177 176 employment in the District of Columbia of | law does violence to the constitutional prosuch clerical and other personal services tection of the 4th Amendment, and, this is and for rent of such quarters as may be equally true of the 5th Amendment, pronecessary, twenty-five thousand dollars: tecting persons against compulsory self-inProvided, That any and all such returns criminating testimony. No question under shall be open to inspection only upon the the latter Amendment properly arises in order of the President, under rules and these cases, and when circumstances are regulations to be prescribed by the Secre- presented which invoke the protection of tary of the Treasury and approved by the that Amendment, and raise questions inPresident." [Stat. at L. 2d Sess. 61st Cong. volving rights thereby secured, it will be 494, chap. 297.] time enough to decide them. And so of the argument that the penalties for the nonpayment of the taxes are so high as to violate the Constitution. No case is presented involving that question, and, moreover, the penalties are clearly a separate part of the act, and whether collectible or not may be determined in a case involving an attempt to enforce them. Willcox v. Consolidated Gas Co. 212 U. S. 19, 53, 53 L. ed. 382, 400, 29 Sup. Ct. Rep. 192, 15 A. & E. Ann. Cas. 1034. The contention is that the above section as originally framed and as now amended could have no legitimate connection with the collection of the tax, and in substance amounts to no more than an unlawful at tempt to exhibit the private affairs of corporations to public or private inspection, without any substantial connection with or legitimate purpose to be subserved in the collection of the tax under the act now under consideration. But we cannot agree to this contention. The taxation being, as we have held, within the legitimate powers of Congress, it is for that body to determine what means are appropriate and adapted to the purposes of making the law effectual. In this connection the oftenquoted declaration of Chief Justice Marshall in M'Culloch v. Maryland, 4 Wheat. 316, 421, 4 L. ed. 579, 605, is appropriate: "Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the Constitution, are constitutional." Congress may have deemed the public inspection of such returns a means of more properly securing the fullness and accuracy thereof. In many of the states laws are to be found making tax returns public documents, and open to inspection.† * We cannot say that this feature of the +In Connecticut, the requirement is that the tax lists of the assessors shall be abstracted and lodged in the town clerk's office "for public inspection." Rev. Stat. (Conn.) § 2310. In New York, notices of the completion of the assessment rolls must be conspicuously posted in three or more public places, and a copy left in a specified place, where it may be seen and examined by any person until the third Tuesday of August next following." Consol. Laws of N. Y. vol. 5, p. 5859; N. Y. Laws 1909, chap. 62, 36. In Maryland, a record of property asBessed is required to be kept, and the valuation thereof, with alphabetical list of owners, recorded in a book, "which any person It has been suggested that there is a lack of power to tax foreign corporations, doing local business in a state, in the manner proposed in this act, and that the tax upon such corporations, being unconstitutional, works such inequality against domestic corporations as to invalidate the law. It is sufficient to say of this that no such case is presented in the record. Southern R. Co. v. King, 217 U. S. 525, 54 L. ed. 868, 30 Sup. Ct. Rep. 594. This is equally true as to the alleged invalidity of the act as a tax on exports, which is beyond the power of Congress. No such case is presented in those now before the court. We have noticed such objections as are made to the constitutionality of this law as it is deemed necessary to consider. Finding the statute to be within the constitutional power of the Congress, it follows that the judgments in the several cases must be affirmed. Affirmed. may inspect without fee or reward." Pub. 184 183 (220 U. S. 178.) AMORY ELIOT, Appt., V. JAMES G. FREEMAN, Robert A. Boit, Nathanael Thayer, and Robert H. Gardner. (No. 448.) pose of purchasing, improving, holding, and selling lands and buildings in Boston, known as the Cushing Real Estate Trust. By the terms of the trust, the property was con veyed to certain trustees, who executed a trust agreement whereby the management MAINE BAPTIST MISSIONARY CON- of the property was vested in the trustees, VENTION, Appt., V. who had absolute control and authority over the same, with right to sell for cash or credit, at public or private sale, and with full power to manage the property as they CHARLES E. COTTING and Charles F. ESTATE TRUSTS. Real estate trusts created by deed for the purchasing, improving, holding, or selling lands and buildings for the benefit of the shareholders, which do not derive any benefit from, and are not organized under, any statute of the state, and which, by their terms, end with lives in being and twenty years thereafter, are not subject to the excise imposed by the act of August 5, 1909 (Stat. at L. 1st Sess. 61st Cong. pp. 11112-117, chap. 6, U. S. Comp. Stat. Supp. 1909, pp. 659-844-849), § 38, upon the doing of business by corporations, joint stock companies, or associations "now or hereafter organized under the laws of the United States or of any state or territory." [Ed. Note.-For other cases, see Internal Revenue, Cent. Dig. §§ 13-28; Dec. Dig. § 9.*] The facts are stated in the opinion. Messrs. Moorfield Storey, John W. Yerkes, Richard Hale, and Frank W. Grinnell for appellant in No. 448. Messrs. Burton E. Eames, Barry Mohun, A. R. Serven, Charles H. Tayler, Owen D. Young, and Clement F. Robinson for appellant in No. 496. Solicitor General Lehmann and Mr. Henry E. Colton for the United States. * Mr. Justice Day delivered the opinion of the court: These cases present facts differing from those involved in the consideration of the corporation tax cases, just decided. Flint v. Stone Tracy Co. [220 U. S. 107, 55 L. ed. 31 Sup. Ct. Rep. 342.] In No. 448, the question is raised as to the right to lay a tax under this statute upon a certain trust formed for the pur holders. The shareholders are to be paid title or interest in the property, and no The trust has a building, leasing it to a single tenant. It also maintains and operates an office building with elevator service, janitor service, etc. Case No. 496 involves what is known as a Department Store Trust. It was created by deed, and formed for the purpose of purchasing and holding certain parcels of land in the city of Boston, and erecting a building thereon suitable for a department store. The land and buildings are leased to one tenant for a period of thirty years. The trust had transferable certifi cates issued to shareholders at the par value of $100 each. The trustees conduct the affairs of the trust, manage the property, and pay dividends when declared. The shareholders meet annually, and a majority of them have the power to elect and depose trustees, and to alter and amend the terms of the trust agreement. This trust also For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes *185 •186 continues for certain lives in being and for | joint stock companies that the only subtwenty years thereafter. Each of the trusts stantial difference between them and corinvolved in these cases is in receipt of a porations is that the members are not net income exceeding $5,000. exempt from liability as partners for the debts of the company." Under the terms of the corporation tax act, corporations and joint stock associations must be such as are "now or hereafter organized under the laws of the United States, or of any state or territory of the United States, or under the acts of Congress applicable to Alaska or the District of Columbia." The pertinent question in this connection is: Are these trusts organized under the laws of the state? As we have construed the corporation tax act in the previous cases (Flint v. Stone Tracy Co. ante, 342), the tax is imposed upon doing business in a corporate or quasi corporate capacity; that is, with the facility or advantage of corporate organization. It was the purpose of the act to treat corporations and joint stock companies, similarly organized, in the same way, and assess them upon the facility in doing business which is substantially the same in both forms of* organization. Joint stock organizations are not infrequently organized under the statute laws of a state, deriving therefrom, in a large measure, the characteristics of a corporation. The language of the act ,now or hereafter organized under the laws of the United States," etc., imports an organization deriving power from statutory enactment. The statute does not say under the law of the United States, or a state, or lawful in the United States or in any state, but is made applicable to such as are organized under the laws of the United States, etc. The description of the corporation or joint stock association as one organized under the laws of a state at once suggests that they are such as are the creation of statutory law, from which they derive their powers and are qualified to carry on their operations. A trust of the character of those here involved can hardly be said to be organized, within the ordinary meaning of that term; it certainly is not organized under statutory laws as corporations are. The difference between joint stock associations at common law and those organized under statutes is well recognized (2 Cook, Corp. § 505): "There is an essential difference between a joint stock company as it exists at com. mon law and a joint stock company having extensive statutory powers conferred upon it by the state within which it is organized. The latter kind of joint stock companies is found in England and in the state of New York. To such an extent have these statutory powers been conferred on The two cases now under consideration embrace trusts which do not derive any benefit from and are not* organized under the statutory laws of Massachusetts. Joint stock companies of the statutory character are not known to the laws of that commonwealth. Ricker v. American Loan & T. Co. 140 Mass. 346, 5 N. E. 284. These trusts do not have perpetual succession, but end with lives in being and twenty years thereafter. Entertaining the view that it was the intention of Congress to embrace within the corporation tax statute only such corporations and joint stock associations as are organized under some statute, or derive from that source some quality, or benefit not existing at the common law, we are of opinion that the real estate trusts involved in these two cases are not within the terms of the act. In that view the decrees in both cases will be reversed and the same remanded to the Circuit Court of the United States for the District of Massachusetts, with directions to overrule the demurrers, and for further proceedings consistent with this opinion. Reversed. (220 U. S. 187.) ARY E. ZONNE, Appt., V. MINNEAPOLIS SYNDICATE, John De Laittre, Treasurer. and J. Frank Conklin, Assistant Treasurer. INTERNAL REVENUE (§ 9*)-EXCISE ON CORPORATIONS "DOING BUSINESS. A corporation organized for the purpose of owning and renting an office building, but which has wholly parted with the control and management of the property, and by the terms of a reorganization has disto it, its sole authority being to hold the qualified itself from any activity in respect title subject to a lease for 130 years, and to receive and distribute the rentals which may accrue under the terms of the lease, or the proceeds of any sale of the land, if it shall be sold, is not doing business within the meaning of the act of August 5, 1909 (Stat. at L. 1st Sess. 61st Cong. pp. 11112-117, chap. 6, U. S. Comp. Stat. Supp. 1909, pp. 659-844-849), § 38, imposing an excise upon the doing or the carrying on of business in a corporate or quasi corporate capacity. [Ed. Note.-For other cases, see Internal Revenue, Cent. Dig. §§ 13-28; Dec. Dig. § 9.* For other definitions, see Words and Phrases, vol. 3, pp. 2155-2160; vol. 8, pp. 7640-7641.] [No. 627.] *For other cases see same topic & § NUMBER ID Dec. & Am. Digs. 1907 to date, & Rep'r Indexes PPEAL from the Circuit Court of the United States for the District of Minnesota to review a decree sustaining a demurrer to and dismissing a bill filed by a stockholder to restrain the corporation and its officers from complying with the Federal corporation tax. Reversed. The facts are stated in the opinion. Messrs. John R. Van Derlip and Burt F. Lum for appellant. meaning of the law, and are therefore liable to the tax imposed. The corporation involved in the present case, as originally organized and owning and renting an office building, was doing business with the meaning of the statute as we have construed it. Upon the record now presented we are of opinion that the Minneapolis Syndicate, after the demise of the property and reorganization of the *corporation, was not engaged in doing business within the meaning of the act. It had wholly parted with control and manage Solicitor General Lehmann for the ment of the property; its sole authority was United States. * Mr. Justice Day delivered the opinion of the court: This case involves the validity of the corporation tax act just passed upon in No. 407, Flint v. Stone Tracy Co. [220 U. S. 107, 55 L. ed. —, 31 Sup. Ct. Rep. 342.] The case presents a peculiarity of corporate organization and purpose not involved in the cases just decided. The Minneapolis Syndicate, as the allegations of the bill,*admitted by the demurrer, show, was originally organized for and engaged in the business of letting stores and offices in a building owned by it, and collecting and receiving rents therefor. On the 27th of December, 1906, the corporation demised and let all of the tracts, lots, and parcels of land belonging to it, being the westerly half of block 87 in the city of Minneapolis, to Richard M. Bradley, Arthur Lyman, and Russell Tyson, as tustees, for the term of 130 years from January 1, 1907, at an annual rental of $61,000, to be paid by said lessees to said corporation. At that time the corporation caused its articles of incorporation, which had theretofore been those of a corporation organized for profit, to be so amended as to read: "The sole purpose of the corporation shall be to hold the title to the westerly one half of block 87 of the town of Minneapolis, now vested in the corporation, subject to a lease thereof for a term of 130 years from January 1, 1907, and, for the convenience of its stockholders, to receive, and to distribute among them, from time to time, the rentals that accrue under said lease, and the proceeds of any disposition of said land." As we have construed the corporation tax law (Flint v. Stone Tracy Co. supra), it provides for an excise upon the carrying on or doing of business in a corporate capacity. We have held in the preceding cases that corporations organized for profit under the laws of the state, authorized to manage and rent real estate, and being so engaged, are doing business within the to hold the title subject to the lease for 130 years, to receive and distribute the rentals which might accrue under the terms of the lease, or the proceeds of any sale of the land, if it should be sold. The corporation had practically gone out of business in connection with the property, and had disqualified itself by the terms of reorganization from any activity in respect to it. We are of opinion that the corporation was not doing business in such wise as to make it subject to the tax imposed by the act of 1909 [Stat. at L. 1st Sess. 61st Cong. 112, chap. 6, § 38, U. S. Comp. Stat. Supp. 1909, p. 844]. Holding this view, we think the court below erred in sustaining the demurrer to the bill. The decree of the court below is therefore reversed and the cause remanded to the Circuit Court of the United States for the District of Minnesota, with directions to overrule the demurrer, and for further proceedings consistent with this opinion. Requiring a railway telegraph operator to work five and one half hours, and then, after an interval, three and one half more hours in the same twenty-four, is not made unlawful by the provisions of the act of March 4, 1907 (34 Stat. at L. 1415, 1416, chap. 2939, U. S. Comp. Stat. Supp. 1909, pp. 1170, 1171), §§ 2, 3, forbidding common carriers to permit such employees to be on duty for a longer period than nine hours in any twenty-four-hour period in a place continuously operated night and day. [Ed. Note.-For other cases, see Master and Servant, Cent. Dig. § 14; Dec. Dig. § 13.*] [No. 504.] Argued February 28, 1911. Decided March 13, 1911. For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes 68T. 42 N WRIT of Certiorari to the United | past 6 o'clock in the morning until 12, States Circuit Court of Appeals for the and again from 3 P. M. to half-past 6, or Seventh Circuit, to review a judgment nine hours, in all, of actual work. The which reversed a judgment of the District government contends that when nine hours Court for the Northern District of Illinois, have passed from the moment of beginning Eastern Division, in favor of the govern- work, the statute allows no more labor withment in an action to recover the penalty in twenty-four hours from the same time, provided for a violation by a common car- even though the nine hours have not all of rier of the Federal statute prescribing the them been spent in work. According to hours of labor for telegraph operators. Af- the government's argument, the operator's firmed. nine hours expired at half-past 3 in the afternoon. These questions on the construction of the statute are the only ones that we have to decide. See same case below, 100 C. C. A. 534, 177 Fed. 114. The facts are stated in the opinion. Assistant to the Attorney General Kenyon, Attorney General Wickersham, and Special Assistant United States Attorney Doherty for petitioner. Messrs. Robert Dunlap and Gardiner Lathrop for respondent. *Mr. Justice Holmes delivered the opinion of the court: This is an action to recover penalties for violation of the "Act to Promote the Safety of Employees and Travelers upon Railroads by Limiting the Hours of Service of Employees Thereon." March 4, 1907, chap. 2939, §§ 2, 3, 34 Stat. at L. 1415, 1416, U. S. Comp. Stat. Supp. 1909, pp. 1170, 1171. The government had a verdict in the district court, subject to exceptions, and the judgment was reversed by the circuit court of appeals. 100 C. C. A. 534, 177 Fed. 114. The case is this: By § 2 it is made unlawful for common carriers subject to the act to permit any employee subject to the act to be on duty "for a longer period than sixteen consecutive hours," or, after that period, to do on duty again until he has had at least ten consecutive hours off* duty, or eight hours after sixteen hours' work in the aggregate: Provided that no telegraph operator and the like shall be permitted to be "on duty for a longer period than nine hours in any twenty-four hour period in all towers, offices, places, and stations continuously operated night and day, nor for a longer period than thirteen hours in all towers, offices, places, and stations operated only during the daytime," with immaterial exceptions. By § 3 there is a penalty of not exceeding $500 for each violation of § 2. The defendant was subject to the act. It had a station and telegraph office at Corwith, in the outer limits of Chicago, which was shut from 12 to 3 by day and by night, but open the rest of the time. The government contends that this was a place "continuously operated night and day." At this station the same telegraph operator was employed from half We are of opinion that the government's argument cannot be sustained, even if it be conceded that Corwith was a place continuously operated night and day, as there are strong reasons for admitting. The antithesis is between places continuously operated night and day and places operated only during the daytime. We think that the government is right in saying that the proviso is meant to deal with all offices, and if so, we should go farther than otherwise we might in holding offices not*operated only during the daytime as falling under the other head. A trifling interrup tion would not be considered, and it is possible that even three hours by night and three hours by day would not exclude the office from all operation of the law, and to that extent defeat what we believe was its intent. But if we concede the government's first proposition, it is impossible to extract the requirement of fifteen hours' continuous leisure from the words of the statute by grammatical construction alone. The proviso does not say nine "consecutive" hours, as was said in the earlier part of the section, and if it had said so, or even "for a longer period than a period of nine consecutive hours," still the defendant's conduct would not have contravened the literal meaning of the words. A man employed for six hours and then, after an interval, for three, in the same twenty-four, is not employed for a longer period than nine consecutive hours. Indeed, the word "consecutive" was struck out when the bill was under discussion, on the suggestion that otherwise a man might be worked for a The second nine hours after an interval of half an hour. In order to bring about the effect contended for it would have been necessary to add, as the section does add in the earlier part, a provision for the required number of consecutive hours off duty. presence of such a provision in the one part and its absence in the other is an argument against reading it as implied. The government suggests that if it is not implied, a man might be set to work for two hours on and two hours off, alternately. |