(260 U. S. 3)

(43 Sup.Ct.)

the Hospital. Under the terms of the loan LEDERER, Collector of Internal Revenue for and mortgage, the Hospital only pays interest First District of Pennsylvania, v. enough to satisfy the administrative charges and the annuity. It uses the remainder of the

STOCKTON.

(Argued Oct. 5, 1922. Decided Oct. 16, 1922.) income from the fund for its expenses. It is

No. 16.

Internal revenue 7-Income received by hospital from property devised to it subject to annuities and loaned to it by the trustee held not taxable.

Under Income Tax Law Sept. 8, 1916, § 2b (Comp. St. § 6336b), relative to income from property held in trust, and section 11a (Comp. St. § 6336k), exempting charitable corporations, where property was devised to a hospital subject to the payment of certain annuities, and the trustee loaned the property to the hospital, taking security for the payment of sufficient interest to satisfy the administrative charges and the last remaining annuity, the hospital's income therefrom is not taxable. On Writ of Certiorari to the United States Circuit Court of Appeals for the Third Cir

thus actually receiving the full benefit of the income of $15,000 from the residuary fund, reduced only by the annuity of $800.

Section 2b of the Income Tax Law of 1916, supra (Comp. St. § 6336b), is as follows:

"Income received by estates of deceased persons during the period of administration or settlement of the estate, shall be subject to the normal and additional tax and taxed to their estates, and also such income of estates or any kind of property held in trust, including such income accumulated in trust for the benefit of unborn or unascertained persons, or persons with contingent interests, and income held for future distribution under the terms of the will or trust shall be likewise taxed, the tax in each instance, except when the income is returned for the purpose of the tax by the beneficiary, to be assessed to the executor, administrator, or trustee, as the case may be: Provided, that where the income is to be dis

heirs or legatees, or beneficiaries the rate of tax and method of computing the same shall be based in each case upon the amount of the individual share to be distributed."

cuit. Action by Alexander D. Stockton, sole sur-tributed annually or regularly between existing viving trustee under the will of Alexander J. Derbyshire, deceased, against Ephraim Lederer, Collector of Internal Revenue for the First District of Pennsylvania. A judgment for plaintiff was affirmed by the Circuit Court of Appeals (266 Fed. 676), and defendant brings error. Affirmed.

4

Section 11 (a) of the same act (Comp. St. 6336k) provides:

"That there shall not be taxed under this title any income received by any

*Mr. Assistant Attorney General Ottinger, corporation or association organized and opfor petitioner.

*6

erated exclusively for religious, charitable, scientific, or educational purposes, no part of the

*Mr. Maurice Bower Saul, of Philadelphia, net income of which inures to the benefit of Pa., for respondent. any private stockholder or individual."

Mr. Chief Justice TAFT delivered the opinion of the Court.

Upon these facts, Lederer, the internal revenue collector, assessed Stockton, the

*8

trustee, on the income from *the residuary es-
tate for the years 1916 and 1917, under sec-
The trus-
tion 2b, and collected the same.
tee brought suit in the United States District
Court against the collector to recover the
sums so paid as illegally collected. The Dis-
and this was affirmed by the Circuit Court
trict Court gave judgment for the trustee,
of Appeals for the Third Circuit, 266 Fed.

676.

The question in this case is whether the Income Tax Law of September 8, 1916 (39 Stat. 756), as amended by the Act of October 3, 1917 (40 Stat. 300), requires the Contributors to the Pennsylvania Hospital, a corporation of Pennsylvania, created for charitable uses and purposes, no part of whose net income is for the benefit of any private stockholder or individual, to pay a tax on the income of a residuary estate devised to it by the will of Alexander J. Derbyshire This residuary fund was vested in the Hosin 1879 and inuring to its benefit under the pital. The death of the annuitant would following circumstances: The devise was subject to the payment of certain annuities, completely end the trust. For this reason, All of the annuitants are dead save one. The the trustee was able safely to make the arSupreme Court of that state decided that the rangement by which the Hospital has really income could not be paid outright to the Hos-received the benefit of the income subject to pital until the death of all the annuitants, and until then must remain in control of the trustee appointed under the will. Derbyshire's Estate, 239 Pa. 389, 86 Atl. 878. The

trustee transferred the whole resid*uary fund as a loan for 15 years to the Hospital, and secured himself by mortgage on property of

the annuity. As the Hospital is admitted to be a corporation, whose income when received is exempted from taxation under section 11 (a), we see no reason why the exemption should not be given effect under the circumstances. To allow the technical formality of the trust, which does not prevent the Hospital from really enjoying the in

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come would be to defeat the beneficent pur- |lowances for the loading service and also othpose of Congress. er damages for violation of law and that the The judgment of the Circuit Court of Ap-carriers be ordered to observe the law in the peals is Affirmed.

(260 U. S. 32)

INTERSTATE COMMERCE COMMISSION
v. UNITED STATES ex rel. MEMBERS
OF WASTE MERCHANTS' ASS'N OF NEW
YORK.

(Argued October 9 and 10, 1922. Decided
Oct. 23, 1922.)

No. 245.

Mandamus 73(1)-Error to compel declsion by Interstate Commerce Commission in parties' favor.

future. The Director General of Railroads and 184 transportation companies were made respondents; extensive hearings were had; the Commission filed a report embodying its findings of fact and conclusions, entered an order dismissing the complaint, and on August 7, 1920, overruled a petition for rehearing based on alleged errors in conclusions of fact and of law and newly discovered evidence. Then, on behalf of the association members, this petition for a writ of mandamus was filed in the Supreme Court of the District of Columbia. It prayed that the Commission be directed to take jurisdiction of the claims, to allow damages and to fix the amount thereof. Upon a rule to show cause, objection was made to the jurisdiction of the court over the subject-matter; and the case was heard upon demurrer to the an

Where the Interstate Commerce Commission did not dismiss a complaint seeking reparation and an order that carriers perform the duty of loading paper stock for lack of jurisdic-swer, which set up more fully the proceedtion, but because it held that the petitioners ings before the Commission. The Supreme were not entitled to relief, mandamus sought Court of the District dismissed the petition, for the purpose of compelling a decision in on the ground that the relators, having parpetitioners' favor was erroneously granted, as mandamus cannot be had to compel a particular exercise of judgment or discretion, or be used as a writ of error.

34

*ticipated in and obtained benefits from the alleged violations of law, were not in a position to complain. Its judgment was reversed by the Court of Appeals of the Dis

In Error to the Court of Appeals of the trict, on the ground that upon the facts found District of Columbia.

*Mr. Justice BRANDEIS delivered the opinion of the Court.

by the Commission complainants were clearwith directions to issue the mandamus. 51 ly entitled to relief. The case was remanded, App. D. C. 136, 277 Fed. 538. It is here on

writ of error.

We have no occasion to consider the merits of the controversy before the Commission. That it did not dismiss the complaint for lack of jurisdiction is clear. It heard the case fully. It found that the rates charged were not unreasonable or discriminatory in violation of the Commerce Act, nor unreasonable for the service actually performed in violation of the Federal Control Act. Comp. St. 1918, Comp. St. Ann. Supp. 1919, §§ 31154a-3115p. It found that the conditions complained of were an incident of the World War; that the arrangement for loading was a voluntary one beneficial to complainants' members; that there was no provision in the tariffs for allowance to shippers who load cars; and that therefore such allowance could not legally be made by the carriers.

The Commission dismissed the complaint because it held that the petitioners were not entitled to relief. Waste Merchants' Association v. Director General, 57 Int. Com. Com'n R. 686.

In March, 1919, the Waste Merchants' Association of New York filed in the Interstate Commerce Commission a complaint under section 13 of the Act to Regulate Commerce of February 9, 1887, c. 104, 24 Stat. 379, 384, as amended (Comp. St. § 8581). It alleged that existing tariffs on paper stock shipped in carload lots from New York Harbor imposed upon carriers the duty of loading cars; that the carriers had failed to perform this duty on shipments made by complainants' members; that these had been obliged to Petitioners sought in the proceeding to set perform the service at their own expense; aside the adverse decision of the Commission and that they were entitled, under section 15 on the merits and to compel a decision in of the act (Comp. St. § 8583), to allowances their favor. The Court of Appeals granted therefor. The prayer was that the carriers the writ. This was error. Mandamus canbe ordered to pay, by way of reparation, al- not be had to compel a particular exercise For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

(43 Sup.Ct.)

Mr. Alfred A. Wheat, of New York City, for plaintiff in error.

Mr. Justice MCKENNA delivered the opin

of judgment or discretion, Riverside Oil Co.
v. Hitchcock, 190 U. S. 316, 23 Sup. Ct. 698,
47 L. Ed. 1074; Ness v. Fisher, 223 U. S.
683, 32 Sup. Ct. 356, 56 L. Ed. 610; Hall v.
Payne, 254 U. S. 343, 41 Sup. Ct. 131, 65 Lion of the Court.
Ed. 295; or be used as a writ of error, Com-
missioner of Patents v. Whiteley, 4 Wall.
522, 18 L. Ed. 335. The case at bar is not
like Interstate Commerce Commission V.
Humbolt Steamship Co., 224 U. S. 474, 32
Sup. Ct. 556, 56 L. Ed. 849, and Louisville
Cement Co. v. Interstate Commerce Commis-
sion, 246 U. S. 638, 38 Sup. Ct. 408, 62 L. Ed.
914, where the Com*mission had wrongly held
that it did not have jurisdiction to adjudi-
cate the controversy; nor is it like Kansas
City Southern Railway Co. v. Interstate
Commerce Commission, 252 U. S. 178, 40 Sup.
Ct. 187, 64 L. Ed. 517, where the Commission
wrongly refused to perform a specific, per-
emptory duty prescribed by Congress.

*35

Whether a judicial review can be had by some other form of proceeding, we need not inquire. Compare Louisiana & Pine Bluff Railway Co. v. United States, 257 U. S. 114, 116, 42 Sup. Ct. 25; Philadelphia & Reading Railway Co. v. United States, 240 U. S. 334, 336, 36 Sup. Ct. 354, 60 L. Ed. 675; Proctor & Gamble Co. v. United States, 225 U. S. 282, 32 Sup. Ct. 761, 56 L. Ed. 1091. Reversed.

(260 U. S. 18)

UNITED STATES v. WONG SING.

Error to review the action of the District Court in dismissing an indictment against defendant in error. The indictment was in two counts. The first count charged that Wong Sing feloniously had in his possession and under his control, at a specified date, certain derivatives and preparations of morphine and cocaine for the purpose of sale and distribution; he not being registered under the provisions of the act of Congress approved December 17, 1914, and its amendments (Comp. St. § 6287 et seq.), and not having paid the special tax required by the Act.1

19

The second count charged that Wong Sing, at a specified date and time on such date, and at a specified place in Salt Lake City, within the jurisdiction of the court, knowingly, willfully, unlawfully, and feloniously purchased, from a person or persons unknown to the grand jurors, morphine and cocaine, the exact quantity being unknown to the grand jurors; the said drugs not being in the original stamped packages, or from the original stamped packages; he not having then and there obtained the drugs from a registered dealer in pursuance of a prescription written for legitimate medical uses by a practitioner registered under the act of December, 17, 1914, and its amendments; and the purchase not being by a patient from a

(Argued Oct. 11, 1922. Decided Oct. 23, 1922.) registered practitioner in the course of his

No. 44.

1. Poisons 3-Provision against purchase of narcotic drugs, except in stamped paper, not limited to those required to register and pay special tax.

Act Feb. 24, 1919, § 1006 (Comp. St. Ann. Supp. 1919, § 6287g), making it unlawful for any person to purchase, sell, etc., certain narcotic drugs, except in or from the original stamped package, is not limited to importers, manufacturers, dealers, etc., required thereby to register and pay a special tax.

2. Poisons 3-Statute as to purchase of narcotic drugs in unstamped paper held constitutional.

Act Feb. 24, 1919, § 1006 (Comp. St. Ann. Supp. 1919, § 6287g) construed as making it unlawful for persons other than those required thereby to register and pay a special tax to purchase the narcotic drugs therein specified in unstamped paper, is not unconstitutional.

professional practice, and he, Wong Sing, not being then and there registered under the provisions of the act of Congress, and not having then and there, or theretofore, the act-contrary to the form of the statute or at all, paid the special tax provided by in such case made and provided, and against the peace and dignity of the United States of America.

Wong Sing, upon being arraigned, pleaded not guilty, but subsequently withdrew the plea and demurred to the indictment "for

failure to state an offense, and being insufficient." The demurrer was sustained, and he was discharged from all liability thereon.

The court made a certificate, to be part of the record and proceedings, that the first count of the indictment was based upon section 8 of the Act of Congress of December 17, 1914, commonly called the Harrison An

⚫20

ti-Narcotic *Act, and that he sustained the demurrer to that count upon the authority

In Error to the District Court of the Unit- of United States v. Jin Fuey Moy, 241 U. S. ed States for the District of Utah.

Wong Sing was indicted for offenses, and a demurrer was sustained to the indictment, and the United States brings error. Reversed and remanded.

394, 36 Sup. Ct. 658, 60 L. Ed. 1061, Ann.

1 Counsel for the United States say that only the second count is material on this writ of error. The first count, however, is a part of the representation of the case.

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21

also a certain independence. The first *makes it "unlawful for any person to purchase" the drugs; the second enumerates other persons who have a larger connection with the drugs, and requires them to register the fact and pay the tax prescribed. There could be drugs to register, but it fulfilled the purpose no object in requiring a purchaser of the of the law to forbid a purchase "except in the original stamped package or from the original stamped package." The requirement fortifies the other injunctions of the statute.

Cas. 1917D, 854. And the court further cer- court have a certain relation but they have tified that the second count of the indictment was based upon the amended Harrison AntiNarcotic Act contained in section 1006 of the Revenue Act of February 24, 1919, c. 18 (40 Stat. 1130; Comp. St. Ann. Supp. 1919, 6287g), and that the count was predicated upon the following provisions: "It shall be unlawful for any person to purchase, sell, dispense or distribute any of the aforesaid drugs except in the original stamped package or from the original stamped package "-and that he construed "the word 'persons' in the foregoing language to mean the persons enumerated in the first para- [2] In Doremus v. United States and Webb graph of section 1006, namely, 'Every person et al. v. United States, it was decided that who imports, manufactures, produces, com- the power of Congress, exerted through the pounds, sells, deals in, dispenses, or gives act of 1914, though the act might be denomaway opium, or coca leaves, or any com- inated a revenue measure, could, as a compound, manufacture, salt, derivative, or plement to it, make criminally unlawful the preparation thereof, shall register with the sale, barter or exchange of narcotic drugs, collector of internal revenue of the district, except under certain prescribed conditions his name or style, place of business and designed to make effective as a revenue place or places where such business is to be measure. The principle of the decision apcarried on, and pay the special taxes here- plies to the act of 1919 upon which count 2 inafter provided.'" is based. If the law can put conditions upThe demurrer was sustained, it was fur- on sellers, it can put conditions with a like ther certified, because the second count con- purpose upon purchasers which is done here. tained no appropriate allegation giving effect Therefore the apprehension of the District to the word "person," and hence fell within Court, if it should be so held, that the act the ruling in the Jin Fuey Moy Case, other- would be unconstitutional under the decision wise, it was said, the amendment would be in United States v. Jin Fuey Moy, 241 U. S. unconstitutional; and, further, that the de-394, 36 Sup. Ct. 658, 60 L. Ed. 1061, Ann. murrer was treated as presenting that question of construction, and was sustained only for that reason.

The construction by the court of section 1006 constitutes the question in the case. It is attacked by the United States as not justified, and United States v. Doremus, 249 U. S. 86, 39 Sup. Ct. 214, 63 L. Ed. 493, and Webb v. United States, 249 U. S. 96, 39 Sup. Ct. 217, 63 L. Ed. 497, are cited.

[1] We are unable to concur with the District Court. The provisions quoted by the

another distinction between the Jin Fuey Cas. 1917D, 854, was not justified. There is Moy Case and this. In that case, which was under the act of 1914, it was intimated that the persons affected by the act received definition from the requirement of registration. This case is under the act of 1919, and it, as we have said, does not require registration.

It follows that the judgment of the District Court must be and it is

Reversed, and cause remanded for further proceedings in accordance with this opinion.

(43 Sup.Ct.)

(Argued Oct. 4, 1922. Decided Oct. 23, 1922.) without proof of negligence, was contrary to

In Error to the Supreme Court of the State to impose burdens upon property or to State of Pennsylvania.

*Mr. H. F. Stambaugh, of Pittsburgh, Pa., Bradley, 164 U. S. 112, 17 Sup. Ct. 56, 41 L. for plaintiff in error. Ed. 369; Noble State Bank v. Haskell, 219

*Mr. A. Leo Weil, of Pittsburgh, Pa., for U. S. 104, 111, 31 Sup. Ct. 186, 55 L. Ed. 112, defendant in error.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes