Where, as in this case, the certificate sufficiently states both
the question and the desire of the circuit court of appeals for
instructions so that it may make a proper decision, it conforms in
substance to the provisions of § 6 of the Act of March 3, 1891, c.
517, 26 Stat. 826.
The rule of
stare decisis tends to uniformity and
consistency of decision but it is not inflexible, and it is within
the discretion of a court to follow or depart from its prior
decisions.
It is the practice of this Court to affirm without opinion where
the judgment under review is not decided to be erroneous by a
majority of the Court sitting in the cause.
While the affirmance of a judgment by this Court by a divided
court is a conclusive adjudication between the parties, it is not
an authority on the principles of law involved for the
determination of other cases in this or in inferior courts, and
this although a different rule has been sanctioned in England.
While an unqualified repeal of a law operates to destroy
inchoate rights as a release of imperfect obligations and as a
remission of penalties and forfeitures dependent upon the destroyed
statute, § 13, Rev.Stat., based on § 4 of the Act of February 25,
1871, c. 71, 16 Stat. 431, operates, unless the repealing act does
not expressly or by implication exclude such operation, as a
general saving clause for all repealing statutes and extends not
only to penalties and forfeitures but to liabilities under the
repealed statute.
Great Northern Railway Co. v. United
States, 208 U. S. 452.
Upon the passing by death of a vested right to the immediate
possession or enjoyment of a legacy or distributive share, there
was imposed by the inheritance tax provisions of the War Revenue
Act of 1898
Page 218 U. S. 206
the tax or duty exacted upon every such right of succession
which was saved by the saving clause of the repealing act of April
12, 1902.
Mason v. Sargent, 104 U.
S. 689, distinguished.
Although, in the statute, a time limit as to payment of a tax
upon distributive hares and legacies may refer to the death of the
testator, it may be construed as applying to shares in intestate
estate as well as to legacies from testators, the omission being
supplied by necessary implication.
The fact that the testator died within one year immediately
prior to the taking effect of the repealing Act of April 12, 1902,
c. 500, 32 Stat. 96, does not relieve from taxation legacies
otherwise taxable under §§ 29 and 30 of the War Revenue Act of June
13, 1898, c. 448, 30 Stat. 448, as amended by the Act of March 2,
1901, c. 803, 31 Stat. 895.
The facts, which involve the construction of the Act of April
12, 1902, c. 500, 32 Stat. 96, repealing certain provisions of the
War Revenue Act of 1898 relating to inheritance taxes, are stated
in the opinion.
Page 218 U. S. 210
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, 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, 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 (U.S.Comp.Stat.Supp.
Page 218 U. S. 211
1903, p. 279), 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?"
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;
United States v. Pridgeon, 153 U. S.
48;
United States v. Ju Toy, 198 U.
S. 253.
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., 143 F. 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, and, in the
second, an application by the United States for a writ of
certiorari was denied, 212 U.S. 572. 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 136 F. 141, the affirmance by this Court being reported
in 203 U.S. 580, and similar judgments of affirmance in
Philadelphia Trust Co. v. McCoach, 142 F. 120, and 205
U.S. 539, 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
Page 218 U. S. 212
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., 164 F. 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
Page 218 U. S. 213
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,
24
U. S. 78. 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 been 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,
74 U. S. 110,
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.,168
F. 617;
Hartman v. Greenhow, 102 U.
S. 672,
102 U. S. 676.
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. Cases 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
Page 218 U. S. 214
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
twenty-ninth section of the Act of June 13, 1898, 30 Stat. 464, c.
448; the thirtieth section of the same act, as amended by § 11 of
the Act of March 2, 1901, 31 Stat. 948, c. 806, and §§ 7, 8, and 11
of the Act of April 12, 1902, 32 Stat. 97
et seq., c. 500.
So much of the sections referred to as is material to the present
question is set out in the margin.
*
Page 218 U. S. 215
The seventh section of the Act of April 12, 1902, which act we
shall hereafter refer to as the repealing act, did not go into
effect until July 1, 1902. That section explicitly repealed § 29 of
the Act of June 13, 1898, which was the only section imposing a tax
upon inheritances, and the only authority for the tax collected
from the defendants in error. The claim of the United States was
and is that, as the testator's death occurred prior to July 1,
1902, the tax demanded had been imposed as an obligation before the
repeal of the taxing section, and that
Page 218 U. S. 216
the liability thus imposed was saved by the eighth section of
the repealing act. For convenience, that section is here again set
out:
"SEC. 8. That all taxes or duties imposed by section twenty-nine
of the ct of June thirteenth, eighteen hundred and ninety-eight,
and amendments thereof, prior to the taking effect of this act,
shall be subject, as to lien, charge, collection, and otherwise, to
the provisions of section thirty of said act of June thirteenth,
eighteen hundred and ninety-eight, and amendments thereof, which
are hereby continued in force, as follows. . . ."
The question for solution must therefore turn upon the inquiry
whether the tax in question had been imposed prior to the going
into effect of the repealing act within the intent and effect of
the saving clause just set out.
There are cases which go so far as to say that the unqualified
repeal of a law as effectually destroys rights and liabilities
dependent upon it, not past and concluded, as if the statute had
never existed. It is, however, putting it strongly enough to say
that an unqualified repeal operates to destroy inchoate rights, as
a release of imperfect obligations, and as a remission of penalties
and forfeitures dependent upon the destroyed statute.
United
States v. Reisinger, 128 U. S. 398;
Curtis v. Leavitt, 15 N.Y. 9, 152
et seq.; Town of
Belvidere v. Warren R. Co. 34 N.J.L.193; 1 Lewis' Sutherland,
Stat. Const. §§ 282
et seq.
There has been a marked legislative trend in the direction of
escaping from the serious consequence sometimes incident to this
common law rule of construction, indicated by general statutes
saving liabilities, penalties, and forfeitures incurred under
repealed statutes. Such a general statute was passed by Congress in
1817, c. 71, 16 Stat. 431, the fourth section of which was carried
into the revision of 1878, and is now in force as § 13, Rev.Stat.
That section reads as follows:
"The repeal of any statute shall not have the effect to
Page 218 U. S. 217
release or extinguish any penalty, forfeiture, or liability
incurred under such statute, unless the repealing act shall so
expressly provide, and such statute shall be treated as still
remaining in force for the purpose of sustaining any proper action
or prosecution for the enforcement of such penalty, forfeiture, or
liability."
This provision has been upheld by this Court as a rule of
construction applicable, when not otherwise provided, as a general
saving clause, to be read and construed as a part of all subsequent
repealing statutes, in order to give effect to the will and intent
of Congress.
United States v. Reisinger, 128 U.
S. 398;
Great Northern R. Co. v. United States,
208 U. S. 452.
In the last case cited, the Court said of this section that
--
"As the section of the Revised Statutes in question has only the
force of a statute, its provisions cannot justify a disregard of
the will of Congress as manifested either expressly or by necessary
implication in a subsequent enactment. But while this is true, the
provisions of § 13 are to be treated as if incorporated in and as a
part of subsequent enactments, and therefore, under the general
principles of construction requiring, if possible, that effect be
given to all the parts of a law, the section must be enforced
unless, either by express declaration or necessary implication,
arising from the terms of the law, as a whole, it results that the
legislative mind will be set at naught by giving effect to the
provisions of § 13. For the sake of brevity, we do not stop to
refer to the many cases from state courts of last resort, dealing
with the operation of general state statutes like unto § 13,
Rev.Stat., because we think the views just stated are obvious and
their correctness is established by a prior decision of this Court
concerning that section.
United States v. Reisinger,
128 U. S.
398."
This section is not alone applicable to penalties and
forfeitures
Page 218 U. S. 218
under penal statutes. It extends as well to "liabilities," and a
liability or obligation to pay a tax imposed under a repealed
statute is not only within the letter, but the spirit and purpose,
of the provision. Therefore we must take that general saving clause
into consideration as a part of the legislation involved in the
determination of whether a "liability" had been incurred by the
imposition of a tax prior to the act that destroyed the law under
which it had been imposed.
The repealing act here involved includes a saving clause, and if
it necessarily or by clear implication conflicts with the general
rule declared in § 13, the latest expression of the legislative
will must prevail. In the case of
Great Northern Ry. Co. v.
United States, cited above, the question was whether the
saving clause in the Hepburn Act was so plainly in conflict with
the rule of construction found in § 13 as to limit the actions or
liabilities saved to those enumerated therein; but the Court held
that, as the later clause applied to remedies and procedure, it was
not, by implication, in conflict with the general provision of §
13, which saved penalties, forfeitures, and liabilities. 208 U.S.
208 U. S.
466-467. The significance of § 13 is therefore this:
that if, prior to the repealing act, the defendants in error were
under any liability or obligation to pay the tax or duty imposed by
§ 29 of the Act of June 13, 1898, that obligation or liability was
not relieved by the mere repeal of that section, nor as a
consequence of the saving clause in the repealing act, unless the
special character of that clause, by plain implication, cuts down
the scope and operation of the general rule in § 13.
In the light of these principles of interpretation, we come,
then, to the question as to whether, at the date of the repeal of §
29 of the Act of June 13, 1898, the legacies to the defendants in
error were subject to any tax or duty under the repealed section
which constituted a "liability" under
Page 218 U. S. 219
§ 13, or to a tax or duty "imposed," under the saving clause of
the repealing act.
The only section which imposes any tax upon inheritances is the
twenty-ninth. Any legacy or distributive share or gift in
anticipation of death "passing after the passage of the act" is, by
the express terms of that section, "made subject to a duty or tax
to be paid to the United States, as follows," etc.
Section 30 of the same act deals only with the return, payment,
and procedure for the collection of "the tax or duty
aforesaid," referring to the tax imposed by § 29.
Now what is the property, right, or thing which is made subject
to the tax? This has been most conclusively answered by
Knowlton v. Moore, 178 U. S. 41,
178 U. S. 56,
where the section in question is construed as laying a tax upon the
transmission, or the right to succeed to a legacy or distributive
share or gift in contemplation of death, passing after the act.
For reasons and upon grounds not necessary to be restated, it
has been also conclusively decided in
Vanderbilt v.
Eidman, 196 U. S. 480,
that the tax or duty does not attach to legacies or distributive
shares until the right of succession becomes an absolute right of
immediate possession or enjoyment. It was therefore held in the
case cited that a legacy upon conditions which might never happen
was not subject to the tax or duty prior to the time, if ever, when
the right of possession or enjoyment should become absolute.
To repeat, then: the subject of the tax or duty exacted by § 29
is the right of succession which passes by death to a vested
beneficial right of possession or enjoyment of a legacy or
distributive share.
Upon the facts certified, the right of succession which passed
by the death of the testator was an absolute right to the immediate
possession and enjoyment -- a right neither
Page 218 U. S. 220
postponed until the falling in of a life estate, as in
Mason
v. Sargent, 104 U. S. 689, nor
subject to contingencies, as in
Vanderbilt v. Eidman,
supra. No further event could make their title more certain
nor their possession and enjoyment more secure. The law, then
unrepealed and in full force, operated to fasten at the moment this
right of succession passed by death, a liability for the tax
imposed upon the passing of every such inheritance or right of
succession. The time for scheduling or listing was practically
identical with the time for payment, and the listing or scheduling
was required to be done by the executor charged with payment, but
might be and was postponed for reasons of grace and of convenience.
That is almost universal under any taxing system. The liability
attaches at some time before the time for payment. But the
liability for the payment of the tax exacted under § 29 of the Act
of June 13, 1898, accrued or arose the moment the right of
succession by death passed to the defendants in error, and the
occurrence of no other fact or event was essential to the
imposition of a liability for the statutory tax upon the interest
thus acquired.
Much has been urged because the tax was not "due and payable"
when the repealing act took effect, and the contention is that,
because not "due and payable," no tax had been theretofore imposed
within the intent of the saving clause. What we have already said
answers this. But let us see the very unreasonable result which
would ensure if we are required to say that, by "tax or duty
imposed under section twenty-nine," Congress meant a tax or duty
due and payable when the repealing act should go into effect.
No one questions but that one effect of this saving clause would
be to save any such tax as was "due and payable" one year before
July 1, 1902. This being so, it would be very unjust if the tax in
the latter case is saved and the other remitted, inasmuch as the
thing made subject to
Page 218 U. S. 221
the tax would, in each case, be the same -- namely, the
transmission of a beneficial right to the possession and enjoyment
of a legacy or distributive share at the death of a testator or
intestate. In the one case, the tax paid upon the right passing by
death would be preserved. In the other, a tax upon a like
inheritance would be remitted. The only difference would be that,
in one case, the time for payment had arrived, while in the other
it had not, though, in the latter case, the ultimate obligation to
pay was equally as certain and fixed as in the first case.
Now, did Congress intend to make such an unjust distinction as
would result from such an interpretation of the saving clause in
question as shall make the time limit for payment the test as to
whether one tax shall be preserved and the other remitted in a
situation otherwise identical?
The saving clause does not, in terms, limit the right saved to a
tax or duty which should be due and payable at the date of the
repeal. It is, perhaps, an obvious suggestion that, if that had
been the purpose of Congress, it would have been easy to make that
purpose clear.
But in place of saying in so many words that "all taxes or
duties which should be due and payable prior to the taking effect
of the act" should be subject to the provisions of § 30, etc., the
Congress said that "all taxes or duties imposed by section
twenty-nine," etc., prior to the taking effect of this act, should
be subject to the provisions of § 30. Now it is to be noticed that
this § 30, which is the remedial or procedure section, is not one
of the sections repealed. The twenty-ninth section, which alone
imposes any tax, is the one which is repealed. The plain purpose of
the saving clause was to preserve some liability which had been
imposed under § 29, which would otherwise be lost. This it did by
providing that all taxes "imposed" prior to the going into effect
of the act should, notwithstanding the repeal of the section which
originated the tax, be preserved, and as to collection lien, etc.,
be
Page 218 U. S. 222
subject to the unrepealed § 30. It must also be borne in mind
that this time limit for payment to "one year after the death of
the testator" came into the thirtieth section only by the amendment
of March 2, 1901. Up to the time of that amendment, the only
provision as to time was that
still found in the
later
parts of the same section, namely, that "before payment and
distribution to the legatees" the executor, administrator, or
trustee
"shall pay to the collector . . . the amount of the duty or tax
assessed upon such legacy or distributive share, and shall also
make and render [to the collector] a schedule, list, or statement,
in duplicate, of the amount of such legacy or distributive share,
together with the amount of duty which has accrued, or shall accrue
thereon, verified,"
etc. The same original section also provided that, in case of
neglect to so pay or deliver the statement required "
within the
time hereinbefore provided," certain penalties should be
incurred, and that the collector should make out schedules, etc.
This reference to the "time hereinbefore provided" is in the
original section, and must therefore refer to a time before
"payment and distribution" to the legatees and distributees.
It would seem to follow that the purpose and effect of the
amendment making such tax "due and payable in one year after the
death of the testator" was to advance the time of payment so as to
require payment within one year if there should be longer delay in
paying legacies and distributive shares, leaving in full force the
requirement that the tax should be paid before the payment of
legacies and distributive shares, if such payment and distribution
should be made in less than one year. We have not passed over the
fact that this time limit in terms applies only to the tax due
under wills, and to the uncertainty as to the time for the payment
of the tax upon distributive shares. It, however, seems quite
obvious that that time limit was intended to apply to shares in
intestate estates, as well as
Page 218 U. S. 223
to legacies from testators, and that the omission may be
supplied by necessary implication.
In has been suggested that the lien given by § 30 only attaches
when the tax is due and payable. The lien was in the section before
the amendment, and, in view of its purpose, would attach with the
obligation or liability for the tax. There is no reason which would
justify the assumption that the lien only attached when the day of
payment might arrive -- a date most indefinite before the insertion
of the time limit by the amendment of 1902.
But it has been urged that any conclusion which saves a tax from
the effect of a repealing act which was not actually due and
payable is in conflict with
Mason v. Sargent, supra. That
case arose under the inheritance tax law of 1864. The plaintiff's
testator died while the law was in force, it having been repealed
October 1, 1870. The legacy to the plaintiff, which was in that
case held to have been illegally taxed, was one payable after the
death of the widow of the testator, which did not occur until 1872,
and after the repeal of the law under which the tax was claimed.
But that case is distinguishable from this in more than one
particular. The legacy sought to be taxed did not vest in
possession and enjoyment before the repeal of the act under which
it was supposed to be taxable. If, therefore, no taxable succession
occurred during the existence of the inheritance tax law of 1864,
the right to the tax would fail under the very test which this
Court, in
Vanderbilt v. Eidman, made the test of whether a
tax had been imposed during the operation of the Act of June 13,
1898, and the very test which is applied in the present case.
The precise question here involved, and upon which this case
must turn, namely, whether a tax is not at once "imposed," by
succeeding to an immediate right of possession and enjoyment,
during the operation of the Act of June 13, 1898, in such sense as
to be within the
Page 218 U. S. 224
intent of the saving clause in the act which repealed that act,
was not and could not have been involved in the case cited. The
terms, both of the act of 1864, as amended in 1866, and of the act
which repealed that act, and of the saving clause in the repealing
act, are in some important aspects to be differentiated from the
acts here involved. It is enough, however, to say of that case that
no taxable succession having occurred before the repeal of the act,
there was nothing to save by the saving clause in the repealing
act. In the present case, it is equally as clear that, if no
taxable succession actually vested prior to the repeal of the
taxing act, no tax would be saved. If, however, there did occur
such an absolute right to the possession and enjoyment of the
legacies to the present defendants in error as made it subject at
once to the imposition of a tax under the law in operation when
such succession occurred, a very different question must be decided
from any decided in
Mason v. Sargent.
The conclusion we reach is that, upon the passing by death of a
vested right to the immediate possession or enjoyment of a legacy
or distributive share, there was imposed the tax or duty exacted
upon every such right of succession, which was saved by the saving
clause of the repealing act.
The question certified must be answered in the
negative.
* 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, to any person or persons, or to any body or bodies,
politic or corporate, in trust or otherwise, shall be, and hereby
are, made subject to a duty or tax, to be paid to the United
States, as follows, that is to say: . . ."
30 Stat. 464, c. 448.
So much of section thirty of the Act of June 13, 1898, as
amended by section eleven of the Act of March 2, 1901, as is
material, reads:
"That the tax or duty aforesaid shall be due and payable in one
year after the death of the testator, and shall be a lien and
charge upon the property of every person who may die as aforesaid
for twenty years, or until the same shall, within that period, be
duly paid to and discharged by the United States, and every
executor, administrator, or trustee having in charge or trust any
legacy or distributive share, as aforesaid, shall give notice
thereof, in writing, to the collector or deputy collector of the
district where the deceased grantor or bargainor last resided
within thirty days after he shall have taken charge of such trust,
and every executor, administrator, or trustee, before payment and
distribution to the legatees, or any parties entitled to beneficial
interest therein, shall pay to the collector or deputy collector of
the district of which the deceased person was a resident, or in
which the property was located in case of nonresidents, the amount
of the duty or tax assessed upon such legacy or distributive
share,"
etc.
Sections seven, eight and eleven of the Act of April 12, 1902,
are as follows:
"SEC. 7. That section four of said act of March second, nineteen
hundred and one, and sections, six, twelve, eighteen, twenty,
twenty-one, twenty-two, twenty-three, twenty-four, twenty-five,
Schedule A, Schedule B, sections twenty-seven, twenty-eight, and
twenty-nine of the act of June thirteenth, eighteen hundred and
ninety-eight, and all amendments of said sections and schedules,
be, and the same are hereby, repealed."
"SEC. 8. That all taxes or duties imposed by section twenty-nine
of the act of June thirteenth, eighteen hundred and ninety-eight,
and amendments thereof, prior to the taking effect of this act,
shall be subject, as to lien, charge, collection, and otherwise, to
the provisions of section thirty of said act of June thirteenth,
eighteen hundred and ninety-eight, and amendments thereof, which
are hereby continued in force, as follows: . . ."
"SEC. 11. That this act, except as otherwise specially provided
for in the preceding section, shall take effect July first,
nineteen hundred and two."
32 Stat. pp. 97-99, c. 500.
MR. JUSTICE McKENNA, dissenting:
I am unable to agree to the judgment of the Court. I regret that
time does not serve to give adequate expression to my views or to
consider opposing ones. Some of the elements of dissent I can only
hastily give. The question of the interpretation of a statute is,
however, seldom in broad compass. The purpose is to get at the
meaning of the words, and fortunately there are well known
rules
Page 218 U. S. 225
to assist the process. The first of these is the motive of the
law. Whatever construction advances that carries a presumption of
truth.
There must be a strict or liberal construction, according to the
purpose of the law -- the former, if it imposes burdens, the
latter, if it relieves from them. The contentions of the
government, it seems to me, reverse this order. Their consequences
seem to me to be: the law is a taxing one; is concededly of
doubtful meaning; it must nevertheless be construed against the
taxpayer. It was intended to relieve from burdens; its ambiguities
must be resolved to retain them.
These contradictions between intention and result are
intensified if we consider the general purpose of the law,
proclaimed at the time of its enactment. It was intended as a
repeal of war revenue taxation. In other words, to take from a time
of peace burdens laid in time of war. A worthy purpose, I submit,
and based on wisest considerations of governmental policy, and not
to be defeated or impaired in any of its details by resolving the
uncertainties of language against it.
There was emphatic and illustrative unanimity in the Committee
of Ways and Means of the House of Representatives that reported and
recommended the law. There was a difference of opinion in the
committee as to the extent of the reduction which should be made,
resulting from a difference in other views of its members, but
there was no difference as to the necessity of a reduction of
revenue.
The majority of the committee recommended a reduction of
$73,000,000; the minority was of opinion it should be $123,000,000.
In the reduction, there was a special item of legacies. The figures
need no comment. They display the purpose of Congress. Words,
however, were added to emphasize it. "Sound business judgment," it
was said, "dictates a sweeping reduction of our revenues."
Page 218 U. S. 226
The final word of recommendation of the measure was that "every
consideration of prudence commends" its "wisdom." This, then, was
the purpose of the measure, sanctioned by the highest
considerations of judgment and wisdom. Should it not prevail,
certainly have dominance in the interpretation of the law passed to
effect it? Even as to a live and continuing law, the rule of
interpretation is that taxes must be expressed in clear and
unambiguous language. If there be doubt, it is to be resolved
against the government.
Eidman v. Martinez, 184 U.
S. 578. Such a rule of interpretation certainly should
be applicable to a statute repealing taxation. To what an anomalous
contrast does its disregard bring us? Shall a law passed to supply
the wants of a deficient treasury have a more restrictive
construction than one passed against the burden of a constantly
increasing surplus? Indeed, this case presents even a stronger
contrast. Under the rule of interpretation announced in
Eidman
v. Martinez, a law providing for the exigencies of war cannot
prevail against the right of the taxpayer to resist taxation, the
authority for which is equivocally expressed. But peace
legislation, it seems, may claim a more determined power, though it
have no necessities but the reduction of revenue; though it
proclaims that purpose, and is urged to it by governmental policy.
It may have a double sense and yet be unfaltering in its exactions,
resisting presumptions of law and legal rules, but a war measure
may not.
I cannot believe that Congress intended to leave uncertainty,
or, if uncertainty should inadvertently result, that it was to be
resolved to retain taxes, and not abolish them. And it had the
means of certainty, and, I must assume, availed itself of them.
Prior cases had given it examples of the interpretation of taxing
law -- indeed, of the special kind of taxing laws which it was
repealing, and we may be sure that it had those examples in mind in
fixing the scope of its enactment. And this is in accordance
Page 218 U. S. 227
with a familiar rule of interpretation which this Court has
applied and necessarily will be called upon to apply again. That is
that, when provisions which have received judicial interpretation
are used in a statute, they are supposed to be used with the
meaning that had been given to them. Under any other rule, judicial
decisions would make "not light, but darkness visible."
In
Clapp v. Mason, 94 U. S. 589, a
statute passed in 1864 subjected to a tax legacies and successions.
Under it, a tax was assessed upon certain real estate deivised by
Mason to his widow for her life, or until she should cease to
occupy the same as a place of residence, and upon her death, or
ceasing to occupy the same, to Clapp. The widow occupied the real
estate until June 17, 1872. Mason, the testator, died December 4,
1867; the tax was assessed on the fifteenth of May, 1873. It was
paid on the thirty-first, under protest, to avoid distraint or
other forcible process to collect the same.
Under the statute of 1864, the tax would have been a proper one,
but by a statute passed July 14, 1870, the tax imposed by the
former act was repealed. The repealing clause, however, continued
the provisions of former acts, levying and collecting all taxes
properly assessed or liable to be assessed, or accruing under their
provisions. It provided also that "any act done, right accrued, or
penalty incurred under former acts," should be saved.
The collector insisted that the tax upon succession in question
had accrued before the repeal of the Act of 1864 -- that is, upon
the death of the testator. The devisees contended that it did not
accrue until they came into possession of the land, and before that
occurred, it was asserted, the statute assessing the tax had been
repealed.
The Court stated the question to be when the right to the tax
accrued -- "at the death of the testator or at the death of the
widow, when the plaintiff became entitled to the possession of the
land?" In answer to the question, the
Page 218 U. S. 228
Court conceded that the will of Mason conveyed an estate to
William P. Mason and Charles H. Parker (those who took after the
widow), and that, although they were not entitled to immediate
possession, they had a vested estate. And it was conceded that not
only vested estates, but those in expectancy, were within the
statute. The admission, however, the Court said, did not aid them
in deciding the point before them, as the question of time still
arose -- when was the vested estate taxable?
The question was answered by saying, after a consideration of
the provisions of the statute, that it would be difficult to carry
out its
"system in any other manner than by the provision that the
succession should not be deemed taxable until such time as the
successor should be entitled to its possession."
It was further said:
"The act of 1864 contains no statement or intimation that this
duty creates any lien upon the land, or that any obligation arises,
or that any right accrues at a period earlier than that fixed for
the payment of the duty.
See sections 133, 137."
"
* * * *"
"It is manifest that the right does not accrue until the duty
can be demanded -- that is, when it is made payable; in other
words, at the end of thirty days after becoming entitled to
possession."
The questions were reexamined and decided same way in
Mason
v. Sargent, 104 U. S. 689. The
latter case, however, exhibits more clearly the applicability of
the principles discussed to the case at bar. Mason died December 4,
1867. He bequeathed by his will certain personal property to the
plaintiffs in the action in trust for his widow, and upon her death
one-half to William P. Mason and one-half to Eliza R. Cabot. The
widow died in 1872. In April, 1873, the tax in question was
assessed. It was paid under protest, and plaintiffs brought the
action for the refunding of the tax, on the ground that the
property
Page 218 U. S. 229
did not vest in possession of the legatees until the death of
the testator's widow, which occurred after the repeal of the legacy
succession tax act, and that the tax had not accrued so as to come
within the saving clause of the act of repeal.
The Act of June 30, 1864, 13 Stat. 223, 285, c. 173, subjected
legacies and distributive shares of personal property to a tax
passing from a decedent, in the hands of an executor or
administrator, varying in amount according to the degree of
relationship of the beneficiary to the decedent. It further
provided that the tax or duty should be payable whenever the party
interested in the legacy or shares should become entitled to the
possession and enjoyment thereof. The repealing act contained the
saving clause which has been already set out.
The collector contended that the tax had accrued when the
repealing act took effect, October 1, 1870. The opposing contention
was that the tax did not become a claim in favor of the government
until the legacy itself became payable, which was not until after
the death of the widow, June 17, 1872. The latter contention was
sustained, and the tax declared to have been illegally
demanded.
It was decided that the legacy was the subject of the tax; that
it was exempt during the life of the widow, and only became payable
upon her death; that it did "not become a subject of taxation until
the right" accrued "to reduce it to possession." The provision of
the law which required the trustee to give written notice to the
assessor of his trust within thirty days after he should take
charge of it was declared "not material to the argument," and that
the provision of the act of 1864, that the tax or duty thereby
imposed should be a lien or charge upon the property bequeathed for
twenty years, or until the same be paid within that period,
determined nothing as to the time when the tax accrued.
Clapp v. Mason was cited as applicable, and the
Court
Page 218 U. S. 230
concluded as follows:
"No right to the payment of the tax had accrued at the date when
the repealing act took effect, and therefore none to collect it can
be deduced from its saving clauses."
Clapp v. Mason and
Mason v. Sargent were
followed as determinative of when, under § 7 of the Act of April
12, 1902 (the act now in question), the tax should be regarded as
"imposed" in
Tilghman v. Eidman, by Circuit Judge Lacombe
at circuit, and also by the Circuit Court of Appeals of the Second
Circuit. 131 F. 652. The judgment was affirmed by this Court by an
equal division of its members. 203 U.S. 580.
A distinction is made between those cases and that at bar, and
there is some distinction in the facts, but not such, in my
opinion, as to take this case out of the principle announced in
them. They were made to turn upon the fact that the tax or duty was
upon the legacy or distributive shares. In this they were applied
in
Sturges v. United States, 117
U. S. 293, and followed in
Knowlton v. Moore,
178 U. S. 41, and
Vanderbilt v. Eidman, 196 U. S. 480, in
which the Act of June 13, 1898, was interpreted. It is said in
Knowlton v. Moore "that the provisions of the Act of 1864
were in mind when" the Act of June 13, 1898, was drafted. The cases
of
Clapp v. Mason and
Mason v. Sargent were
decided when that act was drafted. Is it not a fair inference that
it and its repealing act were intended to have the same meaning and
interpretation which had been given to its prototype and its
repealing act?
Those cases were also made to turn on the fact that, as the tax
was upon the legacy or distributive share, there could be no tax
nor claim in favor of the government until such legacy or share was
vested in the possession and enjoyment of the legatee or
distributee. In this again they were followed in
Vanderbilt v.
Eidman. And it seems to me, therefore, that there is such
resemblance of the provisions of the act of 1864 to those of the
Act of
Page 218 U. S. 231
June 13, 1898, as to make the cases interpreting the former
decisive precedents of the meaning of the latter.
The time of payment is in both acts at a date subsequent to the
death of the testator. In the act of 1898, one year after his
death; in the act of 1864, when the legacy came into possession and
enjoyment. This difference in time can make no difference with the
principle that the tax does not accrue until it becomes due and
payable. And, I submit, is not "imposed" until then, does not
become a claim in favor of the government until then, and, not
being such, is not saved by § 8 of the repealing act. The lien does
not attach until then By § 30 of the act of 1898, the tax is due
one year after the death of the testator, and is secured by a lien;
but when the lien attaches is not stated. There is the same silence
in the act of 1864. The omission was supplied by
Mason v.
Sargent, which declared that the lien presupposed the
existence of the tax, and only attached when the tax accrued. This
must also be the meaning of § 30, and we have a further parallel
between the acts, completing the application of the cited cases.
Mark, too, the words of § 8 of the repealing act, associating the
tax and the lien, showing how closely the legislative mind followed
the judicial decisions and gave its legislation, as I think, the
certain meaning that the interpretation of the prior enactments
afforded. Section 8 provides as follows: "That all taxes or duties
imposed by section 29 . . . shall be subject as to lien, charge,
collection, and otherwise to the provisions of section 30. . .
."
An argument is made to show that a tax may be said to be
imposed, though it be not due and payable. The argument is
answered, I think, by what I have said. A tax is not imposed by a
mere provision for it. Illustrations of this will readily come to
mind besides those afforded by the cited cases. However, I will not
attempt to further review the contentions of the government or the
opposing
Page 218 U. S. 232
ones, nor consider from which the greater embarrassments, if
any, will result. The force of the conflicting contentions, and, of
course, they have force, establish the ambiguity of the statute and
the different meanings that can be ascribed to it. In such
situation, the rule of interpretation which I have announced, and
which I have shown is sanctioned by this Court, should turn
decision against the tax. I will not quote the circuit courts and
the circuit courts of appeal, which have so thought and have
pronounced against the government. They make a body of authority,
persuasive in their numbers and rank. And this Court has divided in
opinion. I do not mention the fact as a circumstance which should
preclude consideration of the question, but I bring it forward as
an element of some power in the discussion. In may not have the
"true, fixed, and resting quality" of
stare decisis, but
it has nevertheless strong appeal and persuasion. It has persisted
through quite a period of time and against many attempts to disturb
it. It is certainly something more patent than inaction. It gave
authority to the decision of the circuit court of appeals in
Eidman v. Tilghman and that again determined other
judgments and became a rule of decision for the settlement of
estates.
I think the question certified should be answered in the
affirmative.
I am authorized to say that the CHIEF JUSTICE and MR. JUSTICE
DAY concur in this dissent.