Source: https://supreme.justia.com/cases/federal/us/232/261/
Timestamp: 2019-04-23 04:06:00+00:00

Document:
The jurisdiction of this Court on direct writ of error is not confined to the constitutional questions, but embraces every issue in the case. Williamson v. United States, 207 U. S. 425. The circuit court of appeals has no power to ask instructions upon an issue which it has no right to decide, nor has this Court authority to instruct on such a subject. This Court cannot refuse to decide questions which are properly before it for judgment.
it, and the other party has obtained a writ of error from the circuit court of appeals as to other questions decided against it, which court has certified that question to this Court, and the record is in such condition as to enable this Court to decide the whole case, this Court may treat the writ of error from the circuit court of appeals as a cross-writ, and so determine all the issues involved.
Under § 37 of the Tariff Act of August, 1909, imposing a tax on the use of foreign-built yachts owned or chartered for more than six months by citizens of the United States, to be collected annually on September 1, the tax became due on the first day of September next occurring after the act became effective; further held that the six months' clause relates only to the chartering of the yachts, and the word "annually" indicates continuity and that the tax is not a sporadic one to cease after a single payment.
Where words are used in a statute in their every-day sense and not in a technical one, they should be so construed.
The use of a foreign-built yacht which renders the owner subject to the tax imposed by § 37 of the Tariff Act of 1909 is active and actual use, and not the potential use arising from the mere fact of ownership. See Pierce v. United States, p. 232 U. S. 290, post.
The fact that a tax statute operates retroactively does not necessarily cause it to be unconstitutional. Flint v. Stone Tracy Co., 220 U. S. 107.
The rule that statutes should be construed if possible so as not to operate retroactively does not authorize a judicial reenactment of the statute to save it from acting retroactively if Congress intended it so to do.
Section 37 of the Tariff Act of 1909, imposing a tax on foreign-built yachts, is not unconstitutional because it operates retroactively as to the tax levied for the year 1909, and the use of yachts within the meaning of the statute during the year 1909 renders the owner or charterer liable for the tax for that year.
The requirement of uniformity imposed by the Constitution on Congress in levying excise taxes is not intrinsic, but geographic.
The Constitution is not self-destructive -- it does not take away by one provision powers conferred by another, and the express authority to tax is not limited or restricted by subsequent provisions or amendments, especially the due process clause of the Fifth Amendment. McCray v. United States, 195 U. S. 27.
yachts is not so repugnant to justice as to amount to denial of due process of law because domestic-built yachts are not subject to the same tax; nor is § 37 of the Tariff Act of 1909, unconstitutional for lack of uniformity.
The state rule as to interest on taxes differs from the United States rule -- the former excludes interest unless the statute so provides; the latter allows interest unless forbidden by statute. This Court will not now apply the state rule, as to do so would repudiate settled principles and disregard the sanction expressly or impliedly given by Congress to the rule adopted by the federal courts.
The government is entitled to interest on taxes on use of foreign-built yachts under § 37 of the Tariff Act of 1909 from the date when the taxes become due, and may maintain an action against the owner or charterer therefor.
190 F. 359 modified and affirmed.
The facts, which involve the construction and constitutionality of § 37 of the Tariff Act of 1909, imposing a tax on the use of foreign-built yachts, are stated in the opinion.
It is necessary to determine whether these two cases from different courts are not virtually, one and to be considered in that aspect.
The United States sued for the amount of a tax with interest. The alleged liability under the statute was challenged, and if it existed, the statute was alleged to be repugnant to the Constitution of the United States, and right to interest was denied. The court held the statute to be constitutional, and judgment was awarded for the sum claimed, but the prayer for interest was rejected. Error was prosecuted directly from this court by the defendant, and from the circuit court of appeals by the United States, the first because of the constitutional questions and the second because of the disallowance of interest. The circuit court of appeals certified a question concerning the right to recover interest, and the two cases before us consist of the direct writ of error on the one hand and the certificate on the other. Both writs of error when taken were authorized. Ohio R. Comm'n v. Worthington, 225 U. S. 101; Macfadden v. United States, 213 U. S. 288. Our jurisdiction, however, on the direct writ of error, is not confined to the constitutional questions, but embraces every issue in the case. Williamson v. United States, 207 U. S. 425. The circuit court of appeals, however, has no power to ask instructions upon an issue which it has no right to decide, and we have no authority to instruct on such a subject, or to refuse to decide issues which are properly before us for judgment.
as regards the controversy as to interest, which was taken to the circuit court of appeals by writ of error and in which cases the certificates now before us were drawn, to treat the writ of error from the circuit court of appeals as in substance pending here on a cross-writ by the United States, and, as without further orders the record is in such a condition as to enable us to decide the whole case, we proceed to do so.
"There shall be levied and collected annually on the first day of September by the collector of customs of the district nearest the residence of the managing owner, upon the use of every foreign-built yacht, pleasure boat, or vessel, not used or intended to be used for trade, now or hereafter owned or chartered for more than six months by any citizen or citizens of the United States, a sum equivalent to a tonnage tax of seven dollars per gross ton."
The second paragraph of the provision, which we need not quote, gives the right to the owner of any "foreign-built yacht, pleasure boat, or vessel above described" to pay a duty of 35 percent ad valorem, and thus secure an exemption from the tax provided by the first paragraph.
The act went into effect on August 6, 1909, and the collector of the port of New York thereafter made a demand upon C. K. G. Billings, the plaintiff in error, for the payment of $7,644 -- that is, of the sum produced by calculating $7 per ton on 1,091.71 tons, the tonnage of the foreign-built yacht Vanadis, owned and controlled by him.
"has been used by the defendant outside of the waters and territorial limits or jurisdiction of the United States from time to time and at various times . . . and was not used for six months during such year within the waters and territorial limits or jurisdiction of the United States or elsewhere."
"an annual tax, that it should be prospective, and operate only upon the future use of any such foreign-built yacht, pleasure boat, or vessel, and that said annual tax did not accrue and could not be duly levied and collected prior to the first day of September in the year 1910."
the tax was not repugnant to the Constitution, but that the government was not entitled to recover interest.
"the use of every foreign-built yacht, pleasure boat, or vessel . . . now or hereafter owned or chartered for more than six months by any citizen or citizens of the United States."
This is not seriously, if at all, disputed in argument, the controversy turning first upon the period when the tax provided for is to take effect, and the nature and character of the use which is taxed. These subjects are so interwoven that we consider and dispose of them together.
caprice as to its use and the uncertainties of the subject led to the fact of making the use alone the criterion as the wiser and juster method of operating equally upon all. Again let it be conceded that the causing the tax for the annual period to become due in September, 1909, is to give it, in some respects, a retroactive effect, such concession does not cause the act to be beyond the power of Congress under the Constitution to adopt. Flint v. Stone Tracy Co., 220 U. S. 107, and authorities there cited. While the rule is that statutes should be so construed as to prevent them from operating retroactively, that principle is one of construction, and not of reconstruction, and therefore does not authorize a judicial reenactment by interpretation of a statute to save it from producing a retroactive effect.
As, under the meaning which we thus give the statute, the admitted use of the vessel was within its provision, and therefore the amount due for excise was rightfully imposed, and under our interpretation was due when demanded, we must consider whether the asserted repugnancy of the statute to the Constitution is well founded.
It has been conclusively determined that the requirement of uniformity which the Constitution imposes upon Congress in the levy of excise taxes is not an intrinsic uniformity, but merely a geographical one. Flint v. Stone Tracy Co. supra; McCray v. United States, 195 U. S. 27; Knowlton v. Moore, 178 U. S. 41. It is also settled beyond dispute that the Constitution is not self-destructive. In other words, that the powers which it confers on the one hand it does not immediately take away on the other; that is to say, that the authority to tax which is given in express terms is not limited or restricted by the subsequent provisions of the Constitution or the Amendments thereto, especially by the due process clause of the Fifth Amendment. McCray v. United States, 195 U. S. 27, and authorities there cited.
assertion that the tax which the statute imposes is void because of a want of intrinsic uniformity, and therefore all the contentions are adversely disposed of by the previous decisions of this Court on that subject. That which is settled beyond dispute may not be disregarded and be brought into the realm of that which is controvertible and questionable by the mere garb in which propositions are clothed.
"Delinquent taxes do not bear interest unless it is expressly so provided by statute. But it is competent for the legislature to prescribe the payment of interest as a penalty for delay in the payment of taxes, and to regulate its rate. This, however, can be effected only by an act plainly manifesting the legislative intention as to the right to recover interest, its amount, and the date from which it shall begin, the latter being ordinarily the time when the assessment is complete and the taxes become payable."
"It is said there is no law in the Territory of Utah prescribing a rate of interest in transactions like the one in controversy in this suit, and that therefore no interest can be recovered. But this result does not follow. If there is no statute on the subject, interest will be allowed by way of damages for unreasonably withholding payment of an overdue account. The rate must be reasonable, and conform to the custom which obtains in the community in dealings of this character."
"It appears to us clear upon principle, as well as upon the obvious import of the provisions of the various acts of Congress on this subject, that the duties due upon all goods imported constitute a personal debt due to the United States from the importer."
"On the contrary, in suits against collectors to recover moneys illegally exacted as taxes and paid under protest, the settled rule is that interest is recoverable without any statute to that effect, and this although the judgment is not to be paid by the collector, but directly from the Treasury. Erskine v. Van Arsdale, 15 Wall. 75; Redfield v. Bartels, 139 U. S. 694."
contract; no interest without statute in the United States rule; interest in all cases where equitably due unless forbidden by statute. In one, no suit for taxes as a debt without express statutory authority; in the other, the right to sue for taxes as for a debt in every case where not prohibited by statute.
From this review it results that the doctrine as to nonliability to pay interest for taxes which have become due which prevails in the state courts is absolutely in conflict with the doctrine applied to the same subject in this Court, and cannot now be made the rule without repudiating settled principles which have been here applied for many years in various aspects, and without in effect disregarding the sanction either expressly or impliedly given by Congress to such rules. From this it follows that although, in the cases in this Court to which we at the outset made reference which enforced the liability for interest, and which are here controlling if they be not now overruled, there was no controversy as to the liability for interest, this was presumably because the matter was deemed not disputable as the direct result of the then-settled doctrine that interest could be recovered by the United States on a default in payment of import duties. Under this condition, we can see no ground for departing from the rule which the cases enforced, and we are therefore constrained to the conclusion that the court below was wrong in rejecting the prayer of the government for interest, and its action in that respect must be reversed, while in others it must be affirmed.

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