89 F.2d 207 (5th Cir. 1937), 8410, Chas. C. Steward Mach. Co. v. Davis

Docket Nº:8410.
Citation:89 F.2d 207
Party Name:CHAS. C. STEWARD MACH. CO. v. DAVIS. [*]
Case Date:March 20, 1937
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 207

89 F.2d 207 (5th Cir. 1937)



DAVIS. [*]

No. 8410.

United States Court of Appeals, Fifth Circuit.

March 20, 1937

Page 208

Appeal from the District Court of the United States for the Northern District of Alabama; David J. Davis, Judge.

Walter Bouldin, Wm. Logan Martin, and Borden Buff, all of Birmingham, Ala., for appellant.

Robert H. Jackson, Asst. Atty. Gen., and Sewall Key and J. P. Jackson, Sp. Assts. to Atty. Gen., for appellee.

Before FOSTER, SIBLEY, and HOLMES, Circuit Judges.

SIBLEY, Circuit Judge.

The Charles C. Steward Machine Company sued the Collector of Internal Revenue to recover a tax of $46.14 collected from it as the employer of more than eight persons during the year 1936, by virtue of title IX of the Social Security Act (sections 901-910), 49 Stat. 639 (42 U.S.C.A. §§ 1101-1110). The tax is alleged to have been wrongfully and illegally assessed and collected because the Social Security Act is unconstitutional and void for reasons in brief as follows: (1) The act in purpose and effect coerces the enactment by the States of unemployment compensation laws. (2) It violates the Ninth and Tenth Amendments of the Constitution by setting up a federal system of unemployment compensation by controlling the administration of the State statutes and the moneys raised under them, thus intruding on the constitutional power and jurisdiction of the States. (3) By the system so created the property of the employers is taken without just compensation for the benefit of an arbitrarily defined class. (4) The

Page 209

taxes imposed under the act are not for revenue to support the Government for constitutional purposes, but for the purpose of providing funds to support State administration in matters beyond the province of the Congress to control. (5) The act violates article 1, section 1, of the Constitution by investing legislative authority in the Social Security Board in its stated activities. Refusal of an application for refund based on the same grounds was alleged. The District Court sustained a general demurrer and dismissed the suit.

The question whether the tax is in conflict with the Constitution is thus presented, uncomplicated by the question of a remedy in equity on which the decision in Beeland Wholesale Co. v. Davis. Collector (C.C.A.) 88 F.2d 447, mainly went. Mindful of the established rule that a court will enquire into the constitutionality of a statute only when and to the extent that the case before it requires entry upon that duty, we are of opinion that we need not consider the Social Security Act as a whole (42 U.S.C.A. § 301-1305). The act deals with a number of subject-matters, somewhat related but separately regulated. It contains ten broad divisions or titles which might have been made separate acts. At the end is section 1103 (42 U.S.C.A. § 1303); 'If any provision of this Act (chapter), or the application thereof to any person or circumstance, is held invalid, the remainder of the Act (chapter), and the application of such provision to other persons or circumstances shall not be affected thereby. ' The tax here disputed is laid under title IX (42...

To continue reading