Treat v. White

On September 18, 1899, S. V. White brought an action in the supreme court of the state of New York against Charles H. Treat, United States collector of internal revenue, to recover the sum of $604, alleged to have been unlawfully exacted by such collector. The action was removed to the United States circuit court for the southern district of New York, and a judgment there rendered in favor of the plaintiff. 100 Fed. Rep. 290. The case was taken to the United States court of appeals for the second circuit, which, before any decision, certified a question to this court. The statement of facts and question are as follows:

'From the 1st day of July, 1898, until the date of the commencement of this action the defendant in error, Stephen V. White, was doing business as a stockbroker on the New York stock exchange. In the course of his business While sold 'calls' upon 30,200 shares of stock, the said 'calls' being of the same effect and tenor as Exhibit A, hereinafter set forth, and only varying in the names of the stock, the date, and the price at which they were offered.

'EXHIBIT A.

'New York, May 18th, 1899.

'For value received the bearer may call on me on one day's notice, except last day, when notice is not required. One hundred shares of the common stock of the American Sugar Refining Company at 175 per cent at any time in fifteen days from date. All dividends, for which transfer books close during said time, go with the stock. Expires June 2, 1899, at 3 P. M.

'(Signed) S. V. White.

'These 30,200 shares of stock, for which 'calls' at various times had been in existence, were, as matter of fact, never actually 'called,' and no stamp was put upon the same. That the plaintiff in error, Charles H. Treat, United States collector of internal revenue, demanded of the defendant in error, Stephen V. White, the sum of $604, which sum was the value of 30,200 internal revenue stamps of the denomination of 2 cents each.

'This sum of $604 was paid by the defendant in error, Stephen V. White, under protest. Subsequently the defendant in error demanded the return of the said $604, but the demand was refused.

'Upon the facts set forth the question of law, concerning which this court desires the instruction of the Supreme Court for its proper decision, is:

'Is the above memorandum in writing, designated as Exhibit A, an 'agreement to sell' under the provisions of § 25, Schedule A, act of Congress approved June 13th, 1898, and, as such, taxable?'

The collector acted under the provision of § 25, Schedule A, of the war revenue act of June 13, 1898 (30 Stat. at L. 448, chap. 448), which reads as follows:

'On all sales, or agreements to sell, or memoranda of sales or deliveries or transfers of shares or certificates of stock in any association, company, or corporation, whether made upon or shown by the books of the association, company, or corporation, or by any assignment in blank, or by any delivery, or by any paper or agreement or memorandum or other evidence of transfer or sale, whether entitling the holder in any Columbia, 116 U.S. 404, 29 L. ed. 680, 6 the future payment of money or for the future transfer of any stock, on each hundred dollars of face value or fraction thereof, two cents: Provided, That in case of sale where the evidence of transfer is shown only by the books of the company the stamp shall be placed upon such books; and where the change of ownership is by transfer certificate the stamp shall be placed upon the certificate; and in cases of an agreement to sell, or where the transfer is by delivery of the certificate assigned in blank, there shall be made and delivered by the seller to the buyer a bill or memorandum of such sale, to which the stamp shall be affixed; and every bill or memorandum of sale or agreement to sell before mentioned shall show the date thereof, the name of the seller, the amount of the sale, and the matter or thing to which it refers.'

Assistant Attorney General Beck for plaintiff in error.

Mr. Stephen V. White, P. P.

Mr. Justice Brewer delivered the opinion of the court: