WALLACH v. RUDOLPH ET AL., COMMISSIONERS OF THE DISTRICT OF COLUMBIA.1

ERROR TO THE COURT OF APPEALS OF THE DISTRICT OF

COLUMBIA.

No. 148. Argued April 12, 13, 1910.--Decided May 16, 1910.

Jurisdiction to review, when dependent on amount, is determined by the amount directly and not contingently involved in the decree sought to be reviewed.

A writ of error will not lie to review a judgment of the Court of Appeals of the District of Columbia confirming assessments for less than $5.000, even though plaintiff in error may be contingently liable in case the judgment stands for other assessments exceeding $5,000, in the same proceeding on other lots disposed of pending the proceeding

Writ of error to review 31 App. D. C. 130, dismissed.

THE facts, which involve the validity of certain assessments in the District of Columbia, and the jurisdiction of this court to review judgments of the Court of Appeals of the District of Columbia, are stated in the opinion.

Mr. Samuel Maddox, with whom Mr. H. Prescott Gatley was on the brief, for plaintiff in error.

Mr. James Francis Smith, with whom Mr. Edward H. Thomas was on the brief, for defendants in error.

MR. JUSTICE LURTON delivered the opinion of the

court.

This case was argued with the case of Columbia Heights Realty Company v. The Commissioners of the District of Columbia, and the questions presented are substantially the same. The plaintiffs in error were interested as owners of certain lots or parts of lots involved in the gen

1 Original Docket Title: Rosa Wallach v. Henry B. F. Macfarland and others, Commissioners of the District of Columbia.

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eral proceeding for the condemnation of property for the extension of Eleventh street, and an assessment for benefits was confirmed as to the property owned by them. They were allowed to prosecute a separate writ of error to the Court of Appeals of the District of Columbia from so much of the award as affected them, where the judgment was affirmed, and from that affirmation this writ of error has been sued out. The aggregate of the amounts which affect these plaintiffs in error and in respect of which they have assigned error is only $2,450.

Jurisdictional limit upon writs of error and appeals to or from the Court of Appeals of the District of Columbia is $5,000, exclusive of interest and costs. See act of February 9, 1893, c. 74, 27 Stat. 434, 436.

To sustain the jurisdiction an affidavit has been filed to show that plaintiffs in error are contingently liable for an amount in excess of $5,000, if this judgment is sustained, by reason of like assessments in the same proceeding upon certain other lots or parts of lots, under other subdivision numbers and standing in the name of different owners, being lots disposed of pending the proceeding under an undertaking to remove the lien of any assessment for benefits which might be made herein. It does not follow as matter of law that such assessments against such other lots to other parties will be determined by this review. But, however this may be, "jurisdiction is to be determined by the amount directly involved in the decree appealed from, and not by any contingent demand which may be recovered, or any contingent loss which may be sustained by either one of the parties through the probative effect of the decree, however direct its bearing upon such contingency." Hollander v. Fechheimer, 162 U. S. 326, 328.

The motion to dismiss for want of jurisdiction must be granted, and the writ is accordingly

Dismissed.

BROWN-FORMAN CO. v. COMMONWEALTH OF KENTUCKY.

ERROR TO THE COURT OF APPEALS OF THE STATE OF KENTUCKY.

No. 6. Argued April 11, 12, 1910.—Decided May 16, 1910.

This court accepts the construction by the highest court of the State that the tax imposed by the state statute in this case is not a property tax, but a license tax, imposed on the doing of a business which is subject to the regulating power of the State. The function of taxation is fundamental to the existence of the governmental power of the States, and the restriction against denial of equal protection of the law does not compel an iron rule of equal taxation, prevent variety in methods, or the exercise of a wide discretion in classification.

A classification which is not capricious or arbitrary and rests upon reasonable consideration of difference or policy does not deny equal protection of the law, and so held that the classification in the Kentucky act of 1906, imposing a license tax on persons compounding, rectifying, adulterating, or blending distilled spirits, is not a denial of equal protection of the law because it discriminates in favor of the distillers and rectifiers of straight distilled spirits. A State cannot impose an occupation tax on a business conducted outside of the State, and a license tax imposed on those doing a specified business within the State is not unconstitutional as denying equal protection of the law or violating the commerce clause because not imposed on those who carry on the same business beyond the jurisdiction of the State and who ship goods into the State. While taxation discriminating in favor of residents and domestic products, and against non-residents and foreign products, might be invalid under the commerce clause, that objection does not apply to uniform taxation on a business which does not discriminate in favor of residents or domestic products.

While a state tax on goods which discriminates arbitrarily against the products of that State and in favor of other States denies equal protection of the law, as both classes of goods are within the taxing power of the State, where the license tax for the business of pro

Argument for Plaintiff in Error.

217 U.S.

ducing the product cannot be imposed on the business beyond the State, it is not discriminatory. State v. Hoyt, 71 Vermont, 59, distinguished.

125 Kentucky, 402, affirmed.

THE facts are stated in the opinion.

Mr. Levi Cooke and Mr. A. B. Hayes, with whom Mr. W. M. Hough was on the brief, for plaintiff in error:

The act is unconstitutional under the Fourteenth Amendment; under the commerce clause, and under prohibition against imposts upon exports and imports.

On writ of error to review the judgment of the highest court of a State, as against a right claimed under the Federal Constitution, this court is not bound by the state court's construction of the statute. Scott v. McNeal, 154 U. S. 34; Huntington v. Attrill, 146 U. S. 657, 683; Mobile & O. R. Co. v. Tennessee, 153 U. S. 486; Connolly v Union Sewer Pipe Co., 184 U. S. 540, 558.

A State may not, by an arbitrary exercise of its taxing function, single out for oppression a particular person or class of persons within its domain, in violation of the Constitution. McCullough v. Maryland, 4 Wheat. 316; Santa Clara County v. The Southern Pacific R. R. Co., 18 Fed. Rep. 385, 398.

While the Fourteenth Amendment was not intended to compel a State to adopt an iron rule of equal taxation, Adams Express Co. v. Ohio, 165 U. S. 194; it does prevent singling out and subjecting to taxation a class, and in this case the act discriminates against Kentucky rectifiers and blenders included within its provisions, in favor of other classes engaged in similar business.

The tax is a property tax. Thierman v. Commonwealth, 123 Kentucky, 740. Its prime purpose is revenue, and as a revenue measure, it must, to afford equal protection of the laws, apply equally to all of the general class engaged in the same business.

217 U.S.

Argument for Plaintiff in Error.

A license tax upon a sale of goods is in effect a tax upon the goods. Brown v. Maryland, 12 Wheat. 425; Welton v. Missouri, 91 U. S. 275; Brennan v. Titusville, 153 U. S. 289; Cook v. Pennsylvania, 97 U. S. 566; Tiernan v. Rinker, 102 U. S. 123; United States v. Mayo, 26 Fed. Cas. 1231; United States v. James, 14 Blatchf. 207; Perry County v. Railroad, 58 Alabama, 546. The act cannot be reasonably construed as a policing of the business, and the only purpose it effects is to secure accurate returns upon the goods handled, similar to what is effected by §§ 3259, 3260, Rev. Stat. U. S., and see State v. Bengsch, 170 Missouri, 81; City of Brookfield v. Tooey, 141 Missouri, 619; Adams Express Co. v. Kentucky, 166 U. S. 171; Levi v. Louisville, 97 Kentucky, 394, 408.

The tax is discriminatory. There is no inherent distinction between blended and unblended distilled spirits sufficient to justify the classification. The tax discriminates against the distilled spirits attempted to be subjected thereto in favor of the exempted spirits produced in the State as well as similar exempted spirits coming from other States and countries.

As to similar statutes held unconstitutional see Hinson v. Lott, 8 Wall. 148; State v. Bengsch, 170 Missouri, 81; State v. Hoyt, 71 Vermont, 59; State v. Pratt, 59 Vermont, 590; State v. Montgomery, 94 Maine, 192.

State measures have been sustained on the ground that they operated with equality both upon domestic goods and goods from other States, in Kehrer v. Stewart, 197 U. S. 60; Phillips v. Mobile, 208 U. S. 472; Pabst Brewing Co. v. Crenshaw, 198 U. S. 17; Howe Machine Co. v. Gage, 100 U. S. 676, and see Darnell v. Memphis, 208 U. S. 113, holding a tax levied upon logs brought into the State of Tennessee from elsewhere invalid, so long as logs cut from lands within the State of Tennessee were exempt as products of the State. The converse of this rule must be equally true, i. e., a tax levied upon the product of a State