Sunday, December 8, 2013

Steward Machine Co. v. Davis case brief

Steward Machine Co. v. Davis case brief summary
301 U.S. 548 (1937)

Petitioner corporation sought review of a judgment of the Circuit Court of Appeals for the Fifth Circuit, which affirmed a district court's judgment dismissing the corporation's claim for a refund from respondent Commission of Internal Revenue of a tax paid in accordance with the Social Security Act of 1935.

Petitioner challenged the constitutionality of the Social Security Act of 1935. Petitioner claimed the tax was neither an excise nor uniform. A tax on the right of employment was found appropriate, as excise could extend to vocations pursued as of common right. The tax was levied uniformly. Petitioner asserted that exceptions to the statute violated U.S. Constitutional Amendment V. The classifications and exclusions were appropriate. Petitioner contended that the purpose of the tax was not revenue but an unlawful invasion of reserved powers of states and that states had yielded to coercion.


  • Petitioner had to show that, separated from the credit, the revenue provisions could not stand by themselves and that the tax and credit in combination were weapons of coercion that destroyed or impaired states' autonomy. 
  • The states were not bound to keep their unemployment laws in force, nor were monies paid into federal fund to be kept there indefinitely or for any stated period of time. 
  • The Secretary of the Treasury had to honor a requisition for any or all deposit in the fund when request was made by appropriate officials. 
The United States Supreme Court affirmed the dismissal of the complaint.

The judgment dismissing petitioner's complaint challenging the constitutionality of the Social Security Act of 1935 and requesting recovery of taxes paid was affirmed. The statute levied an appropriate excise tax with valid exceptions uniformly across the states, and the terms of the statute did not invade the reserved powers of the states.

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