Heald v. District of Columbia

• Citation: 259 U.S. 114,66 L.Ed. 852,42 S.Ct. 434
• Decision Date: 15 May 1922
• Docket Number: No. 268,268
• Parties: HEALD v. DISTRICT OF COLUMBIA
• Court: United States Supreme Court

259 U.S. 114

42 S.Ct. 434

66 L.Ed. 852

HEALD

v DISTRICT OF COLUMBIA.

No. 268.

Argued April 13, 1922.

Decided May 15, 1922.

Messrs. Vernon E. West and A. S. Worthington, both of Washington, D. C., for plaintiff in error.

[Argument of Counsel from pages 115-120 intentionally omitted] Mr. F. H. Stephens, of Washington, D. C., for the District of columbia.

Mr. Justice BRANDEIS delivered the opinion of the Court.

To aid in defraying the espenses of the District of Columbia Congress laid a tax of three-tenths of 1 per cent. on the value of the intangible property of persons resident, or engaged in business, within the District. Act of March 3, 1917, c. 160, § 9, 39 Stat. 1004, 1046. This tax was assessed upon such property held by Heald and others, as committee of Peters, an insane person. They and their ward were residents of the District; the property was located there; and none of it consisted of municipal bonds or was otherwise of a character exempt by law from taxation. The committee, asserting that the taxing act violated the federal Constitution, paid the tax under protest, and brought this action in the Supreme Court of the District to recover the amount so paid. Judgment was there entered for the defendant. The case was then taken to the Court of Appeals of the District which sought by certificate to obtain from this court instructions as to the constitutionality of the act. The certificate was dismissed for want of jurisdiction. Heald v. District of Columbia, 254 U.S. 20, 41 Sup. Ct. 42, 65 L. Ed. 106. Thereupon the case was heard in the Court of Appeals, and it affirmed the judgment of the lower court. 50 App. D. C. 231, 269 Fed. 1015. The case is now here on writ of error. Peters having died, his executors, of whom Heald is the survivor, were substituted as plaintiffs in error.

Plaintiff contends that the act is void: (a) Because it requires every nonresident of the District who engages in business therein to pay a tax on all his intangible property wherever situated or from whatever source derived; (b) because it requires a nonresident engaged in business within the District to pay a tax on all his credits or choses in action, whether due from residents or nonresidents, including those which have not been reduced to concrete form; (c) because it taxes bonds of states and their municipalities. The District insists that such is not the correct construction of the act, that it has not in fact been so construed or applied by the taxing officials, and that, even if it had been, the whole act would not thereby be rendered void, as these provisions are clearly severable from the rest of the act. Compare Hatch v. Reardon, 204 U.S. 152, 161, 27 Sup. Ct. 188, 51 L. Ed. 415, 9 Ann. Cas. 736; Ratterman v. Western Union Telegraph Co., 127 U.S. 411, 8 Sup. Ct. 1127, 32 L. Ed. 229; Texas Co. v. Brown, 258 U.S. 466, 42 Sup. Ct. 375, 66 L. Ed. ——. But these objections, even if otherwise well founded, would not entitle plaintiff to challenge the validity of the tax. The property taxed is located within the District; those who hold it and the owner are residents; and there is no state or municipal bond among the property taxed. It has been repeatedly held that one who would strike down a state statute as violative of the federal Constitution must show that he is within the class of persons with respect to whom the act is unconstitutional and that the alleged unconstitutional feature injures him.¹ In no case has it been held that a different rule applies where the statute assailed is an act of Congress; nor has any good reason been suggested why it should be so held. Compare United States v. Changler-Dunbar Co., 229 U.S. 53, 73, 33 Sup. Ct. 667, 57 L. Ed. 1063; Straus v. Foxworth, 231 U.S. 162, 171, 34 Sup. Ct. 42, 58 L. Ed. 168; Fairchild v. Hughes, 258 U.S. 126, 42 Sup. Ct. 274, 66 L. Ed. ——.

Then it is contended that one clause of the act is void, because, in enumerating classes of property exempt from the tax on intangibles, it recites 'the shares of stock of business companies which by reason of or in addition to incorporation receive no special franchise or privilege.' The argument is that the meaning and application of this clause is so uncertain that the taxpayer is left without a guide in making his return. We have no occasion to inquire into the meaning or effect of this provision or whether it is open to the criticism leveled against it; for this plaintiff would likewise not be entitled to raise this objection, even if well founded, since it is not shown that any...