The income of the estate is taxed in the hands of the executor and added provisions reach it when the corpus reaches the legatee or devisee.

The plaintiff seeks to repudiate the agreement of March 13, 1918, now for the first time challenges its validity, and insists that notwithstanding the complete observance of its terms he did not acquire title and ownership of the stocks until they were transferred to his name on the books of the corporation. We doubt the availability of the contention. Is the plaintiff at present in a position to urge it, after it has been performed, and he has enjoyed all its benefits and advantages, wishing now to escape only its tax liabilities? To sustain the contention a section of the administration act of Illinois is cited. Under this enactment an executor of a deceased person’s estate is precluded from exercising any powers, except those specifically mentioned in the statue prior to his qualification as such. With this as a premise the argument is made that to constitute an assignment there must be an assignor, and the law .inhibits the executor from assigning until he qualified, hence there was and cán be no competent assignor prior to this time. The will was not probated until March 21, 1918, more than a month after the death of the testator. The plaintiff and his sister were co-executors and trustees of the entire estate; they, in conjunction with the testator’s grandson, were the sole legatees and fevisees of the entire residuary estate. If the agreement was a nullity, if its terms wer'e disadvantageous, if it was not the intention of the sole parties in interest to acquire and possess the property distributed thereunder, if as a matter of fact they did not take the property scheduled, why was the agreement not repudiated in the court having jurisdiction of the administration of the estate? Some objection should have been interposed there to an illegal proceeding. Obviously the plaintiff, as trustee, executor, and legatee, as well as his coexecutors and cotrustees, were the proper parties to object to the contract and contest its legality in the probate court. This they did not do. On the contrary, without objection from any source, they asked for and secured its Ratification in all respects. No claim is made that any creditor or other legatee or devisee under the testator’s will objected to the agreement, and the findings disclose that the estate, with the probate court’s assent, was distributed exactly as therein provided. We do not think that the agreement was null and void, but valid. The' executors, legatees, and devisees of a testator’s estate, and exceptionally large estate, made up of numerous holdings of great value, and beyond peradventure solvent and fully equal to responding in all respects to the testator’s gifts and the expenses of administration, including taxes, etc., get together for the express purpose of accelerating the distribution period and preserving, as. far as may be done, the present worth of the property involved. The only and vitally interested owners of the residuum enter into an amicable distribution of the property they were given, each agreeing with the other that their proportionate share of whatever amount is necessary to be paid to satisfy prior bequests, costs, etc., will be paid, and then in fact acquiring and taking over said property with the assent and acquiescence of the executors, treating it as their own, receipting for its delivery in writing, paying their full share of the expense of administration, surely such a proceeding contravenes no law and exhibits no unfaithfulness upon the part of the executors in executing the trust imposed upon them by the testator’s will. What the plaintiff did reflects his intention, and manifestly the purpose of this agreement was to vest title and ownership of the property in and to the parties to the same. The contract is carefully drawn, it is complete in its provisions, and what is vital was performed ,in toto. Subsequently, on June 18, 1918, an order of the probate court was procured authorizing distribution of all stocks. Why it was delayed is not shown. In any event, the order does not nullify the contract; it was the usual and formal proceeding, effective to prevent liability upon the executor’s bond. The distribution in fact had previously been made. Agreements of this character are frequently made. It is in nowise unusual for executors to anticipate the distribution date in a will or the date fixed by law for the settlement of estates. This he may do by agreement among the heirs, or of his own motion; and if it is done, as it was in this case, the agreement is effectual, unless, disturbed by some outside interests prejudiced by its terms. The Board of Tax Appeals in an exhaustive opinion so held (2 B. T. A. 921), and with this opinion we agree.

Obviously the failure to have the stock transferred from the testator’s name to the plaintiff’s on the books of the corporation can not affect title. In this case, as pertinently observed in the opinion of the Board of Tax Appeals, “ we are not passing upon the proper method of administering estates, but upon the tax liability of the taxpayer as determined by the transactions which actually occurred.” We believe the plaintiff acquired full ownership of the stock under the terms of this agreement and at the time of its execution.

The petition will be dismissed. It is so ordered.

Moss, Judge; Graham, Judge; and Campbell, Chief Justice, concur.

GreeN, Judge, took no part in the decision of this case.  