Towne v. Eisner

Citation62 L.Ed. 372,245 U.S. 418,38 S.Ct. 158
Decision Date07 January 1918
Docket NumberNo. 563,563
PartiesTOWNE v. EISNER, Collector of United States Internal Revenue for the Third District of the State of New York
CourtUnited States Supreme Court

[Syllabus from page 418 intentionally omitted] Messrs. Charles E. Hughes, George Welwood Murray, Charles P. Howland, and Louis H. Porter, all of New York City, for plaintiff in error.

[Argument of Counsel from pages 419-421 intentionally omitted] Mr. Solicitor General Davis, of Washington, D. C., for defendant in error.

[Argument of Counsel from pages 421-424 intentionally omitted] Mr. Justice HOLMES delivered the opinion of the Court.

This is a suit to recover the amount of a tax paid under duress in respect of a stock dividend alleged by the Government to be income. A demurrer to the declaration was sustained by the District Court and judgment was entered for the defendant. 242 Fed. 702. The facts alleged are that the corporation voted on December 17, 1913, to transfer $1,500,000 surplus, being profits earned before January 1, 1913, to its capital account and to issue fifteen thousand shares of stock representing the same to its stockholders of record on December 26; that the distribution took place on January 2, 1914, and that the plaintiff received as his due proportion four thousand one hundred and seventy-four and a half shares. The defendant compelled the plaintiff to pay an income tax upon this stock as equivalent to $417,450 income in cash. The District Court held that the stock was income within the meaning of the Income Tax of October 3, 1913, c. 16, Section II; A, subdivisions 1 and 2; and B. 38 Stat. 114, 116, 167. It also held that the Act so construed was constitutional, whereas the declaration set up that so far as the Act purported to confer power to make this levy it was unconstitutional and void.

The Government in the first place moves to dismiss the case for want of jurisdiction, on the ground that the only question here is the construction of the statute not its constitutionality. It argues that if such a stock dividend is not income within the meaning of the Constitution it is not income within the intent of the statute, and hence that the meaning of the Sixteenth Amendment is not an immediate issue, and is important only as throwing light on the construction of the Act. But it is not necessarily true that income means the same thing in the Constitution and the Act. A word is not a crystal, transparent and unchanged, it is the skin of a living thought and may vary greatly in color and content according to the circumstances and the time in which it is used. Lamar v. United States, 240 U. S. 60, 65, 36 Sup. Ct. 255, 60 L. Ed. 526. Whatever the meaning of the Constitution, the Government had applied its force to the plaintiff, on the assertion that the statute authorized it to do so, before the suit was brought, and the Court below has sanctioned its course. The plaintiff says that the statute as it is construed and administered is unconstitutional. He is not to be defeated by the reply that the Government does not adhere to the construction by virtue of which alone it has taken and keeps the plaintiff's money, if this Court should think that the construction would make the Act unconstitutional. While it keeps the money it opens the question whether the Act construed as it has construed it can be maintained....

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471 cases
  • General Motors Corp. v. City of Linden
    • United States
    • New Jersey Supreme Court
    • July 21, 1997
    ... ... See Towne v ... Page 540 ... Eisner, 245 U.S. 418, 425, 38 S.Ct. 158, 159, 62 L. Ed. 372, 376 (1918) ...         Although the difficulty posed ... ...
  • State v. Courchesne
    • United States
    • Connecticut Supreme Court
    • March 11, 2003
    ...222 (1972) ("condemned to the use of words, we can never expect mathematical certainty from our language"); Towne v. Eisner, 245 U.S. 418, 425, 38 S. Ct. 158, 62 L. Ed. 2d 372 (1918) ("a word is not a crystal, transparent and unchanged, it is the skin of a living thought and may vary greatl......
  • United States v. Louisiana
    • United States
    • U.S. District Court — Middle District of Louisiana
    • July 26, 2016
    ...most mundane instances of statutory construction, it is context that often proves critical. Cf. Towne v. Eisner, 245 U.S. 418, 425, 38 S. Ct. 158, 159, 62 L. Ed. 372, 375 (1918) (Holmes, J.) ("A word is not a crystal, transparent and unchanged, it is the skin of a living thought and may var......
  • Commonwealth v. Gordon
    • United States
    • Pennsylvania Commonwealth Court
    • March 18, 1949
    ... ... " Law accepts as the pattern of its justice the morality ... of the community whose conduct it assumes to regulate" ... (p. 37). In Towne v. Eisner, 245 U.S. 418, 425, 62 ... L.Ed. 372, 376 (1918) Mr. Justice Holmes said: " A word ... is not a crystal, transparent and unchanged, it ... ...
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8 books & journal articles
  • The Rosetta Stone for the doctrine of means-plus-function patent claims.
    • United States
    • Rutgers Computer & Technology Law Journal Vol. 23 No. 2, June 1997
    • June 22, 1997
    ...(citing Markman v. Westview Instrs., Inc., 52 F.3d 967, 979-80 (Fed. Cir. 1995), aff'd, 116 S. Ct. 1384 (1996)). (274.) Towne v. Eisner, 245 U.S. 418, 425 Rudolph P. Hofmann, Jr. & Edward P. Heller, III, Mr. Hoffman is a registered patent attorney with Schwegman, Lundberg. Woessner &......
  • 2003 Connecticut Appellate Review
    • United States
    • Connecticut Bar Association Connecticut Bar Journal No. 77, January 2003
    • Invalid date
    ...Bartschi reluctantly agrees that a comprehensive approach to statutory construction is probably best in the long run. 4 Towne v. Eisner, 245 U.S. 418, 425 (1918). 5 The one possible exception is DiLieto v. County Obstetrics & Gynecology Group, P.C., 265 Conn. 79, 828 A.2d 31 (2003), in whic......
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    • United States
    • Georgetown Law Journal No. 109-3, February 2021
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    ...conduct can be measured). 147. Cabell v. Markham, 148 F.2d 737, 739 (2d Cir.), aff’d, 326 U.S. 404 (1945); see also Towne v. Eisner, 245 U.S. 418, 425 (1918) (“A word is not a crystal, transparent and unchanged, it is the skin of a living thought and may vary greatly in color and content ac......
  • CGL pollution exclusion provisions and the sick building syndrome.
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    • Defense Counsel Journal Vol. 66 No. 1, January 1999
    • January 1, 1999
    ...N.Y. Laws 2633 (McKinney 1971). (18.) GEORGE J. COUCH, 9 COUCH ON INSURANCE 3d [sections] 127:12, at pages 127-32. (19.) Towne v. Eisner, 245 U.S. 418 (1918) (Holmes, (20.) Insureds may show what actual expectations they had, but the fact finder should determine whether those expectations w......
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