Henry Hertz v. Gordon Woodman

• Decision Date: 31 May 1910
• Docket Number: No. 640,640
• Citation: 30 S.Ct. 621,218 U.S. 205,54 L.Ed. 1001
• Parties: HENRY L. HERTZ, Collector, etc., v. GORDON O. WOODMAN et al
• Court: U.S. Supreme Court

218 U.S. 205

30 S.Ct. 621

54 L.Ed. 1001

HENRY L. HERTZ, Collector, etc.,

v GORDON O. WOODMAN et al.

No. 640.

Argued April 25, 26, 1910.

Decided May 31, 1910.

Messrs. H. T. Newcomb, Edward Lauterbach, and Underwood & Smyser for Woodman et al.

[Argument of Counsel from pages 206-210 intentionally omitted] Mr. Justice Lurton delivered the opinion of the court:

This case comes to this court upon a certificate under § 6 of the act of 1891 [26 Stat. at L. 828, chap. 517, U. S. Comp. Stat. 1901, p. 549], creating circuit courts of appeals. The action in the circuit court was one by the executor and legatees under the will of James F. Woodman, to recover an amount of money which had been paid, under protest, as a tax upon legacies under the will of the testator, by virtue of §§ 29 and 30 of the act of June 13, 1898 [30 Stat. at L. 464, 465, chap. 448, U. S. Comp. Stat. 1901, pp. 2307, 2308], and amendments, known as the war revenue act.

The facts certified are: That Woodman died at Chicago, March 15, 1902, leaving a will, which was there duly probated on May 3, 1902, and that the Illinois Trust & Savings Bank qualified as executor. The clear value of legacies payable under the will to the defendants in error was $166,250. On January 17, 1905, and before the payment of these legacies, the collector claimed and collected, as the amount of duty and tax due and payable upon said legacies, under the act of Congress before mentioned, the sum of $2,812.49. After stating the facts, substantially as above, the certificate concludes as follows:

'Upon the foregoing facts the question of law concerning which this court desires the instruction and advice of the Supreme Court is this: Does the fact that the testator dies within one year immediately prior to the taking effect of the repealing act of April 12 1902 ([32 Stat. at L. 97, chap. 500] U. S. Comp Stat.Supp. 1903, p. 279, U. S. Comp. Stat. Supp. 1909, p. 876), relieve from taxation legacies otherwise taxable under §§ 29 and 30 of the act of June 13, 1898, as amended by the act of March 2, 1901 [31 Stat. at L. 946-948, chap. 806, U. S. Comp. Stat. 1901, pp. 2307, 2308]?'

The form of this certificate has been criticized, but we think it sufficiently states both the question and the desire of that court for the instruction of this court that it may make a proper decision. It conforms in substance with the statute, and finds precedents in a number of instances in matter of form. Helwig v. United States, 188 U. S. 605, 47 L. ed. 614, 23 Sup. Ct. Rep. 427; United States v. Pridgeon, 153 U. S. 48, 38 L. ed. 631, 14 Sup. Ct. Rep. 746; United States v. Ju Toy, 198 U. S. 253, 49 L. ed. 1040, 25 Sup. Ct. Rep. 644.

It is also urged that the circuit court of appeals for the seventh circuit is precluded from requesting the instruction of this court, because it had in two cases theretofore decided the very question now certified. United States v. Marion Trust Co. 74 C. C. A. 439, 143 Fed. 301; United States v. Stephenson, not yet reported. In both cases the decision was adverse to the contention of the United States. The first was affirmed by this court without opinion, by an evenly divided court (203 U. S. 594, 51 L. ed. 332, 27 Sup. Ct. Rep. 783); and, in the second, an application by the United States for a writ of certiorari was denied (212 U. S. 572, 53 L. ed. 656, 29 Sup. Ct. Rep. 682). It is further contended that, if not concluded by its own decisions, it was bound to follow the judgments of this court in Eidman v. Tilghman, affirming the judgment of the circuit court of appeals of the second circuit, reported in 69 C. C. A. 139, 136 Fed. 141, the affirmance by this court being reported in 203 U. S. 580, 51 L. ed. 326, 27 Sup. Ct. Rep. 779, and similar judgments of affirmance in McCoach v. Philadelphia Trust, S. D. & Ins. Co. 73 C. C. A. 610, 142 Fed. 120, and 205 U. S. 539, 51 L. ed. 921, 27 Sup. Ct. Rep. 783, and United States v. Marion Trust Co. supra.

All of these cases were affirmances by an equally divided court of the judgments of the court below in favor of the legatees or distributees who had sued to recover taxes paid upon legacies or shares which had passed to the plaintiffs within one year after the death of the testator or intestate, the several lower courts having ruled that the tax had not been saved, because it was not due and payable at the time of the repeal of the act under which the tax was claimed.

The circuit court of appeals was obviously not bound to follow its own prior decision. The rule of stare decisis, though one tending to consistency and uniformity of decision, is not inflexible. Whether it shall be followed or departed from is a question entirely within the discretion of the court, which is again called upon to consider a question once decided. The court below, in this instance, when called upon to reconsider its former construction of the inheritance tax act, found itself confronted by the fact that this court had been equally divided in opinion as to the proper interpretation of the act, and for that reason alone obliged to affirm the ruling of that and other courts against the legality of the tax which had been collected. If the decision of the court under review had been in favor of the legality of the tax, an affirmance must likewise have resulted from an equal division. That court also found that its own former view of the act had not been satisfactory to the circuit court of appeals for the eighth circuit, which court had decided contrariwise in Westhus v. Union Trust Co. 90 C. C. A. 441, 164 Fed. 795. In such circumstances the court below was not only free to regard the question as one open for determination, but one which might well be certified to this court, that the question of law which had never been authoritatively decided by this court might be so determined by an instruction as to how it should decide the matter when thus presented for reconsideration.

When this court, in the exercise of its appellate powers, is called upon to decide whether that which has been done in the lower court shall be reversed or affirmed, it is obvious that that which has been done must stand unless reversed by the affirmative action of a majority. It has therefore been the invariable practice to affirm, without opinion, any judgment or decree which is not decided to be erroneous by a majority of the court sitting in the cause. The earliest precedent is that of Etting v. Bank of United States, 11 Wheat. 59, 78, 6 L. ed. 419, 423. Chief Justice Marshall said at the conclusion of the opinion:

'In the very elaborate arguments which have been made at the bar, several cases have heen cited which have been attentively considered. No attempt will be made to analyze them, or to decide on their application to the case before us, because the judges are divided respecting it. Consequently, the principles of law which have been argued cannot be settled; but the judgment is affirmed, the court being divided in opinion upon it.'

In Durant v. Essex Co. 7 Wall. 107, 110, 19 L. ed. 154, 156, Mr. Justice Field, for this court, said, in respect of the effect of the affirmance by a divided court:

'There is nothing in the fact that the judges of this court were divided in opinion upon the question whether the decree should be reversed or not, and, therefore, ordered an affirmance of the decree of the court below. The judgment of affirmance was the judgment of the entire court. The division of opinion between the judges was the reason for the entry of that judgment; but the reason is no part of the judgment itself.'

To the same effect are Westhus v. Union Trust Co. 94 C. C. A. 95, 168 Fed. 617; Hartman v. Greenhow, 102 U. S. 672, 676, 26 L. ed. 271, 273. A different rule seems to have been sanctioned in the English courts. Catherwood v. Caslon, 13 Mees. & W. 261; Beamish v. Beamish, 9 H. L. Cas. 274.

Under the precedents of this court, and, as seems justified by reason as well as by authority, an affirmance by an equally divided court is, as between the parties, a conclusive determination and adjudication of the matter adjudged; but the principles of law involved not having been agreed upon by a majority of the court sitting prevents the case from becoming an authority for the determination of other cases, either in this or in inferior courts. The affirmance by a divided court in the second case shows this, for if it was not so, the second equal division could not have happened, for the case would have been controlled by the first equal division.

We shall therefore proceed to determine the question of law presented by the certificate of the circuit court of appeals, feeling free to decide it as our judgments may dictate.

The statutes involved and requiring consideration are the 29th section of the act of June 13, 1898 (30 Stat. at L. 464, chap. 448, U. S. Comp. Stat. 1901, p. 2307); the 30th section of the same act, as amended by § 11 of the act of March 2, 1901 (31 Stat. at L. 948, chap. 806, U. S. Comp. Stat. 1901, p. 2308), and §§ 7, 8, and 11 of the act of April 12, 1902 (32 Stat. at L. 97 et seq., chap. 500, U. S. Comp. Stat. Supp. 1909, pp. 875, 876, 878). So much of the sections referred to as is material to the present question is set out in the margin.¹

¹ Section 29 of the act of June 13, 1898, is as follows:

'That any person or persons having in charge or trust, as administrators, executors, or trustees, any legacies or distributive shares arising from personal property, where the whole amount of such personal property as aforesaid shall exceed the sum of ten thousand dollars in actual value, passing, after the passage of this act, from any person possessed of such property, either by will or by the intestate laws of any state or territory, or any personal property or interest therein, transferred by deed, grant, bargain, sale, or gift, made or intended to take effect in possession or enjoyment after the death of the grantor or bargainor,...