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lina. That court affirmed the conviction. | ufacturers or wholesale merchants from the The reasoning by which the action of the prohibitions of the act of 1889, concerning court was controlled was stated as follows: the making of gambling contracts for future "Upon the authority of State v. McGinnis, delivery. Considering this subject, the court, at this term, there is no error." And in the in express terms, decided that the 7th secjudgment of affirmance there was embodied tion did not have that effect, since the dealthe record and opinion in State v. McGinnis, ings which were prohibited by the acts of and such record and opinion are contained 1889 were alike prohibited as to all, includin the transcript before us. ing manufacturers and wholesale merchants. The court said:

The assignments of error and the argument in support thereof involve three general contentions, viz.: the asserted repugnancy of the statute to the equal protection of the law clause of the 14th Amendment, and the alleged want of power of the state to enact the statute, because its provisions not only abridge the privileges and immunities of the plaintiff in error as a citizen of the United States, but also deprive him of his properly without due process of law, in violation of the same Amendment. The contention that the statute denied the equal protection of the laws rests upon the terms of the 7th section, reading as follows:

"Sec. 7. That this act shall not be construed so as to apply to any person, firm, corporation, or his or their agent, engaged in the business of manufacturing or wholesale merchandising, in the purchase or sale of the necessary commodities required in the ordinary course of their business."

The alleged repugnancy of § 7, and consequently of the entire act, to the equality clause of the 14th Amendment, is sought to be sustained upon two grounds: First, because it is asserted that those engaged in the business of manufacturing or wholesale merchandising are permitted to commit without offense the act or acts which are made criminal by the laws of 1889 and 1905, when done by any other person; and, second, because, even if the terms of the 7th section do not effect such a result, the section nevertheless operates to produce an unlawful inequality, since it creates a prima facie presumption of guilt from the proof of certain acts as against all persons but those engaged in the business of manufacturing and wholesale merchandising.

"Section 7 does not confer any exclusive right or privilege upon manufacturers or wholesale merchants. It does not authorize them to engage in any business prohibited by the act of 1889. It does not authorize them to speculate in cotton or other commodities. It simply provides that the courts shall not construe the act of 1905 to have the effect of preventing [manufacturers or wholesale merchants] from buying and selling for future delivery the necessary commodities required in their ordinary business."

"But a purchase for actual future delivery of necessary commodities, required in the ordinary course of business, and not for 'wagering' or gambling on the fluctuations of the market, would not be against the statute. The statute of this state does not prohibit all purchases or sales for future delivery, but only such dealings as are in the nature of gambling or wagering contracts. Though § 7 mentions only manufacturers and wholesale mercantile establishments as authorized to make bona fide dealings in 'futures,' this was done unnecessarily, we think, and only out of abundant caution. It is not a discrimination, for there is no prohibition upon anyone else or any other business to buy commodities for future delivery bona fide in the 'ordinary course of such business,' when not for speculative or gambling purposes. That no other businesses or persons are mentioned as authorized to deal bona fide for the purchase of commodities on 'margin' is not an implied restriction upon others to do an act not forbidden by any statute.”

In the argument it is insisted that the construction given by the supreme court of North Carolina to the statute is wrong,

It suffices to say, as to the first of these propositions, that the supreme court of the state, in the case upon the authority of which it placed its decision in this, express- since, in effect, it reads out the provisions ly decided that the statute did not operate of $7, and it is urged that it is the duty ly decided that the statute did not operate of this court to disregard the interpretathe asserted discrimination. Thus, after expressly holding that the effect of § 7 was not to relieve those engaged in manufacturing and wholesale merchandising from the operation of the provisions of § 1 of the act of 1905, prohibiting the opening and keeping of a place for gambling dealings in futures, denominated by the court a "bucket shop," the court came to consider whether the provisions of § 7 operated to relieve man

tions affixed by the state court, thereby bringing the statute within the prohibitions of the 14th Amendment. But it is elementary that, under the circumstances, we must follow the construction given by the state court, and test the constitutionality of the statute under that view. Armour Packing Co. v. Lacy, 200 U. S. 226, 50 L. ed. 451, 26 Sup. Ct. Rep. 232; Smiley v. Kansas, 196

U. S. 447, 455, 49 L. ed. 546, 550, 25 Sup. | business indictable. Booth v. Illinois, 184 Ct. Rep. 289, and cases cited.

U. S. 425, 46 L. ed. 623, 22 Sup. Ct. Rep. 425, and other cases cited, supra. The facts found are that the defendant was carrying on the forbidden business. It can in no wise affect the validity of the statute making such business indictable that the pur

gin' shall, under certain circumstances, raise a prima facie case that such purchases were void, and under other circumstances shall not constitute such prima facie evidence. A statute may be void in part and valid in part. If the provision as to prima facie evidence, as to certain purchases upon 'margin,' were null, because not applying to all purchases upon 'margin,' this would in no wise invalidate that part of the statute which forbids carrying on the business of running a 'bucket shop.' The defendant is not in

livery upon a 'margin;' nor are manufacturers and wholesale merchants, nor anyone else, exempted from the prohibition of carrying on the 'bucket shop' business. Upon the special verdict the defendant was properly adjudged guilty."

As to the second proposition, viz., the asserted discrimination, because of inequality produced by the engendering a prima facie presumption of guilt from the proof of certain acts when done by persons generally, and not raising such prima facie presump-chase of commodities by others upon 'martion from the same acts when done by those engaged in manufacturing or wholesale merchandising, we think the question is not open on this record. As we have stated, the indictment distinctly charged the commission of the offense prohibited by the 1st section of the act of 1905, viz., the keeping a place for gambling in futures, and at the same time in a separate paragraph charged the doing of acts from which the presumption of guilt was authorized by certain sections of the act of 1905. Upon the indictment so framed a special verdict was re-dicted for buying commodities for future deturned, finding that the prohibited place of business had been opened and kept as charged, and that the other acts separately charged in the indictment had been committed. Now, as the evidence upon which the jury acted is not in the record, and as there is nothing in the verdict tending to show that the separate conclusion as to the commission of the act forbidden by § 1 of the statute of 1905, viz., the keeping of a place for gambling in futures, was found by the jury because of the presumptions authorized by the statute, it cannot be affirmed that the finding of the jury as to the keeping of the place for gambling in futures was not based upon independent evidence, wholly irrespective of any presumption authorized by the act of 1905. And this conclusion becomes irresistible when it is considered that there is nothing in the record disclosing any request made to the trial court for instructions concerning the effect of the presumption created by the act of 1905, or that any express rulings on that subject were made by the court.

This ruling as to the separability of the statute is conclusive, and refutes the contention that the entire law is void, even upon the hypothesis that the creation of presumptions as to one class, not applicable to another class or classes, was repugnant to the 14th Amendment.

It remains only to consider the contentions that the statute upon which the conviction was had was repugnant to the due process clause of the 14th Amendment, and was, moreover, void because it abridged the privileges and immunities of the plaintiff in error as a citizen of the United States. As the first rests solely upon the proposition that there was a want of due process of law, because the state was without power to authorize a presumption of guilt on proof of the doing of certain acts specified in the statute, it is disposed of by what we have already said. And as the second was not pressed in argument, and is not shown by the record to have been raised or even suggested in the court below, we need not further consider it. Affirmed.

The contention that the judgment of conviction should be reversed, even although it does not appear that the same was based upon the presumptions authorized by the act of 1905, because of the inseparability of the alleged unequal presumptions, is without merit. In State v. McGinnis, supra, after expressing an opinion as to the right of a state under its police power, without BOARD OF EDUCATION OF THE KENviolating the 14th Amendment, to create presumptions of guilt as to some classes of persons which would not be applicable to the same acts when done by other classes, the court said:

"But, aside from what we have already said, the defendant is indicted for carrying on a 'bucket shop' business. The legislature had unquestionably power to make such

EPISCOPAL

TUCKY ANNUAL CONFERENCE OF
THE METHODIST
CHURCH, Plff. in Err.,

V.
PEOPLE OF THE STATE OF ILLINOIS.

Constitutional law-privileges and immuni-
ties-equal protection of the laws-state
inheritance tax.

Excluding foreign corporations from

the exemption from an inheritance tax in favor of property devised for educational or religious uses, which is made by Ill. act May 10, 1901, amending Ill. Laws, 1895, p. 301, does not abridge privileges or immunities of citizens of the United States or deny the equal protection of the laws.*

[No. 103.]

From the action of the county judge imposing the tax, plaintiff in error appealed to the county court of Cook county and assigned as grounds of appeal: (1) That by reason of its organization and the purposes of its organization, as shown by the record, it was exempt from such tax under the act of May 10, 1901, amending the act of June 15, 1895. (2) For that the imposition

Argued November 14, 1906. Decided Decem- of such tax upon it (the plaintiff in error),

IN

ber 24, 1906.

N ERROR to the Supreme Court of the State of Illinois to review a judgment which affirmed a judgment of the County Court of Cook County, in that state, imposing an inheritance tax on property devised to a foreign corporation for educational and religious purposes. Affirmed. See same case below, 216 Ill. 23, 74 N. E. 809.

The facts are stated in the opinion. Messrs. Charles H. Aldrich, Henry S. McAuley, and Lawrence Maxwell, Jr., for plaintiff in error.

Messrs. Edwin M. Ashcraft and William H. Stead for defendant in error.

when corporations organized for like purposes under the laws of the state were exempt therefrom, was in conflict with the Constitution of the state of Illinois, and rendered said act void as to plaintiff in error, as in conflict with the 14th Amendment of the Constitution of the United States, in that it abridged the privileges and immunities of plaintiff in error, who was a citizen of the United States, and denied to it the equal protection of the laws. The county court sustained the tax and the supreme court affirmed the judgment. This writ of error was then sued out.

The assignment of errors in this court, omitting the specification of error based on the Constitution of the state, is the same

Mr. Justice McKenna delivered the opin- as that in the state courts. ion of the court:

It is enough for our purpose to say that 1 of the act of 1895 subjects to a tax all property situated within the state, which shall, by will or by the intetsate laws, pass from any person who may die seised or possessed of the same. The act was amended in 1901 by adding thereto the following section:

This writ of error is directed to a judg-§ ment of the supreme court of the state of Illinois sustaining a tax assessed against plaintiff in error under the inheritance tax law of that state, passed June 15, 1895, entitled "An Act to Tax Gifts, Legacies, and Inheritances in Certain Cases, and to Provide for the Collection of the Same." Laws of 1895, p. 301.

The facts are as follows: Fanny Speed, a citizen and resident of Kentucky, died seised of certain real estate in the city of Chicago. She devised a one-half interest to plaintiff in error, to be used as part of its educational fund, "to be held, invested, and administered" as other properties forming a part of that fund. The will was probated in the probate court of Cook county, state of Illinois. An inheritance tax of $6,280.50 was assessed by the county judge against plaintiff in error, based on the value of the interest devised.

"When the beneficial interest of any property or income there from shall pass to or for the use of any hospital, religious, educational, Bible, missionary, tract, scientific, benevolent, or charitable purpose, or to any trustee, bishop, or minister of any church or religious denomination, held and used exclusively for the religious, educational, or charitable uses and purposes of such church or religious denomination, institution, or corporation, by grant, gift, bequest, or otherwise, the same shall not be subject to any such duty or tax; but this provision shall not apply to any corporation which has the right to make dividends or distribute profits or assets among its members."

The supreme court decided that this amendment did not apply to "corporations created under the laws of a sister state." And also decided, as so construed, the amendment was not repugnant to the Constitution of the United States. The court said:

Plaintiff in error was incorporated by an act of the legislature of the state of Kentucky to form an educational fund for the promotion of literature, education, art, morality, and religion. Its funds are held and used exclusively for such purposes, and are required to be wholly expended within the state of Kentucky. It is not permitted to make dividends or distribution of profits or assets among its members or stockholders. It does not have or maintain an office in the state of Illinois, or engage in education-porations fall naturally into their respective al or religious work therein. classes. Over the one--that which the state

"A clear distinction exists between domestic corporations and corporations organized under the laws of other states. Such cor

*Ed. Note.-For cases in point, see vol. 10, Cent. Dig. Constitutional Law, §§ 627, 685.

cluded? The questions raise important considerations, but we may pass them, because the contention that the act of 1901 is invalid encounters an insuperable obstacle in

has created-the state has certain powers of control; and the other is beyond its jurisdiction. Those of its own creation have been endowed with corporate powers for the purpose of subserving the interests of the power of the state to classify objects the state and its people; those which have been given life by the laws of a sister state have entirely different ends and objects to accomplish. The lawmaking power would find many weighty considerations authorizing the classification of foreign and domestic corporations into different classes and justifying the creation of liability on the part of foreign corporations to pay a tax on the right to take property by descent, devise, or bequest, under the laws of the state, and at the same time leaving the right of a domestic corporation so to take free of any such exaction." [216 Ill. 28, 74 N. E. 811.]

of legislation and discriminate between classes. This power is not unconstitutionally exercised by legislation which exempts the religious and educational institutions of the state from an inheritance tax and subjects educational and religious institutions of other states to the tax. Regarding alone the purposes of the institutions, no difference may be perceived between them, but regarding the spheres of their exercise, and the benefits derived from their exercise, a difference is conspicuous. It is this benefit that may have constituted the inducement of the legislation.

It will be seen by a reference to the as- Plaintiff in error contests the classificasignment of errors that the ground of the tion of the act of 1901 and the conclusions attack by the plaintiff in error on the va- deduced from it in an able argument. We lidity of the tax assessed against it is that do not reply to the argument in detail, bethe imposition of the tax upon it, while cause we have defined so often the princiother corporations organized for like pur-ples of classification that we must regard poses under the laws of Illinois are exempt, repetition as unnecessary. An observation renders the act of May 10, 1901, void, as or two, however, may be worth while. It to plaintiff in error. And, in their argument, is contended that the exemption of the counsel say: "It is the effect given by the amendment of 1901 "is not limited by the supreme court of Illinois to this amendment decision of the supreme court to corporate (the act of 1901) that violates the rights takers or users," and that the decision, by claimed by the plaintiff in error under the treating the act "as a grant of privileges Constitution of the United States." The and immunities to corporations," ignored construction of the act by the supreme court "the test of use found in the inquiry "To we must accept as determining the meaning what purpose is the beneficial interest in of the act. In other words, we must re- the property devoted?" and the consideragard the act as if the legislature had, in tion that there was no necessity for corpoexplicit language, excluded from its pro-rate agency in that connection. The result visions foreign corporations. If this ren- of this is, it is urged, that the court made ders the act void, plaintiff in error, whether the "power of state visitation and control" its argument be tenable or untenable, seems over corporations "the test of taxability or to be put in the dilemma urged by the de- nontaxability upon the right of succession." fendant in error, and an affirmance of the Denying this to be the test, and contending judgment is required. If the act of May 10, that the test should be the use to which 1901, is invalid, it cannot give exemption the property is devoted, and the question from taxation to either domestic or foreign .of tax or freedom from tax determined corporations, and plaintiff in error was right- thereby, and asserting that plaintiff became ly taxed under the act of June 15, 1895. a person within the jurisdiction of the Plaintiff in error, of course, does not desire state by going there to take title to propto take exemption from domestic corpora-erty there situated, and by probating the tions. It desires to remove the discrimina- will of Mrs. Speed as evidence of such title, tory effect of the amendment of May 10, it is deduced that it was not competent for 1901, by including in its bounty foreign cor- the state to tax the property of plaintiff in porations. Can this be done? May a court error at one rate and the property of corpoby construction put into a law that which rations, organized under her laws, at anoththe legislature has left out? There is a er rate. difference between burdens and benefits, and it may well be that a law which confers the latter upon some persons, and thereby increases burdens on others, may be declared invalid by the courts. But if the courts may strike down privileges, may they extend favors and make objects of bounty those whom the legislature has ex

It must be kept in mind that the controversies in this case depend upon the power of the state over inheritances, and the conditions she may put upon them in the exercise of that power. And this is prominent in the decision of the supreme court. In considering this power, and classification in the exercise of this power, the court took

into account the greater control and direction the state had over domestic than over foreign corporations. It did not put out of view the uses of property expressed in the act of 1901, nor ignore the consideration that there was no necessity for a corporate agency to execute those uses. The case presented especially a comparison of the rights of corporations, but the decision was broad enough to consider natural persons.

rendering such statute void as making an arbitrary classification which amounts to a denial of the equal protection of the laws, where the highest state court makes the validity of the tax depend upon this classification by deciding that the state can tax the property until it has passed out of the succession of the testator.

[No. 91.]

ber 24, 1906.

IN ERROR to the Supreme Court of the

State of Louisiana to review a judgment which affirmed a judgment of the Civil District Court for the Parish of Orleans, in that state, imposing an inheritance tax. Affirmed.

37.

See same case below, 115 La. 377, 39 So.

"In laying such a tax" (an inheritance tax), Argued November 9, 1906. Decided Decemthe court said, "the legislature may consider the relation which the person or corporation given the right of succession sustains to the deceased, to the property, or to the state, and may regulate the amount of the tax to be required in view of such relation, and in exercising this power may lay a tax on the right of one class of persons or corporations to take, and may deem it wise to impose no tax upon the right of other classes of persons or corporations to take." A Federal court would hesitate indeed to put impediments on this power or declare invalid any classification of persons or corporations that had reasonable regard to the purposes of the state and its legislation. And it cannot be said that if a state exempt property bequeathed for charitable or educational purposes from taxation it is unreasonable or arbitrary to require the charity to be exercised or the education to be bestowed within her borders and for her people, whether exercised through persons or corporations.

Judgment affirmed.

MRS. CAMILLE CAHEN, Mrs. Julie Kahn,
Eva Cahen, et al., Plffs. in Err.,

V.

JOHN BREWSTER, Tax Collector for the
Second District of the City of New Or-
leans, State of Louisiana, and Andrew H.
Wilson, President School Board of the
City of New Orleans, State of Louisiana.

Constitutional law-due process of law-
state inheritance tax.

The facts are stated in the opinion. Messrs. Charles Rosen and Gustave Lemle for plaintiffs in error.

Mr. F. C. Zacharie for defendants in error.

Mr. Justice McKenna delivered the opinion of the court:

The case involves the validity, under the Constitution of the United States, of a burden imposed under the inheritance tax law of the state of Louisiana, passed June 28,. 1904.

Mathias Levy, a resident of New Orleans, died in that city May 26, 1904. He was unmarried and left no ascendants, and was, therefore, without forced heirs. He left a last will and testament of the date of December 23, 1903, in which he named executors and made sundry particular bequests to charitable institutions. He bequeathed the balance of his estate, in equal shares, to his two nieces, Camille Cahen and Julie Kahn, constituting them thereby his universal legatees and instituted heirs.

The will was duly probated in the civil district court for the parish of Orleans, May 30, 1904. An inventory of his estate was taken June 9, 1904, and a supplementary inshowed the total appraised value of the esventory August 3, 1904. The inventories showed the total appraised value of the estate to be $64,676.05. Of this amount, after deducting the debts and charges of the estate and particular legacies, there was left, as the portion going to the universal legatees, $42,927.94.

1. Universal legatees under the will of a person who died before the enactment of the Louisiana inheritance tax law of June 28, 1904, are not deprived of their property without due process of law by subjecting their shares to the tax imposed by that statute, although, under the Louisiana Civil Code, the ownership of the property passed to such legatees upon the death of the tes-tribution was filed August 3, 1904, and apThe final accounting and tableau of dis

tator.

Constitutional law-equal protection of the

laws-state inheritance tax.

2. Successions which have been finally closed and administered upon may be exempted from the inheritance tax imposed by the Louisiana act of June 28, 1904, without

proved and homologated by judgment Au

gust 16, and the funds ordered to be distributed.

October 16 a motion was made for a rule on the executors to show cause why they should not pay over the legacies as ordered.

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