Court Opinion

ID: 9637498
Source: CourtListenerOpinion
Date Created: 2023-08-22 15:07:52.614318+00
Date Added: 2024-06-11T18:09:56.628206
License: Public Domain

On Petition for Rehearing.
HOLMES, Circuit Judge.
In its petition for rehearing, the respondent takes exception to the statement in our opinion that it is never the function of a rebuttable presumption to shift the-burden-of proof, citing Heiner v. Donnan, 285 U. S. 312, 52 S.Ct. 358, 76 L.Ed. 772; but while the language of that opinion at the top of page 329 supports respondent, the decision, itself does not, since the court was dealing with a conclusive presumption. It was not dealing with a rebuttable presumption, and. its statement that the latter had the effect of shifting the burden of proof was dictum.
As authority for this statement, the court-cited Mobile, J. & K. C. R. Co. v. Turnipseed, 219 U.S. 35, 43, 31 S.Ct. 136, 55 L. Ed. 78, 32 L.R.A.,N.S., 226. If we turn to that case, we find that the court was dealing with a disputable presumption. It said in part, beginning at page 42, of 219 U.S., 31 S.Ct. at page 137, 55 L.Ed. 78, 32 L.R.A.,N.S., 226: “The law of evidence is full of presumptions either of fact or law. The former are, of course, disputable, and. the strength of any inference of one fact from proof of another depends upon the generality of the experience upon which it is founded. * * * Legislation providing that proof of one fact shall-constitute prima facie evidence of the main fact in issue is but to .enact a rule of evidence, and quite within the general power of government. * * * We are-not impressed with the argument that the supreme court of Mississippi, in construing the act, has declared that the effect of the statute is to create a presumption of liability, giving to it, thereby, an effect in excess of a mere temporary inference of fact. * * * The only legal effect of this inference is to cast upon the railroad company the duty of producing some evidence to the contrary. When that is done the inference is at an end, and the question of negligence is one for the jury, upon all of llie evidence.”
If we compare the Turnipseed case with Western & A. R. R. Co. v. Henderson, 279 U.S. 639, 49 S.Ct. 445, 73 L.Ed. 884, we shall observe the difference between a stat*859ute that merely supplies an inference of fact in the absence of evidence contradicting such inference, and a statute that creates an inference that is given the effect of evidence to be weighed against opposing testimony. The latter presumption is unreasonable; and, between private parties, violates the due-process clause of the Fourteenth Amendment if created by a state statute and the same clause of the Fifth Amendment if created by an Act of Congress. While there is no question of due process in this case, but merely a question as to the weight and character of the presumption that Congress intended to create, the difference in the nature of the two presumptions is persuasive in arriving at the legislative intent.
We think it is inaccurate to say that a disputable presumption has the effect of shifting the burden of proof. The law as to the burden of proof is a matter of substance,1 and the substantive law of a case does not change as the trial proceeds. A rule of evidence may supply an inference in behalf of the party upon whom the burden of proof rests; but, if that inference is rebutted, it disappears entirely from the case and the law governing the burden of proof remains constant. o
In the instant case, the disputable presumption came into play upon proof of the fact that the margin of profit was less during the tax period; it compelled the inference that the burden of the tax was borne by the taxpayer; but this inference was wholly rebuttable by the production of direct or circumstantial evidence showing that in every instance possible it was the intention and settled practice of the processor to pass on the tax to the purchaser. The presumption only came into play once, and its operation ended upon the introduction of evidence that the burden of the tax had been passed on in every possible instance. If then the taxpayer should prove that in some instances the tax had not been passed on, that evidence would not revive the presumption, though it would pro tanto meet the burden of proof resting upon the plaintiff.
The presumption would not be revived because its creation is dependent upon proof that the margin of profit was less during the tax period, not upon proof that there were instances wherein the tax was not shifted. Respondent’s argument would have the presumption standing as a witness for the taxpayer in every instance where the margin during the tax period was lower and the plaintiff failed otherwise to meet the burden of proof imposed by the substantive law. In the Turnipseed case, supra, it was expressly held that disputable presumptions had no such effect, that they only created a temporary inference, and that, upon the introduction of evidence to the contrary, the presumption was “at an an end”.
In Western & A. R. R. Co. v. Henderson, supra, the court held that it was wholly arbitrary and unreasonable to leave the presumption in the case and give it the effect of evidence after testimony rebutting it had been introduced. The constitutionality of the prima facie statute in the Turnipseed case was upheld because it created merely a temporary inference of fact that vanished upon the introduction of opposing evidence. In the Henderson case, the statute was held invalid because the inference was given the effect of evidence to be weighed against opposing testimony and was to prevail unless such testimony was found to preponderate. In other words, it shifted the burden of proof and therefore was held to be arbitrary, unreasonable, and violative of the Fourteenth Amendment.
The question before us is one of the nature and effect of the presumption created by the federal prima-facie statute. Does it merely create a temporary inference of fact that vanishes upon the introduction of opposing evidence, or does it create an inference that is given the effect of evidence? We should not ascribe to the lawmakers an intention to create an inference that changes the substantive law, shifts the burden of proof, stands throughout the trial as a witness for the taxpayer, supplies without proof facts peculiarly within the knowledge of the taxpayer, and is of a nature similar to the presumption in the Henderson case that was denounced by the Supreme Court as arbitrary, unreasonable, and violative of the due-process clause.2 *860We think the presumption created by the federal statute is of the nature of that dealt with in Mobile J. & K. C. R. Co. v. Turnip-seed, supra. Therefore, the petition for rehearing is denied.
HUTCHESON, Circuit Judge, dissents.

 Central Vermont R. v. White, 238 U. S. 507, 35 S.Ct. 865, 59 L.Ed. 1433, Ann. Cas.1916B, 252; New Orleans & N. E. R. Co. v. Harris, 247 U.S. 367, 38 S.Ct. 535, 62 L.Ed. 1167.

 Western & A. R. R. Co. v. Henderson, Cf. Commercial Molasses Corporation v. New York Tank Barge Corporation, 314 U.S. 104, at page 111, 62 S.Ct. 156, at page 161, 86 L.Ed. 89, wherein Mr. Chief Justice Stone said, “Whether we label this permissible inference with the equivo*860cal term ‘presumption’ or consider merely that it is a rational inference from the facts proven, it does no more than require the bailee, if he would avoid the inference, to go forward with evidence sufficient to persuade that the non-existence of the fact, which would otherwise be inferred, is as probable as its existence. It does not cause the burden of proof to shift, and if the bailee does go forward with evidence enough to raise doubts as to the validity of the inference, which the trier of fact is unable to resolve, the bailor does not sustain the burden of persuasion which upon the whole evidence remains upon him, where it rested at the start. Southern R. Co. v. Prescott, [240 U.S. 632, 36 S. 279 U.S. 639, 49 S.Ct. 445, 73 L.Ed. 884. v. Parkersburg & M. Sand Co., [4 Cir., 266 F. 283, 11 A.L.R. 686], supra; Tomkins Cove Stone Co. v. Bleakley Transp. Co., 3 Cir., 40 F.2d 249; Pickup v. Thames Insurance Co., 3 Q.B.D. 594. Cf. Del Vecchio v. Bowers, 296 U.S. 280, 56 S.Ct. 190, 80 L.Ed. 229; Wigmore, op. cit., supra, §§ 2485, 2490, 2491, and cases cited.”
Cf. also Connecticut Mut. Life Ins. Co. v. Lanahan, 6 Cir., 112 F.2d 375, at page 376, wherein the court said: “It is conceded that the general rule in respect to the presumption against suicide, is applicable in Michigan, and that the presumption is not to be treated as evidence and disappears when testimony is offered to rebut it. Stuckum v. Metropolitan Life Ins. Co., 283 Mich. 297, 277 N.W. 891; Shiovitz v. New York Life Ins. Co., supra [281 Mich. 382, 275 N.W. 181]; Abbott v. Metropolitan Life Ins. Co., 282 Mich. 433, 439, 276 N.W. 506. Compare New York Life Ins. Co. v. Ross, 6 Cir., 30 F.2d 80; Harrison v. New York Life Ins. Co., 6 Cir., 78 F.2d 421.”