The opinion
MADDEN, Judge
(dissenting).
I think the evidence introduced by the plaintiff, upon the basis of which the court has decided the case, has no tendency to prove that the stock exchange prices on the day of the gift were not the actual values of the stock given. The Revenue Act of 1932 provided:
“Sec. 506. If the gift is made in property, the value thereof at the date of the gift shall be considered the amount of the gift.”
Treasury Regulations 79 (1933 Ed.) gave, in Article 19, the conventional definition of value. It said “The value of property is the price at which such property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell.” This meaning of value is used for all sorts of legal purposes, such as direct property taxes, excise taxes computed on value, condemnation and requisition for public use, measuring damages for destruction or conversion and other purposes. When the local tax assessor values the livestock in his taxing district, he uses this definition of value, but he does not assess A’s 100 cows at $90 a head, and B’s 1 cow at $100 a head because, although cows of the kind they both have are selling currently at $100 a head, the available market would be.depressed if A’s 100 cows were all offered for sale on the assessment day. He knows that A is not selling his cows, and is not willing to sell them for even $100 a head, to say nothing of $90. They are not being sold, en bloc; they are being taxed. And if A should, on the tax day, make a gift to his son of his 100 cows, it would be remarkable if the gift tax gatherer, in applying the same meaning of value to the same cows, should be obliged to value them at $90 a head.
The fallacy in the plaintiff’s contention is well stated by Judge Murdock of the Tax Court in his dissenting opinion which was concurred in by five other judges, in Avery v. Commissioner, 3 T.C. 963, 971 . He says that the evidence of the taxpayer in that case, which was like that of the plaintiff in this case, did not tend to show what a willing seller would have sold the stock for, but what an unwilling seller, forced to market an unusually large block of the stock on a single day, would have had to take for it. Neither in that case nor this is there any evidence whatever as to what a willing buyer, desirous of acquiring so large a block of stock on a certain day, would have had to pay for it. Certainly he could not have bought it from the plaintiff at a discount for quantity. We know that if a willing buyer had placed an order for such a block of stock on a certain day, the price would have gone up.
*553 When, as here, we are not dealing with actual sales, hut are attempting to determine hypothetically a market value, I can think of no reason why what a hypothetical seller of an extraordinary amount of a commodity on the tax day would have to take for it is a bit more relevant than what a buyer of an extraordinary amount of the same commodity on the tax day would have to pay for it. In short, I think that neither figure is of any assistance. If the commodity were one for which there is a normal wholesale market, so that one who desired a large amount of it could on that market buy it cheaper, in the regular course of business, and one who had a large amount of it to sell could, because of the competition of other wholesalers, expect to get only the wholesale price, then evidence of that price would be evidence of value. But there was no wholesale market for the stock here in question, and no owner of it would, willingly, throw so ■ much of it in one day upon a market in which only smaller amounts were being traded.
The plaintiff’s evidence is based on the hypothetical assumption that the whole 160,000 shares of Great Western stock and the whole 20,000 shares of the South Porto Rico stock were to be marketed on the same day. But the gifts were to four individuals, and the majority of the Tax Court in the Avery case, supra, held that the hypothetical sale of the stock given to each donee should be treated separately, and in disregard of the others. The result was that the hypothetical market was not so seriously affected, and the prices were not discounted so much from the actual market prices, as they would have been under the other assumption. I see no particular reason for so splitting up the total of the gifts, if we are to engage in the assumption that sales were made which were not made, and in a kind of market which did not exist. I should think that if other donors happened on the same day to make large gifts of the same stock, it would be reasonable to urge that those gifts be included in the hypothetical offerings to the market. But I think it would be equally reasonable for the tax assessor, in determining the value of the livestock in his county on the statutory assessment day, to assume that all the livestock in the state were hypothetically for sale on that day, which, if he did assume it, would depress assessed values, though it would have nothing whatever to do with the actual market value of livestock.
I think the stock exchange prices which the plaintiff used in his original return, and which the Commissioner accepted, are the only relevant evidence of value which we have. I would, therefore, dismiss the petition.
JONES, Judge, took no part in the decision of this case.