Supreme Court of United States.
Mr. Mark Norris for Blodgett.
Mr. Alfred A. Wheat, Special Assistant to the Attorney General, with whom Solicitor General Mitchell and Mr. Robert P. Reeder, Special Assistant to the Attorney General, were on the brief, for Holden, Collector.
*147 The CHIEF JUSTICE, MR. JUSTICE VAN DEVANTER, and MR. JUSTICE BUTLER concur in this opinion.
Although research has shown and practice has established the futility of the charge that it was a usurpation when this Court undertook to declare an Act of Congress unconstitutional, I suppose that we all agree that to do *148 so is the gravest and most delicate duty that this Court is called on to perform. Upon this among other considerations the rule is settled that as between two possible interpretations of a statute, by one of which it would be unconstitutional and by the other valid, our plain duty is to adopt that which will save the Act. Even to avoid a serious doubt the rule is the same. United States v. Delaware & Hudson Co., 213 U.S. 366, 407, 408. United States v. Standard Brewery, 251 U.S. 210, 220. Texas v. Eastern Texas R.R. Co., 258 U.S. 204, 217. Bratton v. Chandler, 260 U.S. 110, 114. Panama R.R. Co. v. Johnson, 264 U.S. 375, 390. Words have been strained more than they need to be strained here in order to avoid that doubt. United States v. Jin Fuey Moy, 241 U.S. 394, 401, 402. In a different sphere but embodying the same general attitude as to construction, see United States v. Goelet, 232 U.S. 293, 297.
By § 319 of the Revenue Act of 1924, (June 2, 1924, c. 234; 43 Stat. 253, 313) a tax is laid on gifts `For the calendar year 1924 and each calendar year thereafter.' In the Code the words are `during any calendar year.' Title 26, § 1131. The latter phrase brings out what I should think was obvious without its aid, that the purpose is a general one to indicate the periods to be regarded, as distinguished from fiscal years, not necessarily to run counter to the usual understanding that statutes direct themselves to future not to past transactions. Reynolds v. McArthur, 2 Pet. 417, 434. Shwab v. Doyle, 258 U.S. 529, 534. Lewellyn v. Frick, 268 U.S. 238, 251, 252. If when the statute was passed it had been well recognized that Congress had no power to tax past gifts I think that we should have no trouble in reading the Act as meant to operate only from its date and only to tax gifts thereafter made. If I am right, we should read it in that way now. By § 324 (a) of the Revenue Act of 1926, (February 26, 1926, c. 27; 44 Stat. 9, 86,) § 319 of the Act of 1924 is amended *149 and the rates of taxation are reduced, and then by (b) it is provided that `subdivision (a) of this section shall take effect as of June 2, 1924,' the date when the earlier act was passed. A reasonable interpretation is that the reduction and the tax operate alike on gifts after that date. Taking both statutes into account, and the principles of construction to which I have referred, I think it tolerably plain that the Act should be read as referring only to transactions taking place after it was passed, when to disregard the rule `would be to impose an unexpected liability that if known might have induced those concerned to avoid it and to use their money in other ways.' Lewellyn v. Frick, 268 U.S. 232, 251, 252.
On the general question whether there is power to tax gifts I express no opinion now. I agree with the result that the plaintiff is entitled to recover the taxes paid in respect of gifts made before the statute went into effect.
MR. JUSTICE BRANDEIS, MR. JUSTICE SANFORD and MR. JUSTICE STONE concur in this opinion.
[1] The first of the two opinions is here published as modified by a memorandum decision of Feb. 20, 1928, to be found in the next volume.
