84 Dissenting Opinion by Judge Madden Plaintiffs' theory of recovery is stated in their reply brief as follows: Plaintiffs' claim is predicated upon a delay of 212 days caused by the Government, resulting primarily from the discovery of faulty foundations which necessitated the drawing of new plans and complete relocation of the Hospital building. There is no claim that anyone was at fault in failing to discover sooner the faulty foundations, but it is plaintiffs' position that the delay resulting therefrom, which made the cost of performance greater than had been expected, was a breach of contract on the part of the defendant, entitling plaintiffs to recover the additional cost. Ordinarily, the fact that the performance of one of the parties to a contract is made more difficult or expensive by supervening circumstances does not excuse him from performing. See 6 Williston, Contracts, sec. 1963, p. 5507; Maryland Dredging Co. v. United States, 47 C. Cls. 557. Nor does it entitle him to additional compensation. Day v. United States, 245 U. S. 159. Plaintiffs' claim then depends upon whether there is anything in the contract here involved to take it out of the general rule. The question should be, not as the majority opinion states, whether under the terms of the contract "the defendant was relieved of responsibility for or liability to plaintiff for excess costs by reason of delay for which plaintiff was in no way responsible", but whether under the terms of the contract, the defendant should be held to have assumed responsibility to compensate plaintiff for excess costs due to delay which was no one's fault. The defendant did not agree to have the building ready for the contractor who was to install the plumbing, heating and wiring at any fixed time, and from the specifications and contract, plaintiff must have known that its time of performance was dependent upon the progress of the building contractor. The specifications clearly directed its attention to the contract for general construction and advised it that its contract was to be performed in harmony with the other work on the building. Article 1 of the contract provided that the work under it was to be completed "at a date Dissenting Opinion by Judge Madden 95 C. Cls. not later than that provided for in the contract for General Construction", but there was no promise on the part of the defendant as to when that date would be. Plaintiff must have known that the government reserved the power to make changes in the builder's contract, as well as in its own, and that exercise of that power would necessarily cause delay. Cf. H. E. Crook Co. v. United States, 270 U. S. 4; Gertner, Sr., v. United States, 76 C. Cls. 643. Article 4 of the contract provided that if the government should discover, or the contractor encounter, unexpected conditions at the site materially differing from those shown in the drawings and specifications, the contracting officer should make the necessary changes in the plans and any necessary changes in the amount of compensation and time for performance. This provision seems to me to have reference only to the contractor whose work is directly affected by the discovery of the unexpected condition. Nor does plaintiff appear to have understood the provision in any other sense, for no reliance is placed on article 4 in its briefs. If plaintiff had made its contract under such circumstances that it and the agents of the government expected that the work would be done in the winter, plaintiff and other bidders would have estimated for a high labor cost. If, then, the building contractor had been delayed due to unforeseen conditions, so that plaintiff's work was done in the summer, it would have profited accordingly and the defendant could not, under the contract, have denied it that profit. I think this risk of gain or loss is not removed by article 4, except as to the contractor who actually encounters the unforeseen condition. The statement of the contracting officer to plaintiff that construction would begin in early spring so that the building would be under roof before cold weather set in appears to have been a truthful statement of a reasonable expectation at the time he spoke, but hardly a promise on the part of the government that what he said would be accomplished, regardless of intervening circumstances or events. The provision in article 9 of the contract that the contractor's right to proceed to perform the contract and to be paid without the deduction of liquidated damages for delay 109 Syllabus should not be prejudiced by delays due to "unforeseeable causes beyond the control and without the fault or negligence of the contractor" seems to show that neither party was to be charged with breach of contract merely for delays due to such causes. Plaintiff was, as it should have been, granted an extension of time and excused from liquidated damages. That was all that it was entitled to under its contract. HENRY ROBERTS AGNE v. THE UNITED STATES [No. 42475. Decided December 1, 1941] On the Proofs Income tax; proceeds of stock sale in cash and notes as taxable income.-Where plaintiff in 1922 owned 20 shares of the capital stock of a corporation and was the sole beneficiary of a trust, under his father's will, which owned 122 shares of said stock; and where said shares, along with the balance of the majority stock of said corporation were sold in 1922 at a price in excess of the income tax base value of said shares; and where the purchase price of said majority stock was paid partly in cash and partly in notes, and distribution of the cash was made proportionately to plaintiff and said trust and the other majority stockholders; and where the transaction became involved in litigation instituted by minority stockholders, such litigation resulting adversely to plaintiff and the other majority stockholders, including said trust, and where in said litigation judgments were obtained against, and subsequently paid by, plaintiff and said trust; it is held that the proceeds of said sale, in cash and notes, constituted income for tax purposes in said year. Same; warranties and covenants in contract of sale.-Where taxpayer made returns for the year 1922 on a cash basis; and where the sale of stock made in that year was pursuant to a contract, executed in 1922, which contained warranties with respect to the financial condition of the corporation and covenant binding the seller not to engage in competition with buyer, as well as certain obligations with respect to income taxes of said corporation; it is held that such warranties and covenants did not keep the transaction inchoate and accordingly said sale was a completed sale in 1922. Same; "readily realizable market value" of notes.-Where in the sale of said majority stock, for cash and notes, said cash and notes in 1922 came into the hands of the agent, or trustee, for said majority stockholders; and where only the cash was 449973-42-CC-vol. 95-9 95 C. Cls. Reporter's Statement of the Case distributed to said stockholders, including plaintiff and the trust of which plaintiff was sole beneficiary; it is held that said notes had a "readily realizable market value" within the meaning of section 202 (a) (3) (c) of the Revenue Act of 1921 and the pertinent Treasury Regulations, and constituted taxable income to plaintiff for his proportionate share, including his proportionate share of the notes in the hands of his agent or trustee. Same; postponement of liability by litigation.-Where the right of plaintiff, as well as the right of other majority stockholders, including the trust of which plaintiff was the sole beneficiary, to retain all the proceeds of the sale of their stock was attacked in litigation beginning in 1922, and was concluded adversely to them some years later; it is held that, under the authorities, this fact did not postpone plaintiff's tax liability until the outcome of said litigation was known. North American Oil Consolidated v. Burnett, 286 U. S. 417, cited. See also McDuffie, Trustee, v. United States, 85 C. Cls. 212; Schramm v. United States, 93 C. Cls. 181. The Reporter's statement of the case: Mr. Preston B. Kavanagh for plaintiff. Mr. J. A. Rees, with whom was Mr. Assistant Attorney General Samuel O. Clark, Jr., for the defendant. Messrs. Robert N. Anderson and Fred K. Dyar were on the brief. The court made special findings of fact as follows upon a stipulation of the parties: 1. Plaintiff is, and at all times material herein was, a resident of the city of Utica, State of New York. This case involves a consideration of his income taxes for the year 1922. 2. At the beginning of the year 1922, plaintiff was the owner of twenty shares of the capital stock of the Utica Sunday Tribune Company, a New York corporation, engaged in publishing a daily newspaper in the city of Utica, New York. At the same time plaintiff was beneficiary of a trust created by the following provisions of the will of his father, Jacob Agne, who died in 1918: Fourth. In case my said son shall not have attained the age of 30 years at the time of my decease, then and in that event, I give, devise and bequeath all said rest, residue and remainder of my property to the trustees hereinafter named in trust to invest the same and to 109 Reporter's Statement of the Case keep the same invested, to collect and receive the rents, issues, and profits therefrom and to pay the rents, issues, and profits therefrom to my said son Henry Roberts Agne until he shall arrive at the age of 30 years; said rest, residue and remainder with its accumulation of interest, if any, shall become the absolute property of my said son when he shall have attained the age of 30 years. The trustees of this trust were Amelia Agne, plaintiff's aunt, and John C. Fulmer, plaintiff's uncle by marriage. Among the trust assets were 122 shares of the capital stock of the Utica Sunday Tribune Company. The stock of the Utica Sunday Tribune Company owned by the trust had a basis for computing gain or loss upon a sale at the rate of $225.00 per share, and the stock owned by plaintiff had a basis of $288.76 per share. 3. The total outstanding capital stock of the Utica Sunday Tribune Company at the beginning of 1922 was 600 shares, held by thirteen stockholders. These stockholders were divided into a "majority" group and a "minority" group, made up of the following persons: Henry Roberts Agne (plaintiff, nephew of Hattie and Estate of Jacob Agne (father of plaintiff and brother of |