State of Kansas, on the relation of S. M. I statutes are there subject to probate proceed Drewster, Attorney General, against J. C. Mr. Ray Campbell, of Wichita, Kan, for Actifs in erгог. Messrs. J. L. Hunt and James P. Coleman, of Topeka, Kan., and T. F. Railsback, Kansas City, Kan., for defendant in error. Memorandum opinion by Mr. Justice MEYNOLDS. The validity of chapter 371, Laws of Kan1915-"An act in relation to the sale produce on commission"-is chalby certain grain dealers carrying on es in that state. It forbids the sale produce on commission without an Deense, to be procured from the State Art of Agriculture upon a proper showing Caracter, responsibility, etc., and a wirioned to make honest accounting. teris required. ings and inheritance taxes. On Motion for Leave to File Original Bill. Motion by the State of Iowa for leave to file an original bill against Abraham Slim mer, Jr., and others, Motion denied. Mr. H. M. Havner, of Des Moines, Iowa, for complainant. Mr. Thomas D. O'Brien, of St. Paul, Minn, for defendants. *Mr. Justice BRANDEIS delivered t opinion of the Court. With a view to collecting ultimately at least $13,750 for taxes which the state of Iowa alleges it is entitled to have assessed and levied against the property of Abraba Slimmer, deceased, it asks leave to the ta this court an original bill of complaint against the state of Minnesota, Abraham Slimmer, Jr., and Charles Bechhoefer, cut zens of Minnesota, and Adolph Lipman, a citizen of Wisconsin. The bill alleges in sab stance as follows: (1) Slimmer, who had for many years been a resident of and domiciled in Iowa, died there testate on August 15, 1917, leaving personal property valued at $550,000, and Plaintiffs in error maintain that the consisting, with the exception of personal res dass legislation which abridges effects and a few United States Liberty s and privileges, that it deprives Bonds, wholly of promissory notes. All of hehe equal protection of the laws and this property, except the personal effects sther property without due process of and one note for $3,000, was then in Minne sota in the possession of Slimmer, Jr., who had had custody of the decedent's property for at least five years before his death. The $3.000 note was brought by him and Bechboefer into Minnesota immediately there after. on of the Fourteenth Lidacy the purpose of the state was to wwerils incident to the business tros mercats in farm products Many former opinions have KANHастя тров powers of as sorting macters of this kind De reentreemed falls to show ave been ascended The 元和配假 before his death, Slimmer, Sr., had conspired #117 33.erty during his lifetime; and to this And he had arranged with them that his will Kanesa had placed in the custody of Simmer, Jr, in Maneta, all his property, ifeeejerna effects and the one note led jeste oce) should be probated may enact ine, tending otect public : reasonably chough prop› commerce; ely in excess lared void as - INSPECTION - JUDI 7 URE , in determinoils and gasnot be lightly mining whethproducts, movtitutes burden e character of nue, instead of NOTICE-STATE 3 for inspection cate of Minneso*Mr. Justice BRANDEIS delivered the weigher does not operate to promote him opinion of the Court. ست and Indexes *152 *153 [1] When an office with a fixed salary has been created by statute, and a person duly appointed to it has qualified and entered upon the discharge of his duties, he is entitled during his incumbency to be paid the salary prescribed by statute; and effect will not be given to any attempt to deprive him of the right thereto, whether it be by unauthorized agreement, by condition, or otherwise. United States v. Andrews, 240 U. S. 90, 36 Sup. Ct. 349, 60 L. Ed. 541; Glavey v. United States, 182 U. S. 595, 21 Sup. Ct. 891, 45 L. Ed. 1247. Section 3 of the Act of July 26, 1866, с. 269 (14 Stat. 289), provides, that weighers at the port of New York shall receive an annual salary of $2,500. Section 2621 of the Revised Statutes (Comp. St. 1916, § 5359) authorizes collectors to employ, with the approval of the Secretary of the Treasury, weighers at the several ports; and it does not prescribe their number. Section 2634 authorizes the Secretary of the Treasury to fix the number and compensation of clerks to be employed by any collector. The statutes appear to have made no specific provision for the appointment of assistant or acting United States weighers. On May 12, 1909, plaintiff's intestate (who had been appointed on August 1, 1896, "assistant weigher of customs" at a salary, "when employed," of $3 per diem, and had later received a like appointment at $4 per diem) was appointed by the collector "clerk, class 3, new office, to act as acting U. S. weigher" with compensation at the rate of $1,600 per annum. On August 18, 1911, he received a like appointment as clerk, class 4, at the rate of $1,800 per annum. He continued to perform the duties assigned and was paid the salary named until his death, October 8, 1913. In February, 1915, his administratrix filed with the Auditor of the Treasury a claim for salary of her intestate as "United States weigher of customs" at the rate of $2,500 per annum, from May 12, 1909, to and including October 7, 1913. Upon disallowance of the claim she brought this suit in the Court of Claims for the amount, namely, $11,013.89. The court automatically to the statutory office of weigher. And the fact that his appointment as clerk in 1909 was made as a part of a reorganization of the service, whereby four of the five positions of United States weigher were abolished, is immaterial; except as showing even more clearly that it was the intention not to appoint him weigher. No contention is, or could successfully be, made that the weighing should be paid for as an extra service, even if it was not a duty attaching to his position as clerk. See United States v. Garlinger, 169 U. S. 316, 18 Sup. Ct. 364, 42 L. Ed. 762. We have, therefore, no occasion to consider whether effect should be given to the agreement by the intestate not to make claim to compensation as acting weigher, or *to his acceptance of the lower compensation without protest during the entire term of his service; nor need we consider the effect of section 2 of the act of July 31, 1894, с. 174 (28 Stat. 162, 205 [Comp. St. 1916, § 3231]), which provides that "No person who holds an office the salary or annual compensation attached to which amounts to the sum of two thousand five hundred dollars shall be appointed to or hold any other office to which compensation is attached unless specially heretofore or hereafter specially authorized thereto by law." The judgment of the Court of Claims is affirmed. found for the defendant and entered judg- license from state board of agriculture, on prop ment dismissing the petition. 51 Ct. Cl. 356. The case comes here on appeal. [2] There is a fundamental objection to the allowance of the claim or any part there of. MacMath was never appointed weigher and never held office as such. His only appointment was that of clerk; his oath of office being "as clerk and acting U. S. weigher, class 3." The Secretary of the Treasury clearly had the right to create and the collector to make appointment to the position of clerk and to designate duties of the appointee. The fact that the incumbent performed also some or all the duties of a Laws Kan. 1915, с. 371, forbidding sale of farm produce on commission without annual er showing of character, responsibility, etc., is not violative of Const. U. S. Amend. 14, as depriving dealers of equal protection of laws. 3. CONSTITUTIONAL LAW287 LICENSES 7(1) - DUE PROCESS RÉGULATION OF COMMISSION DEALERS. Laws Kan. 1915, с. 371, forbidding sale of farm produce on commission without annual license from state board of agriculture, on proper showing of character, responsibility, etc., violative of Const. U. S. Amend. 14, as depriving such dealers of their property without due process of law. In Error to the Supreme Court of the State of Kansas. Original proceeding in mandamus by the For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes *154 property in defendant state, which under its now pending, has the effect of suspending the 118 Memorandum opinion by Mr. Justice MCREYNOLDS. The validity of chapter 371, Laws of Kansas 1915-"An act in relation to the sale of farm produce on commission"-is challenged by certain grain dealers carrying on business in that state. It forbids the sale of farm produce on commission without an annual license, to be procured from the State Board of Agriculture upon a proper showing as to character, responsibility, etc., and a bond conditioned to make honest accounting. A fee of $10 is required. [1-3] Plaintiffs in error maintain that the statute is class legislation which abridges their rights and privileges, that it deprives them of the equal protection of the laws and also of their property without due process of law-all in violation of the Fourteenth Amendment. Manifestly, the purpose of the state was to prevent certain evils incident to the business of commission merchants in farm products by regulating it. Many former opinions have pointed out the limitations upon powers of the states concerning matters of this kind and we think the present record fails to show that these limitations have been transcended. Rast v. Van Deman & Lewis, 240 U. S. 342, 36 Sup. Ct. 370, 60 L. Ed. 679, L. R. A. 1917A, 421, Ann. Cas. 1917B, 455; Brazee v. Michigan, 241 U. S. 340, 36 Sup. Ct. 561, 60 L. Ed. 1034, Ann Cas. 1917C, 522; Adams v. Tanner, 244 U. S. 590, 37 Sup. Ct. 662, 61 L. Ed. 1336, L. R. A. 1917F, 1163, Ann. Cas. 1917D, 973. The judgment of the court below is af COURTS 514-SUPREME COURT OF UNITED STATES ORIGINAL SUIT BY STATE-LEAVE. Leave will be denied a state to file an original bill in the Supreme Court of the United States against another state and others; it not being entitled to the only effective relief sought, to enjoin further administration by the courts of defendant state of the estate of a decedent resident of plaintiff, who died leaving personal statutes are there subject to probate proceedings and inheritance taxes. On Motion for Leave to File Original Bill. Motion by the State of Iowa for leave to file an original bill against Abraham Slimmer, Jr., and others. Motion denied. Mr. H. M. Havner, of Des Moines, Iowa, for complainant. Mr. Thomas D. O'Brien, of St. Paul, Minn., for defendants. Mr. Justice BRANDEIS delivered the opinion of the Court. With a view to collecting ultimately at least $13,750 for taxes which the state of Iowa alleges it is entitled to have assessed and levied against the property of Abraham Slimmer, deceased, it asks leave to file in this court an original bill of complaint against the state of Minnesota, Abraham Slimmer, Jr., and Charles Bechhoefer, citizens of Minnesota, and Adolph Lipman, a citizen of Wisconsin. The bill alleges in substance as follows: (1) Slimmer, who had for many years been a resident of and domiciled in Iowa, died there testate on August 15, 1917, leaving personal property valued at $550,000, and *consisting, with the exception of personal effects and a few United States Liberty Bonds, wholly of promissory notes. All of this property, except the personal effects and one note for $3,000, was then in Minnesota in the possession of Slimmer, Jr., who had had custody of the decedent's property for at least five years before his death. The $3,000 note was brought by him and Bechhoefer into Minnesota immediately thereafter. (2) For the period of at least five years before his death, Slimmer, Sr., had conspired with Slimmer, Jr., and Bechhoefer to defraud the state of Iowa of taxes which, by reason of his domicile in Iowa, might and should have been assessed there against his property during his lifetime; and to this end he had arranged with them that his will (if he should leave one) should be probated in Minnesota, had placed in the custody of Slimmer, Jr., in Minnesota, all his property, except his personal effects and the one note for $3,000, and had concealed his property from the Iowa officials and refused to return the same for taxation there. (3) Pursuant to this conspiracy Slimmer, Jr., and Bechhoefer filed his will for probate in Minnesota on or about August 21, 1917, and procured the appointment of Bechhoefer as special administrator, and by falsely claiming that decedent was domiciled there, secured ex parte a finding to that effect, the probate of the will, and the appointment of themselves as executors. From this decree, the defendant Lipman, claiming to be an heir, appealed; and this appeal, which is For other cases see same topic and KEY NUMBER in all Key-Numbered Digests and Indexes 118 117 $120 *119 decree and leaving the property in the hands, the state Legislature for such an action in of the special administrator. The state of the federal courts. The individual defendIowa has not become a party to these proceedings. (5) On January 7, 1918, the district court of Dubuque county, Iowa (in a proceeding begun apparently on or about that day), decreed, at the instance of the treasurer of that state, that Slimmer, Sr., was domiciled therein and granted to one Mullany letters of administration of his estate. About the same date the state, learning that Slimmer, Jr., and Bechhoefer were about to come into it for the purpose of taking testimony in the Minnesota probate proceedings, obtained from said district court an injunction restraining the witness from testifying and the designated officers from taking their depositions. Slimmer, Jr., and Bechhoefer have not been served in the Iowa suit and have declared their purpose to avoid service within that state. The bill prays that it be adjudged and decreed: (a) That Slimmer, Sr., had for more than five years prior to his death been domi ciled in Iowa; (b) that his estate consisted of evidences of indebtedness to him and that no part of his estate was, at his death, in Minnesota; (c) that Iowa has and Minnesota has not jurisdiction to administer upon his estate; and prays also (d) that such order be entered as will insure the dismissal of the Minnesota probate proceedings and the administration of the estate in Iowa; and (e) that, pending this suit, an injunction issue restraining the prosecution of the Minnesota probate proceedings. ants objected on the grounds that the Iowa administrator was the proper party plaintiff; that he was in any event a necessary party and joining him would oust the court of jurisdiction; that the relief sought would deny to the action of the Minnesota court full faith and credit; and that plaintiff had an adequate remedy at law. The original juris diction of the court to entertain a bill of this character was also questioned. Only one of these objections need be considered, for it presents a conclusive reason why leave to file the bill of complaint should be denied. Substantially the whole of decedent's estate consisted of notes and bonds. Under an arrangement which had been in force for five years or more, these securities were, at the time of his death, in Minnesota in the custody and possession of an agent resident there. Minnesota imposes inheritance taxes; and its statutes provide (G. S. Minn. 1913, § 2281) that no transfer of the property of a nonresident decedent shall be made until the taxes due thereon shall have been paid. Regardless of the domicile of the decedent, these notes and bonds were subject to probate proceedings in that state and likewise subject, at least, to inheritance taxes. G. S. Minn. 1913, §§ 7205, 2271; Bristol v. Washington County, 177 U. S. 133, 20 Sup. Ct. 585, 44 L. Ed. 701; Wheeler v. New York, 233 U. S. 434, 34 Sup. Ct. 607, 58 L. Ed. 1030. Furthermore, so far as concerns the property of the decedent, located at his death in Minnesota, the probate courts of *that state had jurisdiction to determine the domicile. Overby v. Gordon, 177 U. S. 214, 20 Sup. Ct. 603, 44 L. Ed. 741. But even if decedent was not domiciled in Minnesota, its court had the power either to distribute property located there according to the terms of the will applicable thereto, or to direct that it be transmitted to the personal representative of the decedent at the place of his domicile to be disposed of by him. G. S. Minn. 1913, § 7278; Harvey v. Richards, 1 Mason, 381, Fed. Cas. No. 6,184. See Wilkins v. Ellett, 108 U. S. 256, 258, 2 Sup. Ct. 641, 27 L. Ed. 718. The motion for leave to file the bill was submitted ex parte. In view of doubt entertained as to the propriety of granting it, consideration of the application was postponed (as in Minnesota v. Northern Securities Co., 184 U. S. 199, 22 Sup. Ct. 308, 46 L. Ed. 499, and Washington v. Northern Securities Co., 185 U. S. 254, 22 Sup. Ct. 623, 46 L. Ed. 897), so that the parties might be heard; and the motion was fully argued orally and upon briefs. Both the state of Minnesota and the individual defendants, other than Lipman, objected to the granting of leave to file the bill. The state objected on the grounds that the only effective relief sought was an injunction against a proceeding in a state court; that the Minnesota probate court had exclusive jurisdiction to administer assets of a decedent within its borders, regardless of his domicile; and alThe motion for leave to file the bill of so that there was no authority granted by complaint is, therefore, denied. On or about August 21, 1917, Slimmer's executors filed their petition in the probate court for Ramsey county, Minn.; and the court, in the exercise of its jurisdiction, appointed the defendant Bechhoefer special administrator. As such, he took and now holds, pending an appeal to the state district court, possession of the whole of decedent's estate, consisting of the notes and Liberty Bonds as well as the personal effects. The only effective relief sought here is to enjoin the further administration of the estate of the deceased by the courts of Minnesota. It is clear that the state of Iowa is not entitled to such relief. (248 U. S. 71) GULF OIL CORPORATION v. LEWELLYN, INTERNAL REVENUE A transaction effected by entries on the respective companies' books whereby plaintiff corporation, owning the stock, except directors' shares, of subsidiary corporations, took over their earnings and surplus, accumulated and used as capital before the taxing year, and their debts inter se, the corporations being related as one enterprise, held bookkeeping, rather than "dividends declared and paid in the ordinary course by a corporation," within Act Oct. 3, 1913, § 2, and so not subject to income tax. On Writ of Certiorari to the United States Circuit Court of Appeals for the Third Circuit. Action by the Gulf Oil Corporation against C. G. Lewellyn, Collector of Internal Revenue for the Twenty-Third District of Pennsylvania. Judgment for plaintiff (242 Fed. 709) was reversed by the Circuit Court of Appeals (245 Fed. 1, 158 C. C. A. 1), and plaintiff brings certiorari. Reversed. Messrs. William A. Seifert and James H. Beal, both of Pittsburgh, Pa., for plaintiff. Mr. William C. Herron, of Washington, D. C., for respondent. Mr. Justice HOLMES delivered the opinion of the Court. This is a suit to recover a tax levied upon certain dividends as income, under the Act of October 3, 1913, с. 16, section II, 38 Stat. 114, 166. The District Court gave judgment for the plaintiff, 242 Fed. 709, but this judgment was reversed by the Circuit Court of Appeals. 245 Fed. 1, 158 С. С. А. 1. alone, the change being effected by entries upon the respective companies' books. The earnings thus transferred had been accumulated and had been used as capital before the taxing year. Lynch v. Turrish, 247 U. S. 221, 228, 38 Sup. Ct. 537, 62 L. Ed. 1087. We are of opinion that the decision of the District Court was right. It is true that the petitioner and its subsidiaries were distinct beings in contemplation of law, but the facts that they were related as parts of one enterprise, all owned by the petitioner, that the debts were all enterprise debts due to members, and that the dividends represented earnings that had been made in former years and that practically had been converted into capital, unite to convince us that the transaction should be regarded as bookkeeping rather than as "dividends declared and paid in the ordinary course by a corporation." Lynch v. Hornby, 247 U. S. 339, 346, 38 Sup. Ct. 543, 62 L. Ed. 1149. The petitioner did not itself do the business of its subsidiaries and have *possession of their property as in Southern Pacific Co. v. Lowe, 247 U. S. 330, 38 Sup. Ct. 540, 62 L. Ed. 1142, but the prin ciple of that case must be taken to cover this. By section II, G, (c), 38 Stat. 174, and S, 38 Stat. 202, the tax from January 1 to February 28, 1913, is levied as a special excise tax, but in view of our decision that the dividends here concerned were not income it is unnecessary to discuss the further question that has been raised under the latter clause as to the effect of the fact that excise taxes upon the subsidiary corporations had been paid. Judgment reversed. (248 U. S. 158) PURE OIL CO. v. STATE OF MINNESOTA. The facts may be abridged from the findRings below as follows: The petitioner was (Argued Nov. 21 and 22, 1918. Decided Dec. 1 a holding company owning *all the stock in the other corporations concerned except the qualifying shares held by directors. These companies with others constituted a single enterprise, carried on by the petitioner, of producing, buying, transporting, refining and selling oil. The subsidiary companies had retained their earnings, although making some loans inter se, and all their funds were invested in properties or actually required to carry on the business, so that the debtor companies had no money available to pay their debts. In January, 1913, the petitioner decided to take over the previously accumulated earnings and surplus and did so in that year by votes of the companies that it controlled. But, disregarding the forms gone through, the result was merely that the petitioner became the holder of the debts previously due from one of its companies to another. It was no richer than before, but its property now was represented by stock in 9, 1918.) No. 74. 51-INTERSTATE COMMERCE 1. COMMERCE A state, under its police power, may enact laws for inspection of oils and gasoline, tending to promote public safety, or to protect public from frauds, and may charge a fee reasonably sufficient to pay cost of inspection, though property may be moving in interstate commerce; but, if charge is obviously and largely in excess of cost of inspection, act will be declared void as burden on interstate commerce. 2. CONSTITUTIONAL LAW 48 - INSPECTION FEE DISCRETION OF LEGISLATURE CIAL INQUIRY. JUDI Discretion of state Legislature in determining amount of fee for inspection of oils and gasoline, prima facie reasonable, will not be lightly disturbed by federal courts in determining whether exaction for inspection of such products, moving in interstate commerce, constitutes burden thereon, on account of excessive character of charge, rendering state act a revenue, instead of an inspection, measure. 3. EVIDENCE 28-JUDICIAL NOTICE-STATE STATUTES INSPECTION FEES. and debts due frora its subsidiaries, whereas In determining whether fees for inspection formerly it was represented by the stock of oils and gasoline exacted by state of Minneso For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes ト |