United States v. Glab

ERROR to the Circuit Court of the United States for the District of Iowa.

This was a civil action, brought Oct. 24, 1874, to recover the penalty imposed for carrying on the business of a brewer without having paid the special tax therefor required by the act of Congress. The case was submitted on an agreed statement of facts. On May 1, 1873, the defendant and his then partner paid their special tax for carrying on that business. The firm was dissolved August 1 of that year, by the defendant's purchasing the interest of his partner in the business; and he carried it on at the same place until the first day of May thereafter, without having paid any other tax therefor. The District Court gave judgment for the defendant, which was affirmed by the Circuit Court. The United States sued out this writ, and assigns for error the rendition of the judgment in favor of the defendant.

Mr. Assistant Attorney-General Smith for the United States.

The special-tax stamp issued to a firm looks to the transaction of the business by that firm only, and, in the absence of any statutory provision authorizing the use by its successor in business of the tax receipt, the stamp does not exempt from a special tax such successor, whether he is a former member of the firm or not; the stamp being a receipt merely, and not a license, as the court below erroneously regarded it.

There is no provision whereby one person can carry on business under a special-tax stamp issued to another, except in case of death or of removal, names in sect. 3241. The express mention of one thing is the exclusion of others. The specific provision for the cases named in that section may be justly considered as an intentional omission to provide for any other. The withdrawal of one partner operates as a dissolution of the original firm; and they who continue the business under a partnership subsequently formed constitute a new and different artificial person, subject to special tax from the time of commencing business. This view of the law is sustained by the last clause of sect. 3233, requiring the registration with the collector of the name, &c., of every person engaged in a business upon which a special tax is imposed, which clause provides that, 'in case of a firm or company, the names of the several persons constituting the same, and their places of residence, shall be registered.' A firm consisting of two persons pays no more special tax than an individual doing the same business; but when it is dissolved, such payment by it exempts neither partner who continues the business from liability to another tax, because each of them is a different 'person' from the firm.

Each separate legal entity must be taxed for a specified business conducted at a designated place.

Mr. Thomas S. Wilson, contra.

MR. JUSTICE CLIFFORD delivered the opinion of the court.