tion and render it uniform. American Steel | ber 15, 1914, § 20, which forbid an injuneFoundries v. Tri-City Central Trades Coun-tion against recommending, advising or percil, 257 U. S. 184, 42 Sup. Ct. Rep. 72, suading others by peaceful means to cease 66: 189 employment and labor, or against attend ing at any place where such person or persons may lawfully be, for the purpose of peacefully obtaining or communicating information, or peacefully persuading any person to work or to abstain from working, or against peaceably assembling in a lawful manner and for lawful purposes. American Steel Foundries v. Tri-City Central Trades Council, 257 U. S. 184, 42 Sup. Ct. Rep. 72, 66: 189 Monopoly; combination in restraint of trade. Necessary or indispensable parties, see Parties, 6. 4. If, in their attempts at persuasion or communication with those whom they would enlist with them, those of the labor side in an industrial dispute adopt methods which, however lawful in their announced purpose, inevitably lead to intimidation and obstruction, then it is the court's duty, unmodified by the terms of the Clayton Act of October 15, 1914, § 20, which forbid an injunction against recommending, advising, or persuading others by peaceful means to cease employment and labor, or against attending at any place where such person or persons may lawfully be for the purpose of peacefully obtaining or communicating information, or peacefully persuading any 8. Injunctive relief against the making person to work or to abstain from working, of leases of patented shoe machinery, which or against peacefully assembling in a law- contain restrictive "tying" clauses forbidful manner and for lawful purposes, so to den by the Clayton Act of October 15, 1914, limit what the propagandists do as to time, $ 3, should not be denied merely because the manner, and place as shall prevent infrac-form of lease that the lessor has adopted tions of the law and violations of the right of the employees, and of the employer for whom they wish to work. American Steel Foundries v. Tri-City Central Trades Council, 257 U. S. 184, 42 Sup. Ct. Rep. 72, 66: 189 5. Picketing in groups of from four to twelve near an employer's place of business during a strike, accompanied by attempts at persuasion, or communication with those entering or leaving the plant, with the inevitable result of intimidation of employees and would-be employees, and of obstruction of, and interference with, the business of the employer, is unlawful and may be enjoined, notwithstanding the provisions of the Clayton Act of October 15, 1914, § 20, which forbid an injunction against recommending, advising, or persuading others by peaceful means to cease employment and labor, or against attending at any place where such person or persons may lawfully be for the purpose of peacefully obtaining or communicating information, or peacefully persuading any person to work or abstain from working, or against peacefully assembling in a lawful manner and for lawful purposes. American Steel Foundries v. Tri-City Central Trades Council, 257 U. S. 184, 42 Sup. Ct. Rep. 72, 66: 189 6. The extent to which picketing in an industrial dispute should be enjoined is a question for the judgment of the judge who has heard witnesses, familiarized himself with the locus in quo, and observed the tendencies to disturbance and conflict. The purpose should be to prevent the inevitable intimidation of the presence of groups of pickets, but to allow missionaries. American Steel Foundries v. Tri-City Central Trades Council, 257 U. S. 184, 42 Sup. Ct. Rep. 72, 66: 189 7. To enjoin striking employees from inducing by persuasion other employees or would-be employees to leave or stay out of their employer's employ would conflict with the provisions of the Clayton Act of Octo See also supra, 1-7. since that act became effective is free from the objectionable clauses, where these leases are terminable upon thirty days' notice, and are denominated temporary loan agree ments, and are evidently framed in view of the Clayton Act and the litigation likely to arise over the former leases, in view of that enactment, and their fate evidently depends upon the outcome of the present suit. United Shoe Machinery Corp. v. United States, 258 U. S. 451, 42 Sup. Ct. Rep. 363, 66: 708 Against officers, boards, or municipali- Finality of decree, see Appeal and Preserving status quo after appeal, see Appeal and Error, 49. Review of discretion in refusing to grant, see Appeal and Error, 51. Review of discretion in granting injunction upon terms, see Appeal and Error, 52. Affirmance of injunction decree in telephone rate case, see Appeal and Error, 56, 57. Reversible error in decree enjoining Extent of relief in appellate court in Necessary interest of complainant, see cer, United States as necessary party in suit to set aside or suspend order of Interstate Commerce Commission, see Parties, 7. 9. Relief by way of injunction should be granted where an internal revenue offiwithout notice, has undertaken to assess a penalty for an alleged criminal act, and threatens to enforce payment by seizure and sale of property without opportunity for a hearing of any kind. Lipke v. Lederer, 259 U. S. 557, 42 Sup. Ct. Rep. 549, 66: 1061 10. The severe penalties incurred under the Packers and Stockyards Act of August 15, 1921, for failure to comply with the act before opportunity can be given to test its validity, furnish ground for injunctive relief against its enforcement, if the act be invalid. Stafford v. Wallace, 258 U. S. 495, 42 Sup. Ct. Rep. 397, 66: 735 There must be some extraordinary and ex- 66: 816 16. A suit by members of the Chicago Board of Trade to restrain the enforcement of the Future Trading Act of August 24, 1921, challenged as unconstitutional, is not, in so far as it seeks relief against the United States district attorney and the collector of internal revenue, forbidden by the provisions of U. S. Rev. Stat. § 3224, as one to restrain the collection of a tax, in view of the exceptional and extraordinary circumstances with respect to the operation 11. A suit to enjoin a carrier from ob- of the act under which a sale of grain for serving its rule for the distribution of future delivery, without paying the tax, coal cars in times of car, shortage is, where would subject the seller to heavy criminal such carrier's rule is that prescribed by the penalties, and to pay the heavy tax in each Interstate Commerce Commission, to which of many daily transactions which occur in the carrier is bound to conform, a suit to the ordinary business of a member of an stay an order of the Commission, in which, exchange, and then sue to recover it back, under the Act of October 22, 1913, an in- would necessitate a multiplicity of suits, junction can be granted only by a court and for the Board of Trade to refuse to ap of three judges. Lambert Run Coal Co. v. ply for a designation as a contract marBaltimore & O. R. Co. 258 U. S. 377, 42 ket, in order to test the validity of the act, Sup. Ct. Rep. 349, 66: 671 would stop its 1,600 members in a branch 12. A municipality cannot be enjoined of their business most important to themfrom requiring the removal from the selves and to the country. Hill v. Wallace, streets of the system of a waterworks com259 U. S. 44, 42 Sup. Ct. Rep. 453, 66: 822 pany whose franchise has expired. Bank-Payment or tender of sum equitably ers Trust Co. v. Raton, 258 U. S. 328, 42 Sup. Ct. Rep. 340, Against tax or assessment. 66: 642 due. 17. A plaintiff seeking injunctive relief against the collection of a tax must, where court, the amount payable is the only matter in controversy, aver payment or tender of the amount of taxes confessedly due, or at 13. The prohibition of U. S. Rev. Stat. least offer to pay such amount as the court § 3224, against suits to restrain the assess- may find to be justly and equitably due. ment or collection of a tax, has no applica-Keokuk & H. Bridge Co. v. Salm, 258 U. S. tion to a suit to restrain the collector of 122, 42 Sup. Ct. Rep. 207, internal revenue from collecting the sum demanded by him under the provisions of the National Prohibition Act of October 28, 1919, § 35, as a penalty. Lipke v. Lederer, 259 U. S. 557, 42 Sup. Ct. Rep. 549, Other remedy. 66: 1061 14. No case for equitable relief is presented by a bill which seeks to enjoin the collection of a tax challenged under U. S. Const., 14th Amend., as based upon discriminating overvaluation, where the state law affords ample opportunity to question the amount and the validity of the assessment, both before administrative tribunals and in the state courts. Keokuk & H. Bridge Co. v. Salm, 258 U. S. 122, 42 Sup. Ct. Rep. 207, 66: 496 15. The averment that a Federal taxing statute is unconstitutional does not take the case out of the provision of U. S. Rev. Stat. § 3224, that no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court. INSOLVENCY. 66: 496 Dissolution of corporation, see Corporations, 5-7. INSTRUCTIONS. Reversible error in instruction respect ing interest on damages, see Ap- INTERIOR DEPARTMENT. INTERNAL REVENUE. I. In general, 1, 2. II. Powers of Congress, 3-7. III. Officers, 8-11. gust 24, 1921, which, in its essence and on its face, is a complete regulation of boards of trade, with a so-called tax of 20 cents a bushel on all contracts for the sale of IV. Subjects of taxation and regulation, grain for future delivery, imposed by way Construing tax measure in favor of tax payer, see Statutes, 14. I. In general. Tax or penalty. Injunction against collection of, see of penalty to coerce boards of trade and Child labor tax. re Remanding suit to court of claims for additional findings, see Appeal and Error, 73. 7. The Child Labor Tax Law of February 24, 1919, imposing a tax of 10 per cent of the net profits of the year upon an employer who knowingly has employed, during any portion of the taxable year, a child within the age limits therein prescribed, is not a valid exercise by Con1. The mere use of the word "tax" ingress of its powers of taxation, under U. an act primarily designed to define and S. Const. art. 1, § 8, but is an unconstitusuppress crime is not enough to show that, tional regulation by the use of the sowithin the true intendment of the term, a called tax as a penalty for the employment tax was laid. When by its very nature the of child labor in the states, which, under imposition is a penalty, it must be so re- U. S. Const., 10th Amend., is exclusively a garded. Lipke v. Lederer, 259 U. S. 557. state function. Child Labor Tax Case 42 Sup Ct. Rep. 549, 66: 1061 (Bailey v. Drexel Furniture Co.), 259 U. 2. The so-called tax imposed by the S. 20, 42 Sup. Ct. Rep. 449, National Prohibition Act of October 28, 1919, § 35, lacks all the ordinary characteristics of a tax, the primary function of which is to provide for the support of the government, and clearly involves the idea of punishment for infraction of the law, the definite function of a penalty. Lipke v. Lederer, 259 U. S. 557, 42 Sup. Ct. Rep. 549, II. Power of Congress. See also infra, 12. 66: 1061 3. Federal taxation of the residents of III. Officers. 66: 817 Acts of, as infringing constitutional right. 8. It was within the power of Con- 9. The Secretary of the Treasury has the District of Columbia for the support of the power to determine the number of the government of the District is not in-customs inspectors to be employed. Norris valid merely because they lack the suffrage v. United States, 257 U. S. 77, 42 Sup. Ct. and have politically no voice in the ex- Rep. 9, 66: 136 penditure of the money raised. Heald v. 10. The power of the Secretary of the District of Columbia, 259 U. S. 114, 42 Treasury to remove a customs inspector is Sup. Ct. Rep. 434, 66: 852 included in the power to appoint, the statDirect taxes. ute not otherwise providing. Norris v. United States, 257 U. S. 77, 42 Sup. Ct. Rep. 9, 4. The estate tax imposed by the Act of September 8, 1916, like the earlier legacy or succession tax, is a duty or excise, and not a direct tax. Greiner v. Lewellyn, 258 U. S. 384, 42 Sup. Ct. Rep. 324, 66: 136 11. Despite Federal statutes recognizing suits against collectors of internal revenue for duties mistakenly collected. a suit may not be brought and maintained against such officer for the recovery of the amount of a Federal internal revenue tax unlawfully assessed and collected, but in the collection and disbursement of which such collector had no agency, the entire transaction of such assessment, collection, and disbursement having occurred during the incumbency of such office of a predecessor in office of such collector. Smietanka v. Indiana Steel Co. 257 U. S. 1, 42 67:99 6. The Future Trading Act of Au- Sup. Ct. Rep. 1, IV. Subjects of taxation and regulation. plus of accumulated profits, is not a proper a. Income. 12. The preferential right of existing stockholders in a corporation to subscribe at a specified price for an equivalent number of shares of a new issue of capital stock authorized by state statutes and certain resolutions of the stockholders, in and of itself constituted no gain, profit, or income taxable under U. S. Const., 16th Amendment. Miles v. Safe Deposit & T. Co. 259 U. S. 247, 42 Sup. Ct. Rep. 483, 66: 923 test for determining whether individual in- 17. The question whether a dividend made out of the profits of a corporation constitutes taxable income of the stockholders is not affected by antecedent transfers of the stock from hand to hand. United States v. Phellis, 257 U. S. 156, 42 Sup. Ct. Rep. 63, 66: 180 18. The market value of the stock of a new corporation which a previously exist13. Only so much of the proceeds of a ing corporation distributed pro rata among sale of the preferential right of existing its stockholders as a dividend against acstockholders in a corporation to subscribe cumulated surplus, pursuant to a reorganiat a specified price for an equivalent num- zation and financial adjustment plan by ber of shares of a new issue of capital which the old corporation was to transfer stock, authorized by state statutes and cer- all its assets and business to a corporatain resolutions of the stockholders, as rep- tion to be organized in another state, with resented a realized profit over and above a much larger capital stock, and was to rethe cost to the stockholders of what was ceive in return a part of the capital stock sold, is taxable as income, under the Act of the new corporation, there being no pres of February 24, 1919, and such profit is ent change of personnel, either in officers properly computed by adding to the fair or stockholders, or change in the propor market value of each share of the old stock tionate interest of any individual stockat the date of acquisition (in this case its holder, must be regarded as part of the value when turned over to the guardian of stockholder's income, taxable as such under the minor son of a deceased stockholder) the Act of October 3, 1913, although a the sum required to be paid to the cor- comparison of the market value of the poration for each share of the new stock, shares in the old corporation immediately and by treating the total as the cost of before, with the aggregate market value of each two shares, one of which was to pass those shares, plus the dividend shares, imto the purchaser of the right, the acquisi- mediately after, the dividend, showed that tion and sale both being within the same | the stockholders acquired no increase in agtaxing year. Miles v. Safe Deposit & T. gregate wealth through the mere effect of Co. 259 U. S. 247, 42 Sup. Ct. Rep. 483, the reorganization and consequent diviUnited States v. Phellis, 257 U. S. 66: 180 66: 923 dend. 14. Income held and accumulated by a 156, 42 Sup. Ct. Rep. 63, trustee for the benefit of unborn and un- 19. The distribution made under a reor. ascertained beneficiaries was not made tax-ganization and financial adjustment plan able by any language in the Income Tax by which corporations were subdivided Law of October 3, 1913, and such omission without immediate effect upon the personcannot be supplied by judicial construction. Smietanka v. First Trust & Sav. Bank, 257 U. S. 602, 42 Sup. Ct. Rep. 223, 66: 391 Dividends generally; accumulated surplus. 15. The declaration in the Act of October 3, 1913, that income shall include, among other things, gains derived "from interest, rent, dividends, securities, or the transaction of any lawful business carried on for gain or profit, or gains or profits and income derived from any source whatever," does not mean that everything in the form of a dividend must be treated as income, but that income derived in the way of div idends shall be taxed. United States v. Phellis, 257 U. S. 156, 42 Sup. Ct. Rep. 63, 66: 180 16. A comparison of aggregate values immediately before, with those immediately after, the distribution among the stockholders of a corporation, as a dividend, of the stock of a new corporation to which the former corporation, under a reorganization and financial adjustment plan, had transferred all its assets, including a sur nel of the stockholders, or much difference b. Bankers' special tax. Sufficiency of evidence in suit to recover back tax, see Evidence, 11. 20. A banking corporation may escape paid. Right to sue as adequate remedy at law, see Equity, 1. or reduce the special tax imposed by the V. Refunding taxes and recovery of taxes War Revenue Act of June 13, 1898, upon capital used or employed in banking, by showing that it is engaged in several lines of business, and that in fact none, or only a part, of its capital, was used specifically in its banking operations. Fidelity & D. Co. v. United States, 259 U. S. 296, 42 Sup. Ct. Rep. 511, 66: 948 Sufficiency of evidence in suit to recover Bringing in successor to collector of inter- 21. The undivided profits, of a banking corporation, used or employed in banking, were taxable under the provisions of the War Revenue Act of June 13, 1898, § 2, imposing a special tax upon any person, firm, or corporation engaged in banking, 24. The test to be applied in determeasured by the amount of capital actually mining whether legacies were, on July 1, used or employed in banking, and declar- 1902, still contingent in the sense of the ing that, in estimating capital, surplus provision of the Act of June 27, 1902, § 3, shall be included, and that the annual tax for the refunding of succession taxes colshall, in all cases, be computed on the basis lected on contingent beneficial interests not of the capital and surplus for the preced- vested in possession or enjoyment prior to ing fiscal year. Fidelity, Title & T. Co. v. that date, is a practical, not a technical United States, 259 U. S. 304, 42 Sup. Ct.one. The beneficial interests were continRep. 514, gent unless the legacies were then in actual possession or enjoyment, or were entitled immediate possession or enjoyment. Kahn v. United States, 257 U. S. 244, 42 Sup. Ct. Rep. 85, 66: 215 c. Legacies and successions. See also infra, 24-26. 66: 953 22. Transfers or trusts made or created prior to the enactment of the Act of September 8, 1916, are not comprehended by the provisions of that act imposing a tax upon the transfer of the net estate of every decedent dying after the passage of that act, to the extent of any interest therein of which the decedent has at any time made a transfer, or with respect to which he has created a trust in contemplation of, or intended to take effect in possession or enjoyment at, or after, his death, except in case of a bona fide sale for a fair consideration, and creating a presumption that transfers without consideration, made within two years prior to death, are to be deemed made in contemplation of death. Shwab v. Doyle, 258 U. S. 529, 42 Sup. Ct. Rep. 391, 66: 747 Union Trust Co. v. Wardell, 258 U. S. 537, 42 Sup. Ct. Rep. 393, 66: 753 Levy v. Wardell, 258 U. S. 542, 42 Sup. Ct. Rep. 395, 66: 758 23. A joint tenancy created prior to the Act of September 8, 1916, was not comprehended by the provisions of that act, imposing a tax upon the transfer of the net estate of every decedent dying after the passage of that act, to the extent of any interest therein of which the decedent has at any time made a transfer, or with respect to which he has created a trust in contemplation of, or intended to take effect in possession or enjoyment at, or after, his death, except in case of a bona fide sale for a fair consideration, and creating a presumption that transfers without consideration, made within two years prior to death, are to be deemed made in contemplation of death. Knox v. McElligott, 258 U. S. 546, 42 Sup. Ct. Rep. 396, 66: 760 to 25. Trust fund legacies, to the possession of which the trustees were entitled under the local law on July 1, 1902, and to the enjoyment of the income of which the beneficiaries were entitled on that date, with the exception of a small amount involved in controversies over taxes, were vested in possession and enjoyment, within the meaning of the provision of the Act of June 27, 1902, for the refunding of succession taxes collected on contingent beneficial interests not vested prior to July 1, 1902, although none of the funds directed to be paid to the trustees had been paid over to them, or set apart or established by that date. Kahn v. United States, 257 U. S. 244, 42 Sup. Ct. Rep. 85, 66: 215 26. A bequest to trustees of a fund, the net income of which is to be paid over periodically during life, is, at least after the payments have commenced, a life estate, not a contingent beneficial interest, and the mere failure of executors to establish the trust fund will not prevent the vesting of the legacy, in the sense of the provision of the Act of June 27, 1902, § 3, for the refunding of succession taxes collected on contingent beneficial interests not vested prior to July 1, 1902, if, under the local law, the time for payment has come. the right thereto is uncontroverted, and it is clear that the money retained will not be needed to satisfy outstanding claims. Kahn v United States, 257 U. S. 244, 42 Sup. Ct. Rep. 85, 66: 215 INTERNATIONAL LAW. INTERSTATE COMMERCE. |