Metropolitan Stock Exchange v. Gill
Decision Date | 24 October 1912 |
Docket Number | 957. |
Citation | 199 F. 545 |
Parties | METROPOLITAN STOCK EXCHANGE v. GILL, Internal Revenue Collector. |
Court | U.S. Court of Appeals — First Circuit |
Gilbert F. Ordway, of Boston, Mass. (Clark & Ordway, of Boston Mass., on the brief), for plaintiff in error.
William H. Garland, Asst. U.S. Atty., of Boston, Mass. (Asa P French, U.S. Atty., of Boston, Mass., on the brief), for defendant in error.
Before COLT and PUTNAM, Circuit Judges, and ALDRICH, District Judge.
This was a suit brought by the corporation plaintiff below, which we will call the plaintiff here, against the collector of internal revenue for the district of Massachusetts, on a claim arising under paragraph 3 of Schedule A of the War Revenue Act, so called, of June 13, 1898 (Act June 13, 1898 c. 448, 30 Stat. 458), Act March 2, 1901, c 806, Sec. 8, 31 Stat. 943, 944 (U.S. Comp. St. 1901, p. 2302). This is the same statute, and the suit was of the same general nature, as shown and appeared before the courts in the Second circuit in Municipal Telegraph & Stock Co. v. Ward (C.C.) 133 F. 70, affirmed by the Circuit Court of Appeals in 138 F. 1006, 70 C.C.A. 284, and Eldredge v. Ward (C.C.) 155 F. 253, affirmed by the Circuit Court of Appeals in 174 F. 402, 98 C.C.A. 619.
There was a motion in the Circuit Court to dismiss the case for want of jurisdiction, which was refused; and the action of the Circuit Court in that respect was so clearly right that we need not comment upon it.
Judgment in the Circuit Court on the merits was entered for the collector, on the strength, as we understand, of these decisions of the Circuit Court of Appeals for the Second circuit, and, according to our usual practice, we should feel bound to follow the results in that circuit, if the facts here were the same as there; but they are essentially different. The issue involved in the Second circuit, which the United States claimed is the same as that involved here, is best stated by quoting the syllabus in Municipal Telegraph & Stock Co. v. Ward (C.C.) 133 F. 70, already referred to, as follows:
It was there found as a matter of fact that the transactions were between the Municipal Telegraph & Stock Company and its correspondents dealing with it, and that each was acting as an independent dealer, so that there were two purchases and sales, namely, one between the Mutual Telegraph & Stock Company and its respondents, and one between each correspondent and his customers. These were of the character described on page 72 of the opinion of the court, as follows:
The Circuit Court of Appeals, in affirming this decision in 138 F. 1006, 70 C.C.A. 284, said as follows:
Thus these courts found that, as a matter of fact, the plaintiff there and its correspondents were independent principals, and their transactions were independent of the correspondents, each dealing with its own customers.
We need not examine particularly Eldredge v. Ward, because essentially the findings of the facts and the law were the same as in the other case referred to, the details having merely got turned around.
The facts here were of an entirely different character. They show that the entire line of dealings between the plaintiff and its correspondents' customers constituted only one purchase and one sale. The correspondents had stamped their contracts, and thus had discharged the tax on the entire chain of dealings from beginning to end; so that what the plaintiff afterwards paid was merely a second tax on the same thing, which it is entitled to recover back.
This case was sent by the Circuit Court to an auditor, and what we state further is fully sustained by what was found by the auditor.
The first step in each transaction was that the plaintiff 'had contracts, mostly oral, with certain brokers,' called 'correspondents,' and that by virtue of these contracts these correspondents turned into the plaintiff all orders for the purchase and sale of certain stocks. This gave shape and color to whatever followed, and governed the whole of what followed, as far as this case is concerned.
The next step was that one of the plaintiff's correspondents for example, Varina, received orders from a customer, for example, Brown, to buy certain...
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Metropolitan Stock Exchange v. Gill
...No. 957.United States Court of Appeals, First Circuit.February 3, 1914 On rehearing. Reversed and remanded. For former opinion, see 199 F. 545, 118 C.C.A. 19. F. Ordway, of Boston, Mass. (Clark & Ordway, of Boston, Mass., on the brief), for plaintiff in error. James S. Allen, Jr., Asst. U.S......