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*558OPINION.

Love:

The petitioner claims that the transaction outlined in the findings of fact constitute a loss sustained under the provisions of section 214 (a) of the Revenue Act of 1918, and that the loss was sustained in the year 1919, since in that year he gave to the Bank his note for $19,253.54 and $4,899.58 in cash to cover unpaid notes held by the Bank, the payment of which the petitioner had guaranteed.

The respondent denies the right of the petitioner to deduct the amount represented, by the note given in 1919 by the petitioner to the Bank and further denies the propriety of his allowing as a deduction for the year 1919 the amount of $4,899.58 paid in cash in that year to the Bank pursuant to his guaranty agreement. In denying the right of the petitioner to deduct either the note given or cash paid in the year 1919, the respondent argues that the petitioner, in fact, borrowed the money from the Bank and loaned that which he borrowed. He further argues in denying the deductions that no particular note given to the petitioner for the money loaned was determined to be worthless or charged off during the year 1919.

We believe that neither position taken is correct. The evidence shows that the loans were made by and in the name of the Bank. *559It is clear that the petitioner was a guarantor of the loans made by him for the Bank.

In the year 1919, when the petitioner gave to the Bank his note for $19,253.54 and cash in the amount of $4,899.58, he was merely carrying out his agreement of guaranty. Upon carrying out the guaranty agreement the petitioner was subrogated to the rights of the Bank against the makers of the notes remaining unpaid at that time. The petitioner could have then proceeded against the makers of the notes subject, of course, to the defenses available against the Bank. The evidence is silent as to whether the unpaid notes held by the Bank were worthless at the time in 1919 that the petitioner carried out his agreement of guaranty. The evidence is equally silent as to whether the petitioner ascertained and determined any of the notes to be worthless in the year 1919, to which he had been subrogated to the Bank’s rights. The fact that the petitioner as a guarantor of the notes was forced to pay them in cash, notes, or both, does not of itself indicate that he suffered any loss at that time. He may have, and conceivably could have, recovered later the amounts represented by the notes and secured by chattel mortgages.

In the absence of any evidence to show that the petitioner actually sustained a loss in any amount due to the notes in question, we must approve the Commissioner’s determination in denying the deduction from gross income for the year 1919 the amount of $19,253.54 represented by the note given in that year to the Bank and we must also determine that the Commissioner erred in allowing as a deduction from gross income for the year 1919, the amount of $4,899.58 in cash pai(1 to the Bank in that year pursuant to the guaranty agreement between the Bank and the petitioner.

Judgment will T)e entered on 15 days’ notice, under Rule 50.

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How this case has been treated — in progress