formed by the continued operation of the subsidiary corporation, were entitled to priority under National Defense Act June 3, 1916, § 120 (Comp. St. §§ 3115g, 3115f, 3115h), and that they involved interstate commerce, are insufficient to support a claim, first made after dismissal for want of diversity of citizenship, that the cause of action arose under the laws of the United States.

tially a subsidiary of the petitioner, and its interest in the controversy was so certainly on the same side, that it should be treated as a plaintiff; that any decision of the case must necessarily so involve rights of the Tool Company as to render it an indispensable party to the case; and that, giving that company its proper classification as a

Mr. Justice Pitney and Mr. Justice McReyn- plaintiff resulted in the disappearance of

olds dissenting.

Certiorari to the United States Circuit Court of Appeals for the Sixth Circuit.

Suit by the Niles-Bement-Pond Company against the Iron Moulders' Union, Local No. 68, and others. On appeal from grant of a temporary injunction by the District Court, the Circuit Court of Appeals ordered the dismissal of the case for want of jurisdiction (Iron Moulders' Union, Local No. 68, v. Niles-Bement-Pond Co., 258 Fed. 408, 169 C. C. A. 424), and complainant brings certiorari. Decree of the Circuit Court of Appeals affirmed.

Messrs. Lawrence Maxwell and Murray Seasongood, both of Cincinnati, Ohio, for pe

titioner.

Messrs. W. B. Rubin, of Milwaukee, Wis., and Robert J. Shank, of Hamilton, Ohio, for respondent.

*78

the jurisdictional diversity of citizenship and required the dismissal of the bill, which

*79

was ordered. The case was brought here for review by writ of certiorari.

The facts essential to be considered, which were stipulated or sufficiently proved on the hearing of the application for an injunction, may be epitomized as follows:

The petitioner was a corporation of New Jersey, the defendant Tool Company a corporation of Ohio, the petitioner owned a controlling interest in the capital stock of the Tool Company, and the same men were president and vice president, respectively, of both companies. The president was invested with authority to fix prices for the two companies, three of the five directors of the Tool Company were directors of the petitioner, and more than 95 per cent. of the business of that company was obtained through the petitioner, acting as its general sales agent. The customary mode of transacting business between the two companies was for the pe

*Mr. Justice CLARKE delivered the opin- titioner to make contracts for machinery, ion of the Court.

which it passed to the Tool Company for The controversy involved in this suit orig-manufacture and delivery. inated in a strike by employés of the defendant the Niles Tool Works Company, hereinafter designated the Tool Company, and the sole question presented for decision is one of jurisdiction.

The petitioner, a corporation of New Jersey, filed its bill in the District Court for the Southern District of Ohio, making the Tool Company, an Ohio corporation, several local labor unions, and many of the striking employés of the Tool Company (in the bill and hereinafter designated "former employés") parties defendant; it being averred that all of the defendants were citizens of Ohio and residents of the Southern district. The jurisdiction of the court was thus invoked on the ground of diverse citizenship.

Before the filing of the bill the petitioner had entered into many contracts with the United States government to furnish it, as quickly as possible, with machinery, tools, and equipment for arsenals and for navy and ship yards, all of which contracts were necessary for the successful prosecution of the war, and were to be given priority over other work. These contracts had been passed to the Tool Company for manufacture; the petitioner remaining liable for their performance. It was averred, and sufficiently proved, that the defendants other than the Tool Company had conspired together, for the purpose of hindering, delaying, and preventing the petitioner from performing, through the Tool Company, the contracts thus obtained by it from the government, and for the purpose of intimidating workmen in the employ of the Tool Company by threats, violence, and coercion, when going to and from their places of work and

*80

The relief prayed for was an injunction, restraining the striking former employés of the Tool Company from molesting workmen employed by that company to take their places, upon the ground that petitioner had contracts with the Tool Company the performance of which was being delayed by when at their homes. *Such defendants, assuch interference. No case was stated, or sembled about the plant of the Tool Comrelief asked for, against the Tool Company. pany, had at times by threats and violence The District Court overruled a motion to prevented employés from entering its facdismiss for want of jurisdiction, and granted tory to work, and had threatened to prevent, a preliminary injunction as prayed for, but, and unless restrained would have prevented, on appeal the Circuit Court of Appeals that company from freely carrying forward found that the Tool Company was so essen-its business, and thereby the petitioner from

(41 Sup. Ct.)

fulfilling its contracts with the government and with others.

On this record the questions presented for decision are: Was the Tool Company an indispensable party to the suit? and, properly classified, should it be treated as a plaintiff? If these questions are both answered in the affirmative, the decree of the Circuit Court of Appeals must be affirmed; otherwise, it must be reversed.

fore it must be concluded that it was an indispensable party, within the quoted longestablished rule.

[3] Plainly the appellant was not mistaken when it made the Tool Company a party to the suit. But making it a party defendant could not give to the District Court jurisdiction against the objection of another party, or over the court's own scrutiny of the record, unless there existed a genuine controversy between it and the plaintiff, the petitioner. Judicial Code, § 24 (Comp. St. § 991). That there was not and could not be any substantial controversy, any "collision of interest," between the petitioner and the Tool Company, is of course obvious from the potential control which the ownership of stock by the former gave it over the latter company, and from the actual control effected by the membership of the boards of directors and by the selection of executive officers of the two companies, which have been described.

[1] There is no prescribed formula for determining in every case whether a person or corporation is an indispensable party or not; but a rule early announced and often applied by this court is sharply applicable to the case at bar. In Shields v. Barrow, 17 How. 130, 139, 15 L. Ed. 158, this language -quoted with approval in Barney v. Baltimore City, 6 Wall. 280, 284, 18 L. Ed. 825, and again in Waterman v. Canal-Louisiana Bank, &c. Co., 215 U. S. 33, 48, 30 Sup. Ct. 10, 54 L. Ed. 80-was used to describe parties so indispensable that a court of equity will not proceed to final decision without them, viz.: Looking, as the court must, beyond the "Persons who not only have an interest in pleadings, and arranging the parties accordthe controversy, but an interest of such a na-ing to their real interest in the dispute inture that a final decree cannot be made without Volved in the case, Dawson v. Columbia, &c., either affecting that interest, or leaving the controversy in such a condition that its final Trust Co., 197 U. S. 178, 180, 25 Sup. Ct. termination may be wholly inconsistent with 420, 49 L. Ed. 713, Steele v. Culver, 211 U. equity and good conscience." S. 26, 29, 29 Sup. Ct. 9, 53 L. Ed. 74, it is clear that the identity of interest of the Tool Company with the petitioner required that the two be aligned as plaintiffs, and that, with them so classified, the case did not present a controversy wholly between citizens of different states, within the jurisdiction of the District Court. Coal Co. v. Blatchford, 11 Wall. 172, 20 L. Ed. 179; Hooe v. Jamieson, 166 U. S. 395, 17 Sup. Ct. 596, 41 L. Ed. 1049.

[2] The case we are considering is essentially one on the part of the petitioner to protect from interference by striking former employés of the Tool Company the contract which that company had with the men employed by it to take their places. Petitioner's claim of right, the validity of which we are not called upon to determine, is rested wholly upon the contract of the Tool Com

*81

pany with its employés, and the character and construction of that contract of employment must inevitably be passed upon in any decision of the case, and obviously, if the petitioner should fail in such a suit as this, with the Tool Company not a party, any decree rendered would not prevent a relitigating of the same questions in the same or in any other proper court, and it would settle nothing.

Thus, if the Tool Company be considered as having any corporate existence whatever separate from that of the petitioner, it must have an interest in the controversy, involved in such a case as we have here, of a nature such that a final decree could not be made without affecting that interest, and perhaps not without leaving the controversy in a condition wholly inconsistent with that equity which seeks to put an end to litigation by doing complete and final justice, and there

*82

[4] The allegations of the bill that the contracts which the petitioner had with the United States government were of a character which must be given priority under section 120 of the National Defense Act, approved June 3, 1916 (39 Stat. pp. 166, 213 [Comp. St. §§ 3115g, 3115f, 3115h]), and that they involved interstate commerce, are much too casual and meager to give serious color to the claim now made that the cause of action asserted is one arising under the laws of the United States. The contention is an afterthought, and plainly was not in the mind of the writer of the bill of complaint.

It results that the decree of the Circuit Court of Appeals must be affirmed.

Appeal dismissed, petition for writ of certiorari granted, and decree of the Circuit Court of Appeals affirmed.

Mr. Justice PITNEY and Mr. Justice McREYNOLDS dissent.

(254 U. S. 20)

HEALD et al. v. DISTRICT OF COLUMBIA. (Argued Oct. 18, 1920. Decided Nov. 8, 1920.)

1. Courts

No. 300.

and void in whole and in its several parts." It suffices to say that the questions, which are stated in the margin,1 express the purpose of the court below to ask our instructions as to the constitutionality of the act of Congress in the light of the construction of that act which was the basis of the assessment of which complaint is made.

388-Court of Appeals of District of Columbia cannot certify questions in case otherwise reviewable. At bar the subject is discussed as if the The Court of Appeals of the District of Co-case were here on error or appeal, and on the lumbia cannot certify questions to the Su- other hand it is prayed that the power conpreme Court in any case where its judgment or decree would be susceptible to review in the ferred in a case where a certificate is pendSupreme Court on error or appeal. ing to order up the whole record be exerted. But as the want of power in the court below to make the certificate has been suggested and as that naturally arises on the face of the record and will if well founded preclude present inquiry into other questions, we come to consider that subject.

2. Courts 388-Supreme Court can review cases in Court of Appeals of District of Columbia involving constitutionality of local

acts.

Under Judicial Code, § 250 (Comp. St. § 1227), authorizing the Supreme Court to review on error or appeal decrees of the Court of Appeals of the District of Columbia in cases involving the constitutionality of any law of the United States, the court can review on appeal or writ of error cases involving the constitutionality of a local act of Congress, applying only to the District of Columbia, though under paragraph 6 of that section authorizing review of cases involving the construction of acts of Congress, it can review only cases involving the construction of general laws.

3. Statutes 22534-Re-enactment adopts established construction, in absence of contrary implication.

[1, 2] It is indisputable that the court below had no power to certify questions to this court in any case where its judgment or decree would be susceptible of review in this court on error or appeal, Arant v. Lane, 245 U. S. 166, 168, 38 Sup. Ct. 94, 62 L. Ed. 223.

22

*Whether the power to certify exists therefore must be decided by a consideration of section 250 of the Judicial Code (Comp. St. § 1227), which deals with the right to review by error or appeal. As when that section is considered it appears that its third paragraph in express terms confers power on this court to review on error or appeal judgments or decrees of the court below "in cases involving the construction or application of the Constitution of the United States, or the constitutionality of any law of the United States, or the validity or construction of any treaty On Certificate from the Court of Appeals made under its authority," it is at once demof the District of Columbia.

The re-enactment of a statute which has acquired a settled significance adopts that meaning, in the absence of a plain implication to the contrary.

Suit by John C. Heald and others, as committee of the person and estate of Eugene l'eters, against the District of Columbia, to recover taxes paid under protest. On certificate from the Court of Appeals of the District of Columbia, certifying questions concerning the construction and constitutionality of the suit. Certificate dismissed for want of jurisdiction.

Messrs. A. S. Worthington and Vernon E. West, both of Washington, D. C., for petitioners.

onstrated that the court below was devoid of any authority to make the certificate and hence that this court has no jurisdiction to answer the questions.

But it is suggested that, as it was held in American Security & Trust Co. v. District of Columbia, 224 U. S. 491, 32 Sup. Ct. 553, 56 L. Ed. 856, that the power conferred upon this court by paragraph 6 of section 250 to review on error or appeal judgments or decrees of the court below "in cases in which

the construction of any law of the United

1 "1. Does section 9 of an act of Congress apMr. F. H. Stephens, of Washington, D. C., proved March 3, 1917 (39 Stat. 1046), under which for the District of Columbia.

Mr. Chief Justice WHITE delivered the opinion of the court.

The certificate made by the Court of Appeals of the District of Columbia as the basis

*21

said assessment was made, require that 'moneys and credits, including moneys loaned and invested, bonds and shares of stock ... of any person, firm, association, or corporation ⚫ engaged in business within said District,' but re

siding outside of said District, shall be assessed by the District of Columbia for the purpose of

taxation?

"2. If it does, is it invalid? And, if invalid, does that fact render void the entire section?

for the questions which are propounded
shows that they relate to a pending suit to
recover taxes assessed by the District of Columbia to
lumbia upon intangible property pursuant to
an act of Congress and paid under protest on
the ground that the assessment was "illegal

"3. Does the section require the District of Coassess the bonds and other securities of the states and their municipal corporations held by residents of the District of Columbia; and if it does. does its validity on that account render the entire section void?"

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

(41 Sup.Ct.)

States is drawn in question by the defendant" embraced only the construction of laws WATSON et al. v. STATE COMPTROLLER of general operation, as distinguished from those which were local to the District of Columbia, therefore the grant of power to determine the constitutionality of acts of Congress must be treated as applying only to such acts as are general in character, as to which it is insisted the act involved in this. Taxation 42(1) Classification which has reasonable relation to permitted governcase is not one. mental action is valid.

A classification of property for purposes of taxation is permissible, if it has a reasonable action; it not being necessary that the basis relation to some permitted end of governmental of the classification be deducible from the na

which was made in the American Security
Case and overlooks the implication resulting
from a subsequent case directly dealing with
the same matter. United Surety Co. v. Amer-ture of the thing classified.
ican Fruit Co., 238 U. S. 140, 35 Sup. Ct. 828,
59 L. Ed. 1238.

[3] In addition, as the paragraphs of section 250 in question but re-enact provisions of prior statutes which had been construed as conveying authority to review controver

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

Mr. Justice BRANDEIS delivered the opin- ing in the same relationship to the decedent ion of the Court.

will not be taxed. But the power to classify for purposes of taxation is fully established. The executors admit, as they must, that a classification is reasonable, if made with respect to the kind of property transferred, or to the amount or value of property transferred, or to the relationship of the transferees, or to the character of the transferee, for instance, as engaged in charity. Magoun v. Illinois Trust & Savings Bank, 170 U. S. 283, 300, 18 Sup. Ct. 594, 42 L. Ed. 1037; Billings v. Illinois, 188 U. S. 97, 23 Sup. Ct. 272, 47 L. Ed. 400; Campbell v. California, 200 U. S. 87, 26 Sup. Ct. 182, 50 L. Ed. 382. But their list does not exhaust the possibilities of legal classification. See Beers v. Glynn, 211 U. S. 477, 484, 29 Sup. Ct. 186, 53 L. Ed. 290; Keeney v. New York, 22 U. S. 525, 32 Sup. Ct. 105, 56 L. Ed. 299, 38 L. R. A. (N. S.) 1139; Maxwell v. Bugbee, 250 U. S. 525, 40 Sup. Ct. 2, 63 L. Ed. 1124. Compare New York v.

The New York Tax Law (Consolidated Laws, chapter 60) provides (article 1, § 9) that personal property shall be assessed and taxed to the owner at the place where he resides, but exempts (article 15) from such taxation certain bonds and other obligations, called in the act investments, on which there has been paid an optional tax at a lower rate, which payment is evidenced by a stamp affixed. The Tax Law also provides (article 10) for an inheritance or transfer tax, which varies, among other things, according to the relationship of the beneficiary to the decedent. By section 221-b, added by Laws of 1917, c. 700, § 2, an additional tax equal to 5 per cent. of the appraised value of the investment is imposed on the transfer of investments held by the decedent at his death, on which neither the general property tax nor the stamp tax above described has been paid during a fixed period prior thereto, pro- | Reardon, 204 U. S. 152, 27 Sup. Ct. 188, 51 vided that the estate is larger than the exemptions to relatives and charities.

*125

L. Ed. 415, 9 Ann. Cas. 736. Any classification is permissible which has a reasonable relation to some permitted end of governmental action. It is not necessary, as the basis of the classification must be deducithe plaintiff in error seems to contend, that ble from the nature of the things classified

Watson, a resident of New York City, held, at his death in 1917, certain bonds on which neither the general property tax nor the stamp tax had been paid. The transfer tax appraiser, appointed by the Surrogate's Court, reported that there was payable by the execu tors in respect to those bonds the additional-here the right to receive property by devotransfer tax prescribed by the act of 1917. The surrogate (In re Watson's Estate, 101 Misc. Rep. 212, 172 N. Y. Supp. 29) disallowed the tax on the ground that the statute violated the state Constitution, and his de

124

cision was affirmed by the Appellate Division of the Supreme Court (In re Watson's Estate, 186 App. Div. 48, 174 N. Y. Supp. 19). The Court of Appeals of New York held that the act violated neither the state nor the federal Constitution (In re Watson's Estate, 226 N. Y. 384, 123 N. E. 758), and the case comes here on writ of error. The contention is that the tax imposed denies to Watson's estate equal protection of the laws.

lution. It is enough, for instance, if the classification is reasonably founded in "the purposes and policy of taxation." Pacific Express Co. v. Seibert, 142 U. S. 339, 354, 12 Sup. Ct. 250, 35 L. Ed. 1035; Kidd v. Alabama, 188 U. S. 730, 732, 23 Sup. Ct. 401, 47 L. Ed. 669; Clement National Bank v. Vermont, 231 U. S. 120, 136-137, 34 Sup. Ct. 31, 58 L. Ed. 147; Farmers' Bank v. Minnesota, 232 U. S. 519, 529-530, 34 Sup. Ct. 354, 58 L. Ed. 706. And what classification could be more reasonable than to distinguish, in imposing an inheritance or transfer tax, between property which had during the decedent's life borne its fair share of the tax burden and that which had not? 1

[1, 2] The occasion and the purpose of the [3] It does not follow, as is also argued, statute are shown by the Court of Appeals. that the act in question imposes a property An owner of investments is not required ei- tax, merely because its existence may induce ther to list them for assessment locally un- owners of investments to present them for der the general property tax law or to pre-taxation under the investment tax law. Nor sent them for stamping under the invest- is it to be deemed a law imposing a penalty ment tax law. Whether the investments of merely because the decedent's estate may a resident are taxed during his life depends either upon his own will or upon the vigilance siana (Constitution 1898, arts. 235, 236; Act 45 of 1 Connecticut (Gen. Stat. 1918, § 1190) and Louland discretion of the local assessors. This 1904) also impose a special inheritance tax on condition led to loss of revenue by the state the transfer of property which has not borne its and to inequality in taxation among its citi-share of taxation during a period prior to the owner's death. The latter statute has been frequentzens. To remedy both evils this additional ly before the courts. Succession of Mathias Levy, transfer tax was imposed upon investments 115 La. 377, 385, 39 South. 37, 8 L. R. A. (N. S.) of a decedent which bad wholly escaped tax- 1180, 5 Ann. Cas. 871, affirmed Cahen v. Brewster, ation. It is insisted that the tax is discrim-203 U. S. 543, 27 Sup. Ct. 174, 51 L. Ed. 310, 8 Ann. Cas. 215; Succession of Pritchard, 118 La. 883, 43 inatory, because under it other property of South. 537; Succession of Westfeldt, 122 La. 836, the same kind bequeathed to persons stand-48 South. 281.