Birmingham age-herald., 1895-04-09

tutional as laying direct taxes?
 8. Whether any part of the tax, if O, considered as direct tax, is invalid for want of uniformity on either of the grounds suggested?
 The justices who heard the argument were equally divided, and therefore no opinion is expected.
 The result Is that the degree of the circuit court is reversed and the cause remanded, with directions to enter decree in favor of complainant in resp pect only of the voluntary payment oi the tax on the rents aud in- comes of its real estate aud that which 1t holds in trust, and on the income from the municipal bonds owned or so held by it.
 THE CHIEF JUSTICE SAID
 that the jurisdiction of courts of equity 10 prevent diversion of fuuds 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 teiow, but had been ex- plicitly waived on the argument of the case, and the court felt justified in pro- ceeding to q decision of the case on it's mer- it's. He said that the power to decide a law unconstitutional was used with reluctance, but the responsibility could not be evaded when the necessity arose. The contentious respecting this law were:
 l. 1hut tax on rents Was tax on reai estate and that, not being laid according to apportioument, it was invalid.
 2. h tt it was not uniform and viola ton of the consti utional requirement. that such taxes shall be laid witn uniformity. Under this head came the exceptions in favor of those persons who were not in pos session Of an income of To00J, of mutual companies, savings banks aud partnerships, all organized for and doing the same busl- less as that of corporations authorized by the states. These exceptions, 1t was held, were arbitrary andea prielous and not based upou sound public policy.
 s. That incomes from investm snts in n at "a taxed.
 The chief justice proceeded to a consider ation or the constitutional requirement with respect of the imposition of the two forms of taxation. direct and indirect, and said that the tramers of the constitution made the consent of those who were ex- pected 10 pay essential to the validity of any tax.
 They had just come out of con fiict upon the great principle of taxation without rep-- reseD tation, ana they were intended to go together tbat congress should so impose a tax that it would fall
 WITH EVEN FORGE AND EFFECT upon all of the constituents of those who voted for it. The states represented in the constitutional convention, said the chief justice, surrendered their right to levy im- posts, exclses and duties to the general government. They looked forward to the time when the great states to the west of them would be coming into the union, and when they gave up that right they did so with confidence that the rule of uniformity would be observed in the levying of taxes by the congress.
 The first question to be considered, said Chief Justice Fuiter, was whether a tax on rents is direct tax within the meaning of the constitution. It had always been held, he said, that tax on estate, real or per- sonal, was direct tax, but it might be that the constitution had different mean ing, and that it was to be applied to this case. In that view it became necessary 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 debates in the convention on the subject of taxa tion. The inference from them, he said, was that the great distinction between direct and indirect taxation was well under- stood by the members of the convention, and that the expectation was that direct taxation would be the last resort of con- gress.
 The celebrated case of Hyton vs. the United States, decided March B, 1796, was then referred to at great length-tne one in which it was held that tax on carriages was not direct tax. The several opinions filed by the several justices were quoted, and Chief Justice Fuller asserted that in none of them was any expression of opin- ion as to whether or not anything except land and capitalization tax was direct tax, but they were confined to the case at hand. The case, he said, seemed to turn upon the declaration of Hamilton as to what constituted direct taxes. If there had been reference to the decisions of the country from which the United States de- rived it's jurisprudence it would have been fatal, for in Great Britain income taxes had always been treated as direct taxes.
 The opinion then proce eded to review the decisions made by the supreme court in cases arising under the law of 1881, which, the chief justice said, counsel had con- tended declared that au income tax was not direct tax and must be regaroed as con- trolling in the case under review. The principle of state decisions, he continued, applied only to cases as are directly in point. No court had ever held itself bound by any part of a decision not necessary to decide the case before 1t. The duty of any court charged with the collection of con- stitutional provisions was not to extend decision on l. question if an error of prin. ciplc was likely thereby to be perpetrated or committed. In the light of these obser- vation5 he opinion considered the decisions down to that in the. Springer case, and concluded that they were all distinguisha- bie from the one in hand. The Springer case was no exception 10 the rule, inas- much as 1t did not present the point raised in this case--is tax on rents tax on real estate? What is iand but the income thereof? was asked.
 THE CONSTITUTIONAL REQUIREMENT was that direct taxes should be lad only by apportionment among the states &C., cOrding to population. and this tax was a direct tax. There was no distinction be- tween an annual tax on the value of the land and a tax on tue land itself. Consti- tutional provisions, it WAS said, could not be thus evaded. It was the substance and not the form oi shadow that was to prevail iu constructing them. Upon this poiut there were many decisions, and some of them were quoted.
 .What the constitution intended to pre. no tax sb boud be laid on the residents of any state by the representatives of other states. The exercise of the power to levy direct taxes was to be restricted to extra ordinary occasions.n