Maryland Coal and Coke Company v. Edgar A. McGinnes District Director of Internal Revenue

The terms of a contract with a corporate mine owner gave the taxpayer corporation as “sales agent” the exclusive right to sell the entire output of a certain mine and to receive as compensation a commission of 15 cents per net ton. The agreement ran “for the life of the mine”. 1

Desiring to acquire the mine as a source of coal for its own use, Bethlehem Steel Corporation negotiated to purchase all of the stock of the mine-owning corporation. Since Bethlehem did not intend to sell coal, the negotiations included the taxpayer with a view to the termination of its contract. The stock purchase was…