The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1895-04-17

unconstitutional as laying direct taxes +:
5. Whether any part of the tax, If
not considered as a direct tax. is IN
valid, for want Of uniformity 90 either
of the grounds suggested ?-the justices
who heard the argument are equally
divided and therefore no opinion is ex-
pressed.
The result is that the decree of the
Circuit Court is reversed and the cause
remanded with directions to enter a
decree ia favor Of complainant 10 re-
spect only of the voluntary payment OF
the tax 90 the rents and income of its
real estate and that which it holds 10
trust, and on the income from the mu-
uicipal bonds owned or SO held by 1t.
The Chief Justice said that the Juris.
diction Of courts of equity to prevent
diversion of funds by breach of trust
or illegal payment of the funds had
been frequently affirmed by the court.
The question was not raised IN the
court below, but had been explicitly
waived on the argument of the case
and the court felt justified in procsed-
ing to a decision Of the case ou its
merits. He said that the power to de-
eide a law unconditional was used
with reluctance, but the responsibility
could not be evaded when the neces-
sity arose. The contentious respecting
this law we're: l. That a tax on rents
was a tax on real estate and that not
being laid according to apportionmcnt
it was iovalid; (2). That it was not uni
form and a violation of the constitu-
sional requirement that such taxes
shall be laid with uniformity. Under
this head, came the exceptions in favor
Of those persons who we're not in pos
session Of an income of $4,000; of "u-
tual insurance companies, savings
backs aud partnerships, all organized
for and doing the same business as that
Of corporations authorized by the
States. These exceptions. it was held,
were arbitrary and capricious and not
based upon souod public policy; o..
That incomes from investments IN
State aud municipal bonds could not be
taxed.
The Chief Justice proceeded to a con-
sideratinn of the constitutional REQUIRE
nents with respect Of the imposition of
TWO forms of taxation, direct and iudi-
rect, and said that the trainers Of the
Constitution intended to make the
consent Of those who we're expected to
pay, essential 80 the validity of any
tax They had just come out of a COP
Aics upon the great principle Of taxa
ton without representation and they
we're Intended to 60 together-that
Congress should so impose a tax that it
would fall with even force and effect
upon all of the constituents of those
who voted for it. Tie States repre-
scented in the constitutional convention,
said the Justice, surrendered their
right to levy imposts. excuses and
duties to the government. They look
ed forward to the time whee great
States to the west of them would be
coming into the Union and when they
gave up that right, they did so with con-
6dence that the rule of uniformity
would be observed 10 the laying Of
taxes by the Congress.
The first question to be considered,
said Chief Justice Fuller, was whether
or not a tax on rents is a direct tax
within the meaning of the Constitutes.
1t had always been held, he said, that
a tax CO estate, real or personal, was a
direct tax. but it might be that the
Constitution had q different meaning,
and that it vas to be applied to this
case 10 that view, it became neces-
sary to inquire what were direct taxes
at the time the Constitution was
adopted. The Chief Justice then made
extensive quotations from the history
of the debate 10 the convention on the
subject of taxation The inference
from them, he said, vas that the gen.
eral distinction between direct and in
direct taxation was we'll understood by
the members of the convention and
that the expectation was that a direct
tax would be the last resort Of Con-
gress. The celebrated case of Hyton
vs. the United States. decided March 3,
1896. was then referred to at great
length, the one 10 which it was held
that a tax on carriages vas not a direct
tax. The several opinions filed by
the justices were quoted aud Mr.. Chief
Jue'ice Fuller asserted that in none of
them was there any expression of opin-
ion as to whether or not anything ex-
cept land and cspitation taxes was a di.
rect tax, but they were confined to the
case at hand. The case. be said. seemed