337 Opinion of the Court. used in § 112 (b) (3), and hence "would [have been] within the provisions of subsection (b) (3)," "if it were not for the fact that the property [he] received" consisted "not only of" voting stock "but also of . . . money," § 112 (c) (1) authorizes the assumption, as respects the Foremost stock he received, that the exchange was a “reorganization," as defined in § 112 (g) (1)(B) and used in § 112 (b) (3), and hence precludes recognition of his gain "in excess of the . . . money" he received. But we cannot agree that § 112 (c) (1) authorizes the assumption, contrary to the actual facts, of a "reorganization," as defined in § 112 (g)(1)(B) and used in § 112 (b) (3). To indulge such an assumption would actually be to permit the negation of Congress' carefully composed definition and use of "reorganization" in those subsections, and to permit nonrecognition of gains on what are, in reality, only sales, the full gain from which is immediately recognized and taxed under the general rule of § 112 (a). To the contrary, we think that an actual "reorganization," as defined in § 112 (g) (1) and used in § 112 (b)(3), must exist before § 112 (c)(1) can apply thereto. We are also agreed that § 112 (c) (1) can apply only if the exchange actually consists both of "property permitted by [subsection (b)(1), (2), (3), or (5), or subsection (1) of § 112] . . . to be received without the recognition of gain" and "other property or money." And we think it is clear that the "property permitted by [§ 112 (b)(3)] . . . to be received without the recognition of gain" is "stock or securities in . . a party to a reorganization," "in pursuance of [a] plan of reorganization," and "for stock . . . in such corporation or in another corporation [which is] a party to the reorganization." Since, as is admitted, none of the property involved in this exchange actually met that description, none of it was "property permitted by [§ 112 (b)(3)] . . to be received without the recognition of gain," and there Opinion of the Court. 368 U.S. fore § 112 (c) (1) does not apply to postpone recognition of petitioner's gain from the Foremost stock. 8 This, of course, is not to say that § 112 (c) (1) is without purpose or function. It is to say only that it does not apply unless some part, at least, of the property exchanged actually meets the particular description contained in the applicable section or subsection of the Code. But, inasmuch as § 112 (g) (1) (B) defines "reorganization" to mean "the acquisition by one corporation, in exchange solely for all or a part of its voting stock, of at least 80 per centum of the . . . stock of another corporation," an exchange of stock and cash-approximately 30 per centum in stock and 70 per centum in cash-for "at least 80 per centum of the . . . stock of another corporation" cannot be a "reorganization," as defined in § 112 (g) (1) (B), nor hence of "stock . . . in .. in a party to a reorganization" as required by § 112 (b)(3), and thus § 112 (c)(1) cannot be applicable to petitioner's transaction. That holding determines this case and is all we decide. Collaterally, petitioner argues that tax "loopholes" will be opened under other sections of the Code unless his interpretation is adopted. The Commissioner answers that "loopholes" will be opened under the sections involved and other sections only if petitioner's interpretation is adopted. Inasmuch as what we have said decides the case, we have no need or occasion to follow the parties into, or to decide, collateral questions. MR. JUSTICE HARLAN Concurs in the result. Affirmed. 8 The legislative history, much of which is set forth in the opinion of the Court of Appeals, though tending to support our decision, is inconclusive, and no more can fairly be said of the Commissioner's Regulations. See Treas. Reg. 118, §§ 39.112 (c)-1 (e), 39.112 (g)-4, 39.112 (g)-1 (c). 368 U.S. December 18, 1961. VENUS v. UNITED STATES. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT. No. 75. Argued December 14, 1961-Decided December 18, 1961. Judgment reversed with instructions to dismiss the indictment. Reported below: 287 F. 2d 304. Hayden C. Covington argued the cause and filed briefs for petitioner. Jerome M. Feit argued the cause for the United States. With him on the briefs were Solicitor General Cox, Assistant Attorney General Miller and Beatrice Rosenberg. PER CURIAM. The judgment is reversed with instructions to dismiss the indictment. Ward v. United States, 344 U. S. 924, reversing 195 F. 2d 441 (C. A. 5th Cir.). DUTTON ET AL. v. TAWES, GOVERNOR APPEAL FROM THE COURT OF APPEALS OF MARYLAND. No. 533. Decided December 18, 1961. Appeal dismissed and certiorari denied. Reported below: 225 Md. 484, 171 A. 2d 688. Hyman A. Pressman for appellants. Thomas B. Finan, Attorney General of Maryland, and Joseph S. Kaufman, Deputy Attorney General, for appellee. PER CURIAM. The motion to dismiss is granted and the appeal is dismissed. Treating the papers whereon the appeal was taken as a petition for writ of certiorari, certiorari is denied. 649690 O-62-28 BAILEY ET AL. v. PATTERSON ET al. ON MOTION FOR STAY INJUNCTION PENDING APPEAL. No. Decided December 18, 1961. The motion for an injunction to stay the prosecution of a number of criminal cases pending in the state courts of Mississippi, pending an appeal to this Court from the judgment of a three-judge Federal District Court denying such an injunction, is denied. Reported below: 199 F. Supp. 595. Constance Baker Motley, Jack Greenberg, James M. Nabrit III and R. Jess Brown for movants. Joe T. Patterson, Attorney General of Mississippi, Charles Clark and Peter M. Stockett, Special Assistant Attorneys General, and Dugas Shands and Edward L. Cates, Assistant Attorneys General, for Patterson et al., and Thomas H. Watkins for the City of Jackson et al., respondents. Solicitor General Cox, Assistant Attorney General Marshall, Harold H. Greene and Howard A. Glickstein filed a memorandum for the United States, as amicus curiae, in support of the motion. PER CURIAM. This is a motion for an injunction to stay the prosecution of a number of criminal cases in the courts of Mississippi pending an appeal to this Court from the judgment of a three-judge Federal District Court. A federal injunction to stay state criminal proceedings is an extraordinary remedy. Cf. Douglas v. City of Jeannette, 319 U. S. 157; Ex parte Young, 209 U. S. 123. In addition to the considerations normally attending an application for such relief, a serious question of standing is presented on this motion, in that it appears that the movants themselves are not being prosecuted in the Mississippi courts. On the record before us the motion for a stay injunction pending appeal is denied. MR. JUSTICE BLACK and MR. JUSTICE FRANKFURTER concur in the denial of a stay solely on the ground that the three movants are not themselves being prosecuted or threatened with prosecutions in Mississippi and they therefore reach no other questions. CREST FINANCE CO., INC., v. UNITED STATES. ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT. No. 325. Decided December 18, 1961. Certiorari granted; judgment vacated; and case remanded. Edmund L. Jones for petitioner. Solicitor General Cox, Assistant Attorney General Oberdorfer, Wayne G. Barnett, Joseph Kovner and George F. Lynch for the United States. Benjamin M. Nathan and Theodore M. Newman for National Commercial Finance Conference, Inc., as amicus curiae, in support of the petition. PER CURIAM. In the light of the Solicitor General's concession that petitioner's lien is choate, and the Court agreeing therewith, certiorari is granted, the judgment is vacated and the case is remanded to the Court of Appeals for further proceedings not inconsistent with this opinion. |