words "to perform any and all other acts not hereinbefore specified" were not sufficient to require a stamp upon what is known as a judgment note, which contained the not unfamiliar provision authorizing any attorney to appear for the maker and confess judgment in case the note should not be paid. Judge Lacombe said that such an instrument did not 'seem to be a power of attorney within the meaning of the section relied on. It is what is known as a 'warrant of attorney,' and is in fact a retainer, by virtue of which an attorney at law is authorized to appear in court on behalf of a client and take certain steps as attorney in litigations to which the client is a party."

That case came before the Circuit Court of Appeals of the Second Circuit (which at time consisted of Judge Wallace and Judge Townsend), and is reported in 113 Fed., 892. On appeal, Judge Townsend, who wrote the opinion of the court, discussed the clauses of the war revenue act of 1898 in question, and said:

*

The legislative intent, as disclosed by the special provisions of said schedule, appears to have been to tax those instruments by which one individual authorizes another to act on his behalf, either at meetings of corporations or in the transaction of certain classes of business relating to real estate or corporate securities, * The general clause "or to perform any or all other acts not hereinbefore specified," should, therefore, be interpreted, under the doctrine of noscitur a sociis, to refer to other classes of business of the same general character as those specifically enumerated. All of the acts within the scope of this classification are such as may be performed by any layman as an attorney in fact. The acts authorized under the instrument in question are confined to the exercise by an attorney at law of the court of record in the proceedings taken in such court by virtue of his retainer. Such an instrument has always been recognized as a warrant of attorney or evidence of authority to such attorney to represent the party as such officer of court in such a proceeding. The distinction between powers of attorney and warrants of attorney is clearly set forth in textbooks and the decisions of the courts. A power of attorney is an instrument by which the authority of an attorney in fact or private attorney is set forth. By attorney in fact is meant one who is given authority by his principal to do a particular act not of a legal character. A warrant of attorney is an instrument authorizing an attorney at law to appear in an action on behalf of the maker or to confess judgment against him. An attorney at law is employed to appear for parties to actions or other judicial proceedings, and is an officer of the court. * It would seem that Congress could not have intended by such general words to impose a tax upon this class of official acts done in the court of judicial proceedings.

* *

I do not think the reasoning of Judge Townsend or Judge Lacombe applies to the case of letters of attorney under the general forms in bankruptcy. Much of the authority conferred by these letters of attorney is very similar to powers of attorney to vote at stockholders' meetings and to collect dividends or interest, which are specifically set forth as taxable under Schedule A of the act.

For the foregoing reasons I am of the opinion that the referee was correct in his decision as to the letter of attorney and that the 25-cent internal-revenue stamp should have been affixed thereto.

The question next arises as to whether a certificate by the referee that the order approving the trustee's bond is a true copy of the one on file in his office must bear an internal-revenue stamp. This certificate, if taxable, is rendered so by the following provision of Schedule A of the war tax law of 1914, which is identical with that of the act of 1898:

Certificate of any description required by law not otherwise specified in this act, 10 cents.

The clause of the act of 1914 relating to stamp taxes upon certificates, which is in Schedule A under the head of certificates, is as follows:

Certificate of profits, or any certificate of memorandum showing an interest in the property or accumulations of any association, company, or corporation, and on all transfers thereof, on each $100 of face value or fraction thereof, 2 cents.

Certificate: Any certificate of damage, or otherwise, and all other certificates or documents issued by any port warden, marine surveyor, or other person acting as such, 25 cents.

Certificate of any description required by law not otherwise specified in this act, 10 cents.

Under the act of 1898, which contained identical provisions with those of the act of 1914, the Attorney General, in an opinion to the Secretary of State, referred to in No. 20551, Treasury Decisions, advised the department as follows:

The Treasury Department, through the honorable Commissioner of Internal Revenue, has made a ruling which has been approved by this department that papers and instruments executed, made, or issued by officers of the Government of the United States in the discharge of official functions pertaining to the operation of the governmental machinery and for the use or benefit of the United States, are exempt from The same principle would extend to instruments and papers of whatever character (otherwise subject to taxes) executed, made, or issued by officers of the United States for governmental purposes.

taxes.

*

*

*

*

*

Where, however, certificates or other instruments are issued by any department or officer of the Government at the request of private persons solely for private use, a stamp should be affixed. And * such stamps should be furnished by the person applying for the certificate or other instrument for whose use or benefit the same is issued and should be affixed before the document is delivered.

By similar reasoning, the Commissioner of Internal Revenue, in T. D. 20387, held that an original certificate of inspection from local inspectors of steam vessels, which remains on file in the collector's office, is exempt from tax on the ground that it is an instrument issued by direction of law through governmental instrumentality for its own use and purposes and that the two copies of this certificate, which the law requires to be exposed under glass where passengers and other persons can see them, certified by the collector of customs, are also exempt for the same reason.

It was held by the Circuit Court of Appeals for the Eighth Circuit, in the case of Stereman v. Smith (100 Fed., at p. 602), that a notary public, when engaged in taking depositions to be used in evidence before a judicial tribunal, was a judicial officer, and his certificate could not be taxed. Judge Thayer, in his opinion, referred to the proviso in the act of 1898, which is incorporated in the act of 1914, as follows: Provided, that it is the intent hereby to exempt from the stamp tax imposed by this act such State, county, town, or other municipal corporations in the exercise only of functions strictly belonging to them in their ordinary governmental taxing or municipal capacity.

And said that it could hardly be supposed where there was explicit exemption from stamp taxes of all documents issued by a State or other subdivision thereof in the exercise of its governmental functions that Congress could have intended to levy taxes upon instruments used by the United States in the exercise of its governmental functions, and expressed the opinion

That its purpose was to impose stamp taxes on those instruments only which have their origin in the private transaction of individuals and corporations, or to such instruments and writings as are executed mainly for their benefit rather than for the benefit of the public.

In the case of Sackett v. McCaffert (131 Fed., 219) the Circuit Court of Appeals for the Ninth Circuit held that a stamp was required under the law of 1898 upon a certificate of acknowledgment by a notary attached to a declaration of homestead. It was there contended that the notary in taking the acknowledgment and indorsing his certificate thereon was exercising a function of the State government of Montana, where the statute providing for the selection of a homestead had been enacted. The court, however, held that the notary in taking the acknowledgment exercised no governmental function, but was authorized to take the acknowledgment and took it for a private purpose, and that the certificate should have been stamped before being admitted in evidence.

While it may be in some cases difficult to draw the line as to what is and is not a governmental function, I think that where a private individual applies to a judge, referee in bankruptcy, or clerk for a certificate that a certain instrument is a copy and

it does not appear that it is to be used for any governmental purpose it is taxable under the provisions of the act.

A certificate which is required to enable some officer of the court to exercise his functions or to do some act connected with the administration of the Government is under the foregoing reasoning exempt. This would, I think, apply to certified copies of papers necessarily required by receivers, but I think there are comparatively few cases to which the exemption does apply, and the certificate in question is not one of them.

(T. D. 2146.)

Corporation tax-Act of August 5, 1909-Leased roads.

1. DOING BUSINESS.

A lessor corporation which exercises its corporate powers and functions by adding to its properties, disposing of its investments, making others in cooperation with or at request of lessee with a view of enhancing the value of the leased estate, is outside of the rule in McCoach v. Minehill Railway Co. (228 U. S., 295), and is doing business.

2. ACQUIRING PROPERTY FOR BENEFIT OF LESSEE.

The lessor corporation which extends its business for the benefit of the lessee can not say that it is not doing business because it performs the acts done for benefit of lessee as well as of itself.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., February 9, 1915.

The appended decision of the United States District Court, District of New Jersey, in the case of the Public Service Railway Co. and Camden Horse Railroad Co. v. Moffett, collector, is published for the information of internal-revenue officers and others concerned.

DAVID A. GATES,

Acting Commissioner of Internal Revenue.

UNITED STATES DISTRICT COURT, DISTRICT OF NEW JERSEY. No. 485.

Public Service Railway Co. and Camden Horse Railroad Co., plaintiffs, v. Isaac Moffett, defendant.

HUNT, Circuit Judge: This is another of the cases associated with 481 (Public Service Railway Co. and Rapid Transit Street Railway Co., plaintiffs, v. Herold, defendant). It involves taxes paid for 1909, 1910, 1911, and 1912. Following the ruling in case 481, the defendant's plea of the statute of limitations with respect to the taxes for 1909 and 1910 must be sustained.

Whether or not the Camden Horse Railroad Co. was doing business during the years 1911 and 1912 is necessarily involved. It appears that the property of the Camden Horse Railroad Co. and its franchises were leased to the Camden & Suburban Railway Co., and that this last named corporation, by the lease of its property, included its leasehold estate in the Camden Horse Railroad Co., this last referred to lease running to the South Jersey Gas, Electric & Traction Co., which assigned to another corpo

ration as lessee, which thereafter assigned to Public Service Railway Co., one of the plaintiffs herein. The lease runs for 999 years and includes all of the property of the Camden Horse Railroad Co., except its franchise to be a corporation. The active physical operation of the Camden Horse Railroad Co. is carried on by the Public Service Railway Co.

The property of the Camden Horse Railroad Co. consists of street railway tracks, overhead construction, wires, car barns, and other things necessary in and about the carrying on of an electric car line. Under the terms of the lease made by the Camden Horse Railroad Co. there was an agreement that such company would exercise its corporate powers and functions at any time and would apply for additional franchises es might be necessary whenever the lessee should desire an extension of the railway demised or any branches or double tracking thereof or the extension of tracks. It appears that the Camden Horse Railroad Co. did, in 1912, make a petition for the granting of an ordinance by the city council of Camden for the purpose of building a connecting railroad between certain streets in the city of Camden. Presumably the right to make such connection was valuable and important, or it would not have been applied for. Consent of certain property owners was necessary to be obtained and was secured, and the Camden Horse Railroad Co. accepted the ordinance in October, 1912. Again, at a meeting of the corporation on March 26, 1909, the Camden Horse Railroad Co. directed its officers to make and have issued to pay off and discharge certain maturing bonds in the amount of $250,000, and to procure the cancellation of certain bonds and a mortgage. This was done by issuing the bonds of the Camden Horse Railroad Co., the object being to replace $250,000 of bonds which matured under another mortgage. Furthermore, the corporation sold certain real property in 1909, the sale being referred to in the meeting of the directors of December 14, 1909, as having been had "in the usual course of business." It appears that such sales of reality were made, as were the acceptances of ordinances filed, at the requests of the lessee corporation. Inspection of the leased property was also had by a committee acting in behalf of the lessor.

Clearly, part of these activities by the lessor went beyond such as were reasonably necessary for the protection and preservation of the property included in the lease, as existing at the time of the execution thereof, and further than was requisite only to enable the lessor to live up to the covenants of the lease with respect to such then existing property and yet refrain from engaging in business. Buying and selling pieces of real estate, applying for and obtaining valuable franchise rights, and so substantially extending routes meant changes in the quantity and value of the property owned and in existence when the lease was made. They represent the exercise of vital, active, corporate forces by the lessor in effectually, at the instance of the lessee, adding to or changing its properties which had been leased. Thus the attitude of the owner became not that of an investor who leases all its property and does nothing except to preserve the property leased, guard its titles, collect its rents, and distribute them, but rather that of one who, alive to business opportunities, adds to its principal properties, exerts itself to dispose of some investments, to make others, and in cooperation with or at the request of the lessee, does all with a view to enhancing the value of the leased estate. The case is, therefore, outside of the rule in McCoach v. Minehill Railway Co. (228 U. S., 295), in that such a lessor is doing business. A lessor corporation which transfers its business as it exists to-day, yet in doing so preserves a right to extend such business for the benefit of the lessee, if the lessee requests it, and which thereafter exerts such reserved power in a substantial way so as to acquire additional property, ought not to say that it is not doing business, because it performs the acts it does for the benefit of its lessee as well of itself.

Defendant is entitled to judgment.

(T. D. 2147.)

Corporation tax-Act of August 5, 1909-Leased roads.

ACQUISITION BY LESSOR OF ADDITIONAL FRANCHISE RIGHTS.

A lessor corporation which affirmatively exerts its power for the acquisition of additional franchise rights is carrying on business.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., February 9, 1915.

The appended decision of the United States District Court, District of New Jersey, in the case of the Public Service Railway Co. and New Jersey & Hudson River Railway & Ferry Co. v. Herold, collector, is published for the information of internal-revenue officers and others concerned.

DAVID A. GATES,

Acting Commissioner of Internal Revenue.

UNITED STATES DISTRICT COURT, DISTRICT OF NEW JERSEY. No. 497. Public Service Railway Co. and New Jersey & Hudson River Railway & Ferry Co., plaintiffs, v. Herman C. H. Herold, defendant.

HUNT, Circuit Judge: Action to recover an amount paid as excise tax for 1912. Payment was made November 28, 1913. Before payment application for abatement was made, and after payment claim for refund.

The question is whether the lessor was doing business during the year 1912. Stat., c. 6.)

(36

By a lease dated May 1, 1911, the New Jersey & Hudson River Railway & Ferry Co. leased all of its property and franchises, except its franchise to be a corporation, to Public Service Railway Co. for 900 years from that date. The lease contained covenants very similar with respect to the obligations of lessor and lessee to those included in the lease more particularly referred to in the case of Public Service Railway Co. and Bergen Turnpike Co. v. Herold (No. 496). It appears, however, from the testimony adduced on the trial of this case that the lessor corporation during the year 1912 exerted its corporate powers not only with respect to certain certificates of stock in companies which were merged into and formed other companies, but joined in the acceptance of a franchise ordinance that was passed by the municipal authorities of Edgewater, and, under the seal of the corporation, formally accepted such ordinance. The corporation also authorized the renewals of several leases for certain properties and signed the leases. It appears that the renewals of the leases referred to were bargained for by the Public Service Railway Co. and that the income from the leases is collected by the Public Service Railway Co. If there were nothing in this case except the renewals of leases, which appear to be for preexisting tenancies, and the issuance of bonds, it would be very doubtful whether the New Jersey & Hudson River Railway & Ferry Co. could be said to have done business in 1912; but when we find that it affirmatively exerted its power for the acquisition of additional franchise rights, the conclusion seems irresistible that it was carrying on business and doing acts which were evidently performed with a view of enhancing the value of the property leased and of adding thereto. The case is therefore brought within the scope of the views expressed in the opinion filed in the case of Public Service Railway Co. and Camden Horse Railroad Co. (No. 485).

The defendant is entitled to judgment.