On or about December 31, 1953, petitioners also executed a "standby agreement" with respect to debentures of Products which read, in material part, as follows:

To induce the Reconstruction Finance Corporation (herein called "RFC") to make further disbursements of all or any part of the loan (herein called "Loan"), authorized to Oregon Fibre Products, Inc., * * * Borrower,     (herein called "Debenture Holder") hereby represent, warrant and covenant * * * to and with each other and with the RFC with respect to the indebtedness * * * owing by Borrower to Debenture Holder * * * that:

1. Without the prior written consent of RFC, Debenture Holder will take no action to assert, collect or enforce all or any part of the Debenture.

2. Debenture Holder will promptly pay to RFC all amounts which may be received by Holder on account of the Debenture.

* * * *

4. Debenture Holder will deliver to the Trustee under the Debentures or to Borrower and the Trustee or the Borrower will stamp or otherwise mark each Debenture with a legend as follows:

This Debenture and all rights1960 U.S. Tax Ct. LEXIS 35">*43 represented thereby are subject to all the terms and conditions of a certain Standby Agreement made by and between the Debenture Holder and the RFC * * * which Standby Agreement provides, among other things, that the Company shall not pay any interest or principal on this Debenture Bond until payment in full of the RFC Loan in the amount of $ 3,100,000.00 together with interest has been made * * *

* * * *

35 T.C. 192">*196 7. This Standby Agreement and all obligations hereunder or with respect hereto, of Borrower and Debenture Holder, shall continue in full force and effect until payment in full of the indebtedness evidenced by the Note, notwithstanding any action which RFC or Borrower, or others, with the consent of RFC may take or refrain from taking with respect to such indebtedness. * * *

On or about January 7, 1954, the legend specified in the standby agreement was stamped on all of the debentures which petitioner held.

Products made no payments of interest to consenting debenture holders, including petitioner, during any of the periods here in question. In the Federal income tax return filed by petitioner for the calendar year 1954, interest on the debentures of Products was included1960 U.S. Tax Ct. LEXIS 35">*44 in the amount of $ 92,015.

The first issue presented is whether petitioner and Products were entitled to file a consolidated return for the year 1954 under the provisions of section 1504(a)(2) of the 1954 Code. ¹ Petitioner concedes that if all of the 120,000 outstanding shares of Products' common stock are counted, its 74,000 shares constitute a holding insufficient to qualify for the privilege of filing a consolidated return. It insists, however, that the voting rights of 30,000 shares under the voting trust agreement were suspended by operation of the Oregon Business Corporation Act during 1954, and that, therefore, its 74,000 shares possessed not 62 but 82 per cent of the voting power of all classes of stock. Respondent contends that no suspension of the voting rights of the stock held under the voting trust was worked by enactment of the Oregon Business Corporation Act, and that, therefore, petitioner did not own stock in Products possessing 80 per cent of the voting power during the taxable year 1954.

1960 U.S. Tax Ct. LEXIS 35">*45 Prior to the enactment of the Oregon Business Corporation Act, the validity of voting trusts had been recognized by the courts of that State. Curtze v. Iron Dyke Copper Min. Co., 81 P. 815. See also In re Pittock's Will, 199 P. 633; Smith v. Bramwell, 31 P.2d 647. The trust agreement was entered into on November 3, 1952. By its terms the voting trust was to continue for a period of 20 years. It is not contended nor do we find any warrant for holding that the agreement was not valid when executed.

In 1953, the Oregon Legislature enacted a Business Corporation Act which provided that voting trusts might be created "for a period of not to exceed 10 years." Petitioner contends that the enactment 35 T.C. 192">*197 cast "[a] definite pall of invalidity" upon the voting trust. Its position is stated in its brief, thus:

Pending judicial clarification of the impact of this statutory provision upon a pre-existing voting trust, the voting trustees could not validly exercise their voting rights under the voting trust. Neither could the voting trust certificate holders exercise same until the1960 U.S. Tax Ct. LEXIS 35">*46 stock was issued in their names. In the absence of a judicial determination, the matter could be resolved only through a mutual termination of the voting trust agreement. * * *

We do not agree that the voting trustees could not exercise their voting rights. The rights and liability of the parties under the voting trust agreement attached prior to the enactment. For the Oregon Business Corporation Act to invalidate the trust or suspend any rights accruing thereunder would require the retrospective application of the Act. As was set forth in Hartley v. Utah Const. Co., 106 F.2d 953, 955:

The rule in Oregon is:

"* * * no act will be held to have a retrospective effect, unless the intention in that respect is clearly apparent in the statute itself. On the contrary, if it is fairly possible to restrain the operation of the statute so as to be prospective, that course will be adopted by the courts. * * *" Libby v. Southern Pac. Co., 109 Or. 449">109 Or. 449, 109 Or. 449">452, 219 P. 604">219 P. 604, 219 P. 604">605, 220 P. 1017">220 P. 1017.

See also Hoffart v. Lindquist, 189 P.2d 592, 596, in which it is stated1960 U.S. Tax Ct. LEXIS 35">*47 that "[it] is well settled that legislation is usually construed as prospective and not retrospective." We are not directed to, nor do we find, any provision of the Act which would indicate that the Oregon Legislature intended retrospective application of the Act. Indeed, section 57.799 of the Act, by providing that no right, liability, or penalty created under the prior Act should be affected by its repeal, indicates that the legislature intended only prospective operation of the act.

Both parties have discussed cases arising in jurisdictions other than Oregon to buttress their contentions. At least one case, Christopher v. Richardson, 394 Pa. 425">394 Pa. 425, 147 A.2d 375 (1959), cited by petitioner is wholly inapplicable in that it involves a voting trust created after passage of the Act restricting the duration of such trusts. More appropriate to the present issue are Wolf v. Roosevelt, 290 N.Y. 400, 49 N.E.2d 502, and Western Pac. R. Corporation v. Baldwin, 89 F.2d 269, in both of which cases it was concluded that Acts limiting the duration of voting1960 U.S. Tax Ct. LEXIS 35">*48 trusts were not to be applied to preexisting trust agreements in jurisdictions recognizing the validity of such trusts at their creation.

We are satisfied that the voting trust in the present case was not invalidated by enactment of section 57.175 of the Oregon Business Corporation Act, and that there was no concomitant suspension of the voting rights of the 30,000 shares so held in trust. We hold, therefore, 35 T.C. 192">*198 that during 1954, petitioner did not own stock in Products possessing 80 per cent of the voting powers so as to entitle it to file a consolidated return with Products.

The second issue presented is whether interest, in the amount of $ 92,015, on debentures issued by Products and held by petitioner is properly includible in petitioner's income for the year 1954. Petitioner accrued the interest on its books for 1954 and prior years, but contends that such accrual was erroneous for 1954 in that payment of the interest was contingent upon payment of the RFC loan. Petitioner relies solely on the contingency which it claims arises from the modification of the trust indenture, debentures, and the standby agreement with the RFC and Products. Respondent maintains that petitioner1960 U.S. Tax Ct. LEXIS 35">*49 in 1954 had a fixed and unconditional right to the interest although payment of the interest was postponed.

In San Francisco Stevedoring Co., 8 T.C. 222">8 T.C. 222, 8 T.C. 222">225, we set forth the principles of law applicable to a determination of the proper accrual of income as follows:

A taxpayer, using an accrual method of accounting, must accrue an item in the year in which the taxpayer acquires a fixed and unconditional right to receive the amount, even though actual payment is to be deferred. There must be no contingency or unreasonable uncertainty qualifying the payment or receipt. Income does not accrue to a taxpayer using an accrual method until there arises in him a fixed or unconditional right to receive it. * * *

The debentures as issued provided for postponement of interest payments in favor of the RFC loan, but the payments were required to be made no later than January 1, 1958. The debentures were, thus, similar to those involved in Natco Corporation v. United States, 240 F.2d 398, a case cited on brief by both parties. Were we presented with an issue involving only the debentures as originally issued, we should have1960 U.S. Tax Ct. LEXIS 35">*50 no difficulty sustaining respondent's determination. The situation would be substantially the same as it was in the Natco Corporation case.

Petitioner, however, consented to an amendment of the trust indenture, entered into a standby agreement with Products and the RFC, and suffered the alteration of the debentures in accordance with the agreement and consent. By the consent and standby agreement, petitioner relinquished its right to receive payment of principal or interest on the bonds until the RFC loan was fully paid, renounced its right to assert claims under or enforce the debentures, and agreed to pay over to the RFC any sums received under the debentures. Thus, petitioner's right to receive payment of interest on the debentures was dependent upon full payment by Products of the principal and interest of the RFC loan. If an item is to accrue as income, "[there] must be no contingency * * * qualifying the payment or receipt." San Francisco Stevedoring Co., cited and quoted supra.

35 T.C. 192">*199 We hold, therefore, that a contingency so qualified petitioner's right to receipt of the interest here in issue as to render it not properly includible in petitioner's income1960 U.S. Tax Ct. LEXIS 35">*51 for the year 1954.

Decision will be entered under Rule 50.