A husband and wife sold five farm properties in consideration for promissory notes and debentures to a newly-incorporated corporation owned beneficially by family members and certain charities, which then disposed of part of the lands at a gain four years later after having in the meantime earned significant forfeited option premiums with respect to various option agreements granted to third parties other than the ultimate purchasers. In rejecting a submission of the company that "the lands were acquired [by it] as a capital asset for the ultimate purpose of orderly and advantageous liquidation and that the receipts were capital gains" (p. 5020), and in distinguishing Rand v. Alberni Land Co. , Ltd. (1920), 7 T.C. 629 where, on somewhat similar facts, Rowlatt J had found (at 639) that "the company has done no more than to provide the machinery by which the private landowners were enabled ... to properly realise the capital of the property they held in the lands," Judson J. stated (p. 5020):
In none of these realization cases was there an out and out transfer by former owners for a cash consideration. ... The company was not "realizing" or selling these properties for the benefit of prior owners or the creditors of prior owners. ... The company was selling on its own behalf to make a profit... . The company was in business for this purpose ... .