United States v. James Gordon Bennett

• Decision Date: 24 February 1914
• Docket Number: No. 629,629
• Parties: UNITED STATES v. JAMES GORDON BENNETT
• Court: U.S. Supreme Court

232 U.S. 299

34 S.Ct. 433

58 L.Ed. 612

UNITED STATES

v JAMES GORDON BENNETT.

No. 629.

Argued January 6 and 7, 1914.

Decided February 24, 1914.

ON A CERTIFICATE from the United States Circuit Court of Appeals for the Second Circuit presenting the following questions:

I. Does the tax purporting to be imposed by § 37 of the act of Congress, approved August 5, 1909, apply to the use of a foreign-built yacht owned by a citizen of the United States, when such yacht, for a period of more than one year prior to September 1, 1909, and to the levy of such tax, was used wholly outside of the limits and territorial jurisdiction of the United States. Answered in the affirmative.

II. Did the tax purporting to be imposed by said act of Congress operate retrospectively, so as to be payable on September 1, 1909, in respect of the year then ended, or only prospectively, so as to become first due and payable on September 1, 1910? Answered in the affirmative.

III. Did the whole amount of the tax purporting to be imposed by said act of Congress become due and payable on September 1, 1909, or only such proportion thereof as the time during which the act was in force at that date bears to the whole year? Answered in the affirmative; the whole tax.

IV. Has Congress the power to levy a tax upon the use by a citizen of the United States of a yacht which is not actually, and since the year 1904 was not at any time, used within the territorial jurisdiction of the United States, and which has its permanent situs in a foreign country? Answered in the affirmative.

V. Does said act of Congress, by purporting to impose a tax upon the use of foreign-built yachts alone, provide a valid tax, or a valid classification for purposes of taxation, within the power to lay and collect taxes delegated to Congress by the Constitution of the United States? Answered in the affirmative.

VI. Is the tax purporting to be imposed by said act of Congress in conflict with the requirement of due process of law contained in the 5th article of Amendment to the Constitution of the United States? Answered in the negative.

VII. Is the United States entitled to recover interest upon the tax imposed upon the use of foreign-built yachts in and by § 37 of the tariff act of August 5, 1909? Answered in the affirmative.

Assistant Attorney General Adkins and Mr. Karl W. Kirchwey for the United States.

Mr. William D. Guthrie for James Gordon Bennett.

Mr. Chief Justice White delivered the opinion of the court:

So far as we deem it material to the question we are called upon to answer, the certificate in this case is as follows:

'The United States, plaintiff below, sued out a writ of error to this court to review a judgment of the United States circuit court for the southern district of New York in the above-entitled cause, entered on July 6, 1911, dismissing the amended complaint of the United States in an action brought against the defendant below to recover the tax imposed by § 37 of the tariff act of August 5, 1909 (chap. 6, 36 Stat. at L. 112, U. S. Comp. Stat. Supp. 1911, p. 1197), for the year ended September 1, 1909, upon the use of the foreign-built yacht 'Lysistrata,' owned by the defendant.'

After reciting the averment as to the assessment of the tax by the collector, amounting to $13,601, and the failure of the defendant to pay, his citizenship and ownership of the yacht, and the conformity of the assessment to the statute, the certificate states that there was a prayer for the recovery of the amount with interest. It then proceeds to state the answer of the defendant, setting up the nonregistry and nonenrolment of the yacht, that she enjoyed no protection or privileges of any kind under the laws of the United States, and that the yacht since 1904 'had not been within the jurisdiction of the United States, but had had a permanent situs within the jurisdiction of the Republic of France.' The certificate then proceeds to state the facts as to ownership of other yachts in the United States in the exact words used in the answers in previous cases which we have this day decided, and upon which the want of due process of law was set up. Then the certificate declares the United States demurred to this answer, and that this demurrer was overruled, and the United States electing to plead no further, there was judgment rejecting its claim, and that error was then prosecuted to the circuit court of appeals by the United States. The seven questions propounded are the equivalent of the questions in the Goelet Cases, just decided [232 U. S. 293, 58 L. ed. ——, 34 Sup. Ct. Rep. 431], except there is no question asked concerning the power to tax under the statute in case of the permanent domicil of the owner in a foreign country, which was the basis of the decision in the Goelet Cases because, as is shown by the certificate, there was no assertion or proof that there was a permanent foreign domicil of the owner in this case. So that the first question in this case concerns the liability of a citizen of the United States having a domicil therein, for a tax on a yacht owned and used during the taxing period outside of the United States, and is as follows: 'I. Does the tax purporting to be imposed by § 37 of the act of Congress, approved August 5, 1909, apply to the use of a foreign-built yacht owned by a citizen of the United States, when such yacht, for a period of more than one year prior to September 1, 1909, and to the levy of such tax, was used wholly outside of the limits and territorial jurisdiction of the United States?' And if this question is answered in the affirmative, then the duty will arise of deciding whether, because of that aspect, the act is repugnant to the due process clause of the Constitution, since in determining the constitutionality of the act in the previous cases we were not called upon to decide whether the due process clause of the 5th Amendment operates to prevent the levy of such a tax.

The statute applies, since, under the construction we have given it, it clearly establishes three standards as the basis of the excise duty which it imposes; citizenship and domicil within the United States, control by ownership or charter of a foreign-built yacht within the terms of the statute, and its use by the owner during the taxing period. But it said that as in any event the use which the statute taxes is solely a use within the United States, therefore the statute does not embrace this case, since the finding establishes that the yacht whose use is here taxed was wholly used and located outside of the territorial limits of the United States. We fail, however, to find in the...