United States v. Cutting

THE Internal Revenue Act of 30th June, 1864, declares by its 99th section as follows:

'All brokers and bankers doing business as brokers, shall be subject to pay the following duties and rates of duty upon the sales of merchandise, produce, gold and silver bullion, foreign exchange, promissory notes, stocks, bonds, or other securities, &c., and shall also be subject to all the provisions, &c., of the act for making returns, assessments, and collection of the duties.'

The ninth paragraph of the 79th section says:

'Brokers shall pay $50 for each license. Every person, firm, or company (except such as hold a license as banker), whose business it is as a broker to NEGOTIATE purchases or sales of stocks, exchange, bullion, coined money, bank notes, promissory notes, or other securities, shall be regarded as a broker, [and shall make oath or affirmation that all their transactions are made for a commission.']

On the 3d March, 1865, Congress passed an act to amend the former act. This last act amends the former, by inserting, after the words other securities (given above in italics) the words 'for themselves or others;' and by striking out from the paragraph that part of it included above in brackets.

In this state of the statutes, as assumed by the court, Cutting & Co., duly licensed as 'brokers,' besides having bought and sold stocks, bonds, and securities for others, had sold on their ''own account other stocks, bonds, and securities, of which they were themselves the owners at the time. On these last'' they refused to pay any duty; and suit being brought by the United States to recover the duty, the question here, on error to the New York Circuit, was, whether they had refused rightfully; in other words, whether one licensed as a 'broker' only, was liable to pay duty on his own stocks sold on his own account. The Circuit Court thought that he was not.

The case, which largely concerned, of course, both the government and great numbers of persons in all our large cities, was thoroughly and ably argued by Mr. Speed, A. G., for the United States, and by Messrs. Allen, Burrill, and Evarts, contra. The matter involving, however, nothing but the construction of a statute of immense length hastily drawn of necessity in many of its provisions, and liable to be amended indefinitely, even the ability which marked the discussion would not compensate the general reader for the space which any presentation of it would require.

Mr. Justice GRIER delivered the opinion of the court.