The opinion
NORTHCOTT, Circuit Judge
(dissenting).
I cannot concur in the above opinion, for the reason that I have reached the conclusion that the lease for which the petitioner was compensated in the year 1928 had no existence, either real or potential, in the year 1913, and could, therefore, have had no value in the latter year. That which was in existence in the year 1913 was an entirely different lease, and expired, at the end of the fifteen-year period, in 1923. The lease sold in 1928 had its origin in 1923, and was *841 for a different rental from the lease in existence in 1913.
The perpetual right of renewal upon terms fixed by the lessor at the expiration of each period could have no actual value. The right to accept or reject the new rate of rental to be fixed by the lessor, and in the fixing of which the lessee had no voice, would be more than offset by the danger of the winding-up of the lessee’s business if the rental terms were not satisfactory and the lease surrendered. The condition of the lease giving the lessor the sole right to fix the rental rendered the right to renew practically valueless.
Even if it be admitted that the right of perpetual renewal had a value, no evidence was offered before the Board of Tax Appeals as to what that value was. The taxpayer was put upon notice, when the respondent filed his amended answer before the Board, that it would be contended that the water rights had no value in 1913, yet no evidence whatever was offered on this point. I do not think it can be reasonably claimed that the taxpayer was taken by surprise. The petitioner was seeking relief; it was its duty to sustain the burden of making a case. It did not do so. I cannot see how the Board could have acted other than it did, and I am therefore of the opinion that the decision of the Board of Tax Appeals should be affirmed.