Hellman ". The United States. removed from his office, and it is not claimed that the sureties can be held by what was done afterwards. Judgment affirmed. Stewart L. Woodford, (District Attorney,) for the plaint iffs in error. Peter Cantine, for the defendants in error. ANGELO HELLMAN, PLAINTIFF IN ERROR vs. THE UNITED STATES, DEFENDANTS IN ERROR. Under the provisions of §§ 124 and 125 of the Act of June 30th, 1864. (13 U. 8. Stat. at Large, 285, 286, 287,) as amended by § 9 of the Act of July 13th, 1866, (14 Id., 140,) in relation to a tax on legacies and distributive shares of personal property, the tax on a pecuniary legacy accrues on the death of the testator, though not payable until the legatee becomes entitled to the benefit of the legacy. Therefore, where a testator died in 1869, leaving a will making pecuniary legacies, arising out of personal property, but the legatees did not become entitled to the benefit of the legacies until 1875, it was held, that the executor became liable at the latter date to pay the tax on the legacies, although the tax on legacies was repealed by § 3 of the Act of July 14th, 1870, (16 U. S. Stat. at Large, 256,) from and after October 1st, 1870, the liability of such executor being preserved by § 17 of said Act of 1870. (Before WAITE, Ch. J., Southern District of New York, July 1st, 1878.) THIS was a writ of error to the District Court. The United States brought a suit at law in that Court against Angelo Hellman, to recover $860, with interest from February, 1875. The complaint alleged, that, in September, 1869, one Bamberger died, leaving a will, whereby, after making specific legacies, he bequeathed the residue of his property to his executors in trust, and directed that his wife should have the income thereof for her life, and that after her death it should be invested until his youngest child, him surviving, Hellman v. The United States. should become of age, at which time his son Abraham was to have $10,000 of it, and the residue was to be divided among all his children, including Abraham, share and share alike; that his wife and his son Levi, and his son the defendant, were appointed by the will the executors and guardians of the infant children; that the defendant qualified and acted as executor, and had in his charge and trust, as such executor, the rest and remainder of the testator's personal property, for said purposes; that said personal property exceeded the sum of $1,000 in actual value; that the said wife died in March, 1871; that the testator's youngest child, him surviving, became of age in February, 1875; that the testator's children became entitled to the possession and enjoyment of the rest and remainder of said estate in February, 1875; that thereupon a tax or duty, at the rate of $1 for each and every $100 of the clear value of the rest and remainder of said personal property, became due and payable to the United States from the defendant; that the clear value of such rest and remainder, in February, 1875, was $80,000; and that the said tax or duty thereon was $860. The defendant demurred generally to the complaint. The District Court overruled the demurrer and gave judgment for the plaintiffs. The decision of that Court, (BLATCHFORD, J.,) was as follows: "I do not think the decision in Clapp v. Mason, (4 Otto, 589,) covers this case. The facts in this case are like those in Mason v. Sargent, (23 Int. Rev. Record, 155,) and I concur with Judge Shepley in the views announced by him in his decision in that case. The defendant, being executor, is made liable or "subject" to the tax, and was bound to pay it before paying over the legacies, after the legatees became entitled, in February, 1875, to the possession and enjoyment of the legacies. Judgment is ordered for the plaintiffs on the demurrer, with leave to the defendant to answer in 20 days, on payment of costs." Siegmund Spingarn, for the plaintiff in error. Stewart L. Woodford, (District Attorney,) for the defend ants in error. Thacher v. The United States. WAITE, Ch. J. The judgment in this case is affirmed. The distinction between taxes on legacies and taxes on successions is so clearly stated by Judge Shepley, of the First Circuit, in Mason v. Sargent, (23 Int. Rev. Rec., 155,) that it is only necessary to refer to that case as authority for this decision. In cases of succession, the right to the tax does not accrue until the successor becomes entitled to the possession or enjoyment of the estate to which he succeeds, but in cases of pecuniary legacies it accrues upon the death of the testator, though not payable until the legatee becomes entitled to the benefit of his legacy. Clapp v. Mason, (94 U. S., 589,) was a case of a tax upon a succession. THOMAS THACHER, CLAIMANT OF 102 PACKAGES OF DISTILLED SPIRITS, PLAINTIFF IN ERROR vs. THE UNITED STATES, DEFENDANTS IN ERROR. Distilled spirits, unrectified, were seized as forfeited under § 3,451 of the Revised Statutes, which provides, that every person who falsely or fraudulently executes or signs any document required by the provisions of the internal revenue laws, or by any regulation made in pursuance thereof, or who procures the same to be falsely or fraudulently executed, or who advises, aids in, or connives at such execution thereof, shall be imprisoned, &c., and the property to which such false or fraudulent instrument relates shall be forfeited. Under §§ 321 and 3,249, the Commissioner of Internal Revenue had made a regulation that a rectifier, before emptying spirits to be rectified, should give a notice, Form 122, to the collector, and that thereupon a gauger should regauge such spirits and make a report, Form 59, from which the rectifier should make an entry in Form 122, and the gauger should certify on the latter Form as to his making the gauge and seeing the packages emptied and the stamps destroyed, and as to the correctness of such entry by the rectifier. The alleged cause of forfeiture was, that the owner of the spirits, with the purpose of obtaining stamps for rectified spirits, to be placed on other spirits on which the tax had not been paid, made false returns as to the first named spirits, on Form 122, and, by bribing a gauger, induced him to make a false Thacher v. The United States. certificate on Form 122, and a false return on Form 59, so that the packages were not emptied, nor the stamps destroyed, being the packages seized: Held, (1.) That the regulation was a valid and reasonable one; (2.) That it applied to unrectified spirits; (3.) That the false documents related to the spirits in respect to which the certificate and report were made. (Before WAITE, Ch. J., Southern District of New York, July 1st, 1878.) WAITE, Ch. J. Section 3,451 of the Revised Statutes is as follows: "Every person who simulates, or falsely or fraudulently executes or signs, any bond, permit, entry or other document required by the provisions of the internal revenue laws, or by any regulation made in pursuance thereof, or who procures the same to be falsely or fraudulently executed, or who advises, aids in, or connives at such execution thereof, shall be imprisoned for a term not less than one year nor more than five years; and the property to which such false or fraudulent instrument relates shall be forfeited." The Commissioner of Internal Revenue is required, (§ 321,) under the direction of the Secretary of the Treasury, to "prepare and distribute all the instructions, regulations, directions, forms, blanks, stamps, and other matters pertaining to the assessment and collection of internal revenue;" and, by section 3,249, the Commissioner is specially authorized to "prescribe rules and regulations to secure a uniform and correct system of inspection, weighing, marking and gauging of" distilled "spirits." Pursuant to this authority, the Commissioner, with the approval of the Secretary, adopted as one of the rules and regulations of the Department, that, whenever any rectifier proposed to empty any spirits for the purpose of rectifying, &c., he should, in a specific manner and in the proper place, enter upon a blank notice, known as Form 122, the number and description of the casks or packages he would empty, and forward the notice in duplicate to the collector of the district. Upon the receipt of this notice, the collector was required to deliver it to a gauger, with instructions to make an actual regauge of the spirits specified therein, and make a report thereof on what was known and Thacher v. The United States. designated as Form 59. From a copy of this report to be furnished by the gauger, the rectifier was required to fill up the column in Form 122, headed, "Contents, as shown by gauger," and the gauger to certify at the foot of the form, that, on the day of 18 he made an actual gauge of the spirits described in the Form, that he saw the packages emptied and stamps destroyed, and that the column, "Contents, as shown by gauger," was correctly filled up. The gauger was also specially required to witness the dumping of the entire quantity of spirits that the rectifier gave notice, in the Form 122, he would empty, and any neglect in this regard was a breach of duty. This was part of the system of "inspection, weighing, marking and gauging," adopted for the se curity of the collection of taxes upon distilled spirits, and these certificates, returns and notices were essential to an issue of stamps for rectified spirits. The seizure in this case was for a violation of section 3,451, and the information charges that the spirits seized were, prior to their seizure, owned by one Rensberg, who was duly authorized to carry on the business of a rectifier upon premises in the first internal revenue collection district of the State of Missouri, and that, while the foregoing regulations were in force, and while his ownership of the spirits continued, he, "with the purpose and intention of obtaining the issue to him of stamps for rectified spirits, to be placed upon certain other spirits upon which the tax had not been paid, and for the purpose of evading said tax, and enabling him to dispose of the latter mentioned spirits without compliance with any requirement of law respecting them, falsely made returns to the collector of the collection district aforesaid, upon Form 122 aforesaid, that the spirits first above mentioned were emptied for rectification upon his premises aforesaid, and the stamps, marks and brands thereupon effaced and obliterated; and that said Rensberg, then and there, by means of a bribe for that purpose, paid by said Rensberg to a certain United States ganger, who was then and there charged with the duty of inspecting the emptying of packages of spirits for rectification VOL. XV.-2 |