RAFFERTY, COLLECTOR OF INTERNAL REVENUE FOR THE PHILIPPINE ISLANDS,
v.
SMITH, BELL & COMPANY, LIMITED; SAME V. COMPANIA GENERAL DE TABACOS DE FILIPINAS; SAME V. VISAYAN REFINING COMPANY

U.S. | 1921-12-05
Nos. 138, 140, 142
Mr. Justice Clarke concurs in the result.
257 U.S. 226 Supreme Court of the United States (1921) Caution
Also reported at: 66 L. Ed. 208 · 42 S. Ct. 71 · SCDB 1921-028 · 1921 U.S. LEXIS 1334
Cited by 88 cases

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Synopsis

The Collector of Internal Revenue for the Philippine Islands levied export taxes on commodities sold abroad by respondent companies under Philippine law, which the Philippine Supreme Court invalidated as violating the Autonomy Act's prohibition on export duties. The U.S. Supreme Court reversed, holding that a subsequent 1920 Act of Congress retroactively legalized and ratified the tax collections, bringing them within Congress's constitutional power to authorize Philippine taxation even if they would otherwise conflict with prior statutory restrictions.

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Opinion of the Court
Mr. Justice McReynolds

Mr. Justice McReynolds delivered the opinion of the court.

These cases turn upon the same question and were ar-. gued together. In our view they can be disposed of by applying the Act of Congress, .approved. June 5, 1920, c. 253, 41 Stat. 1015, 1025, without passing upon any other point.

Acting under ostensible authority of § 1614, Act 2657, Philippine Legislature, approved February-24, 1916, and effective July 1 thereafter, the Collector of Internal Revenue for the Philippine Islands levied and collected the faxes here challenged upon the value of certain commodities exported from those Islands by respondents between October 1, 1916, and September 30, 1917.

The Supreme Court of the Islands gave judgments for the respondents during March, 1920. Petitions for writs of certiorari filed here in September thereafter and within time prescribed by law, were allowed. Act of Congress, approved September 6, 1916, c. 448, 39 Stat. 726.

Section 1614, Act. 2657. “All merchants not herein specifically exempted shall pay a tax of one per centum on the gross value in money-of the commodities, goods, ‘wares, and merchandise sold, bartered, exchanged, or consigned abroad by them, such tax to be based on the actual . selling price or value at which the things in question are disposed of or consigned, whether consisting of raw material or of manufactured or partially manufactured products, and whether of domestic or foreign origin. . . .”

Section 11, Act of Congress, approved August 29, 1916—Autonomy Act—c. 416, 39 Stat. 545. “ That no export duties shall be levied or collected on exports from the Philippine Islands, but taxes and assessments on property and license fees for franchises, and privileges, and internal taxes, direct or indirect, may be imposed for the purposes of the Philippine government and the provincial and municipal governments thereof,-respectively, as may be provided and defined by acts of the Philippine Legislature, and, where necessary to anticipate taxes and revenues, bonds and other obligations may be issuéd by the Philippine government or any provincial or municipal government therein, as may be provided by law and to protect the public credit. ...”

The Act of Congress, approved June 5,1920, supra, provides: “ The taxes imposed by the Philippine Legislature\ in section 1614 of the Act Numbered 2657, enacted by that body on February 24,1916, are legalized and ratified, and the collection of all such taxes made under or by authority of such Act of the Philippine Legislature is legalized, ratified, and confirmed as fully to all intents and purposes as if the same had by prior Act of Congress been specifically authorized and directed.”

We think the language last quoted was intended to apply to the taxes collected from respondents, here called in question, and that it is sufficiently broad to include them. That the enactment is within the power of Congress necessarily follows from the doctrine announced in United States v. Heinszen & Co., 206 U. S. 370, 386, et seq.

The judgments below were subject to review here and -the mere fact that the causes had'proceeded to such stage gave respondents no higher rights than those possessed by Heinszen & Company, whose action to recover, although instituted prior to the passage of that enactment, was held to have been barred by the Act of June 30, 1906, c. 3912, 34 Stat. 636.

The judgments of the Supreme Court so far as adverse to Rafferty, the Collector, must be reversed and judg merits entered here in his favor but without any allowr anee for .costs either in this court or in the courts below.

Reversed.

Mr. Justice Clarke concurs in the result.

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Citator

Cited By (24 total)

  • Graham and Foster v. Goodcell, 282 U.S. 409 (U.S. 1931)
    …ted States, 229 U. S. 416, 434, 435 (where the application of the Act of Congress with respect to Philippine duties was limited so as to carry out its true intent) and was definitely applied in the case of Rafferty v. Smith, Bell & Company, Limited, 257 U. S. 226, 232. Taxes on the value of exports from the Philippine Islands had been collected under a Philip [*429] pine act while duties on such exports were forbidden by an act of Congress. The taxpayers had recovered judgments for restitution in March, 1920…
  • Swayne & Hoyt, Ltd. v. United States, 300 U.S. 297 (U.S. 1937)
    …force of law to official action unauthorized when taken. Wilson v. Shaw, 204 U. S. 24, 32; United States v. Heinszen & Co., 206 U. S. 370, 382; Hamilton v. Dillin, 21 Wall. 73, 96; Tiaco v. Forbes, 228 U. S. 549, 556; Rafferty v. Smith, Bell & Co., 257 U. S. 226, 232; Charlotte Harbor & Northern Ry. v. Welles, 260 U. S. 8, 11; Hodges v. Snyder, 261 U. S. 600, 603. And we think that Congress, irrespective of any doctrine of ratification, has, by the enactment of the statutes mentioned, in effect confirmed an…
  • Untermyer v. Anderson, 276 U.S. 440 (U.S. 1928)
    …t duties laid and collected without authority, was sustained where thereafter Congress by retroactive legislation confirmed the unlawful action in collecting the duties. United, States v. Heinszen & Co., 206 U. S. 370; Rafferty v. Smith, Bell & Co., 257 U. S. 226. Liability for taxes under retroactive legislation has been “ one of the notorious incidents of social life.” Seattle v. Kelleher, 195 U. S. 351, 360. Recently this Court recognized broadly that “ a tax may be imposed in respect of past benefits.” F…

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