Mr. Justice Van Devanter delivered the opinion of the court: 12, 1902, but the repeal was not to take effect until July 1, 1902, and was not to prevent the collection of any tax imposed prior to that date. 32 Stat. at L. 96, chap. 500, §§ 7, 8, 11, Comp. Stat. 1913, § 6144. As before indicated, the claimant principally relies upon § 3 of the act of June 27, 1902, supra. It reads as follows: "That in all cases where an executor, administrator, or trustee shall have paid, or This is a suit to recover a succession tax shall hereafter pay, any tax upon any paid under §§ 29 and 30 of the act of June legacy or distributive share of personal 13, 1898 (30 Stat. at L. 448, 464, chap. property under the provisions of the act 448, Comp. Stat. 1913, § 6144). The facts approved June thirteenth, eighteen hundred are these: Adelaide P. Dalzell, a resident and ninety-eight, entitled, 'An Act to Proof Allegheny county, Pennsylvania, died vide Ways and Means to Meet War Exintestate June 28, 1902, leaving personal penditures, and for Other Purposes,' and property of considerable value, and being amendments thereof, the Secretary of the survived by two daughters as her only next Treasury be, and he is hereby, authorized of kin. July 14, 1902, an administrator and directed to refund, out of any money in was appointed and the property was com- the Treasury not otherwise appropriated, mitted to his charge for the purposes of upon proper application being made to the administration. Under the local law the commissioner of internal revenue, under debts of the intestate and the expenses of such rules and regulations as may be preadministration were to be paid out of the scribed, so much of said tax as may have property, and what remained was to be been collected on contingent beneficial indistributed in equal shares between the terests which shall not have become vested two daughters, but distribution could not prior to July first, nineteen hundred be made for several months after the ap- and two. And no tax shall hereafter pointment of the administrator. In regu-be assessed or imposed under said act lar course the debts and expenses were approved June thirteenth, eighteen hunascertained and paid, and this left for dis- dred and ninety-eight, upon or in tribution property of the value of $219,341.- spect of any contingent beneficial interest 74. The collector of internal revenue then which shall not become absolutely vested in collected from the administrator, without possession or enjoyment prior to said July protest from him, a succession tax of $3,- first, nineteen hundred and two." 290.12 upon the distributive shares of the daughters, and the tax was covered into the Treasury. About seven months after paying the tax the administrator sought, in the mode prescribed, to have it refunded under § 3 of the act of June 27, 1902 (32 Stat. at L. 406, chap. 1160), but the Secretary of the Treasury denied the application. The administrator then brought this suit and the court of claims gave judgment in his favor. 49 Ct. Cl. 408. A reversal of the judgment is sought by the United States. By 29 of the act of 1898 an executor, administrator, or trustee having in charge any legacy or distributive share arising from personal property, and passing from a decedent to another by will or intestate laws, was subjected to a tax graduated according to the value of the beneficiary's interest in the property and the degree of his kinship to the decedent. Interests which were contingent and uncertain were not affected, but only those whereof the beneficiary had become invested with a present right of possession or enjoyment. Vanderbilt v. Eidman, 196 U. S. 480, 491495, 498, 49 L. ed. 563, 567–570, 25 Sup. Ct. The decisive question, therefore, in the Rep. 331. Section 29 was repealed April' present case, is whether the beneficial in In construing this section this court said in Vanderbilt v. Eidman, supra (p. 500): "It is, we think, incontrovertible that the taxes which the 3d section of the act of 1902 directs to be refunded and those which it forbids the collection of in the future are one and the same in their nature. Any other view would destroy the unity of the section and cause its provisions to produce inexplicable conflict. From this it results that the taxes which are directed in the urst sentence to be refunded, because they had been wrongfully collected on contingent beneficial interests which had not become vested prior to July 1, 1902, were taxes levied on such beneficial interests as had not become rested in possession or enjoyment prior to the date named, within the intendment of the subsequent sentence. In other words, the statute provided for the refunding of taxes collected under the circumstances stated and at the same time forbade like collections in the future." This view was repeated in United States v. Fidelity Trust Co. 222 U. S. 158, 56 L. ed. 137, 32 Sup. Ct. Rep. 59. terests of the daughters, upon which the tax was collected, had become absolutely vested in possession or enjoyment prior to July 1, 1902, or were at that time contingent. If they had become so vested, the effort to recover the tax must fail; but, if they were contingent, the tax must be refunded. Recognizing that this is so, counsel for the United States insists that the distributive interests to which the daughters succeeded became vested in the full sense of the statute the moment the intestate died, which was three days before July 1, 1902. The court below rejected this contention and held that those interests did not become so vested until the daughters were entitled to receive their respective shares in the property remaining after the debts and expenses were paid, which was not until several months after July 1, 1902. The question should, of course, be determined with due regard to the situation to which the refunding statute was addressed. The tax imposed by the act of 1898 was purely a succession tax, a charge upon the transmission of personal property from a deceased owner to legatees or distributees. It was not laid upon the entire personal estate, or upon all that came into the hands of the executor or administrator, but upon "any legacies or distributive shares" in his charge "arising from" such estate, and passing to others by will or intestate laws. It hardly needs statement that personal property does not pass directly from a decedent to legatees or distributees, but goes primarily to the executor or administrator, who is to apply it, so far as may be necessary, in paying debts of the deceased and expenses of administration, and is then to pass the residue, if any, to legatees or distributees. If the estate proves insolvent, nothing is to pass to them. So, in a practical sense, their interests are contingent and uncertain until, in due course of administration, it is ascertained that a surplus remains after the debts and expenses are paid. Until that is done, it properly cannot be said that legatees or distributees are certainly entitled to receive or enjoy any part of the property. The only right which can be said to vest in them at the time of the death is a right to demand and receive at some time in the future whatever may remain after paying the debts and expenses. But that this right was not intended to be taxed before there was an ascertained surplus or residue to which it could attach is inferable from the taxing act as a whole, and especially from the provision whereby the rate of tax was made to depend upon the value of the legacy or distributive share. True, by that act, the executor or administrator was required, before surrender ing a legacy or distributive share to whoever was entitled to it, to pay the tax assessed thereon and to deduct the amount from the particular legacy or distributive share, but this did not mean that the tax was to be assessed or paid in the absence of a right to immediate possession or enjoyment. On the contrary, as was held in Vanderbilt v. Eidman, 196 U. S. 499, 49 L. ed. 570, 25 Sup. Ct. Rep. 331, it imported the existence of "a practically contemporaneous right to receive the legacy or distributive share." In that case it was said, after separately considering the several parts of the act (p. 495): "In view of the express provisions of the statute as to possession or enjoyment and beneficial interest and clear value, and of the absence of any express language exhibiting an intention to tax a mere technically vested interest in a case where the right to possession or enjoyment was subordinated to an uncertain contingency, it would, we think, be doing violence to the statute to construe it as taxing such an interest before the period when possession or enjoyment had attached.” The actual enforcement of the taxing act by the administrative officers was not uniform as respects contingent interests. At first the tax was regarded as not reaching them until they became absolute, but afterwards it came to be treated as imposing the tax at the time of the death. The provisions of the repealing act of April 12, 1902, were such that the tax was to be discontinued on July 1 of that year, but without affecting its collection where the right to it became fixed before that time. Bearing in mind that this was the situation in which § 3 of the act of June 27, 1902, before quoted, was enacted, we think its meaning and purpose are plain. Briefly stated, it deals with legacies and distributive shares upon the same plane, treates both as "contingent" interests until they "become absolutely vested in possession or enjoyment," directs that the tax collected upon contingent interests not so vested prior to July 1, 1902, shall be refunded, and forbids any further enforcement of the tax as respects interests remaining contingent up to that date. In other words, it recognizes that the tax was being improperly collected upon legacies and distributive shares which were not absolutely vested in possession or enjoyment; and, for the purpose of avoiding the injustice that otherwise might result from this, it requires that the tax be refunded in all instances where the interests upon which it was collected had not become absolutely vested in the sense indicated before July 1, 1902, that being the time when the tax was discontinued. Applying this statute to the facts before stated, we see no escape from the conclusion that the tax in question must be refunded. It was colected upon distributive shares which neither were nor could have been absolutely vested in possession or enjoyment prior to July 1, 1902. The intes tate's death had occurred only three days before, no administrator had been appointed, the debts and expenses had not been as certained, what, if anything, would remain after their payment, was uncertain, and the time had not come when the daughters were entitled to a distribution. (236 U. S. 97) JAMES H. DUFFY, Appt., v. WILLIAM CHARAK, Trustee in Bank- CHATTEL MORTGAGES (§ 191*)-RECORDING The case of Hertz v. Woodman, 218 U. S. otherwise taxable under §§ 29 and 30 of the act of June 13, 1898, as amended by the act of March 2, 1901 [31 Stat. at L. [Ed. Note. For other cases, see Chattel Mortgages, Cent. Dig. 417-425; Dec. Dig. $191.] [No. 120.] Decided Jan uary 25, 1915. PPEAL from the United States Circuit 938, chap. 806, Comp. Stat. 1913, § 6144]?" A Court of Appeals for the First Circuit Thus it was expressly stated that the legacies were otherwise taxable, and the ques tion propounded was merely whether they were relieved from taxation by the fact that the testator died within one year of July 1, 1902, when the repealing act took effect. The inquiry was prompted by the provision in the amendatory act of March 2, 1901 (31 Stat. at I. 938, 948, chap. 806, Comp. Stat. 1913, § 6144), that the tax should be due and payable one year after the death. The answer was in the negative, it being held that the time when the tax was made due and payable was not determinative of when it was imposed. The opinion contains some language which, separately considered, gives color to the present contention of the government, but this must be read in the light of the question presented for decision and be taken as restrained accordingly. Besides, the opinion approvingly refers (p. 219) to Vanderbilt v. Eidman, supra, as having "conclusively decided" that the tax "does not attach to legacies or distributive shares until the right of succession becomes an absolute right of immediate possession or enjoyment." Here, as we have said, there was no right of immediate possession or enjoyment at the time designated in the refunding statute. Judgment aflirmed. Mr. Justice McReynolds took no part in the consideration or decision of this case. to review a decree which affirmed a decree of the District Court for the District of Massachusetts in favor of the trustee in bankruptcy in a suit to obtain the surrender of the proceeds of a sale under an unrecorded chattel mortgage. Reversed. See same case below, 119 C. C. A. 191, 200 Fed. 747. The facts are stated in the opinion. Mr. James II. Duffy, in propria persona, for appellant. Mr. William Charak, in propria persona, for appellee. Mr. Justice Holmes delivered the opinion of the court: This is a proceeding by a trustee in bankruptcy to obtain the surrender of the proceeds of goods in possession of the appellant, and sold by him under an agreement with the trustee, without prejudice to the rights of the parties in the property. The petition in bankruptcy was filed on May 26, 1909. The appellant claims under a mortgage to him for $5,675, made on March 2, 1909, but admits that $4,175 of this sum was a pre-existing debt, and claims only $1,500, lent on the day when the mortgage was given. The mortgage was not recorded, and on May 24, 1909, the goods were attached by a third person, the shop where they were was closed, and no more business was done. Afterwards on the same day the mortgagee put in a keeper, subject to the •For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes possession of the sheriff's officer. On May | Accordingly, goods under attachment may 25 he notified the deputy sheriff of his be sold or mortgaged upon notice to the claim, and also gave notice to the bankrupt officer, as effectively as if a true delivery that the property was in his possession, took place. Grant v. Lyman, 4 Met. 470, and that he intended to foreclose. The 477; Mann v. Huston, 1 Gray, 250, 253; latter notice was recorded on May 26, after Clark v. Williams, supra. The acts of the the filing of the petition in bankruptcy on appellant had the same effect as if the that day. Under the Massachusetts laws mortgagor had been present and assenting the unrecorded mortgage was invalid (Keepers v. Fleitmann, 213 Mass. 210, 100 against others than the parties unless the N. E. 333), and we see in the attachment property was delivered to and retained by no sufficient ground for denying him his the mortgagee (Rev. Laws, chap. 198, § 1). security. The mortgage embraced afterThe district court and the circuit court of acquired property, with power of sale and appeals held the mortgage void on the substitution in the mortgagor, but we asground that the deputy sheriff's possession sume that it was good under Massachusetts was exclusive, and that therefore what was law. Blanchard v. Cooke, 144 Mass. 207, done by the mortgagee on May 24 and 25 11 N. E. 83; Thompson v. Fairbanks, 196 had no effect. 193 Fed. 533, 119 C. C. A. U. S. 516, 49 L. ed. 577, 25 Sup. Ct. Rep. 191, 200 Fed. 747. The inain question be- 306. fore us is whether this ruling is right. We may assume that the trustee in bankruptcy is not a party within the meaning of the Massachusetts act. For although there have been decisions by the courts of the United States that the assignee under former acts is the bankrupt, that is to say, that he is a universal successor, who, like the executor, represents the person of him to whom he succeeds, the supreme court of the state has established the construction of the Massachusetts statute. Humphrey v. Tatman, 198 U. S. 91, 93, 49 L. ed. 956, 958, 25 Sup. Ct. Rep. 567; Haskell v. Merrill, 179 Mass. 120, 124, 60 N. E. 485; Clark v. Williams, 190 Mass. 219, 223, 76 N. E. 723. We assume, on the other hand, that if possession was delivered and retained, within the meaning of the act, at any time before the bankruptcy, the title of the mortgagee will be good. Blanchard v. Cooke, 144 Mass. 207, 227, 11 N. E. 83; Keepers v. Fleitmann, 213 Mass. 210, 211, 100 N. E. 333; Humphrey v. Tatman, supra. Moreover, a taking possession under the power in the mortgage is a delivery that satisfies the statute. Keepers v. Fleitmann, So the issue is narrowed to the precise point of the ruling below. supra. Whether or not the lien of the attachment should be preserved for the benefit of the estate, and whether it still is open to the Bankruptcy Court to make an order to that effect if, on due notice, it should seem just, is not before us. No such order has been made. The decree will be reversed without prejudice to further action upon that point. Decree reversed. (236 U. S. 101) BOARD OF COUNTY COMMISSIONERS OF THE CITY AND COUNTY OF DENVER, Petitioner, v. HOME SAVINGS BANK. APPEAL AND ERROR (§§ 254, 544*)-NECES- 1. No exception or bill of exceptions is of a Federal circuit court sustaining a denecessary to bring up for review a ruling murrer to one of the defenses set up in the answer, there being nothing in the record to indicate a waiver of defendant's rights. [Ed. Note.-For other cases, see Appeal and 2422-2426, 2428, 2478, 2479; Dec. Dig. §§ 254, 544.*] Error, Cent. Dig. §§ 1486, 1487, 2412-2415, 2417-2420, MUNICIPAL CORPORATIONS ($ 897*)-ISSUING NEGOTIABLE CERTIFICATES OF IN DEBTEDNESS. We agree that the possession of the deputy sheriff was exclusive, and that there cannot be two possessions properly so called at the same time. But that which would be deemed a delivery sufficient to make a sale good as against attaching creditors also satisfies the statute. Clark v. Williams, 190 Mass. 219, 222, 76 N. E. 723; Wright v. Tetlow, 99 Mass. 397, 400. And it is familiar that what is called a change of possession may be accomplished when the goods are in the hands of a third person claiming a lien. Hallgarten v. Oldham, 135 Mass. 1, 9, 10, 46 Am. Rep. 433; Union Trust Co. v. Wilson, 198 U. S. 530, 536, Argued January 15, 1915. 49 L. ed. 1154, 1155, 25 Sup. Ct. Rep. 766. 2. Authority to issue certificates of indebtedness in negotiable form to provide ballot machines was included in the powers for the payment of the purchase price of conferred upon municipalities by Colo. Const. art. 7, § 8, and Laws 1905, chap. 101, § 6, to provide for such payment by the "issuance of interest-bearing bonds, certificates of indebtedness, or other obligations." [Ed. Note.-For other cases, see Municipal Corporations, Cent. Dig. §§ 1881, 1882; Dec. Dig. § 897.*1 [No. 126.] Decided Jan uary 25, 1915. *For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes N WRIT of Certiorari to the United | attached." This certificate was one of ten O`States Circuit Court of Appeals for the issued to provide for the payment for ballot Eighth Circuit to review a judgment which affirmed a judgment of the Circuit Court for the District of Colorado in favor of plaintiff in an action upon a municipal certificate of indebtedness. Affirmed. machines, and the Constitution of the state authorized provision for payment in such case "by the issuance of interest-bearing bonds, certificates of indebtedness, or other obligations, which shall be a charge upon See same case below, 118 C. C. A. 256, such city, city and county, or town; such 200 Fed. 28. The facts are stated in the opinion. Messrs. Charles R. Brock, William H. Ferguson, I. N. Stevens, Milton Smith, Charles S. Thomas, and William H. Bryant for petitioner. Messrs. John Maxey Zane, Charles W. Waterman, and Charles F. Morse for respondent. Mr. Justice Holmes delivered the opin ion of the court: bonds, certificates, or other obligations may The This is an action brought by the respondent upon a certificate of indebtedness and an interest coupon attached to the same, against the petitioner. There was a verdict and judgment for the plaintiff and the circuit court of appeals affirmed the judgment. 118 C. C. A. 256, 200 Fed. 28. The plaintiff held the instrument by indorsement, and was found to have purchased it in good faith before maturity, but the defendant denied the authority to issue the certificate in negotiable form, and sought to raise the question by its third defense, which set up failure of consideration. There was a demurrer to this defense, which was sustained by the circuit court, and the trial took place upon the other issues. The cir-condition to obtaining a purchaser,-the cuit court of appeals declined to consider the correctness of this ruling because no exception was taken to it. But no exception or bill of exceptions is necessary to open a question of law already apparent on the record, and there is nothing in the record that indicates a waiver of the defend. ant's rights Therefore we must consider the merits of the defense. Nalle v. Oyster, 230 U. S. 165, 57 L. ed. 1439, 33 Sup. Ct. Rep. 1043. The certificate recites the allowance of a claim for ballot machines by the board of county commissioners of the city and county of Denver, and goes on, "the board of county commissioners being authorized thereto by the laws of the state of Colorado, act of 1905, hereby issues its certificate of indebtedness for the said sum, and will in one (1) year pay to the order of the Federal Ballot Machine Company the sum of $11,250, with interest on this sum, from the date hereof, at the rate of 5 per cent per annum; the said interest payable semiannually, as per two (2) coupons, hereto usual form in which municipal bonds are put upon the market. Gunnison County v. E. H. Rollins & Sons, 173 U. S. 255, 276, 43 L. ed. 689, 698, 19 Sup. Ct. Rep. 390. What is true about bonds is true about certificates of indebtedness. Indeed, it is difficult to see any distinction between the two as they are commonly known to the business world. The essence of each is that they contain a promise under the seal of the corporation, to pay a certain sum to order or to bearer. We are of opinion that the board of county commissioners was authorized to issue certificates in the negotiable. form. Carter County v. Sinton, 120 U. S. 517, 525, 30 L. ed. 701, 703, 7 Sup. Ct. Rep. 650; Gelpeke v. Dubuque, 1 Wall. 175, 203, 17 L. ed. 520, 524; Cadillac v. Woonsocket Inst. for Sav. 7 C. C. A. 574, 16 U. S. App. 545, 58 Fed. 935, 937; Ashley v. Presque Isle County, 8 C. C. A. 455, 16 U. S. App. 656, 709, 60 Fed. 55, 67; D'Esterre v. Brooklyn, 90 Fed. 586, 590; Dill. Mun. Corp. 5th ed. § 882. Judgment affirmed. |