hands, with a large discretion in the application of it, but with a recognition that the receipt holders are entitled to it subject to the exercise of the powers confided to the trustees. In fact, the whole income, less taxes and similar expenses, has been paid over in due proportion to the holders of the receipts. There can be little doubt that in Massachusetts this arrangement would be held to create a trust and nothing more. "The certificate holders poration in return. The Maine corporation | income of such property as may be in their then transferred to the plaintiffs as trustees the fee of the property subject to lease, left the Massachusetts stock in their hands, and was dissolved. By the declaration of trust the plaintiffs declared that they held the real estate and all other property at any time received by them thereunder, subject to the provisions thereof, "for the benefit of the cestui que trusts (who shall be trust beneficiaries only, without partnership, associate or other relation whatever inter sese)" upon trust to convert the same into money and distribute the net proceeds to the persons then holding the trustees' receipt certificates-the time of distribution being left to the discretion of the trustees, but not to be postponed beyond the end of twenty years after the death of specified persons then living. In the meantime the trustees were to have the powers of owners. They were to distribute what they determined to be fairly distributable net income according to the interests of the cestui que trusts but could apply any funds in their hands for the repair or development of the property held by them, or the acquisition of other property, pending conversion and distribution. The trust was explained to be because of the determination of the Maine corporation to dissolve without waiting for the final cash sale of its real estate and was declared to be for the benefit of the eight shareholders of the Maine Company who were to receive certificates subject to transfer and subdivision. Then followed a more detailed statement of the power of the trustees and provision for their compensation, not exceeding one per cent. of the gross income unless with the written consent of a majority In Interest of the cestui que trusts. A similar consent was required for the filling of a vacancy among the trustees, and for a modification of the terms of the trust. In no other matter had the beneficiaries any control. The title of the trust was fixed for convenience as The Massachusetts Realty Trust. The declaration of trust on its face is an ordinary real estate trust of the kind familiar in Massachusetts unless in the particular that the trustees' receipt provides that the holder has no interest in any specific property and that it purports only to declare the holder entitled to a certain fraction of the net proceeds of the property when converted into cash "and meantime to income." The only property expressly mentioned is the real estate not transferred to the Massachusetts corporation. Although the trustees in fact have held the stock of that corporation and have collected dividends upon it, their doing so is not contemplated in terms by the instrument. It does not appear very clearly that the eight Maine shareholders might not have demanded it had they been so minded. The function of the trustees is not to manage the mills but simply to collect the rents and are in no way associated together nor is there any provision in the * (*)[instrument] for any meeting to be held by them. The only act which (under the [declaration of] trust > they can do is consent to an alteration * of the trust" and to the other matters that we have mentioned. They are confined to giving or withholding assent, and the giving or withholding it "is not to be had in a meeting but is to be given by them individually." "The sole right of the cestuis que trust is to have the property administered in their interest by the trustees, who are the masters, to receive income while the trust lasts, and their share of the corpus when the trust comes to an end." Williams v. Milton, 215 Mass. 1, 8, 10, 11, 102 N. E. 355, 358. The question is whether a different view is required by the terms of the present act. As by D above referred to trustees and associations acting in a fiduciary capacity have the exemption that individual stockholders have from taxation upon dividends of a corporation that itself pays an income tax, and as the plaintiffs undeniably are trustees, if they are to be subjected to a double liability the language of the statute must make the intention clear. Gould v. Gould, 245 U. S. 151, 153, 38 Sup. Ct. 53, 62 L. Ed. 211; United States v. Isham, 17 Wall. 496, 504, 21 L. Ed. 728. The requirement of G (a) is that the normal tax thereinbefore imposed upon individuals shall be paid upon the entire net income accruing from all sources during the preceding year "to every corporation, jointstock company or association, and every insurance company, organized in the United States, no matter how created or organized, not including partnerships." The trust that has been described would not fall under any familiar conception of a joint-stock association, whether formed under a statute or not. Smith v. Anderson, 15 Ch. D. 247, 273, 274, 277, 282; Eliot v. Freeman, 220 U. S. 178, 186, 31 Sup. Ct. 360, 55 L. Ed. 424. If we assume that the words "no matter how created or organized" apply to "association" and not only to "insurance company," still it would be a wide departure from normal usage to call the beneficiaries here a joint-stock association when they are admitted not to be partners in any sense, and when they have no joint action or interest and no con *234 [4] The challenged orders related directly to prices for gas at burner-tips and only in- (Comp. directly to the receivers' business. They were under no compulsion to accept unremunerative prices; even the original supply contracts had not been adopted and were subject to rejection. See Newark Natural Gas & Fuel Co. v. Newark, 242 U. S. 405, 37 Sup. Ct. 156, 61 L. Ed. 393, Ann. Cas. 1917B, 1025. te Our conclusion concerning relationship be- I tween the receivers and local companies renders it unnecessary to discuss the effect of rates prescribed for the latter. The receivers were in no position to complain of them. Jent of the Chruit Court of Appeals Jug of the District Court affirmed (249 U. S. 26) BOARD OF PURINE UTILITY COM'RS 1. its to the 1-Argued March 1919. Decided March 24, Cou(2)-PHILIPPINE ISLANDS- terthe Courtrain of a franchise ordinance, re The decrees below must be reversed and even the esportation of members of pothe cause remanded for further proceeding te premte met wearing official badges, as not in conformity with this opinion. Reversed and remanded. (249 U. S. 223) CROCKER et al. v. MALLEY, Collec (Argued March 6, 1919. Decided Ma 1919.) No. 649. 1. INTERNAL REVENUE 7-INCOM "ASSOCIATION." Plaintiffs, to whom, as trustees, : tion thereafter dissolved, after conve and leasing the balance of its mills to the M. corporation and receiving t M. in return, transferred the fee of tl subject to lease, and in whose hands stock, the trust being declared to be f fit of the stockholders of the dissolv tion who were to receive certificat functions of the trustees being to rents and incomes, with a large d its application, but with a recognit receipt holders are entitled to it su powers confided to the trustees, hel themselves nor together with the to be an "association," within Inco Oct. 3, 1913, § II, G (a), subjecting mal tax thereinbefore imposed on in entire net income accruing to "ex tion, joint-stock company or asso no matter how created," but to within section II, D, whereby al fiduciary capacity have the exem dividual stockholders have from For other cases see same to; tectives with such badges consequent ruling by Supreme Court Fu Islands that railroad company wald to give such transportation or ard of Public Utility Commissioninvolve Constitution, statute, tresct of privilege of the United States, Code, § 248 387(2)-PHILIPPINE ISLANDSSUPREME COURT-AMOUNT IN en controversy in proceeding by gany against Board of Public Util ssioners, to revoke board's order that y detectives free, decided adverseby Supreme Court of Philippine not be said to exceed $25,000, withCode, 248; the record disclosing for concluding the board had any ry interest. a from and in Error to the SuCurt of the Philippine Islands. ing in the Supreme Court of the Islands by the Manila Electric &Light Company against the Board Cility Commissioners to revoke an the Board. There was a decree vasting aside and annulling the order, Bard appeals and brings error. ward 8. Bailey and S. T. AnWashington, D. C., for appelintiff in error. ert H. Neilson and Paul D. wtf New York City, for appel..meniant in error. m opinion by Mr. Chief Justice Electric Railroad & Light ambered Digests and Indexes the city nia General de Tabacos de Filipinas v. Aln electric hambra Cigar & Cigarette Manufacturing of a fran- Co., 249 U. S. 72, 39 Sup. Ct. 224, 63 L. Ed. dopted in 484, decided March 3, 1919. of a power We are of opinion that the mere construction by the court of the franchise ordinance, effect to the and its consequent ruling that the duty did ance requir- not rest on the railroad company to give the and fire de- free transportation which the orders of the wearing offi- Commissioners had directed to be given afride free up- fords no ground for bringing the case within at requirement the first consideration, and indeed, that the not embracing contention that it does is too unsubstantial, anch of the po- not to say frivolous, to afford any basis for t publicly wear jurisdiction; and that the same conclusion ing such badges is inevitably required as to the second conus in such man- sideration as the record discloses no ground osed or inspected whatever for concluding that the Utility Commissioners had any such pecuniary in'ublic Utility Com-terest as to bring the case within the statmembers of the de- ute. ely wearing their Dismissed for want of jurisdiction. ce, after notice and on the subject, enter- (249 U. S. 265) red to ride free under DOMINION HOTEL, Inc., v. STATE OF d. The railroad, chal the order, refused to ARIZONA. of the remedy provided (Submitted March 11, 1919. Decided March 24, 1919.) No. 178. MASTER ked the jurisdiction of CONSTITUTIONAL LAW 238(2) action of the court complain*before the Act of September it. 726, c. 448), and the appelon of this court was invoked 't went into effect, our power governed by section 248 of the (Act March 3, 1911, c. 231, 36 By that section the authority to the situation here disclosed can upon one or both of two considWhether the Constitution or any y, title or privilege of the Unitinvolved, or (b) whether the valversy exceeds $25,000. Compa In Error to the Supreme Court of the State of Arizona. The Dominion Hotel, Incorporated, was convicted of violation of the law of Arizona as to hours of employment of women, conviction was sustained by the Supreme Court of Arizona (18 Ariz. 345, 161 Pac. 682), and defendant brings error. Affirmed. Mr. Harvey M. Friend, of Washington, D. C., for plaintiff in error. Mr. Wiley E. Jones, Atty. Gen., Ariz., for the State of Arizona. * Mr. Justice HOLMES delivered the opinion of the Court. This is an information alleging that the defendant, the plaintiff in error, was engaged in the hotel business and permitted other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes 267 *235 trol over the fund. On the other hand, the alleged in their claim, were the persons taxtrustees by themselves cannot be a joint- ed, whether they were called an association stock association within the meaning of the or trustees. They were taxed too much. If act unless all trustees with discretionary the United States retains from the amount repowers are such, and the special provision ceived by it the amount that it should have for trustees in D is to be made meaning- received, it cannot recover that sum in a subless. We perceive no ground for grouping sequent suit. the two-beneficiaries and trustees-together, in order to turn them into an association, by uniting their contrasted functions and powers, although they are in no proper sense associated. It seems to be an unnatural perversion of a well-known institution of the law. We do not see either that the result is affected by any technical analysis of the individual receipt holder's rights in the income received by the trustees. The description most in accord with what has been the practice would be that, as the receipts declare, the holders, until distribution of the capital, were entitled to the income of the fund subject to an unexercised power in the trustees in their reasonable discretion to divert it to the improvement of the capital. But even if it were said that the receipt holders were not entitled to the income as such until they got it, we do not discern how that would turn them into a joint-stock company. Moreover the receipt holders did get it and the question is what portion it was the duty of the trustees to withhold. We presume that the taxation of corporations and joint-stock companies upon dividends of corporations that themselves pay the income tax was for the purpose of discouraging combinations of the kind now in disfavor, by which a corporation holds controlling interests in other corporations which in their turn may control others, and so on, and in this way concentrates a power that is disapproved. There is nothing of that sort here. Upon the *whole case we are of opinion that the statute fails to show a clear intent to subject the dividends on the Massachusetts corporation's stock to the extra tax imposed by G (a). [2] Our view upon the main question opens a second one upon which the Circuit Court of Appeals did not have to pass. The District Court while it found for the plaintiffs, ruled that the defendant was entitled to re Judgment of the Circuit Court of Appeals reversed. Judgment of the District Court affirmed. (249 U. S. 262) BOARD OF PUBLIC UTILITY COM'RS V. · MANILA ELECTRIC R. & LIGHT CO. (Argued March 14, 1919. Decided March 24, 1919.) No. 230. 1. COURTS 387(2)-PHILIPPINE ISLANDS— REVIEW BY SUPREME COURT. Construction of a franchise ordinance, requiring free transportation of members of police department wearing official badges, as not applying to detectives with such badges concealed, and consequent ruling by Supreme Court of Philippine Islands that railroad company was not obliged to give such transportation ordered by Board of Public Utility Commissioners, does not involve Constitution, statute, treaty, title, right of privilege of the United States, within Judicial Code, § 248. 2. COURTS 387(2)-PHILIPPINE ISLANDS REVIEW BY SUPREME COURT-AMOUNT INVOLVED. The value in controversy in proceeding by railroad company against Board of Public Utility Commissioners, to revoke board's order that railroad carry detectives free, decided adversely to board by Supreme Court of Philippine Islands, cannot be said to exceed $25,000, within Judicial Code, § 248; the record disclosing no ground for concluding the board had any such pecuniary interest. On Appeal from and in Error to the Supreme Court of the Philippine Islands. Proceeding in the Supreme Court of the Philippine Islands by the Manila Electric Railroad & Light Company against the Board order of the Board. There was a decree vaof Public Utility Commissioners to revoke an cating, setting aside and annulling the order, and the Board appeals and brings error. Dismissed. Messrs. Edward S. Bailey and S. T. Ansell, both of Washington, D. C., for appellant and plaintiff in error. tain out of the sum received by him the amount of the tax that they should have paid as trustees. To this the plaintiffs took a cross writ of error to the Circuit Court of Appeals. There can be no question that although the plaintiffs escape the larger liability, there was probable cause for the defendant's act. The Commissioner of Internal Revenue rejected the plaintiff's claim, and the statute does not leave the matter clear. The recovery therefore will be from Memorandum opinion by Mr. Chief Justice the United States. Rev. St. § 989 (Comp. St. | WHITE. Messrs. Robert H. Neilson and Paul D. Cravath, both of New York City, for appellee and defendant in error. § 1635). The plaintiffs, as they themselves The Manila Electric Railroad & Light For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes Company, the appellee, operated in the city | nia General de Tabacos de Filipinas v. Alof Manila a street railway and an electric hambra Cigar & Cigarette Manufacturing light and power plant by virtue of a fran- Co., 249 U. S. 72, 39 Sup. Ct. 224, 63 L. Ed. chise conferred by an ordinance adopted in 484, decided March 3, 1919. 1902 by the city in the exercise of a power We are of opinion that the mere construcgiven it by the local legislative authority. tion by the court of the franchise ordinance, *From the beginning, in giving effect to the and its consequent ruling that the duty did provision of the franchise ordinance requir- not rest on the railroad company to give the ing that “members of the police and fire de- free transportation which the orders of the partments of the city of Manila wearing offi- Commissioners had directed to be given afcial badges shall be entitled to ride free up- fords no ground for bringing the case within on the cars of the grantee," that requirement the first consideration, and indeed, that the was treated by the grantee as not embracing contention that it does is too unsubstantial, members of the detective branch of the po- not to say frivolous, to afford any basis for lice department who did not publicly wear jurisdiction; and that the same conclusion official badges, although having such badges is inevitably required as to the second conconcealed upon their persons in such man- sideration as the record discloses no ground ner that they could be exposed or inspected | whatever for concluding that the Utility when desired. Commissioners had any such pecuniary in In 1914 the Board of Public Utility Com-terest as to bring the case within the statmissioners deeming that members of the de- ute. ARIZONA. 1919.) No. 178. (249 U. S. 265) CONSTITUTIONAL LAW 238(2) MASTER tective force not publicly wearing their Dismissed for want of jurisdiction. badges were entitled to ride free under the provisions of the ordinance, after notice and hearing to the railroad on the subject, entered an order directing that members of the detective force be allowed to ride free under DOMINION HOTEL, Inc., v. STATE OF the circumstances stated. The railroad, challenging the validity of the order, refused to obey it and availing of the remedy provided (Submitted March 11, 1919. Decided March 24, by the local law invoked the jurisdiction of the Supreme Court. In that court it disputed not only the correctness of the interpretation which had been given the ordinance by the Utility Commissioners, but charged that if such interpretation were enforced a violaIn view of the deference due to the judgtion would result of the rights of the com- ment of the Legislature, of existence of public pany in particulars stated guaranteed to it considerations for the distinction, the equal proby the Bill of Rights provided by Congress tection of the law cannot, on judicial knowledge, for the Philippine Islands. The court, pass- be said to be denied hotel keepers by the proing as unnecessary to be considered all the viso to Pen. Code Ariz. § 717, excepting em⚫contentions made by the railroad but the ployés in railroad restaurants from the provision that the 8 hours of labor per day, to which single one concerning the duty of the comwomen employed in certain industries are limpany under the franchise ordinance to fur-ited, shall be performed within a period of 12 nish the free transportation ordered, decided hours. that under the text of that ordinance the duty to furnish such transportation did not exist, and therefore set aside the order of the Commissioners. That body, both by error and appeal, brought the subject here for consideration. In Error to the Supreme Court of the State of Arizona. The Dominion Hotel, Incorporated, was convicted of violation of the law of Arizona as to hours of employment of women, conviction was sustained by the Supreme Court of Arizona (18 Ariz. 345, 161 Pac. 682), and defendant brings error. Affirmed. Mr. Harvey M. Friend, of Washington, D. C., for plaintiff in error. [1, 2] As the action of the court complained of was taken *before the Act of September 6, 1916 (39 Stat. 726, c. 448), and the appellate jurisdiction of this court was invoked before that act went into effect, our power to review is governed by section 248 of the Judicial Code (Act March 3, 1911, c. 231, 36 Stat. 1158). By that section the authority to review under the situation here disclosed can depend only upon one or both of two considerations: (a) Whether the Constitution or any statute, treaty, title or privilege of the Unit- This is an information alleging that the ed States is involved, or (b) whether the val- defendant, the plaintiff in error, was enue in controversy exceeds $25,000. Compa- gaged in the hotel business and permitted Mr. Wiley E. Jones, Atty. Gen., Ariz., for the State of Arizona. * Mr. Justice HOLMES delivered the opinion of the Court. For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes |