Stella Flint v. Stone Tracy Company Wyckoff Van Derhoeff v. Coney Island Brooklyn Railroad Company Francis Hine v. Home Life Insurance Company Fred Smith v. Northern Trust Company William Miner v. Corn Exchange National Bank of Chicago Cedar Street Company v. Park Realty Company Lewis Jared v. American Multigraph Company Joseph Gay v. Baltic Mining Company Percy Brundage v. Broadway Realty Company Paul Lacroix v. Motor Taximeter Cab Company Arthur Lyman v. Interborough Rapid Transit Company George Wendell Phillips v. Fifty Associates Oscar Mitchell v. Clark Iron Company William Fluhrer v. New York Life Insurance Company Katherine Cary Cook v. Boston Wharf Company 443, 446 456 457 17 18, 1910

• Decision Date: 31 May 1910
• Docket Number: 425,431,412,415,411,420,432,442,410,Nos. 407,409,s. 407
• Citation: 220 U.S. 107,55 L.Ed. 389,31 S.Ct. 342
• Parties: STELLA P. FLINT, as General Guardian of the Property of Samuel N. Stone, Junior, a Minor, Appt., v. STONE TRACY COMPANY et al. WYCKOFF VAN DERHOEFF, Appt., v. CONEY ISLAND & BROOKLYN RAILROAD COMPANY et al. FRANCIS L. HINE, Appt., v. HOME LIFE INSURANCE COMPANY et al. FRED W. SMITH, Appt., v. NORTHERN TRUST COMPANY, A. C. Bartlett, William A. Fuller, et al. WILLIAM H. MINER, Appt., v. CORN EXCHANGE NATIONAL BANK OF CHICAGO, Charles H. Wacker, Martin A. Ryerson, et al. CEDAR STREET COMPANY, Appt., v. PARK REALTY COMPANY. LEWIS W. JARED, Appt., v. AMERICAN MULTIGRAPH COMPANY et al. JOSEPH E. GAY, Appt., v. BALTIC MINING COMPANY et al. PERCY BRUNDAGE, Appt., v. BROADWAY REALTY COMPANY et al. PAUL LACROIX, Appt., v. MOTOR TAXIMETER CAB COMPANY et al. ARTHUR LYMAN and Arthur T. Lyman, as Trustees under the Last Will and Testament of George Baty Blake, Deceased, Appts., v. INTERBOROUGH RAPID TRANSIT COMPANY et al. GEORGE WENDELL PHILLIPS, Appt., v. FIFTY ASSOCIATES et al. OSCAR MITCHELL, Appt., v. CLARK IRON COMPANY. WILLIAM H. FLUHRER, Albert W. Durand, and Howard H. Williams, Appts. v. NEW YORK LIFE INSURANCE COMPANY. KATHERINE CARY COOK, Harriet Huntington Cook, and Ellenor Richardson Cook, by Anna H. R. Cook, Their Guardian and Next Friend, Appts., v. BOSTON WHARF COMPANY et al. , 443, 446, 456 and 457. Argued March 17 and 18, 1910. Ordered for reargument before full bench
• Court: U.S. Supreme Court

220 U.S. 107

31 S.Ct. 342

55 L.Ed. 389

STELLA P. FLINT, as General Guardian of the Property of Samuel N. Stone, Junior, a Minor, Appt.,

v STONE TRACY COMPANY et al.

WYCKOFF VAN DERHOEFF, Appt.,

v. CONEY ISLAND & BROOKLYN RAILROAD COMPANY et al.

FRANCIS L. HINE, Appt.,

v. HOME LIFE INSURANCE COMPANY et al.

FRED W. SMITH, Appt.,

v. NORTHERN TRUST COMPANY, A. C. Bartlett, William A.

Fuller, et al.

WILLIAM H. MINER, Appt.,

v. CORN EXCHANGE NATIONAL BANK OF CHICAGO, Charles H.

Wacker, Martin A. Ryerson, et al.

CEDAR STREET COMPANY, Appt.,

v. PARK REALTY COMPANY.

LEWIS W. JARED, Appt.,

v. AMERICAN MULTIGRAPH COMPANY et al.

JOSEPH E. GAY, Appt.,

v. BALTIC MINING COMPANY et al.

PERCY BRUNDAGE, Appt.,

v. BROADWAY REALTY COMPANY et al.

PAUL LACROIX, Appt.,

v. MOTOR TAXIMETER CAB COMPANY et al.

ARTHUR LYMAN and Arthur T. Lyman, as Trustees under

the Last Will and Testament of George Baty Blake,

Deceased, Appts.,

v. INTERBOROUGH RAPID TRANSIT COMPANY et al.

GEORGE WENDELL PHILLIPS, Appt.,

v. FIFTY ASSOCIATES et al.

OSCAR MITCHELL, Appt.,

v. CLARK IRON COMPANY.

WILLIAM H. FLUHRER, Albert W. Durand, and Howard H.

Williams, Appts.

v. NEW YORK LIFE INSURANCE COMPANY.

KATHERINE CARY COOK, Harriet Huntington Cook, and

Ellenor Richardson Cook, by Anna H. R. Cook, Their Guardian and Next Friend, Appts.,

v. BOSTON WHARF COMPANY et al.

Nos. 407, 409, 410, 411, 412, 415, 420, 425, 431, 432, 442,

443, 446, 456 and 457.

Argued March 17 and 18, 1910.

Ordered for reargument before full bench May 31, 1910.

Reargued January 17, 18 and 19, 1911.

Decided March 13, 1911.

[Syllabus from pages 107-113 intentionally omitted] Messrs. Maxwell Evarts, Henry S. Wardner, and John G. Sargent for appellant in No. 407.

[Argument of Counsel from pages 113-119 intentionally omitted]

Page 119

Messrs. Richard V. Lindabury, and Charles W. Pierson for appellant in no. 409.

Messrs. Richard V. Lindabury, Charles W. Pierson, and Robert Lynn Cox for appellant in No. 410.

[Argument of Counsel from pages 119-121 intentionally omitted]

Page 121

Messrs. John G. Johnson, Frederic Jesup Stimson, Lawrence M. Stockton, J. Grant Forbes, and Harris Livermore for appellant in No. 425 and 457.

[Argument of Counsel from page 112 intentionally omitted]

Page 122

Mr. Richard Reid Rogers for appellants in No. 442.

[Argument of Counsel from Pages 122-124 intentionally omitted]

Page 124

Messrs. Julien T. Davies, Frederic D. McKenney, and Davies, Stone, & Auerbach for appellant in No. 415.

[Argument of Counsel from Page 124 intentionally omitted]

Page 125

Messrs. Edward Osgood Brown, George Packard, Vincent J. Walsh, and Orville Peckham for appellants in Nos. 411 and 412.

[Argument of Counsel from pages 125-126 intentionally omitted]

Page 127

Messrs. Charles H. Tyler, Owen D. Young, Burton E. Eames, Randolph Frothingham, Barry Mohun, Tyler & Young, and McGowan, Serven, & Mohun for appellant in No. 443.

Messrs. Charles Howard Williams and Howard H. Williams for appellants in No. 456.

Messrs. J. B. Foraker, Alton C. Dustin,

Page 128

D. Edward Morgan, Richard Inglis, Arthur F. Odlin, George B. Siddall, and Bulkley & Inglis for appellant in No. 420.

Mr. Frederic R. Coudert for appellants in Nos. 431 and 432.

Messrs. Jed L. Washburn, William D. Bailey, and Oscar Mitchell for appellant in No. 446.

Messrs. William D. Guthrie, Victor Morawetz, and Howard Van Sinderen for appellees in No. 410.

Messrs. William N. Dykman and Arthur E. Goddard for appellees in No. 409.

[Argument of Counsel from pages 128-133 intentionally omitted]

Page 133

Mr. James L. Quackenbush for appellees in No. 442.

Messrs. Charles A. Snow and Joseph H. Knight for appellees in No. 425.

Mr. George L. Nichols for appellees in No. 431.

Mr. Harvey T. Andrews for appellees in No. 432.

Solicitor General Bowers and Solicitor General Lehmann (by special leave) for the United States.

[Argument of Counsel from pages 133-142 intentionally omitted]

Page 142

Mr. Justice Day delivered the opinion of the court:

These cases involve the constitutional validity of § 38 of the act of Congress approved August 5, 1909, known as 'the corporation tax' law. Stat. at L. 1st Sess. 61st Cong. pp. 11-112-117, chap. 6, U. S. Comp. Stat. Supp. 1909, pp. 659-844-849.

It is contended in the first place that this section of the act is unconstitutional, because it is a revenue measure, and originated in the Senate in violation of § 7 of article 1 of the Constitution, providing that 'all bills for raising revenue shall originate in the House of Representatives, but the Senate may propose or concur with the amendments, as on other bills.' The history of the act

Page 143

is contained in the government's brief, and is accepted as correct, no objection being made to its accuracy.

This statement shows that the tariff bill of which the section under consideration is a part, originated in the House of Representatives, and was there a general bill for the collection of revenue. As originally introduced, it contained a plan of inheritance taxation. In the Senate the proposed tax was removed from the bill, and the corporation tax, in a measure, substituted therefor. The bill having properly originated in the House, we perceive no reason in the constitutional provision relied upon why it may not be amended in the Senate in the manner which it was in this case. The amendment was germane to the subject-matter of the bill, and not beyond the power of the Senate to propose. In thus deciding we do not wish to be regarded as holding that the journals of the House and Senate may be examined to invalidate an act which has been passed and signed by the presiding officers of the House and Senate, and approved by the President, and duly deposited with the State Department. Marshall Field & Co. v. Clark, 143 U. S. 649, 36 L. ed. 294, 12 Sup. Ct. Rep. 495; Harwood v. Wentworth, 162 U. S. 547, 40 L. ed. 1069, 16 Sup. Ct. Rep. 890; Twin City Bank v. Nebeker, 167 U. S. 196, 42 L. ed. 134, 17 Sup. Ct. Rep. 766.

In order to have in mind some of the more salient features of the statute, with a view to its interpretation, a part of the first paragraph is here set out, as follows:

'Sec. 38. That every corporation, joint stock company, or association organized for profit and having a capital stock represented by shares, and every insurance company now or hereafter organized under the laws of the United States or of any state or territory of the United States, or under the acts of Congress applicable to Alaska or the District of Columbia, or now or hereafter organized under the laws of any foreign country, and engaged in business in any state or territory of the United States or in Alaska or in the District of Columbia, shall be subject

Page 144

to pay annually a special excise tax with respect to the carrying on or doing business by such corporation, joint stock company or association, or insurance company equivalent to one per certum upon the entire net income over and above five thousand dollars, received by it from all sources during such year, exclusive of amounts received by it as dividends upon stock of other corporations, joint stock companies or associations, or insurance companies subject to the tax hereby imposed; or, if organized under the laws of any foreign country, upon the amount of net income over and above five thousand dollars received by it from business transacted and capital invested within the United States and its territories, Alaska and the District of Columbia, during such year, exclusive of amounts so received by it as dividends upon stock of other corporations, joint stock companies or associations, or insurance companies subject to the tax hereby imposed.'

A reading of this portion of the statute shows the purpose and design of Congress in its enactment and the subject-matter of its operation. It is at once apparent that its terms embrace corporations and joint stock companies or associations which are organized for profit, and have a capital stock represented by shares. Such joint stock companies, while differing somewhat from corporations, have many of their attributes and enjoy many of their privileges. To these are added insurance companies, and they, as corporations, joint stock companies, or associations, must be such as are now or hereafter organized under the laws of the United States or of any state or territory of the United States, or under the acts of Congress applicable to Alaska and the District of Columbia. Each and all of these, the statute declares, shall be subject to pay annually a special excise tax with respect to the carrying on and doing business by such corporation, joint stock company or association, or insurance company. The tax is to be equivalent to 1 per cent of the entire net

Page 145

income over and above $5,000 received by such corporation or company from all sources during the year, excluding, however, amounts received by them as dividends upon stock of other corporations, joint stock companies or associations, or insurance companies, subject to the tax imposed by the statute. Similar companies organized under the laws of any foreign country, and engaged in business in any state or territory of the United States, or in Alaska or the District of Columbia, are required to pay the tax upon the net income over and above $5,000 received by them from business transacted and capital invested within the United States, the territories, Alaska, and the District of Columbia, during each year, with the like exclusion as to amounts received by them as dividends upon stock of other corporations, joint stock companies or associations, or insurance companies, subject to the tax imposed.

While the mere declaration contained in a statute that it shall be regarded as a tax of a particular character does not make it such if it is apparent that it cannot be so designated consistently with the meaning and effect of the act, nevertheless the declaration of the lawmaking power is entitled to much weight,...