Court Opinion

ID: 8123966
Source: CourtListenerOpinion
Date Created: 2022-09-09 15:03:45.772016+00
Date Added: 2024-06-11T16:39:08.447892
License: Public Domain

McKennan, J.
We are of opinion that this case is ruled by U. S. v. Wilson, 106 U. S. 620, [2 Sup. Ct. Rep. 85.] In that ease it was sought to subject to taxation certificates of indebtedness issued
*404by a railroad company, and by a receiver appointed to lake charge of it, as notes or obligations, within the meaning of section 3408 of the Revised Statutes, “calculated, or intended to circulate, or to be used as money,” and the court held that they were not “circulation” and so not taxable. The tax claimed in this case was imposed under the nineteenth section of the act of congress of February 8, 1875, which provides “that every person, firm, association other than national bank associations, and every corporation, state bank, or state banking association shall pay a tax of ten per centum on the amount of their own notes used for circulation and paid out by them.” The notes issued by the complainants here were in the form of promises to pay to bearer a round sum at a future day, with interest, and were upon their face stated to be for wages due by the Philadelphia & Reading Railroad Company, and were receivable before or at maturity in payment, of freight and toll bills of the Philadelphia & Reading Railroad Company and for coal bills of the Philadelphia & Reading Coal & Iron Company, or any other debts due to either of said companies. These notes were only issued to the employes of the railroad company on account of wages due them, and when paid by the company were canceled and not reissued. They were not, therefore, “used for circulation” by the company, but only as evidences of the company’s indebtedness to its employes .for wages. That they were used afterwards by those to whom they were issued to discharge their debts to others, or to purchase subsistence for themselves, is, in our judgment, indecisive in determining the character of these instruments, because that is to be imposed upon them by the company by using them as circulation, and paying them out as such. This, as already stated, was not done. What is there, then, to put them in the category of “circulation?” This is claimed to result from the form in which they were issued. But this is fully answered by the supreme court in U. S. v. Wilson. In every essential particular the certificates issued there and those in question here are remarkably alike. The former were certificates of indebtedness, good for round sums, payable to bearer at a future day, with interest, and one-fourth of their face value was receivable before maturity for freight and debts due the company, and were paid out again at their face value, with interest. Under these circumstances the supreme court held that it was not satisfied that these certificates “were calculated or intended to circulate or be used as money.” Now,, in view of this decision, we cannot hold that certificates of similar form, used by the railroad company, not for circulation, but as evidence of wages due to its employes, are within the scope and meaning of the act of congress, and so subject to the tax imposed by it.
The first prayer of-the bill must therefore be granted.
Butler, J., concurred.