[981]*981OPINION.
Arundell :
The petitioner contends that the $25,333.36, part of the Tex-Penn fee retained by him, in addition to the $6,333.30 representing his admitted earned share, was not taxable income to him. His principal argument is that the fee was a gift from Horace A. Mann. He contends further that, whether it was a gift or not, it was taxable to the assignor.
The several elements of a gift have been too often stated to need repetition here. For the purposes of this case we can adopt the petitioner’s proposed definition that a gift is a voluntary transfer of property from one to another without any consideration or compensation therefor. The transfer from Mann to the petitioner, which resulted in the petitioner’s receipt of the $25,333.36 in dispute, is evidenced by the letter of May 19, 1933, quoted in the findings. That letter authorized the petitioner “to complete all work on the above-named cases and arrange for and collect the fees due.” At that time work on the Tex-Penn case had not been completed. It had been submitted to the Board for decision, but as it turned out, much more work was to be done. Prior to the assignment petitioner had [982]*982been connected with these cases for more than four years. He had attempted their settlement and when this seemed no longer possible, turned his efforts toward preparation for trial. In spite of the fact that petitioner had no written contract with the Tex-Penn clients, he was fully recognized as one of their attorneys at the time of the trial before the Board and, in fact, he was the only one of the three associates who was an attorney of record in those proceedings. At the time of the assignment Mann was in ill health and wanted to retire from active practice. Upon this evidence the true situation appears to be that Mann made the transfer in consideration of the petitioner’s agreement to complete the unfinished cases that were in the office. The petitioner’s assumption of the duty “to complete all work on the above-named cases”, thereby relieving Mann of his burdens, was consideration for the transfer. Where there is consideration there can be no gift. Noel v. Parrott, 15 Fed. (2d) 669; Levey v. Helvering, 68 Fed. (2d) 401.
If there was any gift from Mann to the petitioner, it was a gift of Mann’s interest in the cases in his office and not a gift of the fee paid by the clients. As to some of them, his only remaining interest was the collection of fees. But the Tex-Penn case was not completed and there was no fee to assign by gift or otherwise. Mann’s interest in it was the dual one of completing it to his clients’ satisfaction and collection of the fee to be thereafter fixed. His agreement with J ones shows that he was to render a bill “if you and/or I (or my associates) succeed in bringing these cases to a conclusion satisfactory to our clients.”
There is some suggestion in the petitioner’s brief that the amount ultimately collected had been earned by Mann at the time of the assignment, and, it is argued, it was income to Mann under the case of Helvering v. Enright, 312 U. S. 636. The Enright case decides only a question of the reporting of income for a period ending, with the death of a taxpayer and has no application at all to the issue in this case. The extent to which the Tex-Penn fee had been earned at May 19,1933, is a matter of proof on the part of the petitioner. His evidence falls short of establishing the fact. He points to a letter dated June 1, 1933, from F. B. Parriott in which Parriott says “we think your request is entirely reasonable and will be glad to consider and discuss with you any suggestion you have along the lines of partial or full payment of your fees.” We do not read this as an admission that a fee was then due. It was written in response to one from the petitioner to Benedum and Parriott asking “whether there is any objection on your part to entertaining at this time a bill for, or a discussion of some partial payment on account of services rended by your [our?] firm in connection with those cases.” All that the clients agreed to do was to consider and discuss with the [983]*983petitioner the matter of payment of a fee, which is far from an admission that any fee had then been earned. Moreover, later in the same year Parriott again wrote, calling the petitioner’s attention to a previous payment made by check bearing the notation that no other was to be chargeable prior to final disposition of the case, and stating that Benedum “felt that in view of the substantial payments already made, it was only fair that your firm wait until the case was disposed of before requesting further payments.” This evidence' is not only not convincing that the fee had been earned at the time of the assignment, but rather definitely indicates that the clients regarded it as not then earned.
To sustain his argument that the Tex-Penn fee should be taxed to Mann as an assignor, the petitioner cites Lucas v. Earl, 281 U. S. 111; Helvering v. Horst, 311 U. S. 112; Helvering v. Eubank, 311 U. S. 122; and Harrison v. Schaffner, 312 U. S. 579. They are not helpful to his case. They are cases of the assignment of income only. Here the assignment is of all of Mann’s “right, title, or interest in and to all of the cases now handled by this firm.” This is an assignment of the property out of which the income grew and not an assignment of the income alone. The governing case is Blair v. Commissioner, 300 U. S. 5.
Finally, the petitioner contends that in any event the most that can be taxed to him is the excess of the fee collected over the value of Mann’s interest in the fee at the date of the assignment. The petitioner testified that that value was approximately $24,000. We have made no finding on this because under our view that there was no gift of the fee the value is not material.
What we have said so far is based upon the theories of the parties to the case and their arguments thereon. Another view compels the same result. That view is that the petitioner’s retention of the larger share of the Tex-Penn fee was simply a readjustment of fees among associates in recognition of the amount of labor performed in bringing the case to a conclusion. The petitioner’s testimony establishes that after he came into the case the services of Mann and Jones diminished and the petitioner’s became greater. Mann participated in one conference in the Bureau of Internal Revenue after petitioner came into the case. Thereafter his participation was limited to consultation with his associates. Neither Maim nor Jones was counsel of record in the trial before the Board. Mann attended the trial a part of one day. The petitioner was one of record counsel and attended the trial regularly. After May 19, 1933, Mann had nothing to do with the case. Jones assisted in preparing the brief in the appeal to the Circuit Court of Appeals, but was not counsel of record, and thereafter had no more to do with the case. The petitioner assisted in preparing the case for appeal and was counsel of record in both the [984]*984Circuit Court and the Supreme Court.
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[981]*981OPINION.
Arundell :
The petitioner contends that the $25,333.36, part of the Tex-Penn fee retained by him, in addition to the $6,333.30 representing his admitted earned share, was not taxable income to him. His principal argument is that the fee was a gift from Horace A. Mann. He contends further that, whether it was a gift or not, it was taxable to the assignor.
The several elements of a gift have been too often stated to need repetition here. For the purposes of this case we can adopt the petitioner’s proposed definition that a gift is a voluntary transfer of property from one to another without any consideration or compensation therefor. The transfer from Mann to the petitioner, which resulted in the petitioner’s receipt of the $25,333.36 in dispute, is evidenced by the letter of May 19, 1933, quoted in the findings. That letter authorized the petitioner “to complete all work on the above-named cases and arrange for and collect the fees due.” At that time work on the Tex-Penn case had not been completed. It had been submitted to the Board for decision, but as it turned out, much more work was to be done. Prior to the assignment petitioner had [982]*982been connected with these cases for more than four years. He had attempted their settlement and when this seemed no longer possible, turned his efforts toward preparation for trial. In spite of the fact that petitioner had no written contract with the Tex-Penn clients, he was fully recognized as one of their attorneys at the time of the trial before the Board and, in fact, he was the only one of the three associates who was an attorney of record in those proceedings. At the time of the assignment Mann was in ill health and wanted to retire from active practice. Upon this evidence the true situation appears to be that Mann made the transfer in consideration of the petitioner’s agreement to complete the unfinished cases that were in the office. The petitioner’s assumption of the duty “to complete all work on the above-named cases”, thereby relieving Mann of his burdens, was consideration for the transfer. Where there is consideration there can be no gift. Noel v. Parrott, 15 Fed. (2d) 669; Levey v. Helvering, 68 Fed. (2d) 401.
If there was any gift from Mann to the petitioner, it was a gift of Mann’s interest in the cases in his office and not a gift of the fee paid by the clients. As to some of them, his only remaining interest was the collection of fees. But the Tex-Penn case was not completed and there was no fee to assign by gift or otherwise. Mann’s interest in it was the dual one of completing it to his clients’ satisfaction and collection of the fee to be thereafter fixed. His agreement with J ones shows that he was to render a bill “if you and/or I (or my associates) succeed in bringing these cases to a conclusion satisfactory to our clients.”
There is some suggestion in the petitioner’s brief that the amount ultimately collected had been earned by Mann at the time of the assignment, and, it is argued, it was income to Mann under the case of Helvering v. Enright, 312 U. S. 636. The Enright case decides only a question of the reporting of income for a period ending, with the death of a taxpayer and has no application at all to the issue in this case. The extent to which the Tex-Penn fee had been earned at May 19,1933, is a matter of proof on the part of the petitioner. His evidence falls short of establishing the fact. He points to a letter dated June 1, 1933, from F. B. Parriott in which Parriott says “we think your request is entirely reasonable and will be glad to consider and discuss with you any suggestion you have along the lines of partial or full payment of your fees.” We do not read this as an admission that a fee was then due. It was written in response to one from the petitioner to Benedum and Parriott asking “whether there is any objection on your part to entertaining at this time a bill for, or a discussion of some partial payment on account of services rended by your [our?] firm in connection with those cases.” All that the clients agreed to do was to consider and discuss with the [983]*983petitioner the matter of payment of a fee, which is far from an admission that any fee had then been earned. Moreover, later in the same year Parriott again wrote, calling the petitioner’s attention to a previous payment made by check bearing the notation that no other was to be chargeable prior to final disposition of the case, and stating that Benedum “felt that in view of the substantial payments already made, it was only fair that your firm wait until the case was disposed of before requesting further payments.” This evidence' is not only not convincing that the fee had been earned at the time of the assignment, but rather definitely indicates that the clients regarded it as not then earned.
To sustain his argument that the Tex-Penn fee should be taxed to Mann as an assignor, the petitioner cites Lucas v. Earl, 281 U. S. 111; Helvering v. Horst, 311 U. S. 112; Helvering v. Eubank, 311 U. S. 122; and Harrison v. Schaffner, 312 U. S. 579. They are not helpful to his case. They are cases of the assignment of income only. Here the assignment is of all of Mann’s “right, title, or interest in and to all of the cases now handled by this firm.” This is an assignment of the property out of which the income grew and not an assignment of the income alone. The governing case is Blair v. Commissioner, 300 U. S. 5.
Finally, the petitioner contends that in any event the most that can be taxed to him is the excess of the fee collected over the value of Mann’s interest in the fee at the date of the assignment. The petitioner testified that that value was approximately $24,000. We have made no finding on this because under our view that there was no gift of the fee the value is not material.
What we have said so far is based upon the theories of the parties to the case and their arguments thereon. Another view compels the same result. That view is that the petitioner’s retention of the larger share of the Tex-Penn fee was simply a readjustment of fees among associates in recognition of the amount of labor performed in bringing the case to a conclusion. The petitioner’s testimony establishes that after he came into the case the services of Mann and Jones diminished and the petitioner’s became greater. Mann participated in one conference in the Bureau of Internal Revenue after petitioner came into the case. Thereafter his participation was limited to consultation with his associates. Neither Maim nor Jones was counsel of record in the trial before the Board. Mann attended the trial a part of one day. The petitioner was one of record counsel and attended the trial regularly. After May 19, 1933, Mann had nothing to do with the case. Jones assisted in preparing the brief in the appeal to the Circuit Court of Appeals, but was not counsel of record, and thereafter had no more to do with the case. The petitioner assisted in preparing the case for appeal and was counsel of record in both the [984]*984Circuit Court and the Supreme Court. Both Mann and Jones were ill and were away from their offices at times. At such times the petitioner carried on the firm’s work on the Tex-Penn case. The petitioner’s testimony is clear that the bulk of the work fell on him. On these facts it was only natural that there should be a readjustment of fees in some degree proportionate to the amount of services performed, particularly in view of. the fact that Mann was withdrawing completely, leaving the case unfinished. While the petitioner and his associates were not partners, they held themselves out to the world as a law firm, and their relations were close enough to those of partners to warrant a readjustment of earnings as is not uncommon among partners. On the whole record we are of the opinion that Mann’s assignment to the petitioner was in recognition of the services performed by the petitioner over and above those contemplated when the association began, and that it was an adjustment of the original arrangement among the associates. Accordingly, the sum received and retained by the petitioner was income from professional fees.
Reviewed by the Board.
Decision will be entered for the respondent.