Bank v. School District, 56 Fed. Rep. 197; Nashville v. Ray, 19 Wall. 468; Ottawa v. Carey, 108 U. S. 110; Rev. Stat. Colorado, 1908, § 2342; Session Laws Colorado, 1905, p. 224; Swanson v. Ottumwa, 131 Iowa, 547; West Plains v. Sage, 69 Fed. Rep. 943.

Even if the constitutional provision and statute in question should be held to authorize the issuance of negotiable bonds, the security sued on in this action is not a bond, is not negotiable, and therefore the plaintiff took it subject to any equities existing between the county and the payee. 2 Dillon on Municipal Corporations, 5th ed., pp. 1273-1295; Nashville v. Ray, 19 Wall. 468; Watson v. Huron, 97 Fed. Rep. 449; West Plains v. Sage, 69 Fed. Rep. 943.

Mr. John M. Zane, with whom Mr. Charles F. Morse and Mr. Charles W. Waterman were on the brief, for respondent.

MR. JUSTICE HOLMES delivered the opinion of the court.

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. Rep. 28. The plaintiff held the instrument by endorsement 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 defence which set up failure of consideration. There was a demurrer to this defence which was sustained by the Circuit Court, and the trial took place upon the other issues. The Circuit 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 defendant's rights. Therefore we must consider the merits of the defence. Nalle v. Oyster, 230 U. S. 165.

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, thereby 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 eleven thousand two hundred and fifty dollars, with interest on this sum, from the date hereof, at the rate of five per cent. per annum; the said interest payable semi-annually, as per two (2) coupons, hereto attached." This certificate was one of ten issued to provide for the payment for ballot 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 such city, city and county, or town; such bonds, certificates or other obligations may be made payable at such time or times, not exceeding ten years from the date of issue, as may be determined, but shall not be issued or sold at less than par." Art. VII, § 8, as amended, November 6, 1906. A statute in like words previously had been passed to be effective if the amendment to the constitution should be adopted as it was. Laws of 1905, c. 101, § 6. See Rev. St. 1908, § 2342. The defence that we are considering is that the foregoing words did not warrant making the certificates of indebtedness negotiable, relying especially upon Brenham v. German American Bank, 144 U. S. 173. But the argument seems to us to need no extended answer. The power to issue certificates of indebtedness or bonds is given in terms and

it is contemplated that these instruments may be sold to raise money for the purpose named. But however narrowly we may construe the power of municipal corporations in this respect, when they are authorized to raise money by the sale of bonds we must take it that they are authorized to put the bonds in the form that would be almost a necessary condition to obtaining a purchaserthe usual form in which municipal bonds are put upon the market. Gunnison County Commissioners v. Rollins, 173 U. S. 255, 276. 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. Gelpcke v. Dubuque, 1 Wall. 175, 203. Cadillac v. Woonsocket Savings Institution, 58 Fed. Rep. 935, 937. Ashley v. Board of Supervisors, 60 Fed. Rep. 55, 67. D'Esterre v. Brooklyn, 90 Fed. Rep. 586, 590. Dillon, Munic. Corp., 5th Ed., § 882.

Judgment affirmed.

Argument for the United States.

236 U. S.

UNITED STATES v. JONES, ADMINISTRATOR.

APPEAL FROM THE COURT OF CLAIMS.

No. 450. Argued December 9, 1914. Decided January 25, 1915.

The tax imposed by the War Revenue Act of 1898 was purely a succession tax. It was not laid upon the entire estate, but was a charge upon the transmission of personal property from a deceased owner to legatees or distributees.

Personal property does not pass directly from a decedent to legatees or distributees, but goes primarily to the executor or administrator who passes to them the residue after settlement of the estate. Until in due course of the administration of an estate it has been ascertained that a surplus remains, it cannot be said that the legatees or distributees are certainly entitled to receive or enjoy any part of the property; and so held as to an estate of one dying prior to July 1, 1902, that until such fact was ascertained the interests of legatees and distributees were not absolute, but were contingent within the meaning of § 29 of the War Revenue Act of 1898 and of § 3 of the Refunding Act of June 27, 1902. Vanderbilt v. Eidman, 196 U. S. 480; Hertz v. Woodman, 218 U. S. 205, distinguished. 49 Ct. Cls. 408, affirmed.

THE facts, which involve the construction of the War Revenue Act of 1898 and the subsequent Acts relating thereto, and their application to inheritances, are stated in the opinion.

Mr. Assistant Attorney General Thompson for the United States:

The questions involved in this case have been explicitly passed upon by this court and determined adversely to the position taken by appellee. The position of the Government is covered by Mr. Solicitor General Bowers in his brief in Hertz v. Woodman, 218 U. S. 205. That decision is stare decisis of all questions raised here.

The thing to be taxed in this case was not a contingent

236 U.S.

Argument for the United States.

beneficial interest, but, on the contrary, was subject to the tax, having vested prior to July 1, 1902.

As held in Knowlton v. Moore, 178 U. S. 41, 56, the thing taxed is the power to transmit or the transmission from the dead to the living. See Hertz v. Woodman, supra.

A legacy to pay over the net income from a fund in periodical payments during the life of the legatee is not a contingent beneficial interest, but a vested life estate, the income from which as determined by the mortuary tables and an interest rate of 4 per cent was subject to the tax. United States v. Fidelity Trust Co., 222 U. S. 158. The tax accrued when the testator died on June 28, 1902, although her personal estate was not distributed to her two children until May, 1903, and the tax was not collected until October 24, 1905.

Appellee contends, and the court below sustained his contention, that under a Pennsylvania statute providing that no administrator shall be compelled to make distribution of the goods of an intestate until one year be fully expired from the granting of the administration of the estate, act of Feb. 24, 1834, § 38, P. L., 80 Purd. 447, the administrator had exclusive possession of the personal property up to and subsequent to July 1, 1902, and that therefore no tax had accrued on the several estates, they being contingent beneficial interests at the time of the repeal; but this cannot be sustained. Beer v. Moffat, 209 Fed. Rep. 779; Baldwin v. Eidman, 202 Fed. Rep. 968; United States v. Fidelity Trust Co., 222 U. S. 158. Hertz v. Woodman, 218 U. S. 205, cannot be distinguished. Farrell v. United States, 167 Fed. Rep. 639, does not apply.

As the thing taxed was the right of succession, which occurred upon the death of the intestate prior to July 1, 1902, the distributive shares of the two legatees became vested within the meaning of the act of June 13, 1898, at the moment of her death and subject to taxation regard