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473

Statement of the Case.

of other States should not have been included at their full value without deducting the transfer tax paid to such States in respect of those stocks; and thirdly, that there was no error in refusing to make any deduction from the clear value on account of the estate tax imposed by the United States.

Petitions for certiorari were presented in these cases, but as the cases are properly here on writs of error, the petitions will be denied.

Judgments reversed on writs of error.

Petitions for certiorari denied.

MILES, FORMER COLLECTOR, v. GRAHAM.

ERROR TO THE DISTRICT COURT OF THE UNITED STATES FOR

THE DISTRICT OF MARYLAND.

No. 53. Argued March 16, 1925.—Decided June 1, 1925.

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1. Under Art. III, § 1, of the Constitution it is the duty of Congress

definitely to declare the amount which a federal judge shall receive from time to time out of the public funds, and the times of payment; and the amount thus specified becomes his compensation which is protected against diminution during his "continuance in

office. Evans v. Gore, 253 U. S. 245. P. 506. 2. So held where the salary of a judge of the Court of Claims was fixed and the appointment was made after enactment of the

Revenue Act of 1918,” which prescribed that the official compensation of all the federal judges should be included in their gross

income in computing their income taxes. 3. This provision of the Revenue Act for taxation of income can not

be treated as reducing the salaries of the judges of the Court of

Claims specifically fixed by later enactment. P. 509. 284 Fed. 878, affirmed.

ERROR to a judgment of the District Court against an internal revenue collector in an action by a judge of the Court of Claims to recover a sum which the defendant had exacted of him as an income tax.

Argument for Defendant in Error.

268 U.S.

The Solicitor General, for plaintiff in error. Mr. Robert P. Reeder, Special Assistant to the Attorney General, was on the brief.

In Evans v. Gore this court did not suggest any doubt of the power of Congress to impose taxes which should apply to salaries of federal judges appointed after the enactment of the taxing statutes. The imposition of the tax in that case constituted a diminution of a salary already existing during the judge's continuance in office, and was therefore unconstitutional. But here, the judge was appointed after the enactment of the statute. It is submitted that, within the meaning of the Constitution, the diminution of the salary did not occur during his term of office.

The proceedings of the Constitutional Convention show that it did not intend that the provision for the protection of judicial salaries should apply to any diminution of the compensation of judges appointed to office after a statute making the diminution had been enacted.

While Article III, § 1, of the Constitution forbids Congress to tax a very small proportion of the persons embraced within the broad terms of $ 213 of the Revenue Act of 1918, that section is not thereby rendered inoperative as to all other persons who come within its provisions. It is clear that Congress might constitutionally have imposed a tax which would have fallen upon the defendant in error after his appointment to office, and that, in enacting the law of 1918, Congress intended to authorize the tax which was collected from him. The law was a permanent taxing statute, dealing not merely with the taxes which might be collected for the year 1918 but with the taxes for years to come.

Messrs. William L. Rawls and William L. Marbury for defendant in error.

At the time of the assessment and collection of the taxes in question there was no validly existing law author

501

Argument for Defendant in Error.

izing their exaction. Section 213 of the Act of February 24, 1919, c. 18, 40 Stat. 1062, was before this Court in the case of Evans v. Gore, 253 U. S. 245, wherein it was held that the tax imposed in pursuance thereof upon the salaryo of a judge of an inferior court of the United States was contrary to the constitutional prohibition against the diminution of his salary during his continuance in office, and was therefore invalid. The intention being clear to tax all judges, the operation of the clause cannot be limited without re-writing it so as to give it a narrower scope than it was the intention of Congress it should have, a task which the courts will not assume. Where the legislative wind is expressed in a single, indivisible provision, obviously incapable of modification without destroying its integrity, no separation or severance is logically or legally possible. Hill v. Wallace, 259 U. S. 44; Child Labor Tax Case, 259 U. S. 20; Butts v. Merchants Transportation Co., 230 U. S. 126.

In Evans v. Gore, supra, the power of Congress to impose a tax upon the compensation received for their seryices by judges was denied. This denial we understand was based both upon the specific prohibition in the Constitution against diminution of the compensation of the judges, and the limitation necessarily implied upon the taxing power from the erection by the Constitution of the three separate and independent departments of the Government. In any event it follows necessarily from the narrowest interpretation that can be put upon that decision, that the taxing power as attempted to be exercised with respect to the compensation of judges by the Act of 1918, even when confined in its application to those judges appointed thereafter, is in violation of the Constitution. It must be admitted, when the comprehensive nature of the taxing power is considered, that whatever amount is exacted by virtue of the Act of 1918 from a federal judge on account of his having received compensation as such from

Argument for Defendant in Error.

268 U.S.

the Government, cannot in any real sense be said to be exacted as a result of the exercise of the taxing power. If it were so taken in the exercise of that power, necessarily the amount exacted could be raised from time to time in the discretion of Congress, because the power once recognized acknowledges no limits. But admittedly the amount exacted from a judge at the time he assumes office cannot be increased thereafter by Congress without violating the express prohibition of the Constitution. This limitation, therefore, is so destructive of the asserted power to tax as to make it impossible with any regard to reality to describe the exaction mentioned as an exercise of that power.

The only question which remains open is whether, by regarding the Act of 1918 as simply a reduction of the salaries of such federal judges as should thereafter come into office, in an amount equal to the tax mentioned in the Act, it can be held to be a reduction of compensation in a manner authorized by the Constitution. Not only does the Constitution prohibit the diminution of the salary of the judges during their continuance in office, but it enjoins three things: first, that there shall be “a compensation” fixed and determined for the judges; second, that the judges shall “ receive ” the compensation so fixed and determined for their services; third, that they shall receive this compensation “at stated times.”

An examination of the Act of 1918 respecting the time of payment of the tax therein attempted to be imposed upon the compensation of judges, and the method by which the tax thereon is to be ascertained, will show indisputably that the collection of a tax upon the compensation of judges thereunder will violate all of these express constitutional injunctions as to the certainty of the amount of compensation, the time of payment and the right to receive it.

The effect of these requirements, therefore, is to make it impossible by taxation or any other indirect means to

501

Opinion of the Court.

deal with the compensation of judges. Any change therein must be made directly, and in accordance with the specified requirements of the Constitution. If the Act of February 24, 1919, be regarded as an attempt by Congress to reduce the compensation of judges it plainly does not meet the requirements of the Constitution.

MR. JUSTICE McREYNOLDS delivered the opinion of the Court.

The defendant in error is a judge of the Court of Claims. He assumed the duties of that office September 1, 1919, when the statute (Act Feb. 25, 1919, c. 29, 40 Stat. 1156, 1157) declared that judges of that court should be entitled to receive "an annual salary of $7,500, payable monthly from the Treasury.” He was required to pay to plaintiff in error, Collector of Internal Revenue, the income taxes for 1919 and 1920 prescribed by "An Act to provide revenue, and for other purposes," approved February 24, 1919, [the Revenue Act of 1918] c. 18, 40 Stat. 1057. In computing these his judicial salary was treated as part of

gross income.""

Sec. 213. That for the purposes of this title (except as otherwise provided in section 233) the term 'gross income'

“ (a) Includes gains, profits, and income derived from salaries, wages, or compensation for personal service (including in the case of the President of the United States, the judges of the Supreme and inferior courts of the United States, and all other officers and employees, whether elected or appointed, of the United States, Alaska, Hawaii, or any political subdivision thereof, or the District of Columbia, the compensation received as such), of whatever kind and in whatever form paid, or from professions, vocations, trades, businesses, commerce, or sales, or dealings in property, whether real or personal, growing out of the ownership or use of or interest in such property;

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