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not a tax on property in a sense which | The amount is fixed by the statute, to be brings it within article 4, § 7, paragraph 12, paid on the outstanding capital stock of the of our state Constitution, it is a tax on the corporation each year, and capable of being capital stock of the corporation. Otherwise enforced by action against the will of the the act would be manifestly void for want taxpayer. As was said by Mr. Justice Field, of a title expressing its object, and the state speaking for the court in [Meriwether v. would be deprived of all its revenue under Garrett] 102 U. S. 472, 26 L. ed. 197. the act of 1892. The franchise of the com- "Taxes are not debts. It was so held by pany is the right to hold property and ex- this court in the case of Lane County v. ercise its corporate privileges. The Supreme Oregon, 7 Wall. 71, 19 L. ed. 101. Debts are Court of the United States has decided that obligations for the payment of money foundwhere a corporation is exempted from tax-ed upon contract, express or implied. Taxes ation, it is not subject to a tax on its fran- are imposts levied for the support of the chise. Wilmington & W. R. Co. v. Reid, 13 government, or for some special purpose auWall. 264, 20 L. ed. 568."
thorized by it. The consent of the taxpayer While we take this view of the decisions of is not necessary to their enforcement. They the supreme court of New Jersey, and reach operate in invitum. Nor is their nature af. the conclusion that the claim in question is fected by the fact that in some states-and for a tax within the meaning of the law we believe in Tennessee—an action of debt as construed by that court, the bankruptcy may be instituted for their recovery. The act is a Federal statute, the ultimate inter form of procedure cannot change their char. pretation of which is in the Federal courts. acter." It is doubtless true, as was said in the opin- It is urged by the appellee, and upon this ion of the learned judge speaking for the ground the case was decided in the circuit circuit court of appeals, in this case, that if court of appeals, that this is in no just the highest court of the state should decide sense a tax levied by the state, but is the that a given statute imposed no tax within result of a contraet by which the corpora, the meaning of the law as interpreted by it, tion was brought into existence, the consida Federal court, in passing upon the bank- eration being the payment of annual sums ruptcy act, would not compel the state to for the privileges given it by the state, for accept a preference from the bankrupt's es. which no lien is given upon the property, tate upon a different view of the law. Con- but only a right of action for their recovceding the doctrine that the meaning of a ery. But this imposition is in no just sense statute is a state question, except where a contract. The amount to be paid, fixed by rights, the subject of adjudication by the the statute, is subject to control and change Federal courts, have accrued before its con- at the will of the state. It is imposed upon struction by the state court, or the question all corporations, whether organized before or of contract within the protection of the Fed after the passage of the act. The corporaeral Constitution is involved, still a state tion is not consulted in fixing the amount of court, while entitled to great consideration, the tax, and under the laws of New Jersey cannot conclusively decide that to be a tax the charter of such corporations as this may within the meaning of a Federal law pro- be amended or repealed. Hancock v. Singer viding for the payment of taxes, which is Mfg. Co. 62 N. J. L. 289–328, 42 L.R.A. 852, not so in fact. The section (64a) itself de- 41 Atl. 846. clares that, in case of disputes as to the The form of the collection of taxes is left amount or legality of any such tax, they to the discretion of the taxing power; someshall be heard and determined by the court. times a lien is provided, sometimes a sumThe state court may construe a statute and mary method of collection is awarded; in define its meaning, but whether its construc-other cases, an action for debt is given; and, tion creates a tax within the meaning of as in the present case, with the right of proa Federal statute, giving a preference to hibition of the exercise of corporate frantaxes, is a Federal question, of ultimate de- chises by injunction for failure to pay. cision in this court.
We think, then, that, as denominated in We are of opinion that this claim was for the statute, this was a tax imposed by the a tax. The language of the act, as we have state upon the corporation for the privilege said, is very broad, and includes all taxes. of existence and the continued right to exerIt is not necessary to enter upon a discus-cise its franchise. sion of the different forms which taxes may The state which created this corporation take. Generally speaking, a tax is a pecun- had the right to fix the terms of its existiary burden laid upon individuals or prop- ence, and to provide, if it saw fit so to do, erty for the purpose of supporting the gov- that, for the continued existence of its franernment. We think this exaction is of that chise, the corporation should pay certain character. It is required to be paid by the sums to the state, fixed by the amount of its corporation after organization in invitum. ' yearly outstanding capital stock. New York ex rel. Metropolitan Street R. Co. v. New vides shall be paid in advance of the pay. York State Tax Comrs. 199 U. S. 1–37, 50 ment of dividends to creditors-do not emL. ed. 65-75, 25 Sup. Ct. Rep. 705, et seq. brace an "annual license fee or franchise
Coming to the specific objections to the tax” (the words of the New Jersey statute), claim for the year 1902, the claim was pre- which, strictly, is not a property tax, but sented upon the basis of $40,000,000 of out. only an exaction by the state for the privistanding capital stock, when in fact there lege given to a corporation to do certain was only $10,000,000 of such stock, the as-business under its charter. We think the sessment by the state board being upon the bankruptcy act should be so construed. It , former sum, and made upon the failure of cannot be otherwise construed without doing the corporation to report. But we do not gross injustice to those creditors of the think the finding of the state board is con- bankrupt corporation who have business clusive. The tax is to be assessed upon transactions with it at its place of business. capital stock actually outstanding. It may Here the bankrupt corporation did no busiwell be doubted whether the board had power ness in New Jersey. So far as appears, it to tax any other stock. But be that as it did not have, nor expect to have, any conmay, $ 64a specifically provides that in case nection with that state except to become any question arises as to the amount or incorporated under its laws. It had its seat legality of taxes, the same shall be heard of operations and all its tangible property in and determined by the court, with a view the state of Illinois. It had no property in to ascertaining the amount really due. We New Jersey. Its scheme was to get a chardo not think it was the intention of Con- ter from New Jersey and then go to another gress to conclude the bankruptcy courts by state for purposes of its business. We do the findings of boards of this character, and not think that Congress intended that, in that the claim should have been upon the the distribution of the assets of a bankbasis of the capital stock actually outstand. rupt, preference should be given to the ing.
claims of a state which have their origin in, The amount claimed for the year 1903, it and are wholly based upon, a bargain with is insisted, had not accrued at the time of the state whereby certain privileges are the adjudication in bankruptcy, which was granted in exchange for certain payments,on April 23, 1903, the return being made on privileges which the state may grant or May 2, 1903, and the assessment was not withhold at pleasure. In our opinion the made until July 1, 1903; but the annual word "taxes" in the bankruptcy act was inreturn, required to be made to the board on tended to embrace only burdens or charges or before the first Tuesday in May, is upon imposed in invitum, and which were in their the basis of the capital stock issued and out nature and in reality “taxes," as distinstanding the first of January preceding the guished from governmental exactions for making of the return. The bankrupt act re- privileges granted. The claim of New Jerquires the payment of all taxes legally due sey, whatever its true amount, should not and owing. We think the tax thus assessed be given priority, but should be placed upon upon that basis was legally due and owing, the same footing with claims of other credalthough not collectible until after the ad- itors. This view is consistent with the act judication.
of Congress. We reach the conclusion that, under the bankruptcy act, these taxes, in the amounts hereinbefore indicated, were entitled to pref. erential payment in favor of the state of UNITED STATES ex rel. GEORGE A.
LOWRY and Planters Compress Company, New Jersey, and that the Circuit Court of
Plffs. in Err., Appeals erred in reaching a contrary con
v. clusion. Its judgment will be reversed and the FREDERICK I. ALLEN, Commissioner of
Patents. cause will be remanded to the District Court for further proceedings in conformity with Patents-appeal from interlocutory decithis opinion.
An appeal from a decision of the priMr. Justice Harlan (with whom concurred mary examiner upon a motion to dissolve Mr. Chief Justice Fuller and Mr. Justice an interference, holding that the party had Peckham) dissenting:
the right to make the interfering claims, The Chief Justice, Mr. Justice Peckham, may be prohibited by the rules of the Patand myself dissent from the opinion of the ent Office without infringing the right of court. In our judgment the “taxes” owing Stat. $$ 482, 483, 4904, 4909, U. S. Comp.
appeal in interferences given by U. S. Rev. by a bankrupt to a state-which § 64a of the Stat. 1901, pp. 272, 3389, 3390, since the apbankruptcy act [30 Stat. at L. 563, chap. peal therein provided for must be deemed 541, U. S. Comp. Stat. 1901, p. 3447) pro- ' limited to final decisions upon the question
of priority of invention, which, under these bia, requiring the Commissioner of Patents statutes, is the sole question for determina- to direct the board of examiners in chief to tion in interference cases.
reinstate and take jurisdiction of the appeal
of petitioners from the decision of the pri[No. 56.]
mary examiner, refusing to dissolve an inArgued October 24, 25, 1906. Decided De-terference between a patent granted to Lowcember 10, 1906.
ry and an application for a patent by one
William L. Spoon. The supreme court N ERROR to the Court of Appeals of the granted the mandamus. Its judgment was
District of Columbia to review a judg. reversed by the court of appeals. ment which reversed a judgment of the Su- The question in the case is whether the preme Court of that District, granting a rule of the Patent Office which denies an mandamus to require the Commissioner of appeal from a ruling of a primary examiner, Patents to direct the board of examiners in upon motion to dissolve an interference, is chief to take jurisdiction of an appeal from contrary to the Revised Statutes, and therea ruling of the primary examiner, upon a fore void. Rule 124 provides that "from a motion to dissolve an interference. Af- decision of a primary examiner affirming firmed.
the patentability of the claim or the appliSee same case below, 26 App. D. C. 8. cant's right to make the same, no appeal The facts are stated in the opinion. can be taken.”
Messrs. Oliver Mitchell, Edmund Wet- Plaintiffs in error attack the rule as inmore, and Meyers, Cushman, & Rea for consistent with the sections of the Revised plaintiffs in error.
Statutes which provide for interferences. Assistant Attorney General McReynolds, These sections are inserted in the margin.t and John M. Coit for defendant in error. The facts are as follows: Lowry was
granted a patent for a bale of fibrous maMr. Justice McKenna delivered the opinion terial January 29, 1897. An interference was of the court:
declared between his patent and application This is a petition for mandamus, filed in of one William Spoon, to which interference the supreme court of the District of Colum-'Lowry was made a party. He moved to
* Rev. Stat. Sec. 4904, U. S. Comp. Stat. Sec. 9. (Act of February 9, 1893 [27 1901, p. 3389. Whenever an application is Stat. at L. 436, chap. 74, U. s. Comp. Stat.
. S. made for a patent which, in the opinion of 1901, p. 3391].) That the determination of the Commissioner, would interfere with any appeals from the decision of the Commispending application, or with any unexpired sioner of Patents, now vested in the general patent, he shall give notice thereof to the term of the supreme court of the District applicants, or applicant and patentee, as the of Columbia, in pursuance of the provisions case may be, and shall direct the primary of section seven hundred and eighty of the examiner to proceed to determine the ques. Revised Statutes of the United States, retion of priority of invention. And the Com-lating to the District of Columbia, shall missioner may issue a patent to the party hereafter be, and the same is hereby, vested who is adjudged the prior inventor, unless in the court of appeals created by this act; the adverse party appeals from the decision and in addition, any party aggrieved by a of the primary examiner, or of the board of decision of the Commissioner of Patents in examiners in chief, as the case may be, any interference case may appeal therefrom within such time, not less than twenty days, to said court of appeals. as the Commissioner shall prescribe.
Rev. Stat. Sec. 482, U. S. Comp. Stat. Rev. Stat. Sec. 4909, U. S. Comp. Stat. 1901, p. 272. The examiners in chief shall
. 1901, p. 3390. Every applicant for a patent be persons of competent legal knowleilge or for the reissue of a patent, any of the and scientific ability, whose duty is shall be, claims of which have been twice rejected, on the written petition of the appellant, to and every party to an interference, may revise and determine upon the validity of appeal from the decision of the primary the adverse decisions of examiners upon apexaminer, or of the examiner in charge of plications for patents, and for reissues of interferences in such case, to the board of
patents, and in interference cases; and, examiners in chief, having once paid the when required by the Commissioner, they fee for such appeal.
shall hear and report upon claims for exRev. Stat. Sec. 4910, U. S. Comp. Stat. 1901, p. 3391. If such party is dissatisfied tensions, and perform such other like duties with the decision of the examiners in chief as he may assign them.
Rev. Stat. Sec. 483, U. S. Comp. Stat. he may, on payment of the fee prescribed, appeal to the Commissioner in person.
1901, p. 272. The Commissioner of Patents, Rev. Stat. Sec. 4911, U. S. Comp. Stat.subject to the approval of the Secretary of 1901, p. 3391. If such party, except a party
the Interior, may, from time to time, estabto an interference, is dissatisfied with the lish regulations, not inconsistent with law, decision of the Commissioner, he may ap- for the conduct of proceedings in the Patent peal to the supreme court of the district of Office. Columbia, sitting in banc.
dissolve the interference upon the ground, been decided which party is entitled to the among others, that Spoon's press was in- patent. If it should at any time be decided operative. The primary examiner granted that Spoon is entitled to the patent, Lowry the motion and Spoon appealed to the board will have the right of appeal, but until such of examiners in chief, who confirmed the de- final decision is rendered the statute gives cision. Upon petition of Spoon the Commis- him no right of appeal. sioner of Patents remanded the case to the "It would seem upon general principles of primary examiner for further consideration, law that Lowry could then present for deand the latter officer, upon the filing of ad-termination by his appeal any question ditional affidavits, decided that Spoon's ap- which, in his opinion, vitally affects the plication disclosed an operative device. From question which party is entitled to the this decision an appeal was taken to the patent. The only ground upon which he board of examiners in chief, which was dis- can reasonably claim the right of appeal on missed by that board for want of jurisdic- this motion is that the question vitally aftion. Thereupon Lowry petitioned the Com- fects his claimed right to a patent, and if it missioner to direct the board to issue an does that, he can raise it at final hearing and appeal. The petition was denied, the Acting contest it before the various appellate triCommissioner remarking:
bunals, including the court of appeals. “The rule prohibiting an appeal from a “The refusal to permit the present apdecision upon a motion holding that a party peal on motion is therefore not a denial of has the right to make the claim of the issue an opportunity to have the matter reviewed is in accordance with the practice which has by the several appellate tribunals mentioned prevailed in this office for many years, and in the statute.” has the support of all decisions of the courts And further: “No good reason is seen for which have been rendered on the subject. changing the provisions in Rule 124 here in There seems to be no reason for regarding it controversy, which was adopted and apas inconsistent with the statute. It seems proved by a long line of Commissioners of very clear that the decision in this case is Patents, among whom have been some of the not a final adverse decision, since it is not a ablest patent lawyers in the country, and ruling that Lowry is not entitled to his pat. which rule has been acquiesced in by patent ent. That is a matter which may be deter- attorneys practising before the office for the mined in the further proceedings, and there last quarter of a century.” fore it is clear that the decision relates to There is quite a sharp controversy bea mere interlocutory matter.
tween the parties as to the effect of the rul“The petition is denied."
ing of the Commissioner. Plaintiffs in error Lowry filed another petition, appealing to are apparently convinced that the ruling of the Commissioner “in person,” to direct the the primary examiner involves a fundamentboard of examiners in chief to entertain his al right which, if not decided on Lowry’s apappeal. The petition was considered and peal, will be forever foreclosed to him for denied. In passing on the petition the Com- review. A different view is expressed by missioner said:
defendant in error. However this may “Under the express provisions of rule 124 be, we think the question in the case there is no appeal to the examiners in chief is in quite narrow compass. The statfrom such decision rendered on an interlocu-utes involved not difficult of intory motion. It is believed that there is terpretation. The determining sections are nothing in that rule inconsistent with law, 482, 483, 4904, and 4909(U. S. Comp.
U. and that therefore it has the force of law. Stat. 1901, pp. 272, 3389, 3390). Plaintiffs in The right of appeal in interferences given in error put especial stress upon $$ 482 and general terms in the statute is a very differ- 4909. Section 482 provides for the appointent thing from the right of appeal on all ment of examiners in chief, “whose duty it motions in the interference. To permit apo shall be, on the written petition of the appeals on motions would multiply litigation pellant, to revise and determine upon the and extend the proceedings in interferences validity of the adverse decisions of examinbeyond all reasonable limits. It would work
in interference cases." Section great hardship to parties. The appellate tri. 4909 provides that "every party to an inbunals of this office are no more required to terference may appeal from the decision of give cases piecemeal consideration than are the primary examiner or of the examiner the appellate courts. The whole case should in charge of interferences in such case, to be ready for appeal when the appeal pro- the board of examiners in chief.” The convided for by the statute is taken.
tention is that this section gives the right
of appeal unreservedly and any limitation “It is to be particularly noted that there of it by a rule is void. Such might not be has been no decision as to the rival claims of the result, even if there was no qualification the parties to this interference. It has not of those sections in other sections. As said
by the Commissioner: "The right of appeal, inventor, unless the adverse party appeals in interferences given in general terms in from the decision of the primary examiner the statute is a very different thing from the or examiners in chief, as the case may be. right of appeal on all motions in the inter- The history of the sections and the rules ference.” It certainly could not have been are gone into at length by the court of apthe intention to destroy all distinctions in peals in its opinion. We need not repeat the procedure. But we are not left to inference. discussion. It answers the detailed reason. The statute is explicit. It limits the decla- ing of plaintiffs in error. We concur with ration of interferences to the question of the views expressed, that the statutes propriority of invention. Section 4904 provides vide only for appeals upon the question of that in case of conflict of an application for priority of invention. Appeals on other a patent with a pending application or with questions are left to the regulation of the an unexpired patent (as in the case at bar), Patent Office under the grant of power conthe Commissioner shall give notice thereof, tained in § 483. "and shall direct the primary examiner to Judgment affirmed. proceed to determine the question of prority of invention." (Italics ours.) And it Mr. Justice Peckham and Mr. Justice Day is provided that the Commissioner shall is- dissent. sue a patent to the party adjudged the prior