O'MALLEY v. Woodrough , 59 S. Ct. 838 ( 1939 )

MR. Justice Frankfurter

delivered the opinion of the Court.

The case is here under § 2 of the Act of August 24, 1937 (50 Stat. 751), as a direct appeal from a judgment of a district court whose “decision was against the constitutionality” of an Act of Congress. The suit below, an action at law to recover a tax on income claimed to have been illegally exacted, was disposed of upon the pleadings and turned on the single question now before us, to wit: Is the provision of § 22 of the Revenue Act of 1932 (47 Stat. 169, 178), re-enacted by § 22 (a) of the Revenue Act of 1936 (49 Stat. 1648, 1657), constitutional insofar as it included in the “gross income,” on the basis of which taxes were to be paid, the compensation of “judges of courts of the United States taking office after June 6, 1932.”

That this is the sole issue will emerge from a simple statement of the facts and of the governing legislation. Joseph W. Woodrough was appointed ,a United States circuit judge on April 12, 1933, and qualified as such on May 1, 1933. Eor the calendar year of 1936 a joint income tax return of Judge Woodrough and his wife disclosed his judicial salary of $12,500, but claimed it to be constitutionally immune from taxation. Since it was not included in “gross income” no tax was payable. Subsequently a deficiency of $631.60 was assessed on the basis of that item, which, with interest, was paid under protest. Claim for refund having been rejected, the present suit was brought, and judgment went against the Collector. The assessment of the present tax- was technically under the Act of 1936, but that Act merely carried forward the provisions of the Act of 1932, for the inclusion of compensation of “judges of courts of the United States, taking office after June 6, 1932” which had been similarly incorporated in the Revenue Act of 1934 (48 Stat. 680, 686-687). Therefore, the power of Congress to include Judge Woodrough’s salary as a circuit judge in his “gross income” must be judged on the basis of the validity of § 22 of the Revenue Act of 1932, and not as though that power had been originally asserted by the Revenue Act of 1936. For it was the Act of June 6, 1932 that gave notice to all judges thereafter to be appointed, of .the new Congressional policy to include the judicial .salaries of. such judges in the assessment of income taxes. The fact that Judge Woodrough before he became a circuit judge and prior to June 6, 1932, had been 'a¹ district judge is wholly irrelevant, to the matter in issue. The two offices have different statutory origins, are filled by separate nominations and confirmations, and enjoy different emoluments. A new appointee to a circuit court of appeals occupies a new office no less, when he is taken from the district bench than when he is drawn from the bar.

By means of § 22 of the Revenue Act of 1932, Congress sought to avoid, at least in part, the consequences of Evans v. Gore, 253 U. S. 245. That case, decided on June 1, 1920, ruled for the first time that a provision requiring the compensation received by the judges of the United States to be included in the “gross income” from which the net income is to be computed, although merely part of a taxing measure of general, non-discriminatory application to all earners of incomes, is contrary to Article III, § 1, of the Constitution which provides that the “Compensation” of the “Judges” “shall not be diminished during their Continuance in Office.” See also the separate opinion of Mr. Justice Field in Pollock v. Farmers’ Loan & Trust Co., 157 U. S. 429, 586, 604 et seq. To be sure, in a letter to Secretary Chase, Chief Justice Taney expressed similar views.¹ In doing so, he merely gave his extra-judicial opinion, asserting at the same time that the question could not be adjudicated.² Chief Justice Taney’s vigorous views were shared by Attorney General Hoar.³ Thereafter, both the Treasury Department⁴ and Congress⁵ acted upon this construction of the Constitution. However, the meaning which Evans v. Gore imputed to the history which explains Article III, § 1, was contrary to the way in which it was read by other English-speaking courts.⁶ The decision met wide and steadily growing disfavor from legal scholarship and professional opinion.⁷ Evans v. Gore itself was rejected by most of the courts before whom the matter came after that decision.⁸

Having regard to these circumstances, the question im--mediately before us is whether Congress exceeded its constitutional power in providing that United States judges appointed after the Revenue Act of 1932 shall not enjoy immunity from the incidences of taxation to which everyone else within the defined classes of income is subjected. Thereby, of course, Congress has committed itself to the position that a non-discriminatory tax laid generally on net income is not, when applied to the income of a federal judge, a diminution of his salary within the prohibition of Article III, § 1, of the Constitution. To suggest that it makes inroads upon the independence of judges who took office after Congress had thus charged them with the common duties of citizenship, by making them bear their aliquot share of the cost .of maintaining the Government, is to trivialize the great historic experience on which the framers based the safeguards of Article III,. § 1.⁹ To subject them to a general tax is merely to recognize that judges are also citizens, and that their particular function in government does not generate an immunity from sharing'with their fellow citizens the material burden of the government whose Constitution and laws they are charged with administering.

After this case came here, Congress, by § 3 of the Public Salary Tax Act of 1939, amended § 22 (a) so as to make it applicable to “judges of courts of the United States who took office on or before June 6, 1932.”¹⁰ That section, however, is not now before us. But to the extent that what the Court now says is inconsistent with what was said in Miles v. Graham, 268 U. S. 501, the latter cannot survive.

Judgment reversed.

MR. Justice McReynolds did not hear the argument in this cause and took no part in its consideration or debision.

1 The letter was written on February 16, 1863, and will be found in 157 U. S. 701.

2 “ ... I should not have troubled you with this letter, if there was any mode by which the question could be decided in a judicial proceeding.. But all of the judges of the courts of the United States have an interest in the question, and could not therefore with propriety undertake to hear and decide it.” 157 U. S. at 702.

3 13 Op. A. G. 161; but see the opinion of Attorney General Palmer, 31 Op. A. G. 475.

4 See Mr. Justice Field, concurring, in Pollock v. Farmers’ Loan & Trust Co., 157 U. S. 429, 588, 606-07.

5 See Wayne v. United States, 26 Ct. Cl. 274; Act of July 28, 1892, c. 311, 27 Stat. 306.

6 See Judgments in Cooper v. Commissioner of Income Tax, 4 Comm. L. R. 1304, construing § 17 of the Queensland Constitution Act of 1867 which prohibited “any reduction or diminution of the salary of a Judge during his Term of office”; also, Judges v. Attorney-General for Saskatchewan [1937] 2 D. L. R. 209, construing § 96 of the British North America Act, 1867, that “The Salaries ... of the Judges . . . shall be fixed and provided by the Parliament of Canada” in connection with the Income Tax Act, 1932, of Saskatchewan.

7 See Clark, Further Limitations Upon Federal Income Taxation, 30 Yale L. J. 75; Corwin, Constitutional Law in 1919-1920, 15 Am. Pol. Sci. Rev. 635, 641-644; Fellman, Diminution of Judicial Salaries, 24 Iowa L. Rev. 89; Lowndes, Taxing Income of Federal Judiciary, 19 Va. L. Rev. 153; Powell, Constitutional Law in 1919-1920, 19 Mich. L. Rev. 117-118; Powell, The Sixteenth Amendment and Income from State Securities, National Income Tax Magazine (July 1923) 5-6; 20 Col. L. Rev. 794; 43 Harv. L. Rev. 318; 20 III. L. Rev. 376; 45 L. Q. Rev. 291; 7 Va. L. Rev. 69; 3 U. of Chi. L. Rev. 141.

8 The cases, pro and con, are collected in the recent dissenting'opinion by Chief Judge Bond of the Court of Appeals of Maryland in Gordy v. Dennis, 5 A. 2d 69, 82. Particular attention should be called to the decision of the Supreme Court of South Africa, Krause v. Commissioner for Inland Revenue, [1929] So. Afr. R. (A. D.) 286, construing § 100 of the South Africa Act, which had taken over the identical clause from Article III, § 1, of our Constitution.

9 The provisions regarding security of salary had their source in-the Act of Settlement cf 1700, 12 & 13 Will. Ill, é. 2, § III, and the Act of 1760,1 Geo. Ill, c. 23. See Holdsworth, The Constitutional Position of the Judges, 48 L. Q. Rev. -25; 2 Holdsworth, The History op English Law, 559-64; 6 id. 234, 514.

10 Public No. -32, 76th Cong., 1st Sess., c. 59. Section 209 of the same statute, however, provides that “In the case of the judges of the Supreme Court, and of the inferior courts of the United States created under árticle III of the Constitution, who took office on or before June 6,. 1932, the compensation received as such shall not be subject to income tax under the Revenue Act of 1938 or any prior revenue Act.”