opinion: COMMISSIONER OF INTERNAL REVENUE, Petitioner, v. Robert J. and Emma R. STUART, Respondents.
  No. 13615.
  United States Court of Appeals Third Circuit.
  Argued Dec. 5, 1961.
  Decided April 4, 1962.
  Joseph Kovner, Washington, D. C. (Louis P. Oberdorfer, Assistant Attorney General, Lee A. Jackson, I. Henry Kutz, Attorneys, Department of Justice, Washington, D. C., on the brief), for petitioner.
  Harry Yohlin, Philadelphia, Pa. (Polisher, Steinberg & Yohlin, Bennett L. Aaron, Philadelphia, Pa., on the brief), for respondents.
  Before GOODRICH, STALEY and GANEY, Circuit Judges.
  GANEY, Circuit Judge.
  This is a review of a decision of the Tax Court at the request of the Commissioner of Internal Revenue. The question presented is whether or not that Court correctly held that the sale or other disposition of taxpayers’ real property was made in 1954 within the meaning of § 453(b) of the Internal Revenue Code of 1954, 26 U.S.C.A. § 453(b), as the taxpayers maintained, rather than in 1955, as the Commissioner contended.
  The basic facts are not in dispute and, as obtained from the opinion of the Tax Court, may be stated as follows: In 1954, the taxpayers, husband and wife, owned and resided upon a 187.74 acre farm near Beverly, New Jersey. On April 21, 1954, they entered into a written agreement to sell the land to the purchasing agent (“Buyer”) of Levitt & Sons, Inc., which was then engaged in the development of Levittown, New Jersey. In pertinent part the agreement provides :
  “WITNESSETH, That the Seller and Buyer respectively agree to sell and buy All That Certain tract and parcel of land * * * consist-ting of approximately 187.74 acres * * * “for the price of * * * $150,000.00 * * * under the following conditions:
  “1. (a) A payment of * * * $1,500.00 * * * made herewith is to be applied on account of the purchase price.
  “(b) A further payment of * * * $1,500.00 * * * shall be made on or before July 20, 1954, to be applied on account of the purchase price.
  “(c) A further payment of * * $12,000.00 *. * * shall be made on or before October 20, 1954, to be applied on account of the purchase price.
  “2. Settlement is to take place at Burlington County Abstract Company, 451 High Street, Burlington, New Jersey, on the 20th day of April, 1955, at 2 o’clock P. M., which time is of the essence of this agreement, when the Seller shall deliver a general warranty deed for the said premises, at which time the balance of the purchase price is to be paid. Buyer shall have the right to advance the settlement date by no more than six months, by giving thirty days notice in writing to the Seller of his intention to do so.
  “The above consideration is to be delivered to Burlington County Abstract Company to be disbursed after the insurance company selected by Buyer has completed the necessary continuation search to cover the record date of said deed.
  “3. In the event that the Buyer shall fail to make any of the payments called for hereunder, or shall fail to make settlement in accordance with the terms hereof, then and in that case all sums paid on account by the Buyer shall be forfeited to the Seller as liquidated damages, and Buyer shall be released from all obligation and liability, including any right of the Seller to bring an action for specific performance, and all rights and liabilities of both parties to this agreement shall cease and determine.
  “4. The title to be delivered shall be marketable title and insurable by the title insurance company selected by the Buyer * * *
  ******
  “6. Actual possession is to be given to the Buyer on October 20, 1955.
  * •&* ■X’ -X- ■3v> *
  “9. This agreement includes all fixtures permanently attached to the building or buildings * * * and appurtenances; also specifically includes the following items:
  “9A. Seller shall have the right to completely harvest all crops planted for the year 1954, & 1955, up to October 20, 1955.
  “9B. Seller shall have the right to remove all buildings and trees from the premises in question.
  “9C. Seller shall have the right to occupy and use the dwelling and all buildings up to October 20, 1955.
  “10. Buyer shall have the right at any time or times prior to settlement to enter upon the premises for the purpose of making test borings or test excavations, or any other work of a similar nature, provided, however, that in such event Buyer shall reimburse Seller for any damages that may be thereby inflicted upon the crops or other installations of the Seller. * * * ”
  The agreement was modified in order to change the provision for payment in full of the $135,000 balance of the purchase price at settlement to payment of $85,000 in cash, plus a purchase money mortgage in the amount of $50,000, payable in installments of $20,000 on April 1, 1956, and $30,000 on April 1, 1957. Although the taxpayers began searching for another abode during May of 1954, they continued to live in the dwelling located upon the land until May of 1956. Levitt & Sons, Inc., made use of the land in accordance with paragraph 10 of the agreement. It does not appear when settlement took place. On this point, the Tax Court said: “Settlement was made and title to the land transferred more than a year prior to May of 1956.” On account of the purchase price the taxpayers received $15,000 in 1954, $85,000 in 1955, $20,000 in 1956, and $30,000 in 1957. For the taxable years ending in 1954 and 1955, taxpayers reported the gain from the sale or other disposition of their real property pursuant to § 453 (b) of the Code. The Commissioner determined that they were not entitled to use the installment method of reporting the gain from the disposition of their property, recomputed their returns in accordance with the long term provisions of the Code, and assessed a deficiency for the year 1955. Taxpayers petitioned the Tax Court for a redetermination of the deficiency.
  Before one who sells real property on an installment plan extending over a taxable year may take advantage of § 453(b) of the Code, not more than thirty per cent of the selling price may be received in the year of the sale or other disposition of the property. There is no question that the taxpayers received less than thirty per cent of the selling price in 1954 and more than thirty per cent in 1955. There is a dispute as to whether the sale or other disposition of the property took place in 1954 or 1955.
  The Tax Court stated: “In the case before us there was already a binding agreement on April 21, 1954, between the respective parties to buy and sNl real property. So binding was the agreement that it was necessary that the buyer be relieved by paragraph 3 of the agreement of the obligation to specifically perform thereunder in consideration of the payment of $15,000 liquidated damages. By the agreement taxpayers immediately disposed of all the incidents of ownership in their land and the right of the purchaser to exercise the incidents of ownership thereafter was absolute with the exception that petitioners were permitted to occupy the dwelling therein for a fixed period and that legal title was not to pass until the settlement date, See Wiseman v. Scruggs, 281 F.2d 900 (C.A.10, 1960).” (19 T.C.M. 1311, 1314). The real property is situated and the agreement was made in New Jersey, We look to the law of that State to deteimine what disposition was made of the Property in 1954 and 1955. See Lucas v. North Texas Co., 281 U.S. 11, S.Ct. 184, 74 L.Ed. 668 (1930); National Memorial Park, Inc. v. Commissioner, 145 F.2d 1008, 1014 (4 Cir. 1944), cert. denied 324 U.S. 858, 65 S.Ct. 861, 89 L.Ed. 1416.
  We agree with the Tax Court. that an enforceable agreement came into existence upon the signing of the doeument on April 21, 1954. However, it did not bind the Buyer to perform his promises. Except for the forfeiture of installments already paid, paragraph 3 of the agreement permitted him to terminate the agreement with impunity at any time prior to settlement. Under New Jersey law, that paragraph transformed the agreement into one of option. Such an agreement, as distinguished from an agreement of sale, imposes no binding obligation on the holder of the option. Sooy v. Henkelman, 104 N.J.L. 540, 142 A. 17 (1928); Wellmore Builders, Inc. v. Wannier, 49 N.J.Super. 456, 140 A.2d 422 (1958).
  In the case before us the Buyer kept the option alive by paying the installments amounting to $15,000 as they became due. He could have refused to make any more down payments after making the first $1,500 and would have been relieved of any obligation to pay more. The option to buy was not exercised until the Buyer tendered a purchase money mortgage in the face amount of $50,000, payable as agreed, plus $85,000 in cash on April 26, 1955, at which time he received a deed to the land. Until that time he had only an inchoate right; he was not entitled to the deed before then. Bright v. Forrest Hill Park Development Co., 133 N.J.Eq. 170, 31 A.2d 190, 198 (Ch. 1943). Thus the agreement did not create an unconditional obligation to sell and an unconditional obligation to buy, which were absolute and enforceable at the time of the signing. There never was an unconditional liability on the part of the Buyer for the balance of the purchase price until settlement was completed. At that time a sale of the real property took place, over a year after the signing of the agreement.
  The inchoate right to acquire the land by the Buyer prior to the sale of the real property was not a “disposition” of property within the meaning of § 453(b) of the Code. Hence the ultimate finding by the Tax Court that the taxpayers made a sale or other disposition of their land on April 21, 1954, within the meaning of that section, was clearly erroneous.
  The decision of the Tax Court will be reversed.
  . The decision of the Tax Court is reported at 19 T.C.M. 1311 (1960) under the caption Robert J. and Emma R. Stuart v. Commissioner of Internal Revenue.
  . Any plan involving an arrangement for the sale of land or chattel with payment of the purchase price to be made in two or more periodic payments. See Consolidated Dry Goods Co v. United States, 180 F.Supp. 878 (D.C.Mass.1960).
  . With reference to this section, the Court, in Wiseman v. Scruggs, 281 F.2d 900 (C.A.10, 1960), at p. 902, said: “It concerns itself with the return of income on the installment method. And in presently pertinent part, it provides in substance that where real property is sold on an installment basis extending over more than one year with not more than thirty per cent of the selling price received in the year of the sale, the taxpayer may at his election treat the sale on an installment basis and return as income therefrom in any taxable year only the proportion of the gain reflected by the payment received in that year.”
  . Tunkel v. Filippone, 4 N.J.Super. 107, 66 A.2d 339, 341 (Super.A.D.1949), the Court said: “We must start with the assumption that all the words, printed or written, above the signatures are part of the contract, and that the parties intended each covenant to be effective. A construction is favored that gives to the covenant a reasonable meaning and the certainty which is essential to an enforceable contract. Rest.Contr., § 236; Bullowa v. Thermoid Co., 114 N.J.L. 205, 178 A. 596.”
  . See Lawler v. Commissioner, 78 F.2d 567 (C.C.A.9, 1935).
instruction: What follows is an opinion from a United States Court of Appeals.
  Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
  In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
  To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
  United States of America,
  Plaintiff, Appellant
  v
  International Brotherhood of Widget Workers,AFL-CIO
  Defendant, Appellee.
  International Brotherhood of Widget Workers,AFL-CIO
  Defendants, Cross-appellants
  v
  United States of America.
  Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
  of the Board
  Plaintiff, Appellants,
  v
  United States of America,
  Defendant, Appellee.
  This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
  Your task is to identify the state of the first listed state or local government agency that is an appellant.
choices: not Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachussets Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New New New New North North Ohio Oklahoma Oregon Pennsylvania Rhode South South Tennessee Texas Utah Vermont Virginia Washington West Wisconsin Wyoming Virgin Puerto District Guam not Panama