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The amount is fixed by the statute, to be paid on the outstanding capital stock of the corporation each year, and capable of being enforced by action against the will of the taxpayer. As was said by Mr. Justice Field, speaking for the court in [Meriwether v. Garrett] 102 U. S. 472, 26 L. ed. 197.

not a tax on property in a sense which brings it within article 4, § 7, paragraph 12, of our state Constitution, it is a tax on the capital stock of the corporation. Otherwise the act would be manifestly void for want of a title expressing its object, and the state would be deprived of all its revenue under the act of 1892. The franchise of the company is the right to hold property and exercise its corporate privileges. The Supreme Court of the United States has decided that where a corporation is exempted from tax-ed upon contract, express or implied. Taxes ation, it is not subject to a tax on its franchise. Wilmington & W. R. Co. v. Reid, 13 Wall. 264, 20 L. ed. 568."

"Taxes are not debts. It was so held by this court in the case of Lane County v. Oregon, 7 Wall. 71, 19 L. ed. 101. Debts are obligations for the payment of money found

are imposts levied for the support of the government, or for some special purpose authorized by it. The consent of the taxpayer is not necessary to their enforcement. They operate in invitum. Nor is their nature affected by the fact that in some states-and we believe in Tennessee-an action of debt may be instituted for their recovery. The form of procedure cannot change their char

It is urged by the appellee, and upon this ground the case was decided in the circuit court of appeals, that this is in no just sense a tax levied by the state, but is the result of a contraet by which the corpora, tion was brought into existence, the consid

While we take this view of the decisions of the supreme court of New Jersey, and reach the conclusion that the claim in question is for a tax within the meaning of the law as construed by that court, the bankruptcy act is a Federal statute, the ultimate interpretation of which is in the Federal courts.acter." It is doubtless true, as was said in the opinion of the learned judge speaking for the circuit court of appeals, in this case, that if the highest court of the state should decide that a given statute imposed no tax within the meaning of the law as interpreted by it, a 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 court, while entitled to great consideration, cannot conclusively decide that to be a tax within the meaning of a Federal law providing for the payment of taxes, which is not so in fact. The section (64a) itself declares that, in case of disputes as to the amount or legality of any such tax, they shall be heard and determined by the court. The state court may construe a statute and define its meaning, but whether its construction creates a tax within the meaning of a Federal statute, giving a preference to taxes, is a Federal question, of ultimate decision in this court.

We are of opinion that this claim was for a tax. The language of the act, as we have said, is very broad, and includes all taxes. It is not necessary to enter upon a discussion of the different forms which taxes may take. Generally speaking, a tax is a pecuniary burden laid upon individuals or property for the purpose of supporting the government. We think this exaction is of that character. It is required to be paid by the corporation after organization in invitum.

tion is not consulted in fixing the amount of the tax, and under the laws of New Jersey the charter of such corporations as this may be amended or repealed. Hancock v. Singer Mfg. Co. 62 N. J. L. 289-328, 42 L.R.A. 852, 41 Atl. 846.

The form of the collection of taxes is left to the discretion of the taxing power; sometimes a lien is provided, sometimes a summary method of collection is awarded; in other cases, an action for debt is given; and, as in the present case, with the right of prohibition of the exercise of corporate franchises by injunction for failure to pay.

We think, then, that, as denominated in the statute, this was a tax imposed by the state upon the corporation for the privilege of existence and the continued right to exercise its franchise.

The state which created this corporation had the right to fix the terms of its existence, and to provide, if it saw fit so to do, that, for the continued existence of its franchise, the corporation should pay certain sums to the state, fixed by the amount of its yearly outstanding capital stock. New York

ex rel. Metropolitan Street R. Co. v. New | vides shall be paid in advance of the payYork 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 former sum, and made upon the failure of the corporation to report. But we do not think the finding of the state board is conclusive. The tax is to be assessed upon capital stock actually outstanding. It may well be doubted whether the board had power to tax any other stock. But be that as it may, § 64a specifically provides that in case any question arises as to the amount or legality of taxes, the same shall be heard and determined by the court, with a view to ascertaining the amount really due. We do not think it was the intention of Congress to conclude the bankruptcy courts by the findings of boards of this character, and that the claim should have been upon the basis of the capital stock actually outstand-rupt, preference should be given to the ing.

bankruptcy act should be so construed. It cannot be otherwise construed without doing gross injustice to those creditors of the bankrupt corporation who have business transactions with it at its place of business. Here the bankrupt corporation did no business in New Jersey. So far as appears, it did not have, nor expect to have, any connection with that state except to become incorporated under its laws. It had its seat of operations and all its tangible property in the state of Illinois. It had no property in New Jersey. Its scheme was to get a charter from New Jersey and then go to another state for purposes of its business. We do not think that Congress intended that, in the distribution of the assets of a bank

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.

We reach the conclusion that, under the bankruptcy act, these taxes, in the amounts hereinbefore indicated, were entitled to preferential payment in favor of the state of New Jersey, and that the Circuit Court of Appeals erred in reaching a contrary conclusion.

of Congress.

UNITED STATES ex rel. GEORGE A.
LOWRY and Planters Compress Company,
Plffs. in Err.,

V.

Its judgment will be reversed and the FREDERICK I. ALLEN, Commissioner of

cause will be remanded to the District Court for further proceedings in conformity with this opinion.

Mr. Justice Harlan (with whom concurred Mr. Chief Justice Fuller and Mr. Justice Peckham) dissenting:

Patents.

Patents-appeal from interlocutory deci

sion.

An appeal from a decision of the primary examiner upon a motion to dissolve an interference, holding that the party had 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 primary examiner, refusing to dissolve an in

[No. 56.]

Argued October 24, 25, 1906. Decided De- terference between a patent granted to Low

cember 10, 1906.

IN ERROR to the Court of Appeals of the District of Columbia to review a judgment which reversed a judgment of the Supreme Court of that District, granting a mandamus to require the Commissioner of Patents to direct the board of examiners in chief to take jurisdiction of an appeal from a ruling of the primary examiner, upon a motion to dissolve an interference. Af firmed.

See same case below, 26 App. D. C. 8. The facts are stated in the opinion. Messrs. Oliver Mitchell, Edmund Wetmore, and Meyers, Cushman, & Rea for plaintiffs in error.

Assistant Attorney General McReynolds, and John M. Coit for defendant in error.

ry and an application for a patent by one William L. Spoon. The supreme court granted the mandamus. Its judgment was reversed by the court of appeals.

The question in the case is whether the rule of the Patent Office which denies an appeal from a ruling of a primary examiner, upon motion to dissolve an interference, is contrary to the Revised Statutes, and therefore void. Rule 124 provides that "from a decision of a primary examiner affirming the patentability of the claim or the applicant's right to make the same, no appeal can be taken."

Plaintiffs in error attack the rule as inconsistent with the sections of the Revised Statutes which provide for interferences. These sections are inserted in the margin.†

The facts are as follows: Lowry was granted a patent for a bale of fibrous ma

Mr. Justice McKenna delivered the opinion terial January 29, 1897. An interference was of the court:

This is a petition for mandamus, filed in the supreme court of the District of Colum

declared between his patent and application of one William Spoon, to which interference Lowry was made a party. He moved to

Sec. 9. (Act of February 9, 1893 [27 Stat. at L. 436, chap. 74, U. S. Comp. Stat. 1901, p. 3391].) That the determination of appeals from the decision of the Commissioner of Patents, now vested in the general term of the supreme court of the District of Columbia, in pursuance of the provisions of section seven hundred and eighty of the Revised Statutes of the United States, re

Rev. Stat. Sec. 4904, U. S. Comp. Stat. 1901, p. 3389. Whenever an application is made for a patent which, in the opinion of the Commissioner, would interfere with any pending application, or with any unexpired patent, he shall give notice thereof to the applicants, or applicant and patentee, as the case may be, and shall direct the primary examiner to proceed to determine the question of priority of invention. And the Com-lating to the District of Columbia, shall missioner may issue a patent to the party who is adjudged the prior inventor, unless the adverse party appeals from the decision of the primary examiner, or of the board of examiners in chief, as the case may be, within such time, not less than twenty days, as the Commissioner shall prescribe.

Rev. Stat. Sec. 4909, U. S. Comp. Stat. 1901, p. 3390. Every applicant for a patent or for the reissue of a patent, any of the claims of which have been twice rejected, and every party to an interference, may appeal from the decision of the primary examiner, or of the examiner in charge of interferences in such case, to the board of examiners in chief, having once paid the fee for such appeal.

Rev. Stat. Sec. 4910, U. S. Comp. Stat. 1901, p. 3391. If such party is dissatisfied with the decision of the examiners in chief he may, on payment of the fee prescribed, appeal to the Commissioner in person.

Rev. Stat. Sec. 4911, U. S. Comp. Stat. 1901, p. 3391. If such party, except a party to an interference, is dissatisfied with the decision of the Commissioner, he may appeal to the supreme court of the district of Columbia, sitting in banc.

hereafter be, and the same is hereby, vested in the court of appeals created by this act; and in addition, any party aggrieved by a decision of the Commissioner of Patents in any interference case may appeal therefrom to said court of appeals.

Rev. Stat. Sec. 482, U. S. Comp. Stat. 1901, p. 272. The examiners in chief shall be persons of competent legal knowledge and scientific ability, whose duty is shall be, on the written petition of the appellant, to revise and determine upon the validity of the adverse decisions of examiners upon applications for patents, and for reissues of patents, and in interference cases; and, when required by the Commissioner, they shall hear and report upon claims for extensions, and perform such other like duties as he may assign them.

Rev. Stat. Sec. 483, U. S. Comp. Stat. 1901, p. 272. The Commissioner of Patents, subject to the approval of the Secretary of the Interior, may, from time to time, establish regulations, not inconsistent with law, for the conduct of proceedings in the Patent Office.

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 primary examiner for further consideration, and the latter officer, upon the filing of additional affidavits, decided that Spoon's application disclosed an operative device. From this decision an appeal was taken to the board of examiners in chief, which was dismissed by that board for want of jurisdiction. Thereupon Lowry petitioned the Commissioner to direct the board to issue an appeal. The petition was denied, the Acting Commissioner remarking:

"It would seem upon general principles of law that Lowry could then present for determination by his appeal any question which, in his opinion, vitally affects the question which party is entitled to the patent. The only ground upon which he can reasonably claim the right of appeal on this motion is that the question vitally affects his claimed right to a patent, and if it does that, he can raise it at final hearing and contest it before the various appellate tribunals, including the court of appeals.

"The refusal to permit the present appeal on motion is therefore not a denial of an opportunity to have the matter reviewed by the several appellate tribunals mentioned in the statute.”

"The rule prohibiting an appeal from a decision upon a motion holding that a party has the right to make the claim of the issue is in accordance with the practice which has prevailed in this office for many years, and has the support of all decisions of the courts which have been rendered on the subject. There seems to be no reason for regarding it as inconsistent with the statute. It seems very clear that the decision in this case is not a final adverse decision, since it is not a ruling that Lowry is not entitled to his patent. That is a matter which may be deter-attorneys practising before the office for the mined in the further proceedings, and therefore it is clear that the decision relates to a mere interlocutory matter.

"The petition is denied."

And further: "No good reason is seen for changing the provisions in Rule 124 here in controversy, which was adopted and approved by a long line of Commissioners of Patents, among whom have been some of the ablest patent lawyers in the country, and which rule has been acquiesced in by patent

last quarter of a century."

There is quite a sharp controversy between the parties as to the effect of the ruling 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 Com-review. missioner said:

"Under the express provisions of rule 124 there is no appeal to the examiners in chief from such decision rendered on an interlocutory motion. It is believed that there is nothing in that rule inconsistent with law, and that therefore it has the force of law. The right of appeal in interferences given in general terms in the statute is a very different thing from the right of appeal on all motions in the interference. To permit appeals on motions would multiply litigation and extend the proceedings in interferences beyond all reasonable limits. It would work great hardship to parties. The appellate tribunals of this office are no more required to give cases piecemeal consideration than are the appellate courts. The whole case should be ready for appeal when the appeal provided for by the statute is taken.

"It is to be particularly noted that there has been no decision as to the rival claims of the parties to this interference. It has not

defendant in error. However this may be, we think the question in the case is in quite narrow compass. The statutes involved are not difficult of interpretation. The determining sections are 482, 483, 4904, and 4909 (U. S. Comp. Stat. 1901, pp. 272, 3389, 3390). Plaintiffs in error put especial stress upon §§ 482 and 4909. Section 482 provides for the appointment of examiners in chief, "whose duty it shall be, on the written petition of the appellant, to revise and determine upon the validity of the adverse decisions of examin

ers

. . in interference cases." Section

4909 provides that "every party to an interference may appeal from the decision of the primary examiner or of the examiner in charge of interferences in such case, to the board of examiners in chief." The contention is that this section gives the right of appeal unreservedly and any limitation of it by a rule is void. Such might not be the result, even if there was no qualification 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 reasonThe 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 proceed to determine the question of priority of invention." (Italics ours.) And it is provided that the Commissioner shall issue a patent to the party adjudged the prior

Judgment affirmed.

Mr. Justice Peckham and Mr. Justice Day dissent.

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