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UNITED STATES REPORTS
VOLUME 262
CASES ADJUDGED
m
THE SUPEEME COURT
AT
OCTOBER TERM, 1919
FROM MARCH 1, 1920, TO APRIL 19, 1920
ERNEST KNAEBEL
THE BANKS LAW PUBLISHINa 00.
NEW YORK
1920
Digitized by LjOOQLC
OovTVonv IMO, WW
THB lUNXB LAW PUBU8HINO OOlCPAlfT
Tlie prioe of tUs vohmie is fixed by ftotote (i 226, Judicial Q^
U. 8. Statutes at Isigfi, 1163) at one dcfflar and seventy-five oents.
Cadi must aooonqiaoy the onkr. Hie porehasar must pay the oost
of deiiyeiy.
REPRINTED IN TAIWAN
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JUSTICES
or THB
SUPREME COURT
DURING THB TIMB OF THESE RKPORTS.^
EDWARD DOUGLASS WHITE, Chief JtrsncE.
JOSEPH McKENNA, Associate Justice.
OLIVER WENDELL HOLMES, Associate justice.
WILLIAM R. DAY, Associate Justice.
WILLIS VAN DEVANTER, Associate Justice.
MAHLON PITNEY, Associate Justice.
JAMES CLARK McREYNOLDS, Associate Justice.
LOXTIS D. BRANDEIS, Associate Justice.
JOHN H. CLARKE, Associate Justice.
A. MITCHELL FALBfER, Attornbt General.
ALEXANDER C. KING, Solicitob Gbnbbal.
JAMES D. MAHER, Clbrx.
FRANK KEY GREEN, Marshal.
1 For allotment of The Chief Juetioe and Anoeiate JustioeB amobg
tiie several eireuitB see next page.
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SUPREME COURT OF THE UNITED STATES-
Allotment of Justices, October Tbbm, 1916.^
Ordeb: There having been an Associate Justice of this
court appointed since the adjournment of the last temiy
It is ordered, That the following allotment be made of the
Chief Justice and Associate Justices of this court among '
the circuits agreeably to the act of Congress in such case
made and provided, and that such allotment be entered
of record, viz:
For the First Circuit, Oliver Wendell Holmes^
Associate Justice.
For the Second Circuit, Louis D. Brandeis, Associate
Justice.
For the Third ^Circuit, Mahlon Pitney, Associate
Justice.
For the Fourth Circuit, Edward D. Whitb, Chief
Justice.
For the Fifth Circuit, J. C. McRetnolds, Associate
Justice.
For the Sixth Circuit, William R. Day, Associate
Justice.
For the Seventh Circuit, John H. Clarke, Associate
Justice.
For the Eighth Circuit, Willis Van Devantbr, Asso-
ciate Justice.
For the Ninth Circuit, Joseph McKenna, Associate
Justice.
October 30, 1916.
^ For next previous allotment see 241 U. 8., p. iv.
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TABLE OF CASES REPORTED
AGS
AktieeelskBbet Kom^g Foderstof Eompagnieti
Rederiaktiebolaget Atlanten v. '. , . 313
Alaska S. S. Co., United States 9. .572
VAmerican Ore Reclamation Co. v. Dwight & Lloyd
Sintering Co 582
American ^eet Metal Works, United States for
the use of, National Surety Co. v. 590
Arkansas, State of, v. State of Mississippi . 344
Aron & Co., Hudsod Nav. Co. v 578
A. Schrader's Son, Inc., United States v. . . 85
Ash Sheep Co. v. United States .... 159
Askren, Attorn^ General, v. Continental Oil Co. 444
Askren, Attorn^ General, t^. Sinclair ReBning Co. . 444
Askren, Attorney General, v. Texas Co. 444
Atchafalaya Land Co. v. Capdevielle, Auditor 581
Atchison, Topeka & Santa Fe Ry. v. Industrial
Conmu oir Illinois (Kiley, Admx., etc.) 583
Atkins V. Garrett 130
Atlanten, The . 313
Atlantic Coast line R. R., Capps, Admr., v. . 580
Austell, Exr., Swann v. .... . 579
Backus V. Norfolk Southern R. R. 575
Baender v. United StateB . . 586
Bam V. United States 586
Barb^ & Co. v. Steamship ''Enutsford,'' Ltd. . 586
Beckwith, Inc., Estate of, v. Commissioner of Patents 538
B. F. Goodrich Co., Munger t;. .582
Bishop, Admr., Ex parte 568
Blancett v. State of New Mexico 574
Blum^ostock Bros. Advertising Agency v. Curtis
Pub. Co. . .436
(v)
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TABLE OF CASES REPORTED.
Boehmer v. Penn^Ivania R. R. . . • • 496
Boone, Gulf & Ship Island R. R. v. . . 567
Bradley, Trustee, WiUem v. . .573
Britton, Trustee, v. Union Investment Co. . 580
Bumap t^. United States 5l2
CatdweU t;. Parker, Sheriff . .376
Cameron v. United States 460
Camp Bird, Ltd., v. Howbert, Collector of Int^nal
Revenue 579
Canadian Northern Ry. v. Eggen 553
Capdevielle, Auditor, Atchafalaya Land Co. v. 581
Capps, Admr., v. Atlantic Coast line R. R. . 580
Carlisle, British Consul General, v. Collins 364
CarolinarTenneesee Power Co., Hiawassee River
Power Co. v .341
CarroIIton, City of, Jett Bros. Distilling Co. V. 1
Carter, State Auditor, Shaffer t^. . .37
G. C. Taft Co. 9. State of Iowa .... 560
Central Elevator Go. v. Pyaaon, Master tA the
"WdbeckHaH" .584
Central Elevator Co. v. Naam Loose Vennoot Schap 584
Central of Georgia Ry., Lee v. . . 109
Ghaloner, New York Evening Post Go. v. . 591
Ghapa V. United States 583
Chapman v. Wintroath 126
Charles, Yirginia ft West VbBaiia Goal Go. 9. . . 569
Chase National Bank, United States 9. . 485
Cheatham Elee. Switehing Device Ga v. Transit
Development Go. 567
Cheek, IVudeiEitiallBB. Go. 9. .567
Ghesfaromiii 9. Northem Trust Co., Ezr. 83
GhieaeoftNorthwe8temRy.9.yaiideZaiide. . 574
Chicago, Rock Island ft Padfie Ry. v. Road Inqprove-
ment Dkrt. No. 1 of Ptairie Coimty * 591
CSucago, Rod^ Isbnd ft Pacific Ry. 9. Swaim . . 577
Cadeago, Roek Idand ft Pteific Ry. v. Ward . 18
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TABLE OF CASEd REPOATEID. vfi
Cindimatiy Coviiigton ft Erlanger Ry. v. Common-
wealth of EentucI^ . 408
Cole 9. Ralph 286
Collins, Carlisle, British Consul General, v. . 364
Collins/Miller, United States Marshal, t;. . 364
Commissioner of Patents, Estate of P. D. Beckwith,
Inc., V. .638
Continental Oil Co., Askren, Attorney General, v. . 444
Corporation Comm. of Oklahoma, Oklahoma Oper*
ating Co. v. 331
Cricket S. S. Co. v. Parry 580
Curtis Pub. Co., Blmneustock Bros. Advertising
Agwcyv. 436
Cuyahoga River Power Co. v. Northern Ohio Trac.
ft light Co 388
Dallas, aty of , Gill c^. . .688
Delaware, Lackawanna ft Western R. R. v. Thompson 690
Denver, City and County of, Famcomb v. . 7
Dillon, Stratheam S. S. Co. 9. 348
Donohoe, Tjoeevig t; 587
Drohen, Rowe, Trustee, v 587
Dwic^t ft Uoyd Sintering Co., American Ore Rec-
lamation Co. V 582
Dysaoa, Master of the ''Welbeck Hall," Central
Elevator Co. v. . . . 684
Dyason, Master of the ''Welbeck Hall,'' Pennsyl-
vania R. R. t^. . 684
Eggen, Canadian Northern Ry. v. . . . 563
Eisner, Collector of Internal R^evenue, t^. Macomber . 189
Enq>ire Fuel Co. v. Lyons . . 682
Ennis, City of, Houston ft Texas Central R.R.V. . 683
Equitable Trust Co. of New York, Lane v. . . 578
Eridawn t^. Roebling's Sons Co. . . . 586
Estate of P. D. Beckwith, Inc., v. Commissioner
ofPatents . .638
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viii TABLE OF CASES REPORTED-
FAQI
Everitt, Trustee, Phillips Co. v. . . . . 579
Ex parte Bishop, Admr 568
Ex parte Tiffany, Receiver 32
Famcomb v. City and County of Denver . .7
Firestone Tire & Rubber Co., Munger t;. 582
First National Bank of Canton v. Williams, Comp-
troller of the Currency .... 504
Foster, Howard, State Auditor, v 589
France & Canada S. S. Co. v. Storgard . . . 585
Frazier t;. State of Oregon ..... 581
Galbraith V. Vallely, Trustee 576
Garrett, Atkins v 580
Garvan, Alien Property Custodian, Gregg t^. 588
Garvan, Alien Property Custodian, Kelly et al.,
Trustees, v 588
Gayon v. McCarthy, United States Marshal 171
George G. Prendergast Constr. Co., Goldsmith v. . 12
Gennania Bank of the City of New York, Richard-
son, Trustee, v 582
GiU t;. City of Dallas 588
Gillespie, Washburn v. . . .587
Glascock V. McDaniel 575
Globe Works v. United States . .588
Goepel et al., Partners, t^. Pahner, Alien Ptoperty
Custodian 582
Goldsmith v. Prendergast Constr. Go. . .12
Goodrich Co., Munger v 582
Grand Trunk Western Ry. t;. United States . . 112
Gregg V. Garvan, Alien I^perty Custodian . 588
Griffith 9. United States 577
Gulf & Ship Island R. R. t;. Boone ... 567
TTiifirfthii.n t;. Pacific Transport Co. . 570
Hiawassee River Power Co. v. Cerolina-TennesBee
Power Co, 341
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TABLE OF CASES REPORTED.
Holland, United States Game Warden, State of
Missouri v. 416
Horowitz 9. United States ... 686
Houston, Secy, of the Treasury, v. Ormes, Adm. . 469
Houston & Texas Central R. R. v. City of Ennis . 683
Howard, State Auditor, t;. Foster . . 689
Howbert, Collector of Int^nal Revenue, Camp
Bird, Ltd., ». .' . . .679
Howdl, New York Central R. R., Clmt., v. . .688
Hoyne, State's Attorn^, Metropolitan West Side
Elevated Ry. v. 673
Hudson Nav. Co. v. Aron & Co 678
Hull, Admx., t^. Philadelphia ft Reading Ry. 476
Hutchinson t^. Sperry . 687
Illinois, State of, Tananevicz v. . . 668
Illinois Industrial Comm., Atchison, Topeka ft
Santa Fe Ry. t; 683
Industrial Comm. of Illinois, Atchison, Topeka ft
Santa FeRy.» 683
Interstate Commerce Comm., United States ex rd.
Kansas City Southern Ry. v. ... 178
Iowa, State of , Taft Co. t;. . . .669
J. Arpn ft Co.^ Hudson Nav. Co. v. . . . 678
Jay V. Weinbea^g 686
Jenkins^ Union Pacific R. R. t; 689
Jett Bros. Distilling Co. t;. City of Carrollton . 1
Job ft Co., Ondida Nav. Co., Clmt., v. . 621
John A. Roebling's Sons Co., Erickson v. 686
Kansas City Bolt ft Nut Co. v. Kansas City light
ft Power Co 671
Kansas City Light ft Power Co., Kansas City Bolt
ft Nut C J. » 671
Kansas City South^n Ry., United States ex rel., v.
Interstate Commerce Comm. 178
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z T]iBLE OF CASES REPORTED.
FAOtf
Kansas City Southern Ry. v. United States . 147
Keith, Trustee, Kikner, Trustee, v. 578
Kelly et ol., Trustees, v. Garvan, Ali^ Property
Custodian . 588
Kenn^, Adxpr., v. Supreme Lodge of the World,
Loyal Order of Moose 411
Kentucky, Commonwealth of , Cincinnati, Covington
& Erlanger Ry. v. .408
Kentucky, Commonwealth of, South Covington &
Cincinnati Street Ry. v. .... 399
Keppehnann et ol., Exrs., v. Palmer, Alien Property
Custodian . 581
Kiley, Admx., Atchison, Topeka& Santa FeRy. v. , 583
Kilmer, Trustee, v. Keith, Trustee 578
Kings County TVust Co., Queens Land & Title Co. v. 572
'"Knutsford," Ltd., Steamship, Barber & Co. v. .586
Krichman v. United States ..... 576
Lane v. Equitable Trust Co. of New York . 578
Lederer, Collector of Int^nal Revenue, Penn Mutual
* life Ins. Co. v. . . 523
Lee V. Central of Georgia Ry% .... 109
linds^ v. United States .583
Love et ol.. Corporation Comm. of Oklahoma, Okla-
homa Operating Co. v. .... 331
Loyld Order of Moose, Supreme Lodge of the World,
Kenney, Admr., v. 411
Lucas, Thompson, Master of the ''Westmeath," v. 358
Lyons, Empire Fuel Co. t; 582
McCarthy, United States Marshal, Gayon v. 171
McCay Enj^eering Co. v. United States 571
McCloskeyt;. Tobin, Sheriflf.. .107
McDaniel, Glascock v. . 575
Macomber, Eisner, Collector of Internal Revenue, v. 189
Manners v. Morosco . .... 317
Marshall, Receiver, v. State of New York 577
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TABLE OF CASES REPORTED.
Maryanne Shipping Co., Glmt. of the ''Maryanne/'
V. Ramberg Iron Works 580
Mafion, Trustee, v. Shannon 572
Metropolitan West Side Elevated Ry. v. Hoyne,
State's Attorney 573
Metropolitan West Side Elevated Ry. v. Sanitary
Dist. of Chicago 573
Miller, United States Marshal, Collins v. . 364
MiUer v. United States 584
Milwaukee, City of. State of Wisconsin ix rd.,
Milwaukee Elec. Ry. & light Co. v. .100
Milwaukee Eiec. Ry. & light Co. v. State of Wis-
consin ex rel. City of Milwaukee 100
Minnesota, State of, v. State of Wisconsin 273
Mississippi, State of. State of Arkansas v. 344
Missouri, State of, v. Holland, United States Game
Warden .416
Missouri Pacific R. R. v. Monroe County Road
Improvement Dist 591
Mohn^, New York Central R. R. t;. . . 152
Monroe County Road Improvement Dist., Missouri
Pacific R. R. v. ...... 591
Moor, Parsons v. 570
Moose, Supreme Lodge of the World, Loyal Order
of, Kenney, Admr., v. , .411
Morosco, Manners v. . . 317
Munday, Trustee, v. Wisconsin Trust Co. 499
Mimger v. Firestone Tire & Rubber Co. 582
Mmiger v. Goodridi Co. . . 582
Naam Looze Vennoot Schap, Central Elevator Co. v.. 584
Naam Looze Vennoot Schap, Pennsylvania R. R. v. 584
National Lead Co. V. United States . 140
National Surety Co., United States v. . . 577
National Surety Co. v. United States for the use of
American Sheet Metal Works 590
New Jersey, State of, v. Palmer, Atto!m^ General . 570
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xii TABLE OF CASES REPORTED.
FAOa
New Mexico, State of, Blancett v. . . , 574
New Orleans Land Co. v. Roussel, Admr. 571
New York, State of, Marshall, Receiver, v. . 677
New York Central R. R., Clmt., v. Howell . .588
New York Central R. R. v. Mohn^ 152
New York Evening Post Co. v. Chaloner 691
New York Public Sendee Comm., Pennsylvania
Gas Co. t; -23
Norfolk Southern R. R., Backus v. . . . 575
Northern Ohio Trac. & Light Co., CuyaJ^oga River
Power Co. t;. . ... 388
Northern Trust Co., ^xr., Chesbrougih v. . . 83
Ohio, State of , v. State of West Virginia . . 563
Oklahoma, State of, Oklahoma Gin Co. v. . . .339
Oklahoma, State of, v. State of Texas . . 372
Oklahoma Corporation Conmi.,.Oklahoma Operating
. Co. r. . .... 331
OklahomiEi Gin Co. v. State of Oklahoma . 339
Oklahoma Operating Co. v. Love ei a{., Corporation
Comm. of Oklahoma 331
Olaeida Nav. Co., Clmt. of the ''Percy R. Pyne 2d)'''
V. W. & S. Job & Co. . 521
Oregon, State of, Frazier t^. 581
Ormes, Admr., Houston, Secy, of the Treasury, v. 469
Pacific Transport Co., Hanrahan v. 579
Pahner, Alien Property Custodian, Goepel et al.^
Partners, v. - 582
Pahner, Alien Property Custodian, Keppelmann
et al., Exrs., v 581
Pahner, Attorney General, State of New Jersey v. . 570
"Panama R. R. v. Toppin SOS
Parker, Sheriflf , Caldwell v. 376
Parry, Cricket S. S. Co. »• 580
P^irsons V. Moor 570
Patino, Rooha v. 578
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TABLE OF CASES REPORTED. xiii
P. D. Beckwith, Inc., Estate of, v. Commissioner
of Patents 538
Pemi Mutual life Ins. Co. v. Lederer, Collector
of Internal Revenue 523
Pennsylvania, Commonwealth of, v. State of West
Virginia 563
Pennsylvania Gas Co. t^. Public Service Comm. of
New York 23
Pennsylvania R. R., Boehmer v 496
Pennsylvania R. R. v. Dyason, Master of the ^' Wei-
beck HaU " 584
Pennsylvania R. R. v. Naam Looze Vennoot Schap 584
"Percy R. Pyne 2d," ». W. A S. Job A Co. . . 521
Philadelphia & Reading Ry., Hull, Admx., v. 475
Phillips Co. t;. Everitt, Trustee . .679
Pierce V. United States 239
Pollard V. United States ..... 577
Prairie County Road Improvement Dist. No. 1,
Chicago, Rock Island & Pacific Ry. v. . 591
Prendergast Constr. Co., Goldsmith v 12
Prudential Ins. Co. v. Cheek .... 567
Public Service Conmi. of New York, Pennsylvania
Gas Co. V. . .23
Queens Land & Title Co. v. Kings County Trust
Co 572
Ralph, Cole !;• 286
Ramberg Iron Works, Maryanne Shipping Co.,
Chnt.ofthe"Maryamie," «. .580
Rederiaktiebolaget Atlanten t^. Aktieselskabet Kom-
Og Foderstof Kompagniet .... 313
Reeder v. United States .581
Richardson, Trustee, f^. Germania Bank of the City
of New York 582
Road Improvement Dist. No. 1 of Prairie County,
Chicago, Rock Island & Pacific Ry. v. . 591
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xiy TABLE OF CASES REPORTBD.
Rocha tr. Tuascm y Patino . . • . 678
Roebling's Sons Co., ErickBon v. . 585
Roussel, Admr., New Orleans Land Co. v. . 571
Rowe, Trustee, v. Drohen 587
St. Louis, Lron Mountain ft Southern Ry«, Soutbem
Cotton Oil Co. V. 590
St. Louis, Lron Mountain & Southern Ry., True v. 589
fiandgren t^. tJlster S. S. Co. .... 585
Sanitary Dist. of Chicago, Metropolitan West l%de
Elevated Ry. f^. 573
Schap, Naam Looase Veunoot, Central Elevator Co. v. 584
Schap, Naam Looase Veonoot, Pennsylvania R. R.
V. 584
Schrader's Son, Inc., United States v. . .85
Shaffer, v. Carter, State Auditor .... 37
Shannon, Mason, Trustee, v. . . . . 572
Shreveport, City of. Southwestern Gas & Elec. Co. v. 585
Simpson, United States v. 465
Simpson, Surviving Exr., v. United States 547
Sinclair Refining Co., Askren, Attorney General, v. 444
Skinner, Collector of Internal Revenue, Union
Pacific Coal Co. ». . . .570
South Covington & Cincinnati Street Ry. v. Com-
monwealth of Kentucky .... 399
Southern Cotton Oil Co. v. St. Louis, Iron Mountain
& Southern Ry 590
Southwestern Gas & Elec. Co. v. City of Sireveport 585
Spei^t, Western Union Tel. Co. t;. .576
Speny , Hutchinson v. 587
Crinkle, United States t^. 589
Storgard, France & Canada S. S. Co. t;. .585
Stratheam S. S. Co. t;. Dillon .... 348
Supreme Lodge of the World, Loyal Order of Moose,
Kemiey, Admr., v. 411
Swaim, Chicago, Rock Island &. Pacific Ry. v. . 577
Swann v. Austell, Exr '579
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TABLE OF CASES REPORTED. z7
FAOB
TaftCo. 9.StateQf Iowa . .569
Tananevics v. State of Illinois 568
TeoDM, State of , State of Oldalioma 9. . . .372
Texas Go^ Askren, Attonifigr General, v. 444
Thomp6(xi, Ddaware, Lackawanna ft Western R. R.
V. 500
Thompson, Master of the " Wesbneath/' v. Luead 358
Tiff any I Reoeiver, Ex parte 32
Tiffany, Surviving Exr.,v. United States . 500
Tjosevig f^. Donohoe. 587
Tobin, Sheriff , McQoskey 9. .107
Tqppm, Panama R. R. tr. . .308
Trandt Development Co.| C!heatham Elec. Switch-
ing Device Ck>. v* 567
Travis, Comptrolkr, v. Yale & Towne Mfg. Co. 60
True, St. Louis, Iron Mountain ft Southern Ry.t^. . 589
Tuason y Patino, Rocha v. . . . 578
Ulster S. S. Co., Sandgren tr. .585
Union Investment Co., Britton, Trustee, v. . 580
Union Pacific Coal Co. v. SIdnner, Collector of
Internal Revenue 570
Union Pacific R. R. v. Jenkins . . 589
Union Trust Co. v. Woodward k Lothrop 568
United States, Intervener, State of Oklahoma v.
State of Texas .372
United States v. Alaska S. S. Co 572
United States, Ash Sheep Co. t^. . . 159
United States, Baender 9 .586
United States, Bain v. .586
United States, Bumap v. 512
United States, Cameron f^. 450
United States, Chapa V. . . . . 583
United States f;. Chase National Bank . . 485
United States, Globe Works tr. . .588
United States, Grand Trunk Western Ry. t^. . . 112
United States, Griffith 9. 577
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zvi TABLE OF CASES REPORTED.
United States, Horowits v. . . . .586
United States ex rd. Kansas City Southern Ry. v.
Interstate Commerce Comm. . ' 178
United States, Kansas City Southern Ry. f^. . . 147
United States, Krichman v. . . ". 576
United States, Linds^ t^. 583
United States, McCay En^eering Co. f^. . . 571
United States, Miller v. .584
United States, National Lead Co. 9. .140
United States v. National Surety Co. 577
United States for the use of American Sheet Metal
Works, National Surety Co. v. . . . 590
United States, Pierce v. ^ 239
United States, Pollard v. 577
United States, Reeder v. . . 581
United. States V. Schrader's Son, Inc. ... 85
United States v. Simpson . . 465
United States, Simpson, Surviving Exr., v. . 547
United States f^. Sinrmkle 589
United States, Tiffany, Surviving Exr., V. . 590
United States v. Wayne County, Kentucky . 674
Vallely, Trustee, Galbraith t; 576
Van de Zande, Chicago & Northwestern Ry. v. 574
Vir^nia & West Vir^nia Coal Co. v. Charles . 569
Ward, Chicago, Rock Island & Pacific Ry. v. 18
Washburn v. Gillespie 587
Wayne Coimty, Kentucky, United States v. . . 574
Wdnberg, Jay v. 586
" Welbeck Hall," The, Central Elevator Co. i^. .584
"Welbeck HaU," The, Pennsylvania R. R. t>. . 584
Western Union Tel. Co. V. Speight .576
"Westmeafii," The, v. Lucas .... 358
West Tirpnia, State of , State of Ohio ». . 563
West yu*ginia. State of. Commonwealth of Pamsyl-
vania f^. ...•••• 563
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TABLE OF CASES REPORTED. xvii
PAOB
WiUem t;. Bradley, Trustee . 573
Williams, Comptroller of the Currency, First
National Bank of Canton v 504
Wintroath, Chapman v. 126
Wisconsin, State of, ex rd. City of Milwaukee, Mil-
waukee Elec. Ry. & light Co. v. . ,100
Wisconsin, State of. State of Minnesota v. 273
Wisconsin Trust Co., Mimday, Trustee, v. 499
Woodward & Lothrop, Union Trust Co. v. 568
W. & S. Job & Co., Oneida Nav. Co., Chnt., v. . 521
Yale & Towne Mfg. Co., Travis, Comptroller, v. 60
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TABLE OF CASES
GLTED m OPINIONS.
PAOB
Abranus ff. XJiiited States, 250
U.S. 616 253
Adams ff. Baker, 21 Nev. 375 203
Aktieselskabet &c. v. Bedeiv
iaktiebolaget Atlanten, 232
Fed. Rep. 403; 250 td. 035
314, 315
Alabama Great Southern Ry.
V. Thompeon, 200 U. S. 206 111
Alkeyer v. LouisiaDa, 165
U.S. 578 503
American Mftr. Co. v. St.
Louis, 250 U.S. 450 52,55
American School of Magnetic
Healing v. MoAnnulty, 187
U.S.Oi 267
Amoskeag Savg^. Bank v.
Purdy,^lU.S.373 80
Andrews Vm Andrews, 188
U.S. 14 433
Anglo-American Prov. Co. ff.
Davis Phnr. Co., 101 U. S.
373 414
Anthony v. Jillson, 83 Calif.
206 307
Antoni v. Greenhow, 107
U. S. 760 562
Am>leby v. Buffalo, 221 U. S.
Aricansas v. Tennessee, 246
U. S. 158 281
Armour ACo. v. Vbginia, 246
U. S. 1 52
Ash Sheen) Co. «. United
States, 250 PM. Rep. 501 150
Aspen Bun. Co. «. fiUings,
150 U. S. 31 568
Atduson, T. A S. F. Ry. «.
0'Conn€n%223U.S.280 338
Atchison, T. & S. F. Ry. «•
8owen,213U.&fi6 415
PAOB
Atlantic Coast line R. R. v.
Mims, 242 U. S. 532 110
Auffmorat v. Hedden, 137
U.S. 310 516
Aultman A Taylor Co. v.
Syme, 70 Fed. Rep. 238 562
Aye», In re, 123 U. S. 443
472,478
Backus 9. Fort Street Depot
Co., 160 U. S. 557 106
Bailey v. Railroad Co., 22
WaU. 604 236
Baldwin v. Franks, 120 U. S.
678 434
Bait. A; Potinnac R. R. v.
Hopkins, 130 U. S. 210 6
Bank of Augusta 9. Earie, 13
Pet. 510 414
Bank of En^^d v. Vagliano
Bros., [1801] A. C. 107 406
Bank of United States v.
Bank of Georgia, 10 Wheat.
333 404
Barklage v. RusseU, 20 L. D.
401 306
Reals ff. Cone. 27 Colo. 473 206
Bean v. Moms, 150 Fed. Rep.
651; 221 U. S. 485 164
Beavers v. Haubert, 108 U. S.
77 172
Beckwith, In re, 48 App.
D. C. 110 -530
Belk «. Meai^, 104 U. S.
270 205,307,306
Bell's Gap R. R. v. Ptonsyl-
vania. 134 U. S. 232 76
BerryhiUiF.Carter,760Ua.248 47
Benyman v. United States,
250 Fed. Rep. 206 467
Bilby 9. Stewart, 246 U. S.
2H 567,500
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TABLE OF CASES CITED.
PAOfl
Billixigs V. Sitner, 228 Fed.
Rep. 315 368
Bishop V. State, 149 Ind. 223 220
Blake v. McClung, 172 U. 8.
239; 176 id. 59 79, 560, 562
Blake v. United States, 103
U. S. 227 515
Blumenstock Bros. v. Curtis
Pub. COy 252 U. S. 436 573
Blythe v. ffinckley, 180 U. S.
333 435
BoMxl of Liquidation v. Mo-
Comb, 92 U. S. 531 472
Boehmer v. Pennsylvania R.
R., 252 Fed. Rep. 553 497
Bonner, In re, 151 U. S. 242 368
Boston & Montana Min. Co.
V. Montana Ore Co., 188
U.S. 632 512
Bostwick V. Brinkerhoff, 106
U. S. 3 370
Bowes V, Haywood, 35 Mich.
241 119, 123
Brander v, Brander, 4 Ves. Jr.
800 234
Branson v. Bush, 251 U . S.
182 18
Brazee«. Michigan, 241 U. S.
340 108
Bristol V. Washington County,
177 U. 8. 133 52
Brolan v. United States, 236
U. S. 216 242, 569, 573, 575
Brown v. Alton Water Co.,
222 U. S. 325 568
Brown V. Elliott, 225 U. S.
392 172, 177
Brown V. Gumey, 201 U. S.
184 297
Brown V, Maryland, 12 Wheat.
419 226, 233
Brown Chemical Co. v. Meyer,
139 U. S. 640 544
Bruce v, Tobin, 245 U. S. 18 567
Brushaber v. Union Pac. R.
R., 240 U. 8.1 206
Biuienning v, Chicago, St. P.
&c.Ry.,163U.8.321 464
Bumap V, United States, 53
Ct.Chns.605 613
Burrow-Giles Co. v. SarOtiy,
111 U.S. 53 226
Cameron V.Bass, 19 Ari2. 246 463
PAGB
Cameron v. United States,
250 Fed. R^. 943 451, 454
CaminetU v. United States,
242 U. 8. 470 538
Camp V. Boyd, 229 U. 8. 530 48
Can^ Co. V. Clark, 13 Wall.
311 544
Candno v. Railroad of the
North, Sup. Ct. of Colombia 311
Capital City Dairy Co. i;.
Ohio, 183 U. 8. 238 343
Carey v. 8outh Dakota, 250
U. S. 118 435
Carolina-Tenn. Co. v, Hia-
wassee Co., 171 N. Car.
248: 175 id. 668 341, 342
Cam)Ut>.8aflford,3How.441 460
Catholic Bishop of NesquaUy
1^. Gibbon, 168 U. 8. 156
462, 464
Central Land Co. v, Laidley,
159 U. S. 103 106
Central Trust Co. v. Grant
Locomotive Works, 135
U. S. 207 371
Central Vermont Ry. v.
White, 238 U. 8. 507 110
Chambers v. Bait. & Ohio R.
R., 207 U. 8. 142 415, 660
Champion Lumber Co. v.
Fisher, 227 U. 8. 446 6
Charleston & W. C. Ry. v.
Thompson, 234 U. 8. 576
154, 155, 168
Charlton v. Kelly, 229 U. 8.
447 365,369,371
Chattanoo^ Natl. B. & L.
Assn. V. Denson, 189 U. S.
408 503
Chemung Canal Bank v.
Lowery, 93 U. 8. 72 662
Ches. & Ohio Ry. v. De
Atley, 241 U. 8. 310 21, 22
Ches. & Ohio Ry. v. Ken-
tucky, 179 U. S. 388 407
Ches. & Ohio Ry. v. Proffitt,
241 U. 8. 462 22
Chesbrough v. Woodworth,
196 Fed. Rep. 876; 221 id.
912; 261 u2.' 881; 244 U.S.
72 83,84
Cnicago, Ind. & L. Ry. v.
McGuire, 196 U. 8. 128 344
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.TABLE OF CASES CITED.
XXI
Chicago Junotioii Ry. v.
King, 222 U. S. 222 498
Chicago, Mil. A St. P. Ry. v.
Minnesota, 134 U.S. 418 335
Chicago, R. I, d: Pac. Ry. «.
Arkansas, 219 U.S. 453 105l,
Chicago, R. I. & Pac. Ry. v.
Maucher, 248 U. S. 350 158
Chicago, R. I. A Pac. Ry. v.
Ward,68 0kla. — 19
Chicago, St. Pftul &c, Ry. v.
United States, 217 U. S.
180 122, 124
Chin K. Shue, In re, 199 Fed.
Rep. 282 369
Chin Yow v. United States,
208 U. S. 8 370
Chirac v. Chirac, 2 Wheat.
259 435
Chrisman v. Miller, 197 U. S.
313 299, 459
Christinas v. Russell, 5 Wall.
290 415
Cincinnati, C. A E. Ry. 9.
Commonwealth, 181 Ky.
449 408
Claassen v. United States,
142 U. S. 140 . 253
Clarke v. McDade, 165 U. S.
168 343
Clipper Min. Co. v. Eli Min.
Co., 194 U. S. 220, 296,
29y 463
Coe If. Errol, 116 U. S. 517
155,156
Cole ». Ralph, 252 U. S. 286 456
Coleman v. Tennessee, 97
U. S. 509 385, 386
Collector v. Hubbard, 12
Wall.l 217-219,230
Collins V. MiUer, 252 U. S.
364 522
Connecticut General life Ins.
Co. tf. Eaton, 218 Fed.
Rep. 188 524,527,529
Connecticut Mutual Life Ins.
Co. V. Eaton, 218 Fed. Rep.
206 524, 529
Consolidated Turnpike Co.
9. Norfolk te. Ry., 228
U. S. 326 567,568
Converse v. Hamilton, 224
U. S. 243 415
PAGB
Cooke «. United States, 91
U. S. 389 496
Cooper V. . Schlesinger, 111
UTs. 148 251
Corfield v. CoryeU, 4 Wash.
C. C. 371 560
Cornelius v. Kessel, 128 U. S.
456 461
Cornell v. Coyne, 192 U. S.
418 354
Cosmos Expl. Co. v. Gray
Eagle Oil Co., 190 U. S.
301 462
Covington v. Covington Natl.
B8u£, 185 U. S. 270 370
' V. Missouri, 4 Pet. 410 226
le & Cripple Creek Min.
Co. V. Uinta Tunnel Min.
Co., 196 U.S. 337 296,303,463
Crew Levick Co. v, Pennsyl-
vania, 245 U. S. 292 55,57
Cross Lake Shooting Club «.
Loubiana, 224 U. S. 632 503
Grossman v. Pendery, 8 Fed.
Rep. 693 301
Crow V. Van Sickle, 6 Nev.
.146 293
Cuba R. R. V. Crosby, 222
U. S. 473 309
Dainese v. EendaU, 119 U. S.
53 370
Dandger v. Cooley, 248 U. S.
319 466
Debs V. United States, 249
U. S. 211 242, 250
Decatur Bank v. St. Louis
Bank, 21 Wall. 294 168
Dedham Bank v. Everett
Bank, 177 Mass. 392 496
Defiance Water Co. v. Defi-
ance, 191 U. S. 184 366
De Ganay v. Lederer, 250 U.
S. 376 52
Del., Lack. A W. R. R. v.
Yurkonis, 238 U. S. 439 569
Denver v. Dumars, 33 Colo.
94 11
Denver v. Kennedy, 33 Colo.
80 11
Denver v. Londoner, 33 Colo.
104 10
I Deposit Bank v, Fayette
■ Bank, 90 Ky. 10 496
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TABLE OF CASES CITED.
PAOB
Detatnt United Ry. v. Miohi-
gui, 242 U. S. 238 103
Devine v. Lob Angeles, 202
U. S. 313 512, 569
Dexter Horton Natl. Bank v.
Hawkins, 190 Fed. Bep.
924 37
Dr. Miles Medical Co. «.
Park A Sons Co., 220X7. S.
373 96, 97, 99, 100
Doyle V, Mitchell Bros. Co.,
247 U. S. 179 207
Drury v. Lewis, 200 U. S. 1 388
Duffill, Estate of, 58 CaL
Dec. 97; 180 Calif. 748 225
Earp'sAppeal,28Pa.St.368 235
Edwards v. Darby, 12 Wheat.
206 145
'Emsa V. Canadian Northern
By., 255 Fed. Rep. 937 554
Elgin Natl. Watch Co. ff. Illi-
nois Watch Case Co., 179
U. S. 665 544
Embree v. Kansas City Road
Dist.,240U.S.242 18
Empire State-Idaho Min. Co.
V, Hanley, 205 U. S. 225 573
Equitable Life Assur. Soc. v.
Brown, 187 U. S. 308 344
Erie R. R. v. Purucker, 244
U. 8. 320 22
Erwin v. United States, 97
U. S. 392 474
Evans v. United States, 153
U. S. 584 253
Fair Haven A W. R. R. v.
New Haven, 203 U. S. 379 104
Famcomb v. Denver, 64
Colo. 3 7,10
FaneU v. O'Brien, 199 U. S.
89 573, 575
Fauntleroy v, Lum, 210 U. S.
230 415
Fenn v. Kinsey, 45 Mioh.-446
119, 123
Ficklen v. Shelby County
Taxing Dist., 145 U. S. 1 442
First Natl. Bank v. Marshall-
town Bank, 107 la. 327 496
First Natl. Bank v, Williams,
260 Fed. Rep. 674 504,509
Fishbeck Soap Co. v. Kleeno
Mfg. Co., 44 App. D. C. 6 542
PACB
Fong Yue Ting v. United
States, 149 U. S. 698 309
Ford V. Munroe, 144 S. W.
Rep. 349 108
ForgayiF.Conrad,6How.201 371
Fox V. Myers, 29 Nev. 169 303
FrankUn v. United States,
216 U. S. 559 388
FrittB9.Pakn^l32U.S.282 503
Frohwerk v. United States,
249 U. S. 204 242, 250
Funk V. State, 208 S. W. Rep.
509 388
Galveston Ac. Ry. v. Ginther,
96 Tex. 295 106
Gandia v. Pettingill, 222 U.
S.452 269
Geer v, Connecticut, 161
U. S. 519 432
Gelpcke v. Dubuque, 1 Wall.
175 106
General Oil Co. v. Grain, 209
U. S. 211 415
Geofroy v. Rigcps, 133 U. S.
258 435
Georgia v. Tennessee Copper
Co., 206 U. S. 230 431
Gibbons v. Mahon, 136 U. S.
549 202, 2^ 234, 235
Gibbons v. Ogden, 9 Wneat.
1 442, 468
Globe Newspaper Co. v.
Walker, 210 U.S. 356 441
Goldman v. United States,
245 U. S. 474 244
Goodman v. Niblack, 102
U. S. 556 474
Goodrich V. Ferris, 214 U. S. --
71 573, 575
Goodyear's India Rubber
Glove Co. V, Goodyear
Rubber Co., 128 U. S. 598 544
Grafton v. United States, 206
U. S. 333 388
Grand Canyon Ry. v. Cam-
eron, 35 L. D. 495; 36 ui. 66 456
Grand Trunk W. Ry. v.
United States, 53 Ct. Clms.
473 113, 117
Grant v. Phoenix Ins. Co.,
106 U. S. 429 370
Grant Shoe Co. v. Laird Co.,
212 U. S. 445 441
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TABLE OF CASES CITED.
zziii
PAGl
Gnya Haibor Co. t. Ooate-
FoidiievCo.,248n.8.261 587
Oieenv. BisadL 79 Oonn. 547 228
Greene «. Henkd, 183 U. S.
240 ^^ 172
Greene v. Louis, ft Intenir-
ban R. R., 244 XT. S. 499 4, 46
Grenada Lumber Co. v. Mis-
asrippi, 217 U. S. 433 338
Grin, ^ r«, 112 Fed. Bep. 790 309
Grin ff. Shine, 187 U. 6. 181 309
Gumbd «. Pitkin, 113 U. 8.
545. 30
Gut Lun, In re, 84 Fad. Rep.
323 308
GwiDim «• Donnellan, 115
U. 8. 45 295
Gytl, Bx parte, 210 FM. Rep.
918 300
Haas 9. Henkel, 216 XT. 8. 462 172
Hancock v. Muskogee, 250
U. S. 454 18
Harding, Ex parte, 120 XT. 8.
782 309
Haidiog, Ex parte, 219 IT. 8.
303 37
Harkrader v. WadLey, 172
U. 8. 148 305
Harper Bros. v. Klaw, 232
Fed. lUn. 009 320, 327
Harris «. fiquator Min. Co.,
8 Fed. Rep. 803 300
Harria»-Irby Cotton Co. v.
SUte, 31 Okla. 003 334, 330
Harry Lode Min. Claim, 41
LI).403 295
HaskeD v. Kansas Natural
Gas Co., 224 U.S. 217 28
Hauenstein v. Lynham, 100
U. 8. 483 435
Heal^ ff. Rupo, 37 Colo. 25 297
Healy v. 8ea Gull Spedalty
Co., 237 U.S. 479 441
Heike v. XTnited States, 217
U. 8. 423 305, 370
Henderson L db P. Co. v.
Bhie Ridge Ac Ry., 243
U. 8. 503 344
Hennen, Bz parte, 13 Pet. 230 515
Henry v. Henkel, 235 IT. 8.
219 172, 309
Henry ff. XTnited States, 251
U.8.398 550,553
Heroldv. Mutual Benefit life
Ins. Co., 201 Fed. Rep.
918; 231 IT. 8. 755 529
Hirsh V. Twyford, 40 OUa.
220 , 330
H6£Eman k Co. «. Bank of
MilwaukM. 12 WaU. 181 494
Hohorst ff. Hamburg-Ameri-
can Packet Co., 148 U. 8.
202 522
Holcombe «. McEusidc, 20
How.552 370
Hooper «. California, 155 U.
8.048 443
Hopkins If. United States, 171
Ursr579 443
Hq)kin8 ff. Walker, 244 IT. 8.
480 512
Hc^kif.Bell,3Cranch,454 434
Hortsman ff. Henshaw, 11
How. 177 403
Howard 9. Gipsy Oil Co., 247
U. 8. 503 48
Howard if. Mississippi Vallqr
Bank, 28 La. Ann. 727 490
Hulbert if. Chicago, 202 U. 8.
275 343,344
Hull ff. Burr, 234 U. S. 712 509
Hull ff. Phila. ft Read. Ry.,
132 Md. 540 475, 477
Humphreys ff. Idaho Gold
Mmes Co., 21Idaho, 120 307
Hyde v. Shine, 199 U. 8. 02 172
Hyde v. United States, 225
U. 8. 347 172, 177
Illinois Seed Co., Ex parte,
219 O. G. 931 542
Indiana Transp. Co., Ex
porfo, 244 U. 8. 450 49
International Textbook Co.
If. Figg, 217 U. 8. 91 415,442
Interstate Amusement Co. if.
Albert, 239 U. 8. 500 503
Iowa If. Illinois, 147 U. 8. 1
281,282
Iron Silver Min. Co. v. Camp-
beU, 135 U. 8. 280 297
Italier, The, 257 Fed. Rep.
712 357
Jackson if. Roby, 109 U. 8.
440 297
Jacobs 9. Priohard, 223 U. 8.
200 146
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TABLE OF CASES CITED.
PAOB
Jacobs 9. Southern Ry.. 241
U. 8. 229 21
Jarrolt v. Moberly, 103 U. S.
580 226
Jefferson, The, 215 U. S. 130 441
Jett Droe. Co. v. Carrollton,
178 Ky. 561 1, 4
John V, PaulHn, 231 U. 8. 583 110
Johnson 9. Brandau, 32 App.
D. C. 348 541, 546
Jones V, Rutherford, 26 App.
D.C.114 473
Jones V. United States, 250
Fed. R^. 104 467
Joplin Mercantile Co. v.
United States, 236 U. 8.
531 244
Jureidini «. National British
Ins. Co., [1015] A. C. 409 316
Kaine, In re, 14 How. 103
369, 370
Kansas v. Colorado, 185 U. 8.
125 431
Kansas aty So. Ry. v. "
United States, 53 Ct. Chns.
630 148
Keim v. United States, 177
U. 8. 290 515
Kelley v. Rhoads, 188 U. 8. 1 466
Kennedy v. Gibson, 8 Wall.
498 511
Kenney v, Supinme Lodge,
285 lU. 188 411, 414
Keyser v. LoweU, 117 Fed.
Rep. 400 415
Kirmeyer v. Kuisas, 236
U 8 568 467
Klotz 9. Angle, 220 N. Y. 347 562
Knight 9. United States Land
Assn., 142 U. 8. 161 460
Knowlton 9. Mooie, 178 U. 8.
41 550
Krippendorf 9. Hyde, 110
U. 8. 276 37
Lake 9. Bender, 18 Nev. 361 293
Lane 9. Cameron, 45 App.
D. C. 404 463
Lsst Chance Min. Co. 9.
Tyler Min. Co., 157 U. 8.
683 297
La Tourette 9. McMaster,
248 U. 8. 465 79
Lawrence Mfg. Co. 9. T6n-
PAOB
nessee Mfg. Co., 138 U. 8.
537 544
Leather Mfr's Bank 9. Mor-
gan, 117 U. 8.96 494
Lederer 9. Penn Mutual life
Ins. Co., 258 Fed. Rep. 81
523,524
Lee 9. Central of Ga. Ry., 21
Ga. App. 558; 147 Ga. 428
109-111
Lee9. Johnson, 116 U.S. 48 460
Legal Tender Cases, 12 Wall.
457 238
Legal Tender Case, 110 U. 8.
421 226,238
Leland 9. Hayden, 102 Mass.
642 228
linn & Lane Co. 9. United
States, 236 U. 8. 574 231
Liverpool Ins. Co. 9. Orleans
Assessors, 221 U. 8. 346 52
Logan County 9. United
States, 169 U. 8. 255 208
Londoner 9. Denver, 210 U.
8. 373 8, 10, 12
Louisiana 9. Jumel, 107 U. 8.
711 472
Louisiana 9. Mississippi, 202
U. 8. 1 281, 282
Louisiana Nav. Co. v, Qyster
Comm.. 226 T" 8. 99 370, 667
Louis. A Nash. k. R. 9. Hol-
loway.246U.S.525 110
Louis, a Nash. R. R. 9.
United States, 53 Ct. Clms.
238 151
Lowry 9. Fiinners' L. & T.
Co., 172 N. Y. 137 224
Lynch 9. Hornby, 247 U. 8.
339 204,232,571
McAdoo 9. Ormes, 47 App.
D. C. 364 m, 472
McCloskey 9. San Antonio
Trac. Co., 192 8. W. Rep.
1116 107
McCoach 9. Pratt, 236 U. 8.
562 553
McCorquodale 9. Texas, 211
U. 8. 432 567
McCowan 9. Maclay, 16
Mont. 234 306
McCulloch 9. Maryland, 4
Wheat. 316 51, 220, 226
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TABLE OP CASES CITED.
XXV
TAGM
MoQowan v. Fltfiah, 237 U.
8. 285 48, 473
McLish 9. Roff, 141 U. B. 661 365
McNamara v. Henkd, -226
U: B. 520 368
Mackey v. Coxe, 18 How. 100 474
Magruder v, Oregqn A Cali-
fornia R. R., 28 L. D. 174 303
Mahn v. Harwood, 112 U. S.
354 137
Malcolm v. United States,
256 Fed. Rep. 363 467
Malstrom v. reo^de's Ditch
Co., 32 Nev. 246 283
Manhattan Medicine Co. v.
Wood, 108 U.S. 218 544
Manners v. Moroseo, 254
Fed. Rep. 737; 258 id. 557
317,^23
Manning's Caae, 13 Wall. 578 515
Manufacturing Co. v.
Trainer, 101 U. 8. 51 544
Manhall v. Vicksbuig, 15
Wall. 146 170
Manhall Dental Mfg. Co. v.
Iowa, 226 U. 8. 460 431
Martin v. Hunter, 1 Wheat.
304 226
Martin v. United States, 168
Fed. Rep. 108 516
Marvin v. Trout, 109 U. 8.
212 343,344
Mazy, The, 233 Fed. Rep.
121 369
Masses Pub. Co. v. Fatten,
246Fed.Rep.24 264
Maxwell v. Bugbee, 250 U.
8. 526 56, 81
Medley, In re, 134 U. S. 160 368
Metropolitan Water Co. v.
Kaw Valley Dist., 228
U. 8. 519 568
Michigan Cent. R. R. «.
Powen, 201 U. 8. 245 51
Michigan Land Co. «• Rust,
168ll. 8. 589 461
Mchigan Trust Co. «. Ferry,
2281J.8. 346 49
Miks Medical Co. v. Puk k
Sons Co., 220 U. 8. 373
96, 97. 99, 100
Milligan, Sx parte,4 WaU. 2
386,387
6
PACB
Millingar v. Hartupee, 6
^^.258
Milwaukee v. Milwaukee Ry.
A Lt. Co., 151 Wis. 520;
165 id. 230; 166 id. 163 101-103
Minneapolis A St. L. R. R.
V. Bombolis, 241 U. 8. 211 110
Minnesota v. Hitchcock, 185
U. 8. 373 164-166, 472
Minnesota Rate Cases, 230
U. 8. 352 29, 185, 187, 188
Minot V. Paine, 99 Mass. 101 235
Mississippi R. R. Comm. v.
Mobile A Ohio R. R., 244
U. 8. 388 105
Missouri V. Chicago, BurL A
Q. R. R., 241 XL S. 533 338
Missouri 9. Holland, 258 Fed.
Rq). 479 417, 431
Missouri Pac. Ry. v. Kansas,
216 U. 8. 262 105
Missouri Pac. Ry. v. Omaha,
235 U. 8. 121 105
Missouri Pac. Ry. v. Tucker,
230 U.S. 340 337,338
Moore v. Missouri, 159 U. 8.
673
Mountain Timber Co. v.
Washington, 243 U. 8. 219
Muhlker V. New York A Har-
lem R. R., 197 U. 8. 544 106
Mutchmor v. McCarty, 149
Calif. 603 303
Mutual Benefit life Ins. Co.
V. Herold, 198 Fed. Rep.
199 524, 527, 529
Nairn linoleum Co. v. Ring-
wait Linoleum Works, ft
App. D. C. 64 540, 542
National Lead Co. v. United
States. 53 Ct. Chns. 635 140
National Park Bank v.* Ninth
Natl. Bank, 46 N.Y.r? 496
NeOson v. Rhine Shipping
Co.. 248 U.S. 205 352
Nevada-Calif omiarOrmn
Ry. V. Burrus, 244 U. 8.
Newburyport Water Co. v.
Newburyport, 193 U. 8.
561
New Entfand Oil Co.
CoDgdon, 152 Calif. 211
18
55
110
441
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XXVI
TABLE OF CASES CITED.
PAOB
New Orleans «. StempeL 176
U.S. 309 52
New Orleans ft N. E. R. R.
V. Harris, 247 U. 8. 367 110
New Yoric, L. E. ft W. R. R.
V. PenDMYaniay 153 U. 8.
628 76
New York Life Ins. Go. «.
Deer Lodge Counly, 281
U.S.405 443
New York ft Queens Gas Co.
«.MoCall,245U.8.d45 106
NicholsAnith Case, 46 L. D.
20 463
North Carolina R. R. 9. Zaoh-
aiy, 232 U. 8. 248 480
Norton v. Whiteside, 239
n. 8. 144 276
OgdenCity 9. Armstrong, 168
U. 8. 224 46
Ogden V. 8aunders, 12 Wheat.
213 238
Ohio R. R. Gomm. v. Worth-
ington,225n.S.101 156
Ohio Tax Cases, 232 U. 8. 576 46
Oklahoma, Ex parte, 220
U.S. 191 37
Oklahoma Gin Co. v. Okla-
homa, 252 U. S. 339 337
Oklahoma Gin Co. v. State,
63 Okla. 10 334, 339
Oklahoma Operating Co. 9.
Love. 252 U.S. 331 340
Orchard v. Alexander, 157
U. 8. 372 460, 461
Od[>ome, Matter of, 209
N. Y. 450 224
Pftdfic Express Co. v. Seibert,
142 U. d. 339 46
Panama R. R. 9. Bosse, 249
U. S. 41 309, 312, 313
Panama' R. R. 9. Toppin, 250
Fed. Rep. 989 309
Parish 9. MoGowan, 39 App.
D. C. 184 473
P^irish 9. Mao Vead^, 214
U. S. 124 473
Parsons 9. Venske, 164 U. 8.
89 461
Patterson 9. Bark Eudora,
190 U.S. 169 366
Paul 9. Virginia, 8 Wall. 168
56, 78, 443
Ptebody 9. mam, 247 U. 8.
347 204, 216
Ptek 9. Heurich, 167 U. 8.
624 106
Ptek ft Co. 9. Lowe, 247U. 8.
165 57, 206
Fenn Mutual Life Ins. Co. 9.
Lederar, 247 Fed. Rep. 660;
250U.8.656 524
PennsylYanIa Gas Co. 9. Pub.
Senr. Comm., 226 N. Y.
397 23,27
Ptople 9. Denman, 179 Calif.
497 388
People 9. Glynn, 130 App.
Div. 332; 198 N. Y. 605 224
Pereff09. Dodge, 163 U. 8. 160 207
Pferkms, In n, 100 Fed. Rep.
950 360
Pipe Line Cases, 234 U. 8.
548 466
Pbllock 9. F^umen' L. ft T.
Co., 158 U. 8. 601 202, 206, 218
Pnndergast Co. 9. Gold-
smith, 273 Mo. 184 12, 14
Prioe 9. Forrest, 173 U. 8. 410 474
Price 9. Henkel, 216 U. 8. 488 172
Prioe 9. Neal, 3 Buir. 1354
494,495
Public Utilities Comm. 9.
Landon,249U.8.236 28
Putnam 9. United States, 162
U. 8. 687 253
Railroad Land Co. 9. Court-
rifl^t,21Wa]1.310 128
Ralph 9. Cole, 249 Fed. Rep.
81 2&,289
Ramires 9. Panama R. R.,
Sup. Ct. of Colombia 312
Rand 9. United States, 249
U. 8. 503 550
RiMgan 9. United States, 182
Ura419 615
Reavis 9. Fiansa^ 216 U. 8. 16
307,308
Red Jadcet Coal Co. 9.
United Thacker Coal Co.,
248 U. S. 531 568
Restrepo 9. Sabana Ry., Sup.
Ct. of Colombia . 311
Rezford 9. Brunswick-Balke-
Collender Co., 228 U. 8.
339 370
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TABLE OF CASES CITED
XXYU
PAGB
8 T. M. Rep.
A7; 128 MB. Dec. 141 542
Richmond Min. Co. t . Roee.
114 U.S. 676 297
Rivenide Oil Co. v. Hitob-
cock, 190 U. 8. 316 460
Roberts v. Consaul, 24 App.
D. C. 551 473
Roberts v. United States, 176
U. S. 221 473
Robinson v. Bah. db Ohio R.
R., 237 U. S. 84 479
Robinson v. Oceanic Steam
Nav.Co.,112N.Y.315 562
Romano, Ex parte, 251 Fed.
Rep. 762 368
Roes f . Mclntyre, 140 U. S.
453 435
Round Mt. Min. Co. v.
Round Mt. Sphinx Min.
Co., 36Nev.543 296,303
Rowntree t.. Sloan, 45 App.
D. C. 207 134, 136, 137
Royal Arcanum v. Behrend,
247 U. S. 394 531
St. Anthony Church v, Penib>
sylvania R. R., 237 U. S.
575 569
St. Louis 9. Western Union
Td. Co., 148 U. S. 92 575
St. Louis Sl K. C. Land Co.
9. Kansas City, 241 U. 8.
419 10
St. Louis db San Francisco R.
R. 9. Brown, 241 U. 8. 223 23
St. Louis A San I^randsco R.
R. 9. Shepherd, 240 U. S.
240 567,568
St Loub S. W. Ry. 9. Arkan-
sas, 235 U. S. 350 55, 58
Sanborn 9. Maicwett, 18 App.
D.C.245 473
Sandbeif 9. McDonald, 248
U. S. 185 352, 356
San IVancisco Chemical Co.
9. DttflSdd, 201 Fed. Rq;K
830 295
Savannah 9. Jesup, 106 U. 8.
563 36
SctoMk 9. United States, 249
V. 8. 47 242, 250, 255, 264
Schksser 9. HcmpUB, 196
U.S. 173
567
PACB
Sohulenbeig 9. Haniman, 21
Wall. 44 123
Seaboard Air Line Ry. 9.
Horton,233U.S.492 21
Sean 9. Akron, 246 U. 8. 242
395,396
Second Emidoyers' Liability
Cades, 223 U. 8. 1 468
Sdeetive Diraft Law Cases,
245U.S.366 242
Shaffer 9. Carter, 252 U.S. 37 75
Shaffer 9. Howard, 250 Fed.
Rep. 873: 249 U. S. 200
43 44, 56
Shamro 9. United States, 235 '
XLS. 412 " 568
Shawnee Gas Co. 9. State, 31
(^la.505 334
Sheppy 9. Stevens, 200 Fed.
Itep.946 370
Shulthis 9. McDouisal, 225
U. 8. 561 560
ShurUeff 9. United States,
189 U.S. 311 515
Simpson 9. United States, 53
Ct. Chns. 640 548
Siiddne-Fund Cases, 99 U. 8.
700 238
Slater 9. Mexican Natl. R.
R., 194 U. 8. 120 309
Slaughter-House Cases, 16
Wall. 36 560
Smith 9. Western A Atlantic
R. R., 22 Ga. Am. 437 lir
Smith A Griggs Mig. Co. 9.
Sprague, m U. 8. 249 137
Stauthers 9. Smith, 204 U. 8.
632 84
Sohn 9. WaterBon,17 Wall. 596 562
South Carolina 9. United
States, 199 U. 8. 437 226
South Covington Ac. Ry. 9.
Ccxnmonwealth, 181 Ky.
449 400
South Covington Ac. Ry. 9.
Covington, 235 U. 8. 537
403.405,407
South Covingtcm Ac. Ky. 9.
Kentudcy, 252 U. 8. 399 400
Southern Fac. Co. 9. Aiisona,
249 U.S. 472 157
SouUiem Pae. Co. 9. Schuy-
ler, 227 U. 8. 601 158
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XZVlll
TABLE OF CASES CITED.
PAGB
Southem Pte. Term. Go. v.
Int. Com. Comm., 219 U.
8.408 155
Southem Ry. v. Canon, 194
U. 8. 196 111
Southem Ry. v. Milkr, 217
U. 8. 209 111
Southem Wisconsin Ry. v.
Madison, 240 U. 8.457 103, 104
Spencer v, Duplan Silk Co.,
191 U.S. 526 569
Standard Oil Co. v. Anderson,
212 U.S. 215 480,482,483
Standard Oil Co. v. Graves,
249 n. 8. 389 449
Standard Oil Co. v. United
States. 221 U. 8,1 221
Standard Paint Co. v. Trini-
dad Asphalt Mfg. Co., 220
U. 8. 446 544
Stanton v. Baltic Min. Co.,
240 U. 8. 103 206
State V. Butler, 70 Fla. 102 220
State ex rd. Milwaukee v.Mil-
waukee Ry. & Lt. Co., 151
Wis. 520; 165 id, 230; 166
id, 163 101-103
State Bank v. Cumberland 8.
& T. Co., 168 N. Car. 606 496
State Tax on Foreign-Held
Bonds, 15 Wall 300 52
Stemaman v. Peck, 80 Fed.
Rep. 883 369
Stockton 9. Bait. A N. Y. R.
R., 32 Fed. Rep. 9 575
Stratheam, The, 256 Fed.
Rep. 631 348, 362
Stratheam 8. 8. Co. v. DiUon,
252 U. 8. 348 363
Stratton's Independence 9.
Howbert 231 U. 8. 399 207
Strepey v. Stark, 7 Colo. 614 303
Sugfuman v. United States,
15 U. 8. 182 569, 573, 575
Superior v. Duluth St. Ry.,
166 Wis. 487 105
Swan Brewery Co. v. Rex,
[1914] A. C. 231 . 215,236
Swanson v. Sears, 224 U. 8.
180 295
Tiax Commr. «. Putnam, 227
Mass. 522 216.220,234,
-^ 287
PAOB
Tkyior 9. Anderson, 284 U. 8.
74 512
Tennessee 9. Sneedi 96 U. 8.
69 562
Tennessee v. Union db Plant-
ers' Bank, 152 U. 8. 454 512
Tennessee Coal Co. v.
George, 233 U. 8. 354 415
Terry v. Andereon, 95 U. 8.
628 562
Te^cas A*N. O. R. R. 9. Miller,
221 U. 8. 408 290
Thomson 9. Dean, 7 Wall.
342 371
Tinsl^y 9. Treat, 205 U. 8. 20
172,173
Todd 9. United States, 158
U. 8. 278 369
Tonopah Min. Co. 9. Doug-
bss, 123 Fed. Rep. 936 297
Towne 9. Eisner, 245 U. 8.
418 201, 204, 217, 219, 234
Towne 9. Eisner, 242 Fed.
Rep. 702 202
Traoy 9. Ginsberg, 205 U. 8.
170 106
Trade-Mark Cases, 100 U. 8.
82 238
Travis 9. Yale A Towne Mfg.
Co., 252 U. 8. 60 49, 54
Trustees 9. Greenough, 105
U. 8. 527 371
Union Dry Goods Co. 9.
Georgia Pub. Service Co.,
248 U. 8. 372 571
Union Oa Co. 9. Smith, 249
U. 8. 337 295, 296
Union Pac. Ry. 9. Ch^3renne,
113 U. 8. 516 46
Union Pac. R. R. 9. Harris,
215 U. 8. 386 166
United States, Petr., 194
U. 8. 194 369
United States 9. Alabama
Great So. R. R., 142 U. 8.
615 121
United States 9. AUred, 155
U. 8. 591 369, 515
United States 9. American
Bett Tel. Co., 167 U.S. 224
137 138
United States 9. Ash Sheep
Co., 254 Fed. Rep. 59 150
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TABLE OF CASES CITED.
xxoc
PAOB
Umted States v. Aahfield, 91
U. S- 317 515
United States «. Bail^^ 9
Pet. 238 147
United States v. Berry, 4 Fed.
R^. 779 369
United States v. Britton, 106
U.S. 199 244
United States «. Cerecedo
Hermanos, 209 U. S. 337 146
United States v. Chase Natl.
Bank, 241 Fed. Rep. 535;
250 id. 105 485, 493
United States v. Chaves, ^
U. S. 525 466
United States v. Choctaw
Nation, 179 U. S. 494 164
United States v. Colgate A
Co., 250 U. S. 300 96-98
United States v. Congress
Constr. Co., 222 U. S. 199 510
United States v. Cress, 243
U. S. 316 575
United States v. Crosby, 7
Cranch, 115 503
United States v. Dean lin-
seed-Qil Co., 87 Fed. Rep.
453 147
United States v. Delaware A
Hudson Co., 213 U. S. 366 338
United States v. Falk & Bro.,
204 U.S. 143 146
United States v. Ferreira, 13
How. 40 369
United States t. Fidelity*
Trust Co., 222 U. S. 158
550,553
United States t . IVeeman, 3
How. 556 170
United States v. Gennaine,
99 U. S. 508 515
United States «. Oirault, 11
How. 22 370
United States v. Grizsard,
219 U. S. 180 575
United States v. Hartwell, 6
WaU. 385 170, 516
United States v. Hendee, 124
U. S. 309 516
United States v. Hill, 120
U.S. 169 146
United States v. HiU, 248
U. S. 420 466-468
PACB
United States v. Wrmh, 254
Fed. B/e^. 109 388
United States v. Lacher, 134
U. S. 624 170
United States v. McCullac^,
221 Fed. Rep. 288 432
United States v. McMullen,
222 U.S. 460 315
United States v. Mattock, 2
Sawy. 148 168
United States v. Mesa, 228
U. S. 533 466
United States v. Mille Lao
Indians, 229 U. S. 498 164, 166
United States v. Moore, 95
U. S. 760 516
United States v. Moiiat, 124
U. S. 303 516, 518
United States v. National
Exchange Bank, 214 U. S.
302 494
United States v. Perkins, 116
U. S. 483 516
United States v. Petkos, 214
Fed. Rep. 978 368
United States t . Fhilbrick,
120 U. S. 52 146
United States v. Rabinowich,
238 U. S. 78 244
United States v. Realty Co.,
163 U. S. 427 226
United States v. Rockefeller,
260 Fed. Rep. 346 431
United States v. Schlierholz,
137 Fed. Rep. 616 516
United States v. Schrader's
Son, 264 Fed. Rep. 175 85,94
United States v. Schurs, 102
U. S. 378 460
United States v. Shauver, 214
Fed. R^. 154 432
United States v. Simpson, 257
Fed. Rep. 860 465, 466
United States v. Smith, 124
U. S. 525 516
United States v. Thompson,
98 U. S. -*86 121
United States v. Thompson,
258 Fed. Rep. 257 431
United States v. Welch, 217
U. S. 333 575
United States v. Wickersham,
201 U.S. 390 514
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XXX
TABLE OF CASES CITED.
PACB
United Steta 9. WiDkiDBi >
. 108 Fed. Bep. 228 870
United States Fidelity k
Guaranty Co. v. EientaQkyy
231 U. S. 8M 448
U. S. Glue Ck>. V. Oak Greek,
247 U. S. 321 57
United Surety Co. «. Ameri-
can Fruit Co., 238 U. B.
140 509
Upton 9. Santa Rita Min.
Co., 14 N. Mex. 96 307,306
Vauknan v Northup, 15
P^. 1 474
VoS BeAlinghaiiHwi v. Demp-
ster, 34 App. D. C. ^4 137
Wadky Southern Ry. v.
Georgia, 235 U.S. 051 337,338
Wagner 9. Covington, 251
U. S. 96
450
Wagner v. Railway Co., 38
Ohrst.32 395,897
Ward 9. Maryland, 12 Wall.
418 53,56,78
Ware 9. Hylton, 3 Dall. 199 435
Ware k Ldand 9. Mobile
County, 209 U. S. 405 443
Washington 9. Oregon, 211
U.S. 127: 214 id. 205 281,283
Wask^ 9. Hammer, 223 U. S.
85 296
WaU 9. Rederiaktiebolaget
Luggude. [1915] 3 K. B. 66 316
Watts 9. CunorB, 115 U. S.
353 316
Watts, Watts k Co. 9. Mitsui
k Co., (1917] A. C. 227;
[191612K.B.826 316
Webb 9. American Asphal-
turn Co., 157 Fed. Rep. 203 205
WeUs 9. Roper, 246 U. 8. 335 474
Wehon 9. Missouri, 91 U. B.
275 52
West 9. Kansas Natural Gas
Co., 221 U. S. 229 28
Westbiook, Ex parte, 200
IU.Bep.636 407
PAOB
Western k Atbntie R. R. 9.
Smith, 144 Ga. 737
Western Union Tel. Co. v.
Foster, 247 U. S. 105
Western Union TeL Co. 9.
Richmond, 224 U. S. 160
Westmeath, The, 258 Fed.
Rep. 446 358, 363
Whitfield 9. Hanges, 222 Fed.
Rep. 745
Wiidenhus's Case, 120 U. S. 1
Willeox 9. Consolidated Gas
Co., 212 U.S. 19
Williams 9. Fean, 179 U. S.
270
Williams 9. Morgan, 111 U. S
684
WiDiams 9. Vreeland, 260
U. S. 295
Wintroath 9. Chiqpman, 47
App. D. C. 428
WiBoonain 9. Duluth, 96 U. S.
379
Wisconsin 9. Pelican Ins. Co.,
127 U. S. 265
Wkconsin Cent. R. R. 9.
United States, 164 U. S.
190
"VIHsoonsin Trust Co. 9. Mun-
day,168Wi8.31 499,501
Witherapoon 9. Duncan, 4
Wan. 210
WithneU 9. Bueddng Constr.
Co., 249 U.S. 63
WoDensak 9. Beiher, 115
U.S. 96
Wolverton 9. Nichols, 119
U.S. 485
Wynum 9. Haktead, 109
U.S. 654
Yak k Towne Mfg. Co. 9.
Travii,262Fed.B«i.576
Yard Case, 38 L.D. 59
Youi«, Jb parte, 200 U. S.
123 335,337,338
Zeifer9.Dovdbr«13Aria.331 308
111
575
370
436
443
371
493
126
276
414
121
460
18
137
297
474
61
463
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Google
TABLE OF STATUTES
CITED IN OPINIONS.
OL) BMxans or
PAoa
1776, Jvm ao (Artfaka of
WarJL) 881
1776, Sept. ao (AitidM ot
War.|X,Art.l)........ 881
1790, July 1«, 0. 28, 1 Stat.
lab 816
1796, May 19, e. 80, 1 Stst
4fl&,|2 ..! 167
1802, liCardi 80, e. 13, 2
Stat. 139 167
1802, May 1, e. 41, 2 Stat
175 616
1806, Attfl 10, fl. 20, 2 Stat.
360 (ArtidflB of War, Arta.
88,99) 382
1816, April 29, c. 160, 3 Stat.
- 324 616
1834, Juiw 80, 0. 161, 4 Stat.
729,19 167
1846, Aug. 6, e. 89, 9 Stat.
66 276
1848, MiQT 29, c. 60, 9 Stat.
233 276
1848, Aug. 14, 0. 177, 9 Stat.
323 461
1866, June 3, e. 44, 11 Stat
21,16 118
1867, Feb. 26, e. 60, 11 Stat
166 276
1868, May 11, e. 31, 11 Stat
286 276
1861, Aug. «^ e. 46, 12 Stat.
2».... 63, 143
|49 53
1863, Feb. 25, 0. 68, 12 Stat
666,{69 610
1863, MjvA 8, 0. 76, 12 Stat
736,180 882
Unitbd Statm.
1864, Junes, o. 106, IS Stat.
W,|67 610
1864, June SO, c ITS, IS Stat.
223 53, 218
1116 6S
{ 117 218
1864, July 4, Joint Resolu-
tion. IS Stat. 417 6S
1866, July 13,0. 184, 14 Stat.
gg Kg M
1867|Mai^2,'e.'l«7,14Stat.
466,12.... 516
1867, Mardi 2. c. 169, 14
Stat.471,|lS 58
1870, July 8, c. 2S0, 16 Stat
202,135 ISO
1870, Ju^ 14. 0. 255, 16
Stat. 266 53, 146
|6 53
1876, July 12, c. 170, 19 Stat
78,f IS 117
1879, March 3, Joint Resolu-
tion, 20 Stat. 490 110
1881, March 3, c 140, 21
Stat. 505 297
1883, Maidi S, c 121, 22
Stat. 488 146
1887, Feb. 4, c. 104, 24 Stat
379 (see Interstate Com-
meroe Acts)
1890, July 2, c. 647, 26 Stat.
209 (Sherman Act) 94, 437
11.. 94,441
12 96,441
§7 437
1890, Oct. 1, c 1244, 26
Stat. 567 146
1891, March 3. c. 561, 26
Stat 1095,124 45S
(xxxi)
Digitized by
Google
xxxu
TABLE OP STATUTES CITED,
PAOB
1893 Mareh 2, c. 196, 27
Stat. 531 (flee Safety Ap-
pliance Act)
1894, Aug. 27, c. 349, 28
Stat. 509 53, 143, 206
§22 143
§27. 53, 205
1897, March 3, c. 391, 29
Stat. 692 136
1897, June 4, c. 2, 30 Stat.
34 455
1898*, JuiMi' is,' c.' 448,' 30 Stat.
448 294, 548
§§ 7, 13-15 294
§129,31. 549
1898, Dec. 21, c. 28, 30 Stat.
756 353
1901, Maitdi 3, c. 854, 31
Stat. 1189 474
1902, April 28, c. 594, 32
Stat. 152. 516
1902, June 27, c. 1160, 32
Stat. 406 549
§3 551
1903, Mardi 3, c. 1019, 32
Stat. 1225 135
1904, April 27, c. 1624, 33
Stat. 352 163
§8 165
1905, Feb. 20, c. 592, 33
Stat. 725 540
§2 545
§5... 540
§11 542
1906, May 4, c. 2081, 34
Stat. 168 543
1906, June 8, c 3060, 34
Stat. 225 465
1906, June 26, c. 3546, 34
Stat. 467 149
1907, March 2, c. 2564, 34
Stat. 1246 (Bee Criminal
Appeals Act)
1908, Jan. 11, Proclamation,
35 Stat. 2175 456
1908, April 22, c. 149, 35
Stat. 65 (flee Emjdoyera'
Liability Act)
1909, Feb. 18, c. 144, 35
Stat. 627 543
1909, March 4, e. 321, 35
Stat. 1068 (see Criminal
Code)
PACB
1900, Aug. 5, c 6, 36 Stat.
112 207, 528
§38 528
1910, April 5, c. 143, 36 Stat.
291 (see Employers' Lia-
bitity Act)
1910, June 17, c. 297, 36 Stat
504 517
1910, June 18, c. 309, 36 .
Stat. 539 (see Interstate
Commerce Acts)
§7 30
1910, June 25, c. 421, 36
Stat.847,§2 294
1911, March 2, c. 201, 36
Stat. 1015 294
1911, March 3, c. 231. 36
Stat. 1087 (see Ju<&cial
Code)
1911, March 4, c. 237, 36
Stat. 1207 617
1912, July 27, c. 256, 37 Stat
246._. 540
1912, Aug! 23,' c.' 350,' 37'statl
388 517
1912, Aug. 24, c. 389, 37 Stat.
555,§6 519
1913, Jan. 8, c. 7, 37 Stat. 649 540
1913, March 1, c. 92, 37 Stat.
701 (see Interstate Com-
merce Acts)
1913, March 4, c 142, 37
Stat. 766 517
1913, Oct. 3, e. 16, 38 Stat.
166 Qnoome Tax Act)
53, 201, 232, 524
|n,A(l) 53
|n,B 201
§n,G(b) 524
1914, July 16, c. 141, 38 Stat.
482 517
1914, Oct. 15, c. 323, 38 Stat.
730,§2(aaytonAct).... 98
1914, Oct. 22, e. 331, 38 Stat
762 293
fi 6, 11-13 294
22, schedule A 293
1915, March 4, c. 140, 38
Stat 962 471
1915, Maidi 4, e. 141, 38
Stat 1024 517
1915, March 4, c. 153, 38
Stat 1164 .351, 363
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TABLE OP STATUTES CITED.
zcdii
1915, Mareh
PAGB
4J4 352, a03
111.. 362
1916, May 10, c 117, 39 Stat.
93 617
1916, Aug. 29, e. 418, 39 Stat.
660 380
(ArtideB of War, Arts.
74,92,93) 384
Art. 96 383
1916, 8q>t. 6, c. 448, 39 Stat.
726. .5, 669, 670, 672,
574-676
§2... 569, 670, 572, 674-676
|6 569
1916, Seiyt 8, c 463, 39 Stat
756..... 63. 199, 226, 636
Tit I, Pt I, la 63
2a... 200, 226
3.; 233
12 (2) (c) 635
31 (b)... 232
1917, March 3, o. 162, 39
Statl069,|6 466, 468
1917, April 6, Joint Resolu-
tion, c. l,40Stat 1. . .261, 266
1917, May 7, c. 11, 40 Stat
39 172
1917, May 18, o. 16, 40 Stat
76 (SdflctivB Service Act)
242, 263
1917, June 16. o. 30, 40 Stat
217 (Espionage Act)
243,264
13 243, 264
4 243
1917, Aug. 10, c 63, 40 Stat
276 266
1017, Oct. 3, c 63, 40 Stat
300 63, 232
TitI,Ml,2 53
J1211 232
1918, May 20, Joint Resolu-
tion, c 79, 40 Stat 667... 264
1918,lfoy 20, FhNdamation,
40 Stat. 1781 266
1918, July 3, c. 128, 40 Stat
766 431
1918, July 31, Ftodamation,
40Stat 1812 432
1918, Aug. 13, Fhidamation,
40 Stat 1834 266
1918, Aug. 31, c 166^ 40 Stat
966 266
PACDI
1918, Aug. 31, Ph>damation,
40 SUt 1840 266
1918, Oct. 25, Ptodamation,
40 Stat 1863 432
1919, F€h, 24, c. 18, 40 Stat.
1067 63, 232, 537
§201 (b) 232
§§210, 213(c) 53
§233 (a) 537
1920, Feb. 28 (Transportar
tion Act) 672
Constitution. See Index at
end of volume.
Revised Statutes.
616
549
460
460
321
441
453
629(10), (11) 611
736 611
1342 (Arts, of War,
Arts. 68, 69, 62)...... 383
1797 516
1799 518
1812 517
2117 163
2318 294
2320 295, 456
2326 296, 463
2326 297,463
2329 296
2332 298, 305
2478 460
3182 549
3477 473
3962 149
4002 149
4057 121
4630 352
4886 136
4887.. 135
4894 135
4897 136
4904 138
4920 136
6237 510
Criminal Appeals Act 96
Criminal Code.
110 172
37 171, 244
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xxxtv
TABLE OF STATUTES CITED.
PAOB
Employers' Liability Act. . 21,
109, 477, 482, 497
§1 482
Interstate Commeroe Acts
30, 182
§1 30
§19a 182
Judicial Code.
§24(16) 609
§49 50P
§61 440, 609
PAOB
Judidal Code {Conl.)
§128 36, 569
§237.. 5, 102, 108, 340,
56^-572, 574, 575
§238. .44, 73, 242, 365,
437, 522
§250.... 472
§266 43, 333
National Bank Act. 610
Safety Appliance Act 498
§4. 498
(B.) Statutes of the States and Tbrritobiss.
District of Columbia.
Code, §105 474
Georgia.
Civ. Code, §4512 Ill
Employers' Liability Act HI
Kentucky.
Const 4
Ky. Stats., §796.... 400, 409
§4105 3
§4107 6
§4114 3
Massachusetts.
Const., 44th Amendment
216, 234
Michigan.
1867, Laws, p. 346 118
§4 124
§11 123
1877, Laws, May 14.... 119
1881, Laws, p. 362 120.
Minnesota.
Gen. Stats., 1913, § 7709. 558
Missouri.
Woerner's Rev. Code,
St. Louis, 1907,121.. 17
Nevada.
Rev. Laws, 1912,
§§1038-1040 291
§§2155-2160 293
§4961 305
§§4998,5000 292
§6526 290
New Mexico.
1919, Laws, c. 93 446
New York.
1778, Laws, c. 17 61
1910, Laws, c. 480, § 65. 27
1919, Laws, c. 627 72
Code
351,369,360 73
362,363,366 74
ie Civ. Pro. 1899,
2718 652
§§2721,2722 561
North Carolina.
Const 343
Ohio.
Const., Art. I, § 19 396
Art. XIII, §6.. 392
Gen. Code, 1910,
§§ 10128, 10134 389
§12940 407
Page A Adams Gen.
Code, §§614^^ 398
Oklahoma.
Const., Art. DC, §§ 18-23334
Art.X,§12.... 44
1916, Laws, c. 107, Art.
l,8ubd.B,§§2,7.... 47
Art. 2,subd.A, §L.. 67
1916, Laws, c. 164 44
§1 44
§§2,^11 46
1916, Laws, c. 39....:. 48
1919, Laws, c. 52, §3... 337
Rev. Laws, 1910, §§1192-
1207 334
§8236.. ,.333, 339
Texas.
1917, Laws, c. 133 107
Penal Code, Art. 421... 107
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TABLE OF STATUTES CITED.
XXXV
PAcn
WifloonfliiL
1917, LawB, 0. 211 602
StatB., 1911, S 1770b (2),
(10).. 601
Wifloonam (CrniL)
PACDI
§1770j(l) 602
(1862
106
Great Britain.
1783, Sept. 3, 8 Stat. 80. 346
1842, Aug. 9, 8 Stat. 672 366
1901, Apr. 22, 32 Stat.
1864... 366
1916, Aug. 16, 39 Stat.
1702 431
(C.) Tbbatibs.
Panama.
1903, Nov. 18, 33 Statl
2234 310
Spain.
1819, Feb. 22, 8 Stat.
262 872
Australia, WeBtem.
Dividflod Duties Aet
(D.) FoBxiQN Laws.
Panama.
216
Gctonbia.
Jud. Code, Art. 1601.. . . 811
1887, Laws, No. 62, Art.
5 310
Civ. Code, Art. 2341... 310
Art. 2347 312
Pblioe Code, Arts. 488,
489 310
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OASES ADJUDGED
or TBB
SUPREME COURT OF THE UNITED STATES
AT
OCTOBER TERM, 1919,
JETT BROS. DISTILLING COMPANY v. CITY
OF CARROLLTON.
BBBOR TO THB G0X7RT OF APPEALS OF THE STATE OF
KENTUCKY,
No. 106. Argued December 19, 1019.— Decided March 1, 1920.
An objection that a tax is void under the Fourteenth Amendment be-
cause of systematic discrimination by officials in making assessments,
but which does not draw in question before the state court the
validity of the statute or authority under which they acted, will not
support a writ of error from ihis court under Jud. Code, §^237, as
amended. P. 5.
A petition for rehearing, merely overruled by the state court without
o|Nnion, is not a basis for a writ of error. P. 6.
Writ of error to review 178 Kentucky, 561, dismissed.
The case is stated in the opinion.
Mr. Helm Bruce^ with whom Mr. Geo. B. Window was
on the briefs, for plaintiff in error, argued, inter alia, that
the point that the tax was void and without authority
because assessed in violation of due process of law after
(1)
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Si OCTOPER TERM, 1919.
Argument for PlaintifiF in Error. 262 TT. 8.
xhe whiskey had ceased to be the property of the Dis-
:illing Company, was sufficiently raised and was neces-
t^arily decided by the state court, because, while on this
point the Constitution was not invoked eo nomine in the
complaint, the facts from which the deduction of uncon-
stitutionality must follow were specifically set forth and
the constitutional claim was specifically made in a peti-
tion tot rehearing.
The reason for holding that a federal question made for
the first tim& in a petition for a rehearing is not generally
sufficient, is that, as a general rule, new grotmds for
decisions will not be allowed to be presented in a petition
for a rehearing; and therefore if the state court in over-
ruling such a petition is silent on the subject of a fed-
eral question, it will not be presumed that it passed
on the federal question. Texas & Pacific Ry. Co. v. Sauthr
em Pacific Co., 137 U. S. 48, 53. In view, however,
of the practice of the Kentucky court, which allows new
grotmds of decision to be presented by petition for a
rehearing, the basis being in the record, Elsey v. Peaple^a
Bank of BardweU, 168 Kentucky, 701, the denial of the
petition here necessarily imports an advene decision of
the constitutional claim.
It has often been held that where a federal question is
distinctly made in the court of original jurisdiction, and
where the court of last resort in the State must nec-
essarily have decided the question in order to make
the decision it did make, this is sufficient to ffve
this court jurisdiction, even thou^ the state court
was silent on the subject. Steines v. Franklin County,
14 Wall. 15, 21. In like manner, Tviiere it is evident
from the record and the practice of a state court,
that a federal question made in a petition for a rehear-
ing must have been decided in passing upon the
petition, that should be sufficient to give this court
jurisdiction.
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JETT BROS. CJO. v, CITY OF CARROLLTON. 3
1. Opinion of the Coort.
Mr. A. E. Sbriddett, with whom Mr. J. A. Dandtdtan,
Mr. 0. A. Danaldion and Mr. J. L. Donaldwn were on
the briefs, for defendant m error.
Mb. Justice Day delivered the opinion of the court.
The City of CarroUton brought suit against Jett Bros.
Distilling Company to recover balances allied to be due
as taxes upon distilled spirits belonging to the company
held in a bonded warehouse in that city. The t-vxes sued
for were those for the years 1907 to 1916, inclusive. It
appears that during those yean the City Assessor under-
took to assess for taxation the distilled spirits in the
bonded warehouse and the city taxes were paid as thus
assessed. This suit was brou^t to recover taxes for the
above mentioned years upon the theory that during that
period the spirits should have been valued by the State
Board of Valuatipn and Assessment as provided by the
statutes of Kentucky. (Kentucky Stats., §§ 4105, 4114.)
It was allied that the valuation by the City Assessor
was without authority of law, by mistake and for a much
less sum than that fixed for each of said years by the
State Board. It was also alleged that the company had
notice of the valuation fixed by the State Board; that the
City Assessor was without authority to assess spirits in
bonded warehouses; that the value fixed by him was an
iuoonsiderable stmi and much less than that fixed by the
State Board in accordance with the Kentucky statutes.
The Distilling Company took issue upon the petition.
It pleaded the original levies for the years in question and
the payment of the taxes for each and all of the said years .
It pleaded that the whiskey which it was sought to tax
under the new levy of 1915-1916 had been removed from
the bonded wardiouse of the company, and was no longer
its property^ and that it could no longer protect itself as
it could have done.had the tax been levied while the spir-
its were in its possession.
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4 OCTOBER TERM, 19ia
OpinMnoftheCoivt S62n.&
In the nineteenih paragraph of the answer a defense
was set up upon a ground of federal right under the
Ck)n8titution. It was averred that during all the years
covered by- the amended petition it had been the rulei-
custom, habit, practice and system in the City of Car-
roUton to assess and cause to be assessed the real estate
therein at an average of not more than forty per cent, of
its fair cash value, and to assess and cause to be assessed
personal property in that city at an average of not more
than thirty per cent, of its fsir cash value; that the
assessment made by the State Board upon which taxes
were sought to be recovered was made at 100 per cent,
of the fair cash value of the whiskey, and that the at-
teinpt of the plaintiff to collect the same was in violation
of the defendant's right under the constitution of the State
of Kentucky and the Fourteenth Amendment of the Con-
stitution of the United States.
The Circuit Court gave judgment in favor of the city
for the amounts claimed under the new levy of 1916,
giving credit for the amounts paid under the original
levies for the pr^Mseding years. The company appealed
to the Court of Appeals of Kentucky, where the judgment
of the Circuit Court was aflirmed. 178 Kentucky, 561.
There was no other reference to the Federal Constitu-
tion than that contained in the answer, so far as we have
been able to discover, and the Court of Appeals dealt
with the federal question, deemed to be before it, as
follows (178 Kentucky, 566) :
^ ' It is further asserted that the recent cases of Oreene v.
Louisville & Inierurban RaHroad Co. and Oreene v. LouU-
tnUe Railway Co., decided by the Supreme Court of the
United States and reported by 37 Supreme Court Re-
ports, 673, uproot the contention that the act is consti-
tutional, and hold that the State Board of Valuation, and
the city assessor and Board of Supervisors, acting inde-
pendently of each other, and fixing different valuations
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JETT BROa 00. V. CITY OF CARROLLTON. 6
1. Opinkn of tbe Court
of the same property, work a diflcrimiaation, inimical both
to the federal and state constitutions. In this, however,
appeUafit is in error. It must be borne in mind that
complaint is Only made of the assessment. ^The ware-
houseman had his remedy, in case of an excessive or. un-
fair valuation, by appearing before the Board of Valuaf
tion and Assessment at the time he received notice of the
valuation fixed, and there make complaint as provided in
section 4107, Kentucky Statutes. This appellant failed
to do but acquiesced in the assessment by paying taxes
both to the county and state on the valuation fixed by the
State Board. This being true, it cannot be heard to com-
plain now."
The case is brought here by the allowance of a writ of
enor. As the judgment was rendered after the Act of
September 6, 1916, c. 448, 39 Stat. 726, Judicial Ckxie,'
§ 237 f became effective, that act must determine the
ri^t to have a review in this court.
If the case can come here by writ of error, it is because
there was drawn in question the validity of a statute, oil
authority, exercised under the State on the ground. of
their being repugnant to the Constitution, laws, or
treaties of the United States. Before the petition for
rehearing the contentions based upon constitutional
grounds, by the plaintiff in error, were those embraced in
the nineteenth paragn^h of the answer, to which we have
referred, and such as were deemed to be before the Courti
of Appeals of Eeatudcy in the portion of the opinion
from which we have quoted. Neither the answer nor the '
opinion of the Court of Appeals shows that any claim
under the Federal Constitution was made assailing the
validity of a statute of the State, or of an authority exer-
cised under the State, on the ground of repugnancy to the
Federal Constitution. The answer, in the nineteenth
paragraph, set up discrimination because of different
valuations of the property of others, claimed to violate
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6 OCTOBER TERM, 1919l
Opimon of the Court 262 U. 8.
rights secured by the Fourteenth Amendment to the
Ck)Dstitution of the United States. The opinion of the
Ck)urt of Appeals iikewiBe discussed the discriminatory
action alleged by the plaintiff in error.
Drawing in question the validity of a statute or au-
thority as the basis of appellate review has long been a
subject of regulation in statutes of the United States, as
we had occasion to point out in Champion Lumber Co. v.
Fisher, 227 U. S. 445, 450, 451. What is meant by the
validity of a statute or authority was discussed by this
court in BaUimcre & Potomac R. R. Co. v. Hopkins, 130
U. S. 210, in which this court, speaking by Mr. Chief Jus-
tice Fuller, said: ''Whenever the power to enact a statute
as it is by its terms, or is made to read by construction, is
fairly open to denial and denied, the validity of such
statute is drawn in question, but not oth«:wise." And
the Chief Justice added upon the authority of MiUingar
V. Hartupee, 6 Wall. 258, 261, 262, that the word ''au-
thority " stands upon the same footing.
In order to give this court jurisdiction by writ of error
under amended § 237, Judicial Code, it is the validity of
the statute or authority which must be drawn in ques-
tion. The mere objection to an exercise of authority
imder a statute, whose validity is not attacked, cannot
be made the basis of a writ of errorfrom this court. There
must be a substantial challenge of the validity of the
statute or authority upon a claim that it is repugnant to
the Federal Constitution, treaties, or laws so as to re-
quire the state court to decide the question of validity in
disposing of the contention. Champion Lumber Co. v.
Fisher, supra, and cases cited.
In the present case no such claim of the invalidity of a
state statute or authority was raised in a manner re-
quiring the court below to pass upon the question in
disposing of the rights asserted. As we have said, what-
ever the effect of a petition for rehearing, it came too late
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FARNCOMB v. DENVER. 7
1. Counsel for PiurtieB.
to make the overruling of it, in the absence of an opinion,
the basis of review by writ of error. It follows that tlie
allowance of the writ of error in the present case did n3t
rest upon a decision in which was drawn in question tlie
validity of a statute of the State or any authority exer-
cised under it because of repugnancy to the Fedeial
Constitution, and the writ of error must be dismissed, aiid
it is so ordered.
Diamismid.
FARNCOMB ET AL. v. CITY AND COUNTY OF
DENVER ET AL.
BSBBOU TO THB SXTFRBliB COUBT OF IHB 8TATB OF
OOLOBADO.
No. 110. Argued Januaiy 14, 1920.— Decided March 1, 1990.
Ab ooDstrued by the Sapreme Court of Colorado, §{ 300 and 328 of
the charter of the City and County of Denver gave property owners
an opportunity to be heard before the Board of Supervisors respect-
ing the justice and validity of local assessments for public improve-
ments proposed by tfie Paric Commission, and empoweredthe board
itself to detennine such complaints before the assessments were
made. P. 9.
Parties who did not avail themselves of such opportunity can not be
heard to complain of such assessments as unconstitutional. P. 11.
64 Colorado, 3, affirm^.
Thb case is st&ted in the-opinion.
Mr. T. /. O^DonneU, with whom Mr. J. W. Graham was
on the briefs, for plaintiffs in error.
Mr. Jame9 A. Mar$k, with whom Mr. Norton Mont-
gomery was on the briefs, for defendants in eiror.
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8 OCTOBER TEBMj 191ft
OpinioQ of the Court 262U.8.
Mb. Jubticb Pat delivered the opinion of the court.
Suit was brought in the District, Court of the City and
County of Denver by the plaintiffs in error to enjoin the
City from enforcing an assessment ordinance passed to
raise the necessary means to pay for certain park im-
provements and the construction of boulevards and
streets in the City of Denver.
The charter of the City of Denver was before this
court in Londoner v. Denver^ %IQ U. S. 373. Sections
298 and 299 of the charter provide that the Board of
Local Improvements shall prepare a statement showing
the costs of improvements, interest, cost of collection,
etc., and apportion the same upon each lot or tract of
land to be assessed, shall cause the same to be certified by
the president, and filed in the office of the clerk. The
clerk shall then by advertisement in some newspaper of
general circulation, published in the city and county,
notify the owners of the real estate to be assessed and all
persons interested that said improvements have been or
will be completed, and shall specify the whole cost of the
improvement, and the share so apportioned to each lot, or
tract of land, or person, and any complaint or objection
that may be made in writing by such persons or owners to
the Board of Supervisors, and filed with the clerk within
sixty days from the first publication of such notice, shall
b^ heard and determined by the Board of Supervisors at
its first regular meeting after sixty days, and before the
passage of any ordioance assessing the cost of the im-
provements.
Section 300 provides: ''At the meeting specified in
said notice, or any adjournment thereof, the board of
supervisors, sitting as a board of equalization, shall hear
and determiae all such complaints and objections, and
may recommend to the board of public works any modi-
fication of their apportionments; the board of public
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FARNOOMB v. DENVER. 9
7. Opinion of the Court.
works may thereupon make such modificatious and
changes as to them maty seem equitable and just, or may
confirm the first apportionment and shall notify the
council of their final decision; and the council shall there-
upon, by ordinance, assess the cost of said improvements
against all the real estate in said district and against such
persons, respectively, in the propoi-tions above mentioned.''
Section 328 of the charter provides: "When the cost of
any such park ate or parkway is definitely determined,
the park conunission shall prepare, certify and file with
the clerk a statement showing the cost thereof as required
in Section 298 hereof; the clerk shall thereupon ^ve the
notice required by Section 299 hereof; and thereupon the
same proceedings required in Section 300 hereof shall be
had, except that the proceedings therein provided to
be observed by the board shall be observed by the park
commission; and the council shall thereupon by ordinance
assess the cost against the other real estate as aforesiud,
in the district, in accordance with said apportionments."
The federal question, brought before us by the writ of
error, concerns the constitutionality of § 300, above set
forth, — ^the contention being that it does not give inter-
ested property owners the opportunity to be heard where
the property is to be specially assessed for making im-
provements of the character in question, as the hearing
provided is before a board which has no power to decide
any complaint which the property owner may have or
make with respect to the validity or falseness of such
assessment, or to correct any error in such assessment, but
only has power to recommend to the power or authority,
originally making the assessment, any modifications of
portions of such assessment. That is that the Board of
Supervisors has only the power to recommend to the
Board of Park Comnussioners the apportionment to be
made in the assessment. It is the contention of the
plaintiffs in error that the hearinir thus afforded does not
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10 OCrOBEE TERM, 19ia
OpinkmoltheCoiiii. 26211.8.
give due prooesB of law within the meaiiing of the Four
teeuth Amendment to the Constitution. The Supreme
Court of Colorado, affirming the judgment of the Dis-
trict Court, denied this contention, and affinned the
judgment of the District Court sustaining the validity of
the assessm^it. 64 Colorado, 3.
The Supreme Court of Colorado held that the question
had already been disposed of by its own previous decision,
affirmed as to the constitutional point by our decision in
Londoner v. Denver^ 210 U. S., tupra. In Londoner v.
Denver the section of the charter now involved was before
this C9urt, being then § 31 of the charter. Section 300
to all intents is the same in terms as § 31, except that the
Board of Supervisors; sitting as a board of equalization,
is substituted for the City Council.
This' court when dealing with the constitutionality of
state statutes, challenged under the Fourteenth Amend-
ment, accepts the meaning thereof as construed by the
highest court of the State. St. Louis & Kansas City Land
Co. v. Kansas City, 241 U. S. 419, 427.
In Londoner v. Denver this court accepted, as it was
bound to do, the construction of the charter made by the
state court, and upon that construction determined its
constitutional validity. The City Charter was construed
in the Supreme Court in 33 Colorado, 104. In the opin-
ion in that case, after discussing the steps required in
making improvements of the character involved here,
the court, in dealing with § 31, said (p. 117): "Notwith-
standing the apparently mandatory words employed in
Section 31, supra^ we do not think that thereby the
legislative power and discretion of the city council is
taken away and vested in the board of public works, but
thait the former, in the exercise of its functions, is em-
powered Do pass an assessing ordinance charging property
with the cost of an improvement, which, according to its
judgment, would be just and equitable.''
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PARNCOMB V. DENVER. 11
7. Opinion of the Goart
Adopting this oonstruction of the section, and consid*
ering the objection urged that it would not afford due
process of law, this comrt, by Mr. Justice Moody, said
(p. 379): '^The ninth assignment questions the constitu-
tionality of that part of the law which authorizes the
assessment of benefits. It seems desirable, for the proper
disposition of this and the next assignment, to state the
construction which the Supreme Court gave to the char-
ter. This may be found in the judgment under review
and two cases decided with it. Denver v. Kennedy, 33
Colorado, 80; Denver v. Dumars, 33 Colorado, 94. From
these cases it appears that the lien upon the adjoining
land arises out of the assessment; after the cost of the
work and the provisional apportionment is certified to
the city council the landowners affected are afforded an
opportunity to be heard upon the validity and amount
of the assessment by the council sitting as a board of
equalization; if any further notice than the notice to file
complaints and objections is required, the city authorities
have the implied power to give it; the hearing must be
before the assessment is made; this hearing, provided for
by § 31, is one where the board of equalization 'shall
hear the parties complaining and such testimony as they
may offer in support of their complaints and objections
a3 would be competent and relevant,' 33 Colorado, 97;
and that the full hearing before the board of equalization
excludes the courts from entertaining any objections
which are cognizable by this board. The statute itself
therefore is clear of all constitutional faults."
Plaintiffs in error did not avail themselves of the pri^F-
ilege of a hearing as provided by this section, but after
the assessing ordinance had been passed b^an this pro-
ceeding in the District Court to test the constitutio lality
of the law. As we have said, the question as to what
should be a proper construction of the charter provi^'on
was not for our decision; that matter was within the
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12 OCTOBER TERM, 1919l
Aigumeat for Plaintiffis in Error. 262 U. 8.
sole authority of the state court, and was disposed of, as
the Supreme Court of Colorado held, by the former cases
reported in 33 Colorado, and by our decision based upon
that construction in Londoner v. Denver^ 210 U. S., supra.
As the plaintiffs in error had an opportunity to be heard
before the board duly constituted by § 300, they cannot
be heard to complain now. It follows that the judgment
of the Supreme Court of Colorado must be
Affirmed.
GOLDSMITH ET AL. v. GEORGE G. PRENDER-
GAST CONSTRUCTION COMPANY.
EABOA TO THV SUPBEMB COUBT OF 'CHB STATE OF laSSQUBI.
No. 127. Argued Jaauaiy 13, H 1920.— Decided Maroh 1, 1920.
In apportioning the cost of a sewer, the assessing authorities exduded
therefrom a city parlc from part of which the drainage was naturally
.toward, and was to some extent conducted into, the sewer; but the
amount so conducted was not shown to be considerable, nor did it^
appear that such drainage could not be disposed of by other means.
The state courts having sustained the exclusion as within the discre-
tion of the assessing authorities, hdd, that it could not be regarded
as so arbitrary and unequal in operation and effect as to render
assessments on other property invalid under the Fourteenth Amend-
ment. P. 17.
Refusal to transfer a cause from a division of the Supreme Court of
MissQuri to the court in banc does not violate any constitutional
right. P. 18.
273 Missouri, 184, affirmed.
The case is stated in the opinion.
Mr. David Ooldsmith for plaintiffs in error:
The failure of the municipal authorities to include any
part of the Tower Grove Park property in the sewer
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GOLDSMITH o. PRENDEBOAST CONSTR. CO. 18
12. AiguineDt for Plaintiffs in Error.
district m question, if arbitrary, violated § 1 of the Four-
teenth Ammdment. Masten v. Porikmdy 24: Otegcm,Ul;
Hanaoom v. Omaha, 11 Nebraska, 37, 43, 44; Fraaer y.
MuUmy, tlSd Wisconsiii, 377; Lawrence v. Qrand Bapide,
166 Mchigaa, 134; TiOe Ouarantee & TruA Co. v. Chicago;
162 Illinois, 505; Van Deventer v. Long Idand City, 139
N. Y. 133; Tvlaa v. McCormick, 63 Oklahoma, — ;
WUOey V. Faufcett, Style's Rep., 13.
The facts found by the triaT court are sufficient to
establish that such omission was arbitrary. Lawrence v.
Orand Rapids, supra; ML St. Marffs Cemetery v. MvUHw,
248n.S.50L
The conclusions of law upon which the trial court
based its judgment were erroneous because the omission
of the park property from the sewer district warranted a
finding of fact that the members of the Municipal Assemr
bly were actuated by motives which constitute legal
fraud; and because the motives of the Municipal Assembly
were immateriaL Socn Hing v. Crowley, 113 XT. S. 703;
Brown v. Cape Oirardeau, 90 Missouri, 377; Kansas City v.
Hyde, 196 Missouri, 498; Kerfoot v. Chicago, 195 lUmois,
229; Potter v. McDowell, 31 Missouri, 62.
Tlie refusal of Division No. 2 of the Supreme Court of
Missouri to transfer this cause to the court in banc was
arbitrary, and violated § 1 of the Fourteenth Amend-
ment. Amendment to the CJonstitution of Missouri,
adopted m 1890, § 4; Moore v. Missouri, 159 XT. S. 673.
The action of said Division No. 2 was the action of the
State, within the purview of the Federal Ckmstitution,
and, if arbitrary, violated § 1 of the Fourteenth Amend-
ment. Ex parte Virginia, 100 U. S. 339; Home Tde^
phone & Telegraph Co. v. Xos Angeks, 227 U. S. 278;
Hoeey v. EUiott, 167 U. S. 409; Ex parte Nelson, 251
Missouri, 63.
Moreover, if no federal question had been involved,
the Supreme Court of Missouri would have had no jurifr-
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14 OCTOBER TERM, mSk
OpinkmoftlieOoiiri. 2S2V.8.
diction of this case. Barber Asphalt Pairing Co. v. HuA^
138 Missouri, 228; SmUh v. Westport, 174 Misaouri, 304;
Piatt V. Parker-WashingUm Co., 235 Missoori, 467.
And if the judgment of the Supreme Court was rendered
without jurisdiction, then that, in itself, constituted a
taking of property without due process of law. Soott v.
McNeal, 154 U. S. 34; Pennayer v. Neff, 85 U. S. 714;
Lent V. THhon, 140 U. S. 316; Old Wayne Life Aseoeiatum
V. McDonough, 204 U. S. 8.
«
Mr. Hickman P. RodgerSj with whom Mr. A. R. Taylor
and Mr. Howard Taylor were on the brief, for defendant
in error.
Mr. Justice Day delivered the opinion of the court.
Suit was brought in the Circuit Court of the City of St.
Louis by the Construction Company to recover upon a
special tax-bill issued by the City of St. Louis for the
construction of the sewer in what is known as Manchester
Road Sewer District No. 3, Qty of St. Louis. " The Con-
struction Company recovered a judgment on the tax-
bills against the plaintiffs in error, who were owners of
abutting property. Upon appeal to the Supreme Court
of Missouri the judgment below was affirmed upon hear-
ing and rehearing. 273 Missouri, 184.
The record discloses that the sewer, for the construc-
tion of which the assessment was made, was constructed
in a certain boulevard known as Kingshighway Boulevard.
On the east of this boulevard, and fronting on the same
for a considerable distance, is a tract belonging to the
city, and known as Tower Grove Park; this property was
not assessed for the building of the sewer. This omission
is alleged to be of such an arbitrary and discriminatoiy
character as to render the ordinance making the assess-
ment void as a deprivation of federal constitutional rights
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GOLDSMITH »• PRENDERGA8T C0N8TR. CO. 15
12. Opinion of the Court
secured to the plamtiff s in error by the due procees and
equal protection clauses of the Fourteenth Amendment.
The Circuit Court made findings of fact in which it
found that there was no evidence that the Municipal
Assembly of the City of St. Louis, in passing the ordi-
nances in question, was actuated by motives of fraud or
oppression; th^^t such motives, if any, must be inferred
solely from the failure to incorporate parcels or tracts
of land in the sewer district, the topography of which
might render it necessary or e:.pedient to then, or there-
after, drain the water or sewage therefrom into the sew^.
The court recites the nature of the title of the tract known
as Tower Grove Park.
It appears that the Park had been conv^ed to the
city, the grantor reserving therefrom a strip 200 feet wide,
surrounding the same. The court found that the western
front of the tract, thus conveyed to the city, included the
western gate or entrance of the Park and tiie strip of 200
feet in width, EtUrrounding the Park proper, and embraced
a total frontage along Eingghighway of about 1470 feet,
and that none of the property included within Tower
Grove Park and the strip of 200 feet in width, reserved
for residence property, was included within the taxing
district for such sewer construction. The court also finds
that with .the ezeeptbn of an area composmg 86nie 300
feet, eadi way, located at the southwestern comer of the
Park, the western part of the Park for a distance oi some
600 feet east of Kingshighway is of an elevation !iigher
than Eingshij^way between Arsenal street and Magnolia
avenue, and the natural drainage thereof is in the main
westwardly towards Eingghighway and that before the
building of the sewer in question surface water ai d hy-
drants drained from said part of the Park through drains
and gutters under said street and sidewalk to a point
west of EingBhighway. That whatever drains for siufaoe
and hydrant water existed in said western and nortb-
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16 OCTOBER TERM, 1919.
Opinion of tbe Court 2fi2U.8.
western portion of the Park led into that section of the
sewer in question, situated in Kingshighway adjoining
the Park; but the court finds that it is unable to deter-
mine from the evidence as to when such connection with
said sewer was accomplished, or by whom. The court
also finds that at the time the work in question was per-
formed it was provided by the revised ordinances of the
City of St. Louis that water draining from roofs of houses
should not flow over sidewalks, but should be conducted
through pipes to a sewer if available, and if not th^i
throu^ pipes below the sidewalk, and into the open gut-
ter of the street. The court does not find from the
evidence that it was not possible or feasible to drain the
surface water falling upon or collected from that portion
of Tower Grove Park, and the reserved strip of 200 feet,
which is higher than and inclined towards Kingshighway,
from the surface of said land in any other manner than
through or by the district sewer constructed in Kings-
highway, or that sewage from houses upon said reserved
strip, if any there ever be, cannot be disposed of by
means other than said sewer.
As conclusions of law the court finds that it was within
the powers of the Mimicipal Assembly, in the passage of
the ordinances establishing the sewer district wherein the
work sued for was performed, to embrace and designate
therein only such real estate as, in their judgment,
should be benefited thereby; that the discretk>n vested in
the Municipal Legislature was not subject to review by
the court, unless the powers of the Legislature were
affirmatively shown to have been exercised fraudulently,
oppressively or arbitrarily. And the court found that
the mere omis^on of the lands from said district which
mi^t, at one time, be reasonably included in the sewer
district in question, or as to which it is reasonable to
assume that the same would be more conveniently served
l^ the sewer in questicfn than any other, did not justify
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GOLDSMITH v. PRENDERGAST CONSTR. CX). 17
12. Opinion of the Ckwrt
the court in ocmcluding that the Municipal Assembly,
in omitting said lands from the sewer district in question,
was actuated by motives of fraud, or oppression; or that
the prima facie liability of defendants established by the
certified special tax-bill is thereby rebutted and over-
turned.
On the facts and conclusions of law the judgment was
aflBrmed by the Supreme Court of Missouri.
The establishment of sewer districts was committed to
local authorities by the charter of the City of St. Louis
which had the force and effect of a statute of the State.
That charter provided that, within the limits of the dis-
trict prescribed by ordinance recommended by the Board
of Public Improvements, the Municipal Assembly might
establish sewer districts, and such sewers may be con-
nected with a sewer of any class or with a natural course
of drainage. (See § 21, Woemer's Revised Code of St.
Loui3, 1907, p. 410.)
The mere fact that the court found that a part of
Tower Grove Park might have been drained into the
sewer, it was held by the Missouri courts, under all the
circumstances, did not justify judicial interference with
the exercise of the discretion vested in the municipal
authorities. The court commented on the fact that it
was not shown that any considerable amount of surface
water was conducted away from the park by this sewer.
Much less do such findings afford reason for this court in
the exercise of its revisory power imder the Federal
Constitution to reverse the action of the state courts,
which fully considered the focts, and refused to invalidate
the assessment.
As we have frequently declared, this court only inter-
feres with such assessments on the ground of violation of
constitutional rights secured by the Fourteenth Amend-
ment, when the action of the state authorities is found to
be arbitrary, or wholly unequal in operation and effect.
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18 OCTOBER TERM, 1919.
^Ilabus. 252 U.S.
We need but refer to some of the eases in which this
principle has been declared. Embree v. Kansas City
Road District, 240 U. S. 242; WithneU v. Ruecking Conr
strucHon Co., 249 U. S. 63; Hancock v. Muskogee^ 250 U.
S. 454; Branson v. Brish, 251 U. S. 182.
We find no merit in the contention that a fedieral.con-
stitutional ri^t was violated because of the refusal to
transfer the cause from the division of the Supreme Ck)urt
of Missouri, which heard it, to the court in haiM. See
Moar^ V. Missouri, 159 U. S. 673, 679.
Affirmed.
CHICAGO, ROCK ISLAND & PACIFIC RAILWAY
COMPANY ET AL. v. WARD.
CERTIOBABI TO THE SUPREBiE COURT OF THE STATE
OF OKIAHOBIA.
No. 198. Submitted January 28, 1920— Decided Mareh 1, 1920.
The Federal Employers' Liability Act places a co-employee's negli-
gence, when the ground of the action, in the same relation as that of
the employer as regards assumption of risk. P. 22.
It is inaccurate to charge without qualification that a servant does not
assume a risk created by his master's negligence, the rule being other-
wise where the n^ligence and danger are so obvious that an ordi-
narily careful person, under the circumstances, would observe and
appreciate them. P. 21.
But the defense of assumed risk is inapplicable when the injury arises
from a single act of negligence creating a sudden eineigen<^ without
warning to the servant or opportunity to judge of the resulting
danger. P. 22.
Where a switchman, when about to apply tlic brake to stop a "cut" of
freight cars was thrown to the grcmnd by a jerk due to delay in un-
coupling them from a propelling engine when the engine was slowed,
hdd, that he had a right tid assume that they would be uncoupled ai
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CHICAGO, R. I. & P. RY. 00. p. WARD. 19
18. Opimon of the Court
the proper time, as usual, and did not aasume the risk ol a oo-
employee's negligeiit failure to do 80. Id.
The error of a charge that contributory negligence will prevent re-
covery in an action under the Federal Liability Act, being favorable
to defendants, does not require reversal of a judgment against them.
P. 23.
The Seventh Amendment does not forbid a jury of less than twelve in a
case under the Federal Employers' Liability Act tried in a state
court. Id. 8t. LouU A San Frandaoo R. R. Co. v. Broim, 241
U. S. 223.
68 Okkihoma, — , affirmed.
The case is stated in the opimon.
Mr. R. J. Roberta, Mr. W. H. Moore, Mr. Thomae P-
LitOepage, Mr. Sidney F. Taliaferro and Mr. W. F. Dich-
inson for i>etitioner8. Mr. C. 0. Blake and Mr. John E.
Du Metre were on the brief.
Mr. W. S. PendleUm for respondent. Mr. T. 0. CuOip
was on the brief.
Mr. Jtjbticb Day delivered the opinion of the court.
Suit was brought in the Sui>erior Court, Pottawatomie
County, Oklahoma, i^ainst the Chicago, Rock Island &
Pacific Railway Company and A. J. Carney to recover
damages for injuries aQeged to have been received by
Ward while he was employed as a switchman of the rail-
way company in its yards at Shawnee. He recovered
a judgment which was affirmed by the Supreme Court of
Oklahoma, 68 Oklahoma, . The grotmd upon which
recovery was sought against the railway company and
Carney, who was an engine foreman, was that Ward,
while engaged in his duty as a switchman, was suddenly
thrown from Hie top of a box car upon which he was about
to apply a brake. The i>etition alleged, and the testi-*
mony tended to show, that Ward was engaged as a switch-
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20 OCTOBER TEEIM, 1919.
Opipion of the Court 362 U. 8.
man on a cut of cars ^duch it was the duty of the engiiie
foreman to cut loose from the engine pushing the cars in
order that Ward might gradually stop the cars by apply-
ing the brake. It appears that at the time of the injury
to Ward, the cut of cars had been pushed up an incline
by the engine, over an elevation, and as the cars ran down
the track the effect was to cause the slack to run out
between them permitting them to pull apart sufficiently
to be imcoupled, at which time it was the duty of the
engine foreman to uncouple the cars. The testimony
tended to support the allegations of the petition as to the
negligent manner in which this operation was performed
at the time of thie injury, showing the failure of the engine
foreman to properly cut off the cars at the time he directed
the engineer to retard the speed of the engine, thereby
causing them to slow down in such manner that, when the
check reached the car upon which Ward was about to set
the brake, he wa£ suddenly tiirown from the top of the car
with the resulting injuries for which he brought this action.
The railway company and Carney took issue upon the
allegations of the petition, and set up contributory neg-
ligence and assumption of risk as defenses. The trial
court left the question of negligence on the part of the
company and tiie engine foreman to the jury, and also
instructed it as to assumption of risk by an employee of
the ordinary hazards of the work in which he was engagedi
and further charged the jury as follows:
, ''You are further instructed that while a servant does
not assume the extraordinary and unusual risks of the
employment yet on accepting employment he does
assume aU the ordinary and usuaH risks and perils inci-
dent thereto, whether it be dangerous or otherwise, and
also aU risks which he knows or should,, in the exercise
of reasonable care, know to exist. He does not, however,
assume such risks as are created by the master's negli-
gence nor such as are latent, or are only discoverable at.
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CHICAGO, R- I. A P. RY. CO. v. WARD. 21
18. OpinioQ of tha Court
the time of the injury^ The doctrine of an assumption of
risk is wholly depeiident upon the servant's knowledge,
actual or constructive, of the dangers incident to his em-
ployment. Where he knew, or in the exercise of reason-
able and ordinary care, should know the risk to which he
is exposed, he will, as a rule, be held to have assumed
them; but where he either does not know, or knowing,
does not appreciate such risk, and his ignorance or non-
appreciation is not due to negligence or want of due care
on his part, there is no assumption of risk on the part of
the servant preventing a recovery for injuries/'
Treating the case, as the court below did, as one in
which the injury occurred while the petitioners and re-
spondent were engaged in interstate commerce, this
charge as to the assumption of risk was not accurate, in
stating without qualification that the servant did not
assume the risk created by the master's n^gence. We
have had occasion to deal with the matter of assumption
of risk in cases where the defense is applicable under the
Federal Employers' Liability Act, being those in which
the injury was caused otherwise than by the violation, of
some statute enacted to promote the safety of employees.
As this case was not one of the latter class, assumption of
risk was a defense to which Hhe defendants below were
entitled. Seaboard Air Line By. v. Horbm, 233 U. S. 492;
Jacobs V. Southern Ry. Co., 241 U. S. 229.
As to the nature of the risk assumed by an employee in
actions brought under the Employers' liability Act, we
took occasion to say in' Chesapeake A Ohio Ry. Co. v.
DeAikVy 241 U. S. 310, 315: ''According to our decisions,
the settled rule is, not that it is the duty of an emplo3ree
to exercise care to discover extraordinary dangers that
may arise from the n^igence of the employer or of those
for whose conduct the employer is responsible, but that
the employee may assume that the employer or his agents
have exercised proper care with respect to his safety until
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22 OCrrOBER TERM, 1919.
Opiiuon of the Court 362 U. 8.
notified to the contrary, unless the want of care and the
danger arising from it are so obvious that an ordinarily
careful person, under the circumstances, would observe
and appreciate them." The Federal Employers' Liab-
ility Act places a co-employee's negligence, when it is the
ground of the action, in the same relation as that of the
employer upon the matter of assumption of risk. 241 U.
S. 313. See also Chesapeake A Ohio Ry. Co. v. ProffiU,
241 U- S. 462, 468; Erie R. R. Co. v. Purucker, 244 U. S. 320.
•Applying the principles settled by these decisions to the
facts of this case, the testimony shows that Ward had
neither warning nor opportunity to judge of the danger
to which he was exposed by the failure of the engine fore-
man to cut off the cars. In the absence of notice to the
contrary, and the record shows none. Ward had the ri^t
to act upon the belief that the usual method would be
followed and the cars cut off at the proper time by the
engine foreman so that he might safely proceed to i)erf orm
his duty as a switchman by setting the brake to check the
cars which should have been detached. For the lack of
proper care, on the part of the representative of the rail-
way company while Ward was in the performance of his
duty, he was suddenly precipitated from the front end of
the car by the abrupt checking resulting from the failure
to make the disconnection. Tliis situation did not make
the doctrine of assumed risk a defense to an action for
damages because of the negligent manner of operation
which resulted in Ward's injury, and the part of the charge
complained of though inaccurate could have worked
no harm to the petitioners. It was a sudden emer-
gency, brought about by the negligent operation of that
particular cut of cars, and not a condition of danger,
resulting from the master's or his representatives' neg-
ligence, so obvious that an ordinarily prudent person in
the situation in which Ward was placed had opportunity
to know and appreciate it, and thereby assume the risk.
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PENNA. GAB CO. v. PUB. SERVICE COMM. 23
18. fyDabuB.
The trial court also charged that contributory neg-
ligence by Ward would prevent a recovery. This charge
was more favorable to the petitioners than they were
entitled to, as under the Federal Employers' Liability
Act contributoiy negligence is not a defense, and only
goes in mitigation of damages. The giving of this charge
could not have been prejudical eiror requiring a reversal
of the judgment.
Another assignment of error, dealt with by the Supreme
Court of Oklahoma, that a jury of less than twelve re-
turned the verdict, confoiming to the state practice, does
not seem to be pressed here. In any event it is disposed of
by 8L Louis A San Francisco R. R. Co. v. Brown, 241
U. S. 223.
We find no eiror in the judgment of the Supreme Court
of Oklahonoa and the same is
Affirmed.
PENNSYLVANIA GAS COMPANY t;. PUBLIC
SERVICE COMMISSION, SECOND DISTRICT,
OF THE STATE OP NEW YORK, ET AL.
.SBBOB TO THE SUFRBMB COT7BT OF THB STilTB OF
NBW TOKK.
No. 330. Argued December 8, 9, 1919.— Decided March 1, 192a
Tbe tranamiSBion and sale of natural gas, produced in one State and
transported and furnished directly to consumers in a city of another
Stale t^ means of pipe lines from the source cf supply in part laid in
the dty streetSi is interstate commerce (p. 28); but, in the absence
of any contrary regulation by Congress, is subject to local regula-
tion of rates. P. 29. PvbUe UUUties CamnmHon v. London, 249
IT. S. 236, distinguished.
285 N.Y. 397, affirmed.
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24 OCTOBER TERM» 191%
Aigument for Plaintiff in Error. 252n.&
The case is stated in the opinioiL
Mr. John E. MvBiny with whom Mr. Marion H. Fisher
was on the briefs, for plaintiff in error:
The State has no power to r^ulate the rates in ques-
tion, for such action necessarily imposes a direct burden
and restraint upon interstate commerce.
The State in effect proposes to meet the plaintiff in
error at the state line and to deny it freedom to import
for sale a le^timate commodity of commerce except at a
price to be fixed by the State. Nay more, the State
apparently proposes not only to restrict the right of sale,
but to compel the plaintiff in error to continue to import
its Pennsylvania product for sale at the price fixed by the
State. If such a r^ulation is not direct and substantial —
if it does not restrain and burden interstate commerce, we
can conceive of no action which would.
That a business is ''regulated'' when the return allowed
on the business or the sale price of the commodity dealt
in is fixed by governmental authority cannot be ques-
tioned, and such a regulation is far more substantial and
burdensome than was the regulation of customers de-
clared to be an unauthorized interference with -bommeree
in the Ticker Case^ 247 U. S. 105, or the inspection charge
declared invalid by this court in Western Oil B^g. Co.
V. Lipsconiby 244 U. S. 346. It is more direct than the
state license fees upon agents selling and delivering in-
terstate merchandise declared repugnant to the Con-
stitution in Siewart v. Michigan, 232 U. S. 665; CoHdweJl v.
North Ccarolina, 187 U. S. 622, and in Rearick v. PennxyU
vania, 203 U. S. 507.
The rate or price received for the transportation and
supply of the natural gas is the vital part of the transac-
tion. Short of flat prohibition, there is no way to strike
more directly at the heart of a commercial tranbaction
than to fix the price that is to be received in it. See
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PENNA. GAS 00. v. PUB. SERVICE CJOMM. 25
33. Azgument for Plaintiff in Enor.
Brwm v. Maryland, 12 Wheat. 419, 447; Leisy v. Har-
din, 136 U. S. 100, i08, 119-123; Clark DiaHaing Co. v.
Western Maryland Ry. Co., 242 U. S. 311, 328, 329; Lyng
V. Michigan, 136 U. S. 161, 166; Bmrmn v. Chicago
A Northwestern Ry. Co., 126 U. S. 465, 607; Judson on
Interstate Comm<ratse, § 17; Wea v. Kansas Natural Oas
Co., 221 U. S. 266, 266.
The validity of state action does not rest upon the difh
cretion or good judgment of the State, nor on the reason-
ableness of the regulation imposed. It depends solely
on the question of power. Brown v. Maryland, 12 Wheat.
419, 439; WeOem Union Tel. Co. v. Kansas, 216 U. S. 1,
27; Railroad Commissian v. Worthingtan, 226 IT. S. 101;
107.
Federal functions may not be usurped under the police
power, nor does the occupancy of hi^ways by the plain-
tiff in error imder local franchises authorize the State to
r^ulate the price of gas moving in interstate commerce.
Leisy v. Hardin, 136 U. S. 100, 108, 119-123; Lffng v.
MiMgan, 136 U. S. 161-166; Wabash, St. Louis & Padjk
Ry. Co. V. Illinois, 118 U. S. 667.
Substantially parallel to the pipe line of the plaintiff in
error, between the City of Warren, Pa., and the City of
Jamestown, N. Y., an interurban trolley system is oper-
ated. This line is typical of many others, occupying city
streets imder local franchises. The State will hardly
assert that it is able to regulate the interstate business or
inta:Btate rates of such trolley lines under the police power
or because of the use of local franchises. The same rules
and the same principles must be applied to the interstate
bufflness of the plaintiff in error.
This court has already held that the interstate gas
bufflness may not be regulated under the police power
based on the use of highways. West v. Kansas Natural
Gas Co., 221 U. S. 229. See Kansas Natural Gas Co. v.
HadceU, 172 Fed. Rep; 646.
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26 OCTOBER TERM, 1910.
QirfDioii of the Court. 262U.8.
The interstate natural gas business conducted by
plaintiff in error is national, not local, in character, and
the proposed state regulation thereof is not local in its
operation. An interstate transaction requires national
control whenever it is of such character that one State
cannot control it without in effect extending its regula-
tions into another State, or in effect assuming jurisdic-
tion over property in another State, or leaving the trans-
action subject to conflicting regulations of different States.
The power of a State to enforce common-law duties, or
like statutory duties, of public utilities engaged in inter-
state commerce does not extend to prescribing rates for
interstate commerce. Subjecting interstate rates to con-
trol by a state commission is not the same as enforcing
the common-law duty to serve at reasonable rates.
In fixing intrastate rates, for an interstate public util-
ity, the State has no right to take into consideration the
business of the company outside of the State, or base
them on the value of the proi>erty outside the State. In
fixing the gas rates in question, the State necessarily
regulates the rate or return for the interstate transh
portation of the gas, and that is beyond its power.
Mr. Ledyard P. Hale for Public Service CommissiQn,
defendant in error.
Mt. Louis L. Thrasher for City of Jamestown et al.,
defendants in error.
Mr. Jtjstigb Day delivered the opinion of the court.
This writ of error brings before us for consideration the
question whether the Public Service Commission of the
State of New York has the power to regulate rates at
which natural gas shall be furnished by the Pennsylvania
Gas Company, plaintiff in error, to consumers in tiie city
of Jamestown in the State of New York. The Court of
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PENNA. GAS 00. v. PUB. SERVICE COMM. 27
23. Opinion of the Court
Appeals of New York (226 N. Y. 307) held that the Comr
missioii had such authority.
The statute of the State of New York, § 65, Public
Service Commission Law, Laws 1910, c. 480, provides:
''Every gas corporation, eveiy electrical corporation and
every municipality shall furnish and provide such serv-
ice, instrumentalities and facilities as shall be safe and
adequate and in all respects just and reasonable. All
charges made or demanded by any such gas corporation,
electrical corporation or municipidity for gas, electricity
or any service rendered or to be rendered, shall be just
and reasonable and not more than allowed by law or by
order of the commission having jurisdiction. Eveiy unr
just or unreasonable charge made or demanded for gas,
dectricity or any such service, or in connection therewith,
or in excess of that allowed by law or by the order of the
commission \& prohibited.''
Consumers of gas, furnished by the plaintiff in error in
the city of Jamestown, New York, filed a complaint de-
manding a reduction of gas rates in that city. The Public
Service Commission asserted its jurisdiction which, as we
have said, was sustained by the Court of Appeals of
New York. .
The federal question presented for omr consideration
involves the correctness of the contention of the plaintiff
in error that the authority undertaken to be exercised by
the Commission, and sustained by the court, was an
attempt under state authority to regulate interstate
commerce, and violative of the constitutional power
granted to Congress over commerce among the States.
The facts are undisputed. The plaintiff in error, the
Penn^lvania Gas Company, is a corporation organized
under the laws of the State of Pennsylvania and engaged
in transmitting and selling natural gas in the State of
New York and Penni^lvania. It transports the gas by
pqie-lines about fifty miles in length from the source
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28 OCTOBER TERM, 1918.
Opinion of the Court 2S2n.B.
of supply in the State of Pexmsylvama into the State of
New York. It sells and delivers gas to consumers in the
city of J^estown, in the town of EUicott, and in the
village of Falconer, all in Chautauqua County, ]^ew York.
It also sdls and delivers natural gas to consumers in the
cities of Warren, Corry and Erie in Pennsylvania.
We think that the transmission and sale of natural gas
produced in one State, transported by means of pipe-lines
and directly furnished to consumers in another State, is
interstate commerce within the principles of the cases
already determined by this court. West v. Kansas Natur
ral Oas Co. 221 U. S. 229; HaskeU v. Kansas Natural Oas
Co., 224 U. S. 217; Wedem Union Telegraph Co. v. Foster,
247 U. S. 106.
This case differs from PiMic Utilities Commission v.
London, 249 U. S. 236, whereifa we dealt with the piping
of natural gas from one State to another, and its sale to
independent local gas companies in the recdving State,
and held that the retailing of gas by the local companies
to their consumers was intrastate commerce and not a
continuation of interstate commerce, although the mains
of the local companies recdving and distributing the gas
to local consumers were connected pennanently with
those of the transmitting company. Under the circum-
stances set forth in that case we held that the interstate
movement ended when the gas passed into the local
mains: that the rates to be charged by the local companies
had but an indirect effect upon interstate commerce and,
therefore, the matter was subject to local regulation.
In the instant case the gas is transmitted directly from
the source of supply in Pennsylvania to the consumers in
the cities and towns of New York and Pennsylvania,
above mentioned. Its transmission is direct, and without
intervention of any sort between the teller and the buyer.
The transmission is continuous and single and is, in our
opinion, a transmission in interstate commerce and thea^
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PENNA. GAS, CO. v. PUB. SERVICE COMM. 29
23. OfHiiion of the Ccrart
fore subject to applicable constitutional limitations which
govern the States in dealing with matters of the character
of the one now before us.
The general principle is well established and often
asserted in the decisions of this court that the State may
not directly regulate or burd^ interstate commerce.
That subject, so far as legislative regulation is concerned,
has been committed by the Constitution to the control of
the Federal Congress. But while admitting this general
principle, it, like others of a general nature, is subject
to qualifications not inconsistent with the general rule,
which now are as well established as the principle itself.
In dealing with interstate commerce it is not in some
instances regarded as an infringment upon the authority
delegated to Congress, to permit the States to pass laws
indirectly affecting such commerce, when needed to pro-
tect or regulate matters of local interest. Such laws are
operative until Congress acts imder its superior authority
by regulating the subject-matter for itself. In varying
forms this subject has frequently been before this coinrt.
The previous cases were fully reviewed and deductions
made therefrom in the Minnesota Rate CaseSy 230 U. S.
352. The paramount authority of Congress over the
regulation of interstate commerce was again asserted in
those cases. It was nevertheless recognized that there
existed in the States a permissible exercise of authority,
which they might use until Congre&s had taken posses-
sion of the field of regulation. After stating the limita-
tions upon state authority, of this subject, we said (p. 402) :
''But within these limitations there necessarily remains
to the States, until Congress acts, a wide range for the
permissible exercise of power appropriate to their terri-
torial jurisdiction although interstate commerce may be
affected. It extends to those matters of a local nature as
to which it is impossible to derive from the constitutional
grant an intmtion that they should go uncontrolled
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30 OCTOBER TERM, 19191
Opinkm of tha Court 362U.&
pending Federal intervention. Thus, there are certain
subjects having the most obvious and direct relation to
interstate commerce, which nevertheless, with the ac-
quiescence of Congress, have been controlled by state
legislation from the foundation of the Government be-
cause of the necessity that they should not remain uur
regulated and that their regulation should be adapted
to varying local exigencies; hence, the absence of regula-
tion by Congress in such matters has not imported that
there should be no restriction but rather that the States
should continue to supply the needed rules until Con-
gress should decide to supersede thetn. . . . Our sys-
tem of government is a practical adjustment by which the
National authority as conferred by the Constitution is
maintained in its full scope without unnecessary loss of
local efficiency. Where. the subject is peculiarily one of
local concern, and &om its natiue belongs to the class with
which the State appropriately deals in making reasonable
provision for local needs, it cannot be r^;arded as left to
the unrestrained will of individuals because Congress has
not acted, although it may have such a relation to interstate
commerce as to be within the reach of the Federal power.
In such case. Congress must be the judge of the necessity
of Federal action. Its paramount authority always en-
ables it to intervene at its discretion for the complete and
effective government of that^ which has been committed
to its care, and, for this purpose and to this eactent, in re-
sponse to a conviction of national need, to displace local laws
by substituting laws of its own. The successful working of
our constitutional system has. thus been made possible.'^
The rates of gas companies transmitting gas in inter-
state commerce are not only not regulated by Congress,
but the Interstate Commerce Act expressly withholds the
subject from federal control. C. 309, § 7, 36 Stat. 539, 544.
The thing which the State Commission has under-
taken to r^ulate, while part of an interstate transmis-
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PENNA. GAS 00. v. PUB. SERVICE CX)MM. 81
28. Opinimi dt the Court.
mon, is local in its nature, and pertains to the furnishing
of natural gas to local consumers within the city of
Jamestown in the State qf New York. The -pvpes which
reach the customers served are supplied with gas directly
from the main of the company which brings it into the
State, nevertheless the service rendered is essentially
local, and the sale of gas is by the company to local
consumers who are reached by the use of the streets of the
city in which the pipes are laid, and through which the '
gas is conducted to factories and residences as it is re-
quired for use. The service is similar to that of a local
plant furnishing gas to consumers in a city.
This local service is not of that character which re-
quires general and uniform regulation of rates by con-
gressional action, and which has always been held beyond
the power of Hie States, although Congress has not
l^islated upon the subject. While the manner in which
the business is conducted is part of interstate commerce,
its regulation in the distribution of gas to the local con-
sumers is required in the public interest and has not been
attempted under the superior authority of Congress.
It may be conceded that the local rates may affect the
interstate buoness of the company. But this fact does
not prevent the State from making local regulations of a
reasonable character. Such regulations are always sub-
ject to the exercise of authority by Congress enabling it
to exert its superior power under the commerce clause of
the Constitution.
The principles announced, qft^i reiterated in the deci-
ffions of this coiurt, were applied in the judgment affinned
by the Court of Appeals of New York, and we agree with
that court that, until the subjecir-matter is regulated by
congressional action, the exercise of authority conferred by
the State upon the Public Service Commission is not viola-
tive of the commerce clause of the Federal Constitution.
Ajgbmed.
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32 OCTOBER TERM, 1919.
Aigument for Petitaooer. 262 U. 8.
EX PARTE IN THE MATTER OF J. RAYMOND
TIFFANY, AS RECEIVER, ETC., PETITIONER.
PErnnoN fob writ of mandamus ob pbohibiteon.
No. 26, Origiiial. Aigued January 19, 1920.— Decided March 1, 192a
Where the District Court, in a case depending on diverse citisenship,
having appointed a receiver to take charge of and disburse and dis-
tribute the assets of an insolvent state corporation, permitted a re-
ceiver later appointed for the same corporation by a court of the
State to intervene and, after full hearing, denied his application to
vacate the federal receivership and to have the assets turned over to
him upon the ground that the proceedings in the state court had
deprived the District Court of jurisdiction, Jidd, that the order of
the District Court denying the application was a final decision;
within the meaning of Jud. Code, § 128, appealable to the Circuit
Court of Appeals. P. 36.
The words "final decision" in that section mean the same thing as
"final judgments and decrees," used in former acts regulating
appellate jurisdiction. Id.
When there is a right to a writ of error or appeal, resort may not be had
to mandamus or prohibition. P. 37.
Rule discharged.
The case is stated in the opinion.
Mr. Merritt LanSy with whom Mr. Dougal Herr was on
the brief, for i>etitioner:
The order of the District Court was not appealable
under § 129 of the Judicial Code.
The application of the receiver in chancery was not to
dissolve the injunction but that the District Court should
instruct its receiver to turn over the assets to the Qhan-
eery receiver before distribution to creditors.
And if application had been made to dissolve the in-
junctive order contained in the order i^pointing the
receiver it would not have been appealable under § 129.
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EX PARTE TIFFANY. 83
32. AzgumfliitforBeBpondaiit
Such IS the effect of the decision in Highland Avenue
A BeUR.R. Co. v. Columbian Equipment Co., 168 U. S.
627.
An order refusing to vacate a receivership is not made
appealable under § 129.
The action of the District Court is not appealable
under § 12B. That section applies only to final judg-
ments or decrees. The opinion of the District Court in
denying petitioner's application is not appealable.
The present application is similar to that made by the
petitioners in Re Metropolitan Railway Receivership, 208
U. S. 90, which this court determined on the merits.
If the award of the writ prayed for be a matter of dis-
cretion, we respectfully submit that the discretion should
be exercised, because the matta* involves a conflict be-
tween the federal and state courts which should ulti-
matdy be settled in some form of proceeding in this
court. The applicant in fact represents the Court of
Chancery of New Jersey, which in its turn represents the
State in its sovereign capacity.
Moreover, before proceedings on appeal could be de-
termined in the Circuit Court of Appeals, and in this
court, the assets would be dirtributed and the questions
involved would become merely academic.
Mr. Samuel Heyman for respondent:
The application to the District Court made by the
chancery receiver was for an order dissolving the injunc-
tion issued by it against the corporation and its officers
and for an order vacating the receivership. Such an
order comes within § 129 of the Judicial Code.
The order was therefore appealable to the Circuit
Court of Appeals under that section.
The order was also appealable under §128 of the
Judicial Code.
It totally excluded the chancery receiver from any.
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34 OCTOBER TERM, 1910.
OpinJOQ of the Court 3B2U.a
participation in the estate of the defunct corporation.
Upon a final distribution of the assets, he would be totally
ignored and distribution would be made to creditors
direct. As he claimed title to the assets under the pro-
visions of the New Jersey Corporation Act, the order
was, as to nim, a final judgment depriving him of his
property and under § 128 of the Judicial Code he had the
ri^t to appeal to the Circuit Court of Appeals from this
order as a final judgment. Qutnbel v. Piikin, 113 U. S.
545; Savannah v. Je9up, 106 U. S. 563; Dexter HorUm
Bank v. HawkinSy 190 Fed. Rep. 924; 8. c 194 XT. 8. 631.
The writ of mandamus should not be used for the
purpose of appeal and should be refused where the peti-
tioner has other appellate relief. Ex parte Oldahoma^ 220
U. S. 191 ;^a; parte Harding, 219 U. S. 363; In re Moore,
209 U. S. 490.
Mb. Jxjsticb Day delivered the opinion of the court.
This is an application of J. Raymond Tiffany as re-
ceiver, appointed by the Court of Chancery of New Jer-
sey, of William Necker, Inc., for a writ of mandamus, or
in the alternative a writ of prohibition, the object of
which is to require the District Judge and the District
Court of the United States for the District of New
Jersey to order the assets of the corjxiration, in the hands
of a federal receiver, to be turned over to applicant for
administration by him as receiver i^ipointed l^ the New
Jersey Court of Chancery.
An order to show cause why the prayer of the petition
should not be granted wac issued, a return was made by
the District Judge and the matter was argued and sub-
mitted. The pertinent facts are: On September 30, 1916,
creditors and shareholders of William Necker, Inc., a
corporation of the State of New Jersey, filed a bill in the
United States District Court of New Jersey alleging the
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EX PARTE TIFFANY* 35
XL Opinfcm of the Oourt
insdyoncy of the ooiporation, praying for the appoints
ment of a receiver, and a distribution of the corporate
assets among the creditors and shareholders. The bill
alleged diversity of citizenship as a ground for jurisdio-
tbn. The defendant corporation appeared and answered,
admitting the allegations of the bill, and joined in the
prayer that its assets be sold and distributed according to
law. Upon consent the District Court appointed a re-
ceiver. The estate is insolvent, and the assets in the'
hands of the federal recover are insufficient to pay
creditors, and shareholders will recdve nothing. On
March 28, 1919, two and one-half years alter the ap-
pointment of the federal receiver, creditors of William
Necker, Inc., filed a bill in the Court of Chancery of New
Jersey alleging the corporation's insolvency, praying
that it be decreed to be insolvent, that an injunction
issue restraining it from exercising its franchises, and
that a receiver be appointed to dispose of the property,
and distribute it among creditors and shareholders. A
decree was entered in said cause adjudging the corporar
tion insolvent, and appointing the petitioner, J. Ray-
mond Ti£Fany, recdver. lliereupon Tiffany made ap-
plication to the United States District Court asking that
its injunction enjoining the corporation and all of its
officers, and all other persons from interfering with the
possession of the federal recdver, be dissolved; that the
federal receivership be vacated, and that the federal
recdver turn over the assets of the company then in his
hands, less administration expenses, to the chancery
receiver for final distribution, — ^the contention being
that the appointment of the chancery receiver and the
proceedings in the state court superseded the federal pro-
ceeding, and deprived the federal court of jurisdiction.
The federal recdver had made various rq)orts and
conducted the business of the corporation up until the
time of the application in the Court of Chancery of New
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ae OCTTpBER TERM, loia
Opinion of the Court. 25211.8.
Jersey, in which the applicant w^s appointed receiver.
It appears that the applicants in the state court also filed
their. verified claims with the federal receiver, and that
no creditor or shareholder made objection to the exercise
of the jurisdiction of the federal court until the applica-
tion in the state court.
The Federal District Court permitted the chancery
receiver to intervene, heard the parties, and delivered an
opinion in which the matter was fully considered. As a
result of such hearing and consideration an order was
entered in which it was recited that Tififany, the state
receiver, had made an application to the Federal District
Court for an order directing it to txun over to the chan-
cery receiver all of the assets of the corporation in the
possession of the federal receiver, and the District Court
ordered, adjudged and decreed that the said application
of J. Raymond Tiffany, receiver in chancery ''be and the
same hereby is denied.''
By the Judicial Code, § 128, the Circuit Court of
Appeals is given appellate jurisdiction to review by appeal
or writ of error final decisions in the District Courts, with
certain exceptions not necessary to be considered. It is
clear that the order made in the District Court refusing
to turn over the property to the chancery receiver was a
final decision within the meaning of the section of the
Judicial Code to which we have referred, and from which
the chancery receiver had the right to appeal to the Cir-
cuit Court of Appeals. By the order the ri^t of the state
receiver to possess and administer the property of the
corporation was finally denied. The words: ''final
decisions in the district courts" mean the same thing as
"final judgments and decrees" as used in former acts
regulating appellate jurisdiction. Loveland on Appellate
Jurisdiction of Federal Courts, § 39. This conclusion is
amply sustained by the decisions of this court. Savannah
Y. Jesup, 106 U. S. 563; Gumbd v. Pitkin, 113 U. S. 546;
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SHAEFER V. CARTER. 87
82. Syllabus.
Krippmdarf v. Hyde, 110 U. S. 276, 287. See also a well
considered case in the Circuit Court of Appeals, Ninth
Circuit— Z>e2:£er Horton National Batik v. Hawkins^ 190
Fed. Rep, 924.
It is well settled that ^ere a party has the right to a
writ of error or appeal, resort may not be had to the
extraordinary writ of mandamus or prohibition. Ex parte
Harding, 219 U. S. 363; Ex parte OUaJuma, 220 U. S. 191.
As the petitioner had the ri^t of appeal to the Circuit
Court of Appeals he could not resort to the writ of man-
damus or prohibition. It results that an order must be
made discharging the rule.
Ride dtdchar(fed.
SHAFFER V. CARTER, STATE AUDITOR, ET AL*
APPEALS FEtOM TEOB DISTBICT COURT OF THB UNTTESD
STATES FOR THE EASTERN DISTRICT OF OKLAHOIIA.
Nofl. 631, 580. Argued December 11, 12, 1010.— Decided March 1, 102a
When, upon application for a preliminaiy injunction, the District
Court not only refuses the injunction but dismisses the bill, appeal
to this court ^ould be under Jud. Code, § 238, from the final decree,
and not under § 266. P. 44.
Equity may be resorted to for relief against an unconstitutional tax Ken,
clouding the title to real property, if there be no complete remedy at
law. P. 46.
Qutare: Whether the Oklahoma laws afford an adequate legal remedy
in a case where the constitutionality of the state income tax law is
in question. Id.
TbB Oklahoma taxing laws afford no legal remedy for removing a cloud
caused by an invalid lien for an income tax. P. 48.
Having acquired jurisdiction, equity affords complete relief. Id.
Qovemmental jurisdiction in matters of taxation depends upon the
power to enforce the mandate of the State by action taken within its
borders either in penonam or wi rem. P. 40.
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88 OCIOHER TERM, MM.
Aigument for Appellant. 252 U. B.
A Stele may tex inoome derived from local property and busineaB
owned and managed from without by a dtiien and resident of
another State (pp. 49--55): each power is consistent with Const.,
Art. TV, § 2, guaranteeing privileges and immunities and the equal
protection clause ci the Fourteenth Amendment. Pp. 53-66.
The constitutionality of such a tax depends on its practical operation
and effect,.and not on mere definitians or theoretical distincCionB
■reqwctfaig its nature and quality. P. 54.
The fact that the Oklahoma income tax law permits residents to deduct
from their gross income losses sustained without as well as those sus-
tained within the State, while non-residents may deduct only those
occurring within it, does not make the law obnoxious to the privi-
l^gBS and immunities clause, supra, or the equal protection clause of
the Fourteenth Amendment. P. S%.
Net income derived from interstate commerce is taxable under a state
law providing for a general income tax. P. 57.
The Oklahoma gross production tax, imposed on oil and gas producing
companies, was intended as a substitute for the ad valorem property
tax, and payment of it does not relieve the producer from taxation
under the state income tax law. Id,
The Constitution, including the Fourteenth Amendment, does not for^
bid double taxation by the States. P. 58.
Without deciding whether it would be consistent with due process to
enforce a tax on the inoome derived by a non-resident from part of
his property within instate by imposing a lien on all his property,
real and personal, there situate, hdd, that in this case the State was
justified in treating the various properties and business of a producer
of oil and natural gas, who went on with their operation after the in-
come tax law was enacted, as an entity, producing the inoome and
subject to the lien. Id,
No. 531, appeal dismissed.
No. 580, decree affirmed.
THiB case is stated in the opinion.
Mr. Malcolm E. Roaser, with whom Mr. Oeorge S.
Ramsey f Mr. Edgar A. de Meules, Mr. ViUard^ Martin
and Mr. J. Berry King were on the brief, for appel-
lant:
•The tax is directed against the income as such, entirely
separate from the business or property out of which it
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SHAFFER V. CARTER. 39
37. Argament for AppeOant.
arises. Therefore it is not an excise tax within the mef in-
ing of the Oklahoma constitution; but, even if it were,
it cannot be lawfuUy laid unless the situs of the income
is in Oklahoma.
This tax is not laid on any theory of protection but on
ability to pay. Jnccmie Tax Co^es, 148 Wisconsin, 456. Its
very nature shows that it is directed against wealthy peo-
ple. A thousand whose combined income equals apx)el-
lant's would have no income tax to pay, though their in-
come was from the same sort of business. Appellant's
inccxne is taxed only because it is large and is all going to
one man. AppeDant is not in Oklahoma; therefore the State
does not protect him. It protects his property and busi-
ness, but no more than if they were owned by a thousand
instead of one. It gives his iacome, as such, no protection
at all, but on the other hand seeks to diminish it merely
because it is large. Appellant's income is from a number
of leases. If the income from each lease went to a differ-
«it man there would be no tax. What difference can
it make to Oklahoma whether it all goes to one man
ot not, if the recipient does not live in Oklahoma? Ma-
guire v. Tax CammMsionerf 230 Massachusetts, 503 ; Brady
V. Anderson, 240 Fed. Rep. 665.
The provisions of the law show that the tax is intended
as a tax on i)erson8 rather than property. So the similar
law of Wisconsin has been construed. Manitowoc Oas
Co. V. Wiaconsin Tax Commissum, 161 Wisconsin, 111;
State ex rd. SaUie IP. Moon Co. v. WUconsin Tax Comr
mission, 166 Wisconsin, 287; 17. S. Olue Co. v. Oak
Creek, 161 Wisconsm, 211; s. c. 247 U. S. 321; Peck &
Co. v. Lowe, 247 U. S. 165. And see Brady v. Anderson,
eupra.
Under the facts of this case appellant's income is
never in Oklahoma. Its situs is in Illinois. It appears
that the appellant manages his business from his oflFice
in Chicago; devotes his time, energy and judgment to
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40 OCTOBER TERM, 191ft
Aigument for Appellant 262 U. 8.
it; makes his purchases of supplies and materials, with
minor exceptions, from that office, bujring outside of
Oklahoma and having his p]Lirchases shipped in; the
contracts for the sale of oil are made by him in Chicago
with non-residents of Oklahoma, and these non-residents
^y him by checks drawn at their offices, outside of Okla-
homa, on banks outside of that State and send the diecks
to him in Chicago. The actual mon^ constituting his
income is never in Oklahoma. The net income, which is
all the State is attempting to tax, is never there. He does
not call on the State to assist him in collecting his income,
and if any of the non-residentsto whcmi he sells oil should
breach their contracts he would not call on the courts
of Oklahoma for redress. Unless the income tax is a tax
on the source of the iacome, and not on the income itself,
considered as a sq>arate entity, the subject of taxation
in this case is in Chicago.
An income is not a chose in action — a mere promise
or expectation. It is something already derived or re-
ceived, in the hands of the owner at the time it is derived.
It springs into existence when received; or if there is a
difference, the mon^ from which the income is made
up is with the owner before it has taken the form of net
income. The owner gets the gross proceeds, pays some
expenses, and the remainder constitutes the taxable in-
come under the Oklahoma law. There is no taxable in-
come until the owner has received the money and paid
expenses out of it.
The property or business out of which an income arises
is in no- way representative of the income. The value
of the property, or the volmne of the business, -has no
necessary relation to the amount of net income. A
man may have property and business and lose money
•on both.
The income is not a chose in action- but in possession
and in this case, in fact as well as in law, is at* the
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SHAFFER V, CARTER. 41
37. Aigument for Appellant.
dence of the owner. The usual rule that movables follow
and have their situs at the residence of the owner is in
some cases a mere fiction adopted for the purpose of
convenience and can be changed by the legislature when
it has any jurisdiction at all. But there is a limit to this
power. Situs is determined by the facte. See Adaim v.
Colonial &c. Mortgage Co.^ 82 Mississippi, 263.
It is not possible to escape the conclusion that the
law is attempting to tax appellant simply because he
made money ia Oklahoma. The State has no jurisdic-
tion over either his person or his income and it cannot
tax his business for tiie reason that it is not taxing any
similar business of residents^ except by the gross pro-
duction tax, and appellant has paid that.
Oklahoma cannot tax property not in the State. To
do so would be to take property without due process of
law. Inheritance taxes rest on entirely different bases.
BlackaUme v. Milier, 188 U. S. 189; United States v.
Perkins, 163 IT. S. 625; Union National Bank v. Chicago,
3 Biss. 82.
The jiurisdiction of the State over mcomes of non-resi-
dents is not like that of the Federal Government over
incomes of aliens.'
Oklahoma cannot tax the business, skill, ability and
energy of appellant. StraUon^s Independence w. Howbert,
231 U. S. 3d9. Th^re is a difference between corporations
and individuals in this regard. Adams Express Co. v.
OMo, 166 U. S. 185:
The provisions of the statute attempting to create a
Hen on all of appellant's property in Oklahoma to secure
payment of the income tax are void. Dewey v. Des
Moines, 173 U. S. 193; City of New York v. McLean. 170
N.Y.374.
If the tax is held to be an excise, the payment by
appellant of the gross production tax required by c. 39;
Laws of 1916, relieves him from Uability. That chapter
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42 OCTOBER TERM, 1919.
Aigumeat tot Appellant. 252 U. 8.
repeals the income tax law so far as the income is derived
from the production of oil and gas.
If the tax is an excise, it is void because it deprives
appellant of privities and immunities enjoyed by citizens
of Oklahoma, and because it denies him the equal pro-
tection of the laws and takes his property without due
process of law. County of SarUa Clara v. Southern Pacific
R. R. Co., 18 Fed. Rep. 385; Slaughter-Hou9e Cases, 16
Wall. 36; Ward v. Maryland, 12 WalL 418; Chdlker v.
Birmingham & Northwestern Ry. Co., 249 U. S. 522;
Wiley V. Parmer, 14 Alabama^ 627; Sprague v. Fletcher,
69 Vermont, 69.
The income tax law of Oklahoma permits residents
to deduct from their gross income, not only losses within
the State, but also losses from bisinees or in any other
way, sustained outside of Oklahoma. It does not per-
mit non-residents to deduct their losses from theii business
outside of the State, from their profits on business carried
on inside of the State. It seems to us that this question
is controlled by the Slaughter-House Cases, supra; Ward
V. Maryland, supra; and Southern Ry. Co. v. Oreene, 216
XJ. S. 400. If tiie resident can deduct losses outside of
the State while the non-resident is not permitted to d6
so, there is discrimination^ Here there is no subj^t-
matter to uphold the tax as a privil^e unless the court
shall hold that there are two distinct privil^^ in every
business, one to run the business and another to make
money out of it. An "^cise tax on the business of a
natural person, the business being lawful, not the sub-
ject of license nor exercised through a franchise, cannot
be graduated in proportion to the net profits. Flint v.
Stone Tracy Co., 220 XJ. S. 107, and Magoun v. Illinois
Trust & Savings Bank, 170 U. S. 283, distinguished.
A great part of the net profit is earned outside of the
State. There is no way to divide the profits between
Oklahoma and Chicago, and Oklahoma has not at-
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SHAFFER V. CARTER. 43
37. Opinkm of th6 Gourt
tempted to fonnulate a plan. Under any view this tax
must fall. Western Union Telegraph Co. v. KofneaSj 216
IT. 8. 1, 30.
If the tax is a privilege or excise tax it is void because
it lays a burden on interstate commerce. Crew Letrick
Co. V. Pennsylvania, 24MJ. S. 292; Postal Telegraph Cable
Co. V. Adams, 166 U. 8. C38, 695; Minnesota Rate Cases,
230 n. 8. 362; Kansas City &c. Ry. Co. v. Kansas, 240
IT. S. 227; Western Union Telegraph Co. v. Kansas, 216
IT. S. 1. If the tax is considered an excise on business,
rather than an income tax proper, it is not governed
by U. S. Ghie Co. v. Oak Creek, supra; nor by Pedc <k Co.
V. Lowef supra.
Mr. S. P. Preeling, Attorney General of the State of
Oklahoma, and Mr. C. W. King, Assistant Attorney Gen-
eral of the State of Oklahoma, with whom Mr. W. R.
Bleakmcre, Assistant Attorney General of the State of
Oklahoma, was on the brief, for appellees.
Mr. Justice Pitnet delivered the opinion of the comrt.
These are two appeals, taken under circimistances
that will be explained, from a single decree in a suit in
equity brought by appellant to restram the enforcement
of a tax assessed against him for the year 1916 under the
Income Tax Law of the State of Oklahoma, on the
ground of the unconstitutionality of the statute.
A previous suit having the same object was brought
by him in the same court against the officials then in office,
in which an application for an interlocutory injunction
heard before three judges pursuant to § 266, Judicial Code,
was denied, one judge dissenting. Shaffer v. Howard,
260 Fed. Rep. 873. An appeal was taken to this court,
but, pending its determination, the terms of office of
the defendants expired, and, there being no law of the
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44 OCTOBER TERM, 1919.
Opimon of the Court 252 U. &
State authorizing a revival or oontinuaiioe of the action
against their successors, we reversed the decree and re-
manded the cause with directions to dismiss the bill for
want of proper parties. 249 U. S. 200.
After such dismissal* the present defendant Carter, as
State Auditor, issued another tax warrant and delivered
it to defendant Bruce, Sheriff of Creek County, with
instructions to levy ujpon and sell plaintiff's property
in that county in order to collect the tax in question; and
the sheriff having threatened to proceed, this suit was
commenced. An application for an interlocutory in-
junction, heard before three judges, was denied ujpon
the authority of the decision in 250 Fed. Rep. and of
certain recent decisions of this court. The decree as
ent^^ not only disposed of the application but dismissed
the action. Plaintiff, apparently unaware of this, appealed
to this court under § 266, Judicial Code, from the refusal
of the temporary injunction. Shortly afterwards he took
an appeal under §238, Judicial Code, from the same
decree as a final decree dismiasing the action. The lattar
appeal is in accord with correct practice, since the denial
of the interlocutory application was merged in the final
decree. The first app^ (No. 531) will be dismissed.
The constitution of Oklahoma, besides providing for
the annual taxation of all property in the State upon an
ad valorem basis, authorizes (Art. 10, § 12) the employment
of a variety of other means for raising revenue, among
them income taxes.
The act in question is c. 164 of the Laws of 1915. Its
first section reads as follows: ''Each and every person
in this State, shall be liable to. an annual tax upon the
entire net income of such person arising or accruing from
all sources during the preceding calendar year, and a like
tax shall be levied, assessed, collected and paid annually
upon the entire net income from all property owned, and
of everv business, trade or profession carried on in this
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SHAFFER t^. CARTER. 45
37. Opinkm of the Coort.
State by persons redding elsewhere/' Subsequent seo-
tions define what the term ''income" shall include;
prescribe how net mcome shall be computed; provide
for certain deductions; prescribe varying rates of tax
for all taxable incomes in excess of $3,000, this amount
being deducted (by way of exemption) from the income
of each individual, and for one living with spouse an
additional $1,000, with further deductions where there
are children or dependents, exemptions being the same
for residents and non-residents; require (§ 2) a return on
or before March first from each person Uable for an in-
come tax under the provisions of the act for the preceding
calendar year; provide (§ 9) that the State Auditor shall
revise returns and hear and detennine complaints, with
power to correct and adjust the assessment of income;
that (§ 10) taxes shaU become delinquent if not paid on
or before the first day of July, and the State Auditor
shall have power to issue to any sheriff of the State a
warrant commanding him to levy the amount upon the
personal property of the delinquent party; and (by § 11)
''If any of the taxes herein levied become dehnquent,
they shaU become a lien on all the property, personal
and real, of such delinquent person, and shall be subject
to the same penalties and provisions as are all ad t»Iorem
taxes/'
Plaintiff, a non-resident of Oklahoma, being a citizen
of niinois and a resident of Chicago in that State, was
at the time of the commencement of the suit and for
several years theretofore (including the years 1915 and
1916) engaged in the oil business in Oklahoma, having
purchased, owned, developed, and operated a number
of oil and gas mining leases, and being the owner in fee
of certain oilrproducing land, in that State. From
prq[>erties thus owned and operated during the year 1916
he received a net income exceeding $1,500,000, and of
this he made, under protest, a return which showed that,
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46 OCTOBER TERM, 1910.
Oplnioii of the Ck)uit. 2S2 XT. 8.
at the rates fixed by the act, there was due to the State
an income tax m excess of $76,000. The then State
Auditor overruled the protest and assessed a tax in accord-
ance with the return; the present Auditor has put it in
due course of collection; and plaintiff resists its enforce^
ment upon the ground that the act, in so far as it sub-
jects the incomes of non-residents to the payment of such
a tax, takes their property without due process of law
and denies to them the equal protection of the ]aws,
in contravention of § 1 of the Fourteenth Amendment;
burdens interstate commerce, in contravention of the
commerce clause of § 8 of Art. I of the Constitution; and
discriminates against non-residents in favor of residents,
and thus deprives plaintiff and other non-residents of
the privileges and immunities of citizens and residents
of the State of Oklahoma, in violation of § 2 of Art. IV.
He also insists that the lien attempted to be imposed
upon his property pursuant to § 11 for taxes assessed
upon income not arising out of the same property would
deprive him of property without due process of law.
As grotmd for resorting to equity, the bill allies that
plaintiff is the owner of various oil and gas mining leases
covering lands in Creek Coimty, Oklahoma, and that
the lien asserted thereon by virtue of the levy and tax
warrant creates a cloud upon his title. This entitles
him to bring suit in equity {Union Pacific Ry. Co. v.
Cheyenne, 113 U. S. 516, 525; Pacific Express Co. v.
SeibeH, 142 IT. S. 339, 348; Ogden City v. Armstrong, 168
U. S. 224, 237; Ohio Tax Cases, 232 U. S. 676, 587;
Greene v. LouisviUe & Interurban R. R. Co., 244 U. S.
499, 506), imless the contention that he has a plain,
adequate, and complete remedy at law be well founded.
•This contention is based, firat, ui)on the provision of
§ 9 of c. 164, giving to the State Auditor the same power
to correct and adjust an assessment of income that is
given to the county board of equalization in cases of ad
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SHAFFER V. CARTER. 47
V. Opinion of the Ckwrt
valorem asseomieiitB, taken in connection with c. 107
of the Laws of 1915, which provides (Art. 1, Subdiv. B,
§ 2, p. 147) for an appeal from that board to the district
court of the county. In a recent decision (BerryhiU v.
Carter, 76 Oklahoma, 248), the Supreme Court of the State
held that an aggrieved income taxpayer may have an
appeal under this section, and that thus ''all matters
complained of may be reviewed and adjusted to the ex-
tent that justice may demand." But the case related
to ''correcting and adjusting an iacpme tax return,"
and the decision merely established the appeal to the
district court as the appropriate remedy, rather than
an application to the Supreme Court for a writ of cer-
tiorari. It falls short s>i indicating — ^to say nothing
of plainly showing— that this lurocedure would afford
an adequate remedy to a party contending that the
income tax law itself was repugnant to the Constitution
of the United States.
Secondly, reference is made to § 7 of Subdiv. B, Art. 1,
of c. 107, Oklahoma Laws 1915, p. 149, wherein it is
provided that where ill^ality of a tax is alleged to arise
by reason of some action from which the laws provide
no appeal, the aggrieved person on paying the tax may
ffve notice to the officer collecting it, stating the ffx>unds
of complaint and thatsuit will be brougjht against him;
whereupon it is made the duty of such officer to hold the
tax until the final determination of such suit if brou|^t
within thirty days; and if it be determined that the tax
was illegally collected, the officer is to rqiay the amount
found to be in excess of the l^al and correct amount.
But this section is one of several that have particular
reference to the procedure for collecting ad valorem taxes;
and ihey are prefaced by this statement (p. 147) : "Sub-
division B. To the existing provisions of law relating
to the ad valorem or direct system of taxation the follow-
ing provisions are added:'' Upon this ground, in Qipey
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48 OCTTOBER TERM, Ifllft
Opinion of the Ckmrt 262 IT. 8.
Oil Co. v. Howard and companion suits farou|^t l^ cer-
tain oil-producing companies to restrain enforcement
of taxes authorized by the gross production tax law (Sess.
Laws 1916, c. 39, p. 102), iQ>on the ground that th^
were an imlawful imposition upon federal instrumental-
itiep, the United States District Court for the Western
District of Oklahoma held that the l^al remedy pro-
vided in § 7 of c. 107 applied only to ad valorem taxes,
and did not constitute a bar to equitable relief against
the production taxes. Defendants ^appealed to this
court, and assigned this ruling for eiror, iinter alia; but
they did not press the point, and the decrees were affirmed
upon the merits of the federal question. Howard v.
Qip^ OH Co., 247 U. S. 503.
We deem it unnecessary to pursue further the question
whether either of the statutory provisions referred to
furnishes an adequate l^al remedy against • income
taxes assessed under an unconstitutional law, since one
of the grounds of complaint in the present case is that,
even if the tax itself be valid, the procedure prescribed
by § 11 of the Income Tax Law for enforcing such a tax
by imposing a lieD upon the taxpayer's entire property,
as threatened to be put into ^ect against plaintiff's
property for taxes not assessed against the property itself
and not confined to the income that proceeded from the
same property, is not ''due process of law," within the
requirement of the Fourteenth Amendment. For re*
moval of a cloud upon title caused by an invalid lien
imposed for a tax valid in itself, there appears to be no
l^al remedy. Hence, on this ground at least, resort
was properly had to equity for relief; and since a court
of equity does not ''do justice by halves," and will pre*
vent, if possible, a multiplicity of suits, the jurisdiction
extends to the dieposition of all questions raised by the
bill. Camp v. Bo^d, 229 U. S. 530, 551-^2; McGowan v.
Pariah, 237 U^ S. 285, 296.
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SHAFFER V. GARTSR. 49
87. Opinkm of the Court
This bringB us to the merits.
Under the ''due process of law" provision appellant
makes two contentions: first, that the State is without jur-
isdiction to levy a tax upon the income of non-residents;
and, secondly, that the hen is invalid because imposed
upon all his property real and personal, without r^ard
to its relation to the production of his income.
These are separate questions, and will be so treated.
The tax might be valid, althoi;^ the measures adopted
for enforcing it were not. Governmental jurisdiction
in matters of taxation, as in the exercise of the judicial
function, depends upon the power to enforce the mandate
of th6 State by action taken within its borders, either
in personam oi in rem according to the circumstances
of the case, as by arrest of the person, seizure of goods
or lands, garnishment of credits, sequestration of rents
and profits, forfeiture of franchise, or the like; and the
jurisdiction to act remains even though all permissible
measures be not resorted to. Michigan Truet Co. v.
Ferry, 228 U. S. 346, 353; Ex parte Indiana Tran9portatUm
Co., 244 U. S. 456, 457.
It will be convenient to postpone the question of the
lien until aU questions as to the validity of the tax have
been disposed of.
The contention that a State is without jurisdiction
to impose a tax upon the income of non-residents, while
raised in the present case, was more emphasised in Travis
V. Yak & Toime Mfg. Co., decided this day, post, 60,
involvix^ the income tax law of the State of New York.
Theare it was contended, in substance, that while a StiEite
may tax the property of a nourresident situate within
its borders, or may tax the incomes of its own citizens
and residents because of the privil^es ihey enjoy under
its constitution and laws and the protection th^ receive
from the State, yet a non-resident, although conducting
a business or carrying on an OQCupation there, cannot
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50 OCTOBER TERM, 1919.
Opinkm of the Court 263n.8.
be required ihrough income taxation to oontribute to
the governmental expenses of the State whence his in-
come is derived; that an income tax, as against non-
residents, is not only not a property tax but is not an
excise or privilege tax, since no privilege is granted; the
right of the non-citizen to carry on bis business or occupa-
tion in the taxing State being derived, it is said, from the
provisions of the Federal Constitution.
This radical contention is easily answered by tef er^ice
to fundamental principles. In our system of government
the States have general dominion, and, saving as restricted
4>y particular provisions of the Federal Constitution,
complete dominion over all persons, property, and busi-
ness transactions within their borders; tiiey assume and
perform the duty of preserving and protecting all such
persons, property , and business, and, in consequence, have
the power normally pertaining to governments to resort to
all reasonable forms of taxation in order to defray the
governmental expenses. Certainly they are not restricted
to property taxation, nor to any particular form of excises.
In well-ordered society, property has value chiefly for
what it is capable of producing, and the activities of man-
kind are devoted largely to making recurrent gains from
the use and development of property, from tillage, min-
ing, manufacture, from the employment of human skill
and labor, or from a combination of some of these; gains
capable of being devoted to their own support, and the
surplus accumulated as an increase of capital. That the
State, from whose laws property and business and industry
derive the protection- and security without which produc-
tion and gainful occupation would be impossible,^ is de-
barred from exacting a share of those gains in the form of
income taxes for the support of the government, is a
proposition so wholly inconsistent with fundamental
principles as to be refuted by its mere statemmit. That it
may tax the land but not ^e crc^, the tree but not the
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SHAFFER V. CARTER. 51
S7. Opinioa of the Oodrt
fniity the mdne or well but not the produet, the bosineBS
but not the profit derived from it, is whdly inadmiwrible.
Inoome taxes are a recognized method of distributing
the burdens of government, favored because requiring
contributions from those who realise current pecuniary
benefits under the protection of the govemm^it, and
because the tax may be readily proportioned to thdr
ability to pay. Taxes of this character were imposed by
several of the States at or shortly after the adoption of the
Federal Constitution. New York Laws 1778, c. 17; Re-
port of Oliver Wolcott, Jr., Secretary of the Treasury, to
4th Cong., 2d sess. (1796), concerning Direct Taxes;
American State Papers, 1 Finance, 423, 427, 429, 437, 439.
The rights of the several States to exercise the widest
liberty with reepect to the imposition of internal taxes
always has been recognized in the decisions of this court.
In McCvUoch v. Maryland, 4 TVheat. 316, while denying
their power to impose a tax upon any oi the operations of
the Federal Government, Mr. Chief Justice Marshall,
q)eaking for the court, conceded (pp. 428-429) that the
States have full power to tax their own people and their
own properly, and also that the power is not confined to
the people and property of a State, but may be exercised
upon every object broi^t within its jmrisdiction; saying:
''It is obvious, that it is an incident of sovereignty, and
is co-€Ktensive with that to which it is an incident. /All
subjects over which the sovereign power of a State ex-
tends, are objects of taxation," etc. In Michigan Central
R. R. Co. V. Powers, 201 TJ. S. 245, the court, by Mr»
Justice Brewer, said (pp. 292, 293): ''We have had fre-
quent occasion to consider questions of state taxation in
tiie light of the Federal Constitution, and the scope and
limits of National interference are well settled. There is
no general supervision on the part of the Nation over state
taxation, and in respect to the latter the State has, speak-
ing generally, the freedom of a sovereign both as to ob*
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52 OCTOBER TERM, 1910.
Opimon of the Court " 28217.8.
jects and methods." That a State may tax catlings and
occupations as well as persons and property has long been
recognized. ''The pow^ of taxation, however vast in its
character and searching in its extent, is necessarily limited
to subjects within the jurisdiction of the State. These
subjects are persons, property, and business. ... It
[taxation] may touch business in the aknoet infinite forms
in which it is conducted, in professions, in commerce, in
manufactures, and in transportation. Unless restrained
by provisions of the Fedaral Constitution, the power of the
State as to the mode, form, and extent of taxation is \m-
limited, wh^e the subjects to which it applies are within
her jurisdiction." State Tax an FareignrHeld Bands, 15
Wall. 300, 319. See also WeUan v. Aft88oun, 91 U. S.
275, 278; Armour <fe Ca. v. Virginia, 246 U. S. 1, 6; Ameri-
can Mfg. Co. v. St. Laaia, 250 U. S. 459, 463.
And we deem it clear, upon principle as well as authority,
that just as a State may impose general income taxes upon
its own citizens and residents whose persons are subject
to its control, it may, ajs a necessary consequence, levy a
duty of like character, and not more oneroxis in its effect,
upon incomes accruing to non-residents £rom their prop-
erty or business within the State, or thdr occupations
carried on therein; enforcing payment, so far as it can, by
the exercise of a just control over persons and proi)erty
within its borders. This is consonant with numerous d&>
cisions of this court sustaining state taxation of credits
due to non-residents, New Orleans v. Stempd, 175 U. S.
309, 320, et seq.; Bristol v. Washington County, 177 U. a
133, 145; Liverpool die. Ins. Co. v. Orleans Assessors, 221
U. S. 346, 354; and sustaining federal taxation of the in-*
come of an alien non-resident derived from securities held
in this country, De Oanay v. Lederer, 250 U. S. 376.
That a State, consistently with the Federal Constitution,
may not prohibit the citizens of other States from carry-
ing on legitimate business within its borders like its own
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^ SHAFFER V. CARTER. 53
37. Opinion of the Court
eitizens^ of course is granted; but it does not follow that
the business of non-residents may not be required to make
a ratable contribution in taxes for the support of the gov-
ernment. On the contrary, the very fact that a citizen of
one State has the right to hold property or carry on an oc-
cupation or business in anotlier is a veiy reasonable
ground for subjecting such non-resident, although not
personally yet to the extent of his property held, or his
occupation or business carried on therein, to a duty to pay
taxes not more onerous in effect than those imposed under
like circumstances upon citizens of the latter State. Sec^
tion 2 of Art. IV of the Constitution entitles him to the
privil^es and immunities of a citizen, but no more; not
to an entire inmiunity from taxation, nor to any preferen-
tial treatment as compared with resident citizens. It
protects him against discriminatory taxation, but gives
him no right to be favored by discrimination or exemption.
See Ward v. Maryland, 12 Wall. 418, 430.
Oklahoma has assumed no power to tax non-residents
with respect to income derived from property or business
b^ond the borders of the State. The &:st section of the
act, while imposing a tax upon inhabitants with respect
to their entire net income arising from all sources, confines
the tax upon non-residents to their net income from prop-
erty owned and business, etc., carried on within the State.
A similar distinction has been observed in our federal in-
come tax laws, from one of the earliest down to the pres-
ent.' The Acts of 1861 (12 Stat. 309) and 1864 (13 Stat.
; ' ' ' ■ ,1 ■
1 Acts of August 5, 1861, c. 45, § 49, 12 Stat. 292, 309; June 30, 1864,
c. 173, § 116, 13 Stat. 223, 281; July 4, 1864, Joint Res. 77, 13 Stat. 417;
July 13, 1866, c. 184, § 9, 14 Stat. 98, 137-138; March 2, 1867, c. 169,
§ 13, 14 Stat. 471, 477-478; July 14, 1870, c. 255, § 6, 16 Stat. 256, 257;
August 27, 1894, c. 349, § 27, 28 Stat. 509, 553; October 3, 1913, c. 16,
§ n, A. Subd. 1, 38 Stat. 114, 166; September 8, 1916, c. 463, TiUe I,
P^ I, § 1, a, 39 Stat. 756; October 3, 1917, c. 63, Title T, §§ 1 and 2, 40
Stat. 300; February 24, 1919, c. 18, §§ 210, 213 (c), 40 Stat. 1057, 1062,
1066.
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M OCTOBER TERM, 19ia
Opinion of the Coart. 262U.&
281, 417) confined the tax to persons residing in the United
States and citizens residing abroad. But in 1866 (14
Stat. 137-138) there was inserted by amendment the fol-
lowing: ''And a like tax shall be levied, collected, and paid
annually upon the gains, profits^ and income of every
business, trade, or profession carried on in the United
States by persons residing without the United States, not
citizens thereof." Similar provisions were unbodied in
the Acts of 1870 and 1804; and in the Act of 1013 (38
Stat. 166), after a clause imposing a tax upon the entire
net income arising or accruing from aU sources (with ex-
cq>tions not material here) to every citizen of the United
States, whether residing at home or abroad, and to every
person residing in the United States though not a citizen
thereof, the following ssppesm: "and a like tax shall be
assessed, levied, collected, and paid annually upon the
entire net income from all property owned and of every
busmess, trade, or profession carried on in the United
States by persons residing elsewhere." Evidently this
furnished the model for § 1 of the Oklahoma statute.
No doubt is suggested (the former requirement of
apportioiiment having been removed by constitutional
amendment) as to the power of Congress thus to impose
taxes upon incomes produced within the borders of the
United.States or arising from sources located therein, even
though the income accrues to a non-resident alien. And, so
far as the question of jurisdiction is concerned, the due
process clause of the Fourteenth Amendment imposes no
greater restriction in this regard upon the several States
than the corresponding clause of the Fifth Amendment
imi)oses upon the United States.
It is insisted, however, both by appellant in this case
and by the opponents of the New York law in Travis v.
Yale & Toume Mfg. Co., that an income tax is in its nature
a personal tax, or a '^ subjective tax imposing personal lia-
biUty upon the recipient of the income; " and that as to a
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SHAFFER V. CARTER. 55
87. OpinicmoftheOoart.
non-resident the State has no jurisdiction to impose such
a liability. This argument; upon analysis, resolves itself
into a mere question of definitions, and has no legitimate
bearing upon any question raised under the Federal Con-
stitution. For, where the question is whether a state tax-
ing law contravenes rights secured by that instrument,
the decision must depend not upon any mere question of
form, construction, or definition, but upon the practical
operation and effect of the tax imposed. St. Lcuia Southr
western Ry. Co. v. Arkan^is, 235 IT. S. 350, 362; Maumicdn
Timber Co. v. Washington, 243 U. S. 219, 237; Crew Lemek
Co. y. Penneylvania, 245 IT. S. 292, 204; American Mfg.
Co. v.iSf.L<mi8, 250 U.S. 450, 463. The practical burden
of a tax imposed upon the net income derived by a non-
resident from a business carried on within the State cer-
tainly is no greater than that of a tax upon the conduct of
the business, and this the State has the lawful power to
impose, as we have seen.
The fact that it required the personal skill and manage-
ment of api)ellant to bring his income from producing
property in Oklahoma to fruition, and that his manage-
ment was exerted from his place of business in another
State, did not deprive Oklahoma of jurisdiction to tax the
income which arose within its own borders. The personal
element cannot, by any fiction, oust the jurisdiction of the
State within whidbi the income actually arises and whose
authority over it operates in rem. At most, there might
be a question whether the value of the service of manage-
ment rendered from without the State ought not to be
allowed as an expense incurred in producing the income;
but no such question is raised in the present case, hence
we eacpress no opinion upon it.
The contention that the act deprives appellant and
others similarly circumstanced df the privil^es and im-
munities enjoyed by residents and citizens of the State of
(Hdahoma, in violation of § 2 of Art. IV of the Constitu-
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56 OCTOBER TERM, 1919.
Opinion of the Court. 252 U. 8.
tion, is based upon two grounds, which are relied upon as
showing also a violation of the ''equal protection'' clause
of the Fourteenth Amendment.
One of the rights intended to be secured by the former
provision is that a citizen of one State may remove to and
carry on business in another without being subjected in
property or person to taxes more onerous than the citizens
of ^e latter State are subjected to. Paid v. Virginia^ 8
WaU. 168, 180; Ward v. Maryland, 12 Wall. 418, 430;
Maxwell v. Bugbee, 250 U. S. 525, 537. The judge who
dissented in Shaffer v. Hotmrd, 250 Fed. Rep. 873, 883,
concluded that the Oklahoma income tax law offended in
this regard, upon the ground (p. 888) that since the tax
is as to citizens of Oklahoma a purely personal tax meas-
ured by their incomes, while as applied to a non-resident
it is ''essentially a tax upon his property and. business
within the State, to which the property and business of
citizens and residents of the State are not subjected,''
there was a discrimination against the non-resident. We
are unable to accept this reasoning. It errs in paying too
much r^;ard to theoretical distinctions and too little to
the practical effect and operation of the respective taxes
as levied; in failii^ to observe that in effect citizens and
residents of the State are subjected at least to the same
burden as non-residents, and perhaps to a greater, since
the tax imposed upon the former includes all income de-
rived from their property and business within the State
and, in addition, any income they may derive from outside
sources.
Appellant contends that there is a denial to non-citizens
of the privileges and immunities to which they are en-
titled, and also a denial of the equal protection of the laws,
in that the act permits residents to deduct from their gross
income not only losses incurred within the State of Okla-
homa but also those sustained outside of that State, while
non-residents may deduct only those incurrecf within the
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SHAFFER V. CARTER. 67
37. Opimon of the Ckxirt*
State. The difference; however, is only such as arises
naturally from the extent of the jurisdiction of the State
in the two classes of cases, and cannot be regarded as an
unfriendly or unreasonable discrimination. As to resi-
dents it may, and does, exert its taxing power over their
income from all sources, whether within or witkout the
State, and it accords to them a corresponding privilege of
deducting their losses, wherever these accrue; As to non-
residents, the jurisdiction extends only to their property
owned within the State and their business, trade, or pro-
fession carried on therein, and the tax is only on such in-
come as-is derived from tiiose sources. Hence there is no
obligation to accord to tbem a deduction- by reason of
losses dsewhere incurred. It may be remarked, in passing,
that there is no showing that appellant has sustained such
losses, and so he is not entitled to raise this question.
It is lurged that, regarding the tax as imposed upon the
business conducted within the State, it amounts in the
case of appellant's business to a burden upon interstate
commerce, because the products of his oil operations are
shipped out of the State. Assuming that it fairly appears
that his method of business constitutes interstate com-
merce, it is sufficient to say that the tax is imposed not
upon the gross receipts, as in Crew Lemdc Co. v. Pennsyl-
vania, 245 U. S. 292, but only upon the net proceeds, and
is plainly sustainable even if it includes net gains from
interstate commerce. U. S. Qlue Co. v. Oak Creek, 247
U. S. 321. Compare Peek & Co. v. Lowe, 247 U. S. 165.
Reference is made to the gross production tax law of
1915 (c. 107, Art. 2, Subdiv. A, § 1; Sess. Laws 1915, p.
151), as amended by c. 39 of Sess. Laws 1916 (p. 104), un-
der which every person or corporation engaged in produc-
ing oil or natural gas within the State is required to pay
a tax equal to 3 i>er centum of the gross value of such
product in lieu of all taxes imposed by the State, coimties,
or mimidpalitiesupon the land or the leases, mining rights,
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68 OCTOBER TERM, ISIO.
Opinion of the Court. 2S2 U. 8.
and privileges, and the machinery, appliances, and equip-
ment, pertaining to such production. It is contended that
paym^it of the gross production tax relieves the producer
from the payment of the income tax. This is a question
of state law, upon which no controlling decision by the
Supreme Court of the State is cited. We overrule the
contention, denning it clear, as a matter of construction,
that the gross production tax was intended as a substitute
for the ad valorem property tax but not for the income tax,
and that there is no such repugnance between it and the
income tax as to produce a repeal by implication. Nor,
even if the effect of this is akin to double taxation, can it
be regarded as obnoxious to the Federal Constitution for
that reason, since it is settled that nothing in that instru^
ment or in the Fourteenth Amendment prevents the
States from imposing double taxation, or any other form
of unequal taxation, so long as the inequality is not based
upon arbitrary distinctions. St. Louu Southwestern Ry.
Co. V. Arkansas, 235 U. S. 350, 367-368.
The contention that there is a want of due process in
the proceedings for enforcement of the tax, especially in
the lien imposed by § 11 upon aU of the delinquent's prop-
erty, real and personal, reduces itself to this: that the
State is without power to create a li^i upon any property
of a non-resident for income taxes except the very property
from which the income proceeded; or, putting it in another
way, that a lien for an income tax may not be imposed
upon a non-resident's unproductive property, nor upon
any particular productive property b^ond the amount
of the tax upon the income that has proceeded £rom it.
But the facts of the case do not raise this question. It
clearly appears from the averments of the bill that the
whole of plaintiff's property in the State of Oklahoma con-
sists of oil-producing land, oil and gas mining leaseholds,
and other property used in the production of oil and gas;
and that, banning at least as early as the year 1015^
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SHAFFER p. CARTER. 69
37* DiflBBDt.
when the act was passed, and continuing without interrup-
tion until the time of the commencement of the suit (April
16, 1010), he was engaged in the business of developing
and oi)erating these properties for the production of oil,
his entire business in that and other States was managed
as one business, and his entire net income in the State for
the year 1916 was derived from that business. Laying
aside the probability that from time to time there 'may
have been changes arising from purchases, new leases,
sales, and e]q>irations (none of which, however, is set forth
in the bill), it is evident that the lien will rest upon the
same property interests which were the source of the in-
come upon which the tax was imposed. The entire juris-
diction of the State over appellant's property and busi-
ness and the income that he derived from them — the only
jurisdiction that it has sought to assert — is a jurisdiction
in rem; and we are clear that the iState acted within its
lawful power in treating his property interests and busi-
ness as having both unity and continuity. Its purpose to
impose income taxes was declared in its own constitution,
and the precise nature of the tax and the measures to be
taken for enforcing it were plainly set forth in the Act of
1915; and plaintiff having thereafter proceeded, with
notice of this law, to manage the property and conduct
the business out of which proceeded the income now taxed,
the State did not exceed its power or authority in treat-
ing his property interests and his business as a single en-
tity, and enforcing payment of the tax by the imposition
of a lien, to be followed by execution or other appropriate
process, upon all property employed in the business.
No. SSI. Appeal dimiiseed.
No. 680. Decree affirmed.
Mb. Jubtigb McRbtnolds dissents.
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60 OCTOBER TERM» 1919.
QsrOftbus. 262 U. a
TRAVIS, AS COMPTROLLER OF THE STATE OF
NEW YORK, V. YALE & TOWNE MANUFAC-
TURING COMPANY.
APPEAL FBOM THS DISTRICT COUBT OF THE T7NITED STATES
FOQ THE SOUTHEBN DISTRICT OF NEW YORK*
Nob. MS. Argued December 15, 16, 1919.— Dedded Maidi 1, 1920.
fer V. Carter, aniey 27, foUowed, to the effect tbat a State may tax
inoomeB of non-reBidents arising within her bordeiB and that there is
no unconstitutional disoriinination against non-residents in confining
the deductions allowed them for expenses^ losses, etc., to such as are
connected with income so arising while allowing residents, taxed on
their income generally, to make such deductions without regard to
locality. P. 76.
Such a tax may be enforced as to non-residentB woridng within the
State by requiring their employers to withhold and pay it from their
salaries or wages; and no unconstitutional disoriminatian against
such non-residents results from omitting such a requirement in the
case of residents. V, 76.
A regulation requiring that the tax be thus withheld is not unreasonable
as applied to a sister-state corporation carrying on local business
without any contract limiting the regulatory power of the taxing
State; nor is the power to impose such a regulation affected by the
fact that the corporation may find it more convenient to pay its em-
ployees and keep its accounts in the State of its origin and principal
place of business. Id,
The terms ''resident" and "citizen" are not ssmonymous, but a gen-
eral taxing scheme of a State which diseriminates against all non-resi-
dents necessarily includes in the disoriinination those who' are citi-
zens of other States. P. 78.
A general tax laid by a Statio on the incomes of residents and non-resi-
dents, which allows exemptions to the residents, with increases for
married persons and for dependents, but allows no equivalent ex-
emptions to non-residents, operates to abridge the privileges and
immunities of citizens of other States, in violation of § 2 of Art. IV,
of the Constitution. P. 79.
Heia, that such a discrimination in the income tax law of New York is
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TRAVIS V. YALE A TOWNE MPG. 00. 61
GO. Arginneiit for AppeUaat.
Dot overcome by a providon excluding from the taxable income of
noD-reeidents annuities, interest and dividends not part of income
from a local business, or occupation, etc., subject to the tax. P. 81.
An abridgment by one State of the privfleges and immunitieB of the
dtisens of other States cannot be condoned by those States or cured
by retaliation. P. 82.
202 Fed. jRep. 576, affirmed.
Thb case is stated in the opinion.
Afr. Janma S. Y. Ivins and Mr. Jerome L. Cheney^
with whom Mr. Charles D. Newton, Attorney General
of the State of New York, and Mr. E. C. Aiken were on
the brief, for appellant:
It mi|^t be argued that an income tax is mi generis —
neither a tax on property, on a privilege, nor on the per-
aoDr-but a tax on the ri^t to receive income {Peck A
Co. V. Lowe, 247 IT. S. 165); or it might be argued that
it is a commutation tax or a composite tax. As a comr
posite tax it mi|^t be said that in so far as it taxes the
rent from real property it is a real property tax; in so
far as it is a tax on the increased value of personalty, it
is a personal property tax; in so far as it is a tax on the
profits from the purchase and sale of proi)erty, it is an
excise on sales or on conmierce; in so far as it is a tax
on income from trade, profession or labor, it is a privilege
tax; and in so far 'as it taxes residents on income from
sources without the territorial jurisdiction of the soveiv
eign, it is a pure personal tax. The characterization
of a tax by administrative officers, by the phraseology
of the statute, or the opinion of other courts, is not con-
trolling. This court will look only at the practical effect
of the tax as it is forced. Crew Lerick Co. y. PenneyU
vania, 245 U. S. 262, 294. -
It is obvious that the tax onresidents and non-residents
is the same, r^;»rdless of the different phraseology, so
far as both are taxed. In so far as the tax extends to-
income of residents from sources without the States
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62 OCTOBER TERM, 19ia
Aigument far AppeUaat. 252 U. 8.
there is no similax tax upon nonHresideQtBy but that is
nothing for the latter to complain of. It really does not
matter whdther this tax be regarded (so far as non-resi-
dents are concerned) as direct or indirect, a tax on the
person, on property, or on privilege. States can and do
levy all three kinds. The only question is whether the
State has power to enforce this tax, and its nature does
not assist in determining that question.
Whether or not sovereign power to enforce a tax exists,
depends solely on the ability of the State to collect it
without extending its jurisdiction b^ond its territorial
boundaries. The sovereign can levy taxes on property
which is tangible and within its boundaries, by its physi-
cal possession of that property. It can enforce taxes <m
privileges\>r rights, through preventing their exercise
within its boundaries by those who do not pay. It can
extend personal taxes to those over whom it has penomsl
jurisdiction, compelling them to submit or move out.
This inherent power in the sovereign extends equally
to residents and to non-residents, to citizens and to aliens.
Duer V. Small, 4 Blatchf. 263. It exists in each of the
States except as restricted by the Federal Constitution.
State Tax an Fareign^Held Bands, 15 Wall. 300, 319.
With the exception of matters prohibited by the Con-
stitution specifically (such as exports, or interstate com-
merce), or impliedly (such as the activities of the national
government), there is no doubt of the right of the State
to tax anything which is within its territorial jurisdiction.
The only constitutional questions that ordhiarily arise
in respect to modem taxation are (1) those of the situs
of intangibles, (2) those of the equal application of taxing
statutes under Art. IV ofConstitution and the Fourteenth
Amendment, and (3) those of due process of law.
The question of the right to impose a tax on incomes
of non-residents is not a question of the nature of the
tax nor is it a question of whether income is property or
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r&kYIS V. YALE ft TOWNE MFG. €X). 63
00. AigimMat for AppaDsBk
fhe acquisition of it a right or a privilege; bat it is a ques-
tion of the situs of the inoome. The doctrine that mov-
able property follows the person for purposes of taxation
has i^ven way to the doctoine that where property has a
mtus, there it is taxable. BriMl v. WaMfngUm County,
177 U. S. 133.
The reason for r^arding the situs of intangible property
as the domicile of the person dqpends not on the meaning
of property, but on the meaning of atus. That property
18 said to be taxable only at its dtus is because where
property is taxable— that is, wherever a sovereign can
enforce a tax against it — ^there it has a situs. In deter^
mining whether income has a mtus for purposes of taxa-
tion in a given State, we should begin, not by saying:
''Where is its situs? " that we may determine whether
it is taxable, but rather: ''Can it be reached by taxation?*'
to determine whether it has a dtus there. If it can be
reached by taxation by a State— if the' State can en-
force a tax against it by due process of law — ^then it
has a situs for taxation in that State. See State Tax on
Foreign-HM- Bands, supra; Fiddity A Cohmbia Trust
Co. y. Lauisinlle, 246 U. S. 54; KvrOand v. Hotchkiss, 100
U. S. 491; Tappan v. MerOiants' NatUmal Bank, 10 Wall.
490; MelropiiUan Life Ins. Co. v. New Orleans, 205
U. S. 305; Liverpool &c. Ins. Co. v. Orleans Asssssors,
221 U. S. 346, 355; Blaekstane v. MUler, 188 U. S. 189;
New Orleans v. Stempel, 175 U. S. 309; Board of Assessors
V. Comptoir National, 191 U. S. 388; Roffers v. Hennepin
County, 240 U. S. 184, 191.
A person receives income in one of three ways: It is
(1) the product of property, or the money realised fay
tiie sale of such product, (2) the profit gain^ in the
purchase and sale of property, or (3) the compensation
for personal service. In eadi of these cases the 9tate
has power to enforce itisi taxes equally against residents
and against nourresidents.
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64 OCTOBER TERM, 1919.
Aigument for Appellant. 282 XT. 8.
The New York law does not deny to citizens of any
State any of the privileges or immunities of citizens of
the several States. Citizens of other States, as citizens,
and only as such, are protected by Art. IV, § 2, cl. 1.
So, if there is no discrimination against them as citizens,
the provision is not violated. Distinctions are drawn n
between residents and non-residents, but this is regard-
less of citizenship — ^non-resident citizens of New York
are treated like all other non-residents, and citizens of
other sovereigns who are resident in New York are treated
exactly like resident citizens. The term "reside " in
the Fourteenth Amendment probably means to "be
domiciled " ; or to "maintain a voting residence." It does
not mean to "have a place of abode," — especially if one
has several places of abode.
The terms resident and citizen are not normally
synonymous and are not rendered exclusively so by the
use in the Fourteenth Amendment of the word " resident ''
in one of its many meanings. La Tourette v. McMaater,
248 U. S. 465, 470. It is settled that where residence
is a proper basis for classification, the adoption of such
basis is not violative of Art. IV, §2, cl. 1. Travellers*
Ins. Co. V. Connecticut, 185 U. S. 364; Frost v. Brishin,
19 Wend. 11; Chemung Canal Bank v. Lowery, 93 U. S.
72, 76; Field v. Barber Asphalt Paving Co., 194 U. S.
618; Central Loan & Trust Co. v. Campbell Commission
Co., 173 U. S. 84; Blake v. McClung, 172 U. S. 239, 266,
257.
Classification in taxation is a proper exerdse of legis-
lative power. Pacific Express Co. v. Seibert, 142 U. S.
339, 351; Barrett y. Indiana, 229 U. S. 26, 29-^; Giozza
V. Tieman, 148 U. S. 657, 662.
This classification may discriminate between classes
in rates of taxation, Magcun v. Illinois Trust & Savings
Bank, 170 U. S. 283; Michigan Central R. R. Co. v.
Powers, 201 IT. S. 245; or in exemptions fromu^tas&tion,
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TRAVIS V. YALE ft TOWNE MPG. CO. 65
00. Aigument for Appellant.
Beers v. Qlynn, 211 U. S. 477; B:W% Oap R. R. Co. v.
Pennsylmnia, 134 IT. S. 232, 237; Citizena' Telephone Co.
V. Fuller, 229 U. S. 322, 329. A taxing statute is not
invalid because of simple inequality between classes.
International Harvester Co. v. Missouri, 234 U. S. 199,
210. It would seem that the only restriction on the power
of classification is that there must be real differences
between the situations of the different classes. Northr
western Mutual Life Ins. Co. v. Wisconsin, 247 U. 8. 132,
138. What constitutes a real difference dq)ends upon
the puri)08e and extent of the legislation and all the
circumstances of the subjects and objects thereof. Tanner
V. LitOe, 240 U. 8. 369, 382, 383.
The classification of residents and non-reridents by
the New York law is reasonable. La Tourette v. Me-
Master, supra; Northwestern Mutual Life Ins. Co. v.
Wisconsin, supra. Travellers^ Ins. Co. v. Connecticut,
supra, is directly in point.
If the power to levy a tax exists, the rate fixed will
not render it unconstitutional. Tanner v. LitUe, supra.
The power to exempt certain things to the exclusion of
others follows the same rules as the power to tax certain
things, to the exclusion of others — ^it is only another
way of stating the same proposition. And if the rate
is inmiaterial in determining constitutionality as to
taxation, so the rate of exemption is immaterial.
The different methods of collection provided by the
statute for the tax on income received by way of compen-
sation for personal services by residents and by non-
residents, does not deprive any person of the equal pro-
tection of laws. St. John v. New York, 201 U. S. 633, 637.
There are many decided cases in which different methods
of procedure against residents and against non-residents
liave been upheld. Tappan v. Merchants' National Bank,
supra, 505; District of Columbia v. Brooke, 214 U. S. 138;
Central' Loan & Trust Co. v. Campbell Commission Co.^
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66 OCTOBER TERM, 1919.
Aigument for Appellee. 252 U. &
mpra, 84, 97, 98. Many statutes taxing corporate shares
and requiring the corporation to withhold at the source
against non-residents but not agiunst residents have been
upheld. Travellers^ Ins. Co. v. CannecHaitf supra; Mer-
chant' & Manufacturers^ Bank y. Pennsylvania, 167 U.
S. 461, 463.
The law does not deny due process of law; violate the
commerce clause; or impair the obligation of contracts.
Mr. Louis H. Porter and Mr. Archibaid Cox for appellee:
The appellee's factory and principal place of business
is in Connecticut. It is authorized to do business in New
York and owns property there^ but it is a citizen and resi-
dent of Connecticut; and the statute, of course, applies
equally to an individual in its position. It employs sun-
dry persons, including citizens and residents of Connecti-
cut and New Jersey, to work for it, and has contracted to
pay them definite salaries for their services. These sala-
ries are paid in different ways, in some instances by checks
mailed from the ofl3ice in Connecticut to the employees
outside the State of New York, if that is material. And
they are in accordance with contracts of employment
entered into before the enactment of the law. The statute
seeks to impose on the appellee a personal liability as the
means of compelling it to obey.
The invalidity of the provisions for withholding the tax
from the salaries seems to be directly established by New
York, Lake Erie & Western R. R. Co. v. Pennsylvania, 153
U. S. 628.
A corporation, by securing authority to transact busi-
ness within a State, does not thereby bring within the
jmisdiction of that State transactions and properties
wholly outside. It is not a matter of convenient collec-
tion, but a matter of jurisdiction. Distinguishing: HatcR
V. Reardan, 204 U. S. 152; Merchants' & Manvfadurers'
Bank v. Pennsylvania, 167 U. S. 461; Travellers' Ins. Co.
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TRAVm V. YALE ft TOWNB BIFQ. CX). 67
60. . Aigumeiit for Appellee.
\-. Cmnediady 186 U. S. 364; Bruahaber v. l/nicm Paci>!c
A. i2. Co., 240 U. S. l;CitiemB National Bank v. Kentucky,
217 U. S. 443.
To determine the constitutionality of this tax, it is ao-
cordingly neoessary to ascertain, not colloquially but from
a jurisdictional standpoint, what is taxed, and wheth^
that is within the jurisdiction of the State of New York.
The tax is a subjective tax imposing personal liability
ui)on the person receiving the ''net income" which merely
measures the burden imposed on the taxpayer in per^
aonam. Brady v. Andbraon, 240 Fed. Rep. 666; Siate ex
rd. SaUie F. Moon Co. v. Wisconsin Tax Commission, 166
Wisconsin, 287; Income Tax Cases, 148 Wisconsin, 456.
The liability is measured with reference to the net bal-
ance. And that net; from the year's experience, is used
only as a measure of the general financial condition of the
individual and his personal liability to pay from any re-
sources he can control.
Even the amount of the tax varies according to the
person of the recipient, and is not based upon the prop*
erty or amount thereof. Thus, if the amount of income is
twenty thousand dollars, it is taxed at one rate when re-
ceived by one person, at another rate when received by
two persons, and it is free from tax when rec^ved by
twenty i)ersons. This tax is not even measured strictly
by the amount of income which a person receives. It is
measured with a view to securing equality of sacrifice
among taxpayers. Income Tax Cases, 148 Wisconsin, 466.
And that tiie tax is personal is confirmed by the provisions
for its collection, none of which sound in rem and all of
which impose personal liability. That a tax with respect
to ''net incomes" is a personal tax, from the point of view
of jurisdiction similar to a poll tax, is well indicated in
Maguire v. Tax Commissioner, 230 Massachusetts, 603. In*
dividual income as such, dissociated from the person of the
owner, has no existence and is a purely fanciful conception.
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68 OCTOBER TERM, 191ft
Aifument for Ajypellee. 262 U. &
A statute inqx)BiDg a personal tax on peirsons over
whom the State has no jurisdiction conflicts with the
Fourteenth Amendment and is a taking of property with-
out due process of law. United States v. Srie Ry. Co., 106
tJ. S. 327; Railroad Co. v. CoUedar, 100 U. 8. 505; Dewey
V. Dee Moines, 173 U. S. 103; City ojf New York y. McLean,
170 N. Y. 374; Barhyte v. Shepard, 35 N. Y, 237. The
text writers are unanimous in this limitation on the taxing
power of the States. Cooleyi Taxation, 3d ed, p. 24;
BrowU; Jurisdiction of Ck)urts, 2d ed., pp. 540, 550. See
State V. Roes, 23 N. J. L. 517, 521. The source of the in-
come does not in any respect change the nature and char-
acter of the tax imposed upon the recipient, and it is as
much beyond the power of the State to impose such a
personal tax upon a non-resident as it is to impose a capi-
tation tax on him. If the State has not jurisdiction to
impose a personal liability for tax on a non-resident, it is
immaterial whether that non-resident is engaging in an oc-
cupation in the State from which he derives a large income
or not. So, also if the State has the jurisdiction to impose
a tax, it is inunaterial whether the non-resident's occupa-
tion in the State is gainful in money or in health or in
pleasure. The State either has or has not the jurisdiction
to impose a personal liability against anon-resident for the
payment of taxes. The situation here presented in its
inevitable effect upon the integrity of the Union, is of the
same character as that considered by this court in Cran-
daily. Nevada, 6 Wea. 35. 8ee Rcblnns y. Shelby County
Taxing District, 120 U. S. 489.
The argument that it isfair that acitis^i of Connecticut
earning his income in New York should pay a tax to that
State for the protection afforded him therein is political
and legislative rather than judicial. If this argument can
be properly considered by the court, it must be weighed
against the mischievous effects upon the integrity of the
Union and from this standpoint the tax in question would
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TRAVIS V. YAlii A TOWNE MPQ. CO. 09
60. AigumeQt for AppeUee.
seem inoonsisteiit with the very spirit; of the Constitution.
The provisions of the statute here cannot be sustained as
a tax on property.
A "net income'' under this statute is but a measure of
the condition of the person receiving and enjoymg it. A
debt of ten thousand dollars may be paid to one person or
to ten, but remains a fixed measurable amount. Ten thou-
sand dollars paid in gross salaries means nothing as to the
net income of the recipients without consideration, of their
number and personality. Ten thousand dollars in salaries
paid to a number of recipients may after the computation
yield an aggr^ate of net incomes entirely different from
that which it yields if paid to one. The personal condition
of the recipient, and not the amount or character of the
payment made, constitutes and determines the fact of net
income. It seems, therefore, impossible to conceive a net
income for purposes of this taxation separate and distinct
from the person receiving it.
The laws of New York do not create, give validity to,
or affect, the income of appellee's non-resident employees.
They are employed and paid in Ponnecticut, whose laws
govern the contract of employment and whose courts en-
force the contract. The services rendered are not income.
The services are performed in whole or in part in New York.
The net income never has any existence in New York.
The gross salary here is not owing by, or to, anyone in New
York. The fact that the appellee can legally transact
business in New York obviously makes no difference in the
situs of the obligation.
Moreover, property to be taxable in a State must have
some permanency there, and not be merely temporarily
within the State. Ayer & Lard Tie Co. v. Kentucky, 208
U. S. 409; Buck v. Beach, 206 IT. S. 392; Union Refrigeror
tor Transit Co. v. Kentucky, 199 U. S. 194.
In each of those cases such as Tappan v. Merchants^
National Bank, 10 Wall. 490, where a tax has been su9-
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70 OCTOBER TEEIM, 1919.
Aigument for AiipeOae. 2S2n.fi«
iained on property of a non-resideiit; there were present
two factors which have been universally recognized as
essential to jurisdiction — (1) some definite and specific
property in existence, (2) having in a real s^ose a situs
in the^t^xing State. State Tax <m ForeigrirHeld BandSj
15 Wall. 300; Board of Assessors v. New York Lyfe Ins. Co.,
216 U. S. 517; Hawley v. Maiden, 232 U. S. 1; Fidelity it
ColunHna Trust Co. v. LouismUe, 245 U. S. 54; Southern
Pacific Co. V. Kentucky, 222 U. S. 63.
The cases in which the courts have held that choees in
action may acquire a situs different from the residence
of the owner are not in point. A chose in action has not
yet been paid. The debtor has only promised to pay it,
and its value depends on the promise of the debtor. The
actual mon^ to pay the chose in action is in the State
where he resides. Furthermore, the income tax is not
assessed upon all money that comes to the recipient.
It is only after the net amoimt has been determined after
deducting from the gross receipts certain allowable
expenses by way of deductions that the taxable amoimt
is determined. Before that amount is determined and
before any assessment can be laid thereon, most of the
income, both gross and net, has been expended. The
theory of a property tax is that it is a hen on the property
taxed. Obviously the State cannot lawfully impose a
tax hen upon property which is not itself in existence.
The proposition is necessarily a contradiction in terms.
De Ganay v. Lederer, 250 U. S. 376, distinguished.
The distinction between a tax on the income from
property and a tax on the income from occupations and
professions was clearly pointed out in PoUodc v. Fanners'
Lorn & Trust Co., 158 U. S. 635, 637. The distinction
between the rights of the citizens of the several States,
which are assured by the Constitution, and those of
fwdgners, who may be completely excluded from the
United States, is pointed out in United States v. Bennett,
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TRAVIS V. YALE A TOWNE MFQ. CO. 71
00. Aigument for Appdlee.
232 U. S. 299, and more speeificaUy in Railroad Co. v.
CoOector, supra.
The provisions of the statute taxing non-residents
cannot be sustained as imposing a privilege or license
tax; nor on the theory that the State of New York has
in fact i)ower to collect the tax. It is not going too far
to say that in every case in which this court has held
unconstitutional a state law imposing a tax on persons
or property outside its jurisdiction, the State had power
to enforce the tax, because otherwise the case would
not have been brou^t. Board of Aswssora v. New York
Life Ins. Co., supra; New York, Lake Erie & Western
R. R. Co. V. Pennsylvania, supra; Morgan v. Parham, 16
Wall. 471; LouismUe ike. Ferry Co. v. Kentucky, 188 U. S.
385.
As between nations, the proposition that power to
collect is the test of right to tax may be coirect. Just
as foreigners may be completely excluded from the
United States (United Stales v. Bennett, supra), so any-
thing that the United States can in fact seize it may per-
haps tax. But the power of the individual States of the
Union is limited by the Federal Constitution.
The tax on non-residents cannot be sustained on any
theory that the State of New York protects their net
income.
The provisions of the statute taxing non-residents are
unconstitutional because they discriminate against citi-
zens and residenta of Connecticut and New Jersey. A
materially higiher tax is imposed on non-residents than
upon residents.
The provisions operating to discriminate against
appellee's non-resident employees conflict with §2 of
Art. IV of the Constitution and the privileges and
immunities clause of the Fourteenth Amendment. A
statute which in fact operates to defeat rigjhts secured
by the Constitution cannot be justified by invoking
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72 OCTOBER TERM, 1019.
Opinion of the Court 262 U. 8.
the neoeflsity of classification in taxation or by the fact
l^hat the words of the Constitution do not appear in the
statute. ChaJker y. Birmingham & Northwestern Ry. Co*,
249 U. S. 622.
There is no relevancy in cases where the State is deal*
ing with a privilege which it may grant or withhold,
such as those relating to foreign corporations doing busi-
ness in the State, or succession taxes, or the nation's
treatment of foreigners, because they do not deal with
discrimination against persons having rights secured
by the Constitution. Lia Tourette v. McMaster, 248 U. 3.
465; People v. Wearer, 100 U. S. 539; Sprague v. Fletcher,
69 Vermont, 69.
Mr. John W. Griggs, by leave of court, filed a brief as
amicus curice.
Mr. Laurence Arnold Ta'iizer, Mr. William P. Burr,
Mr. William S. Rann and Mr. William J. Wallin, by
leave of court, filed a brief as amici curiae.
Mr. Justice Pitney delivered the opinion of the court.
This was a suit in equity, brought in the District Court
by appellee against appellant as Comptroller of the
State; of New York to obtain an injunction restraining
liie enforcement of the Income Tax Law of that State
(c. 627, Laws 1919) as against complainant, upon the
ground of its repugnance to the Constitution of the
United States because violating the interstate commerce
clause, impairing the obligation of contracts, depriving
citizens of the States of Connecticut and New Jersey
employed by complainant of the privileges and immunities
enjoyed by citizens of the State of New York, depriving
complain^t and its non-resident ^nployees of their
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TRAVIS t;. YALE & TOWNE MFG. 00. 78
00. Opinion of the Court.
property without due process of law, and daiQring to
such employees the equal protection of the laws. A
motion to dismiss the bill — equivalent to a demurrer —
was denied upon the ground that the act violated §2
of Art. IV of the Constitution by discriminating against
non-residents in the exemptions allowed from taxable
income; an answer was filed, raising no question of fact;
in due course there was a final decree in favor of ccmi-
plainant; and defendant took an appeal to this court
under § 238, Judicial Code.
The act (§361) imposes an annual tax upon every
resident of the State with respect to his net income as
defined in tihe act, at specified rates, and provides also:
'^ A like tax is hereby imposed and shall be levied, collected
and paid annually, at the rates specified in this section,
upon and with respect to the entire net income as herein
defined, except as hereinafter provided, from all property
owned and from every business, trade, profession or
occupation carried on in this state by natural persons
not residents of the state." Section 359 'defines gross
income, and contains this paragraph: "3. In the case
of taxpayers other than residents, gross income includes
only the gross income from sources within the state, but
shall not include annuities, interest on bank deposits,
interest on bonds, notes or other interest-bearing obli-
gations or dividends from corporations, except to the
extent to which the same shall be a part of income from
any business, tra^p, profession or occupation carried on
in this state subject to taxation under this article." In
§ 360 provision is made for deducting in the computation
of net income expenses, taxes, losses, d^reciation charges,
etc.; but, by paragraph 11 of the same section, "In the
case of a taxpayer other than a resident of the state the
deductions aUowed in this section shall be allowed only
if, and to the extent iiat, th^ are connected with in-
come arising from sources within the state; . . ." By
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74 OCTOBER TEBM, 1919.
OpimoQ of the Court. aB2n.8.
§ 362, certain exfimptions aie allowed to any randent
individual taapayeri viz., in the case of a ong^e person
a personal exemption of $1,000, in the case of the head
of a family or a married person living with husband or
wife, $2,000; and $200 additional for each dependent
person imder 18 years of age or mentally or physically
defective. The next section reads as follows: '^§363.
Credit for taxes in case of taxpayers other than residents
of the state. Whenever a taxpayer other than a resident
of the state has become liable to income tax to the state
or country where he resides upon his net income for the
taxable year, derived from sources within this state and
subject to taxation under this article, the comptroller
shall credit the amount of income tax payaUe by him .
under this article with such proportion of the tax so
payable l^ him to the state or country where he resides
as his income subject to taxation under this article bears
to his entire income upon which the tax so payable to
such other state or country was inqx)sed; provided that
such credit shall be allowed only if the laws of said state
or country grant a substantially similar credit to residents
of this state subject to iocome tax under such laws." Sec-
tion 366 in terms requires that every '^ withholding agent "
(including employers) shall deduct and withhold 2 per
centum from all salaries, wages, etc., payable to nonnresi-
dents, where the amount paid to any individual equals
or exceeds $1,000 in the year, and shall p^y the tax to
the Comptroller. This appUes to a resident eo^loyee,
also, unless he files a certificate showing his residence ad-
dress witlun the State.
Complainant, a Connecticut corporation doing busmess
in New'York and elsewhere, has employees who are resi-
dents some' of Connecticut others of New Jersey but are
occupied in whole or in part in complainant's business
in New York. Many of them have annual salaries or
fixed con4>ensation exceeding $1,000 per year, and the
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TRAVIS V. YALE k TOWNE MPO. 00. 76
60. OpinioQcf tfaeCoori.
amount required by the act to be withheld by oomplaiii-
ant from the salaries of such non-resident employees is
in excess of $3,000 per year. Most of these persons are
engaged und^ tenn contracts calling for stipulated
wages or salaries for a specified period.
The bill sets up that defendant, as Ck)mptroller of the
State of New York, threatens to enforce the provisions of
the statute against complainant, requires it to deduct and
withhold from the salaries and wages payable to its emr
ployees residing in Connecticut or New Jersey and citizens
of those States respectively, engaged in whole or in part
in complainant's business in the State of New York, the
taxes provided in the statute, and threatens to enforce
against complainant the penalties provided by the act if
it fails to do so; that the act is unconstitutional for the
reasons above specified; and that if complainant does with-
hold the taxes as required it will be subjected to many ac-
tions by its employees for rtimbursement of the sums so
withheld. No question is made about complainant's
rigjit to resort to equity for relief; hence we come at once
to the constitutional questions.
That the State of New York has jurisdiction to impose
a tax of this kind upon the incomes of non-residents aris-
ing from any business, trade, profession, or occupation
carried on within its borders, enforcing payment so far as
it can by the exercise of a just control over persons and
property within the State, as by garnishment of credits
(of which the withhblding provision of the New York law
is the practical equivalent) ; and that such a tax, so en-
forced, does not violate the due process of law provision of
the Fourteenth Amendment, is settled by our decision in
Shaffer v. Carter, this day announced, ante, 37, involving
the income tax law of the State of Oklahoma. That there
is no unconstitutional discrimination against citizens of
other States in confining the deduction of expenses, losses,
etc., in the case of non-resident taxpayers, to such as are
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76 OCTOBER TERM, 19ia
Opinion of the Court. 362n.&
connected with inoome arising from souioeB within the
taxing State, likewise is settled by that decision.
It is not here asserted that the tax is a burden upon in-
terstate conunarce; the point having been abandoned in
this court.
The contention that an unconstitutional discrimination
aigainst non-dtiaens arises out of the provision of § 366
confining the withholding at source to the income of non-
residents is unwibst4int.ial, That provision does not in
any ¥nse increase the burden of the tax upon nonnresidentB^
but merely recognizes the fact that as to them the State
imposes no personal liability, and hence cdopts a conven-
ient substitute for it. See BaO'^ Qap B, JB. Co. v. Penn^
tykmnia, 134 U. S. 232, 239.
Nor has complainant on its own account any just
ground of compliunt by reason of being required to adjust
its system of accounting and paying salaries and wages to
the extent required to fulfill the duty of deducting and
withholding the tax. This cannot be deemed an unrear
sonable regulation of its conduct of business in New York.
New Ycrkf Lake Erie A Weetem R. fi, Co. v. Penneyhania^
153 U. S. 628, cited in bdialf of complainant, is not in
point. In that case Ihe State of Pennsylvania granted to
a railix>ad company organised under the laws of New York
and having its principal place of business in that State
the right to construct a pwtion of its road throu|^ Penn-
sylvania, upon prescribed terms which were assented to
and complied with by the company and were deerndd to
constitute a contract, not subject to inqMurment or modir
fication throu^^ subsequent legislation by the State of
Penn^lvania except to the extent of establishiog reason-
able regulations touching the management of the business
done and ihe property owned by the company in that
State, not materiaUy interfering with or obstructing the
substantial enjoyment of the rights previously granted.
Afterwards, Pennsylvania undertook by statute to re-
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TBAVB p. YALE & TOWNE MPG. 00. 77
flOL Opmimi of the CkRurt
quire the oompany, vrhea making payment of coupons
upon bonds previously issued by it, payable at its office
in the City of New York, to withhold taxes assessed by
the State of P^msylvania against residents of that State
because of ownership of such bonds. The coupons were
payable to bearer, and when th^ were presented for pay*
ment it was practically impossible for the company to
ascertain who were the real owners, or whether they were
owned by the same parties who owned the bonds. The
statute was held to be an unreasonable regulation and
hence to amount to an impairment of the obligation of the
contract.'
In the case at bar complainant,! althou^ it is a Connect*
icut corpcnration and has its principal place of business in
that State, is exercising the privilege of carrying on busi-
ness in the State of New York without any contract lim*
iting the State's power of regulation. The taxes required
to be widiheld are payable with respect to that portion
only of the salaries of its employees whidhi is earned within
the State of New York. It mi{^t pay such salaries, or this
portion of them, at its place of business in New York; and
the fact that it may be more convenient to pay them in
Connecticut is not sufficient to deprive the State of New
York of the right to impose such a regulation.' It is true
complainant asserts that the act impaurs the obligation of
contracts between it and its employees; but there is no
averment that any such contract made before the pas-
sage of the act required the wages or salaries to be paid in
the State of Connecticut, or contained other provisions
in anywise confficting with the requirement of withholding.
The District Court, not passing upon the above ques-
tacms, hdd that the act, in granting to residents exemp-
tions denied to non-residents^ violated the provision of |) 2
of Art IV of the Federal Constitution: "The Qtiaens of
each State shall be entitied to all Privileges pod Immimi-
ties of CStiiens in the several States ''; and, notwithstand-
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78 OCTOBER TERM, 1919.
Opiiiioii of the Court. 252n.&
ing the elaborate and ingenious argument submitted by
appellant to th6 contrary, we are constrained to affirm ihe
ruling.
The purpose of the provision came under consideration
in Paul V. Virginia, 8 Wall. 168, 180, where the court,
speaking by Mr. Justice Field, said: "It was undoubtedly
the object of the clause in question to place the citizens
of each State upon the same footing with citizens of other
States, so far as the advantages resulting from citizenship
in those States are concerned. It relieves them from the
disabilities of alienage in other States; it inhibits dis-
criminating l^slation against them by other States; it
gives them the right of free ingress into other States, and
egress from them; it insures to them in other States the
same freedom possessed by the citizens of those States in
the acquisition and enjosrment of property and in the pur-
suit of happiness; and it secures to them in other States
the equal protection of their laws. It has beai justly
said that no provision in the Constitution has tended so
strongly to constitute the citizens of the United States
one people as this." And in Ward v. Maryland^ 12 Wall.
418, holding a discriminatory state tax up<Hi non-resident
traders to be void, the court, by Mr. Justice Clifford, said
(p. 430): ''Beyond doubt those words [privil^es and im-
munities] are words of very comprehensive meaning, but
it will be sufficient to say that the clause plainly and un-
mistakably secures and protects the right of a citizen of
one State to pass into any other State of the Union for the
purpose of engaging in lawful commerce, trade, or busi-
ness without molestation; to acquire personal property;
to take and hold real estate; to maintain actions in the
courts of the State; and to be exempt from any higher
taxes or excises than are imposed by the State upon its
own citizens."
Of course the terms ''resident" and "citizen" are not
synon3ntnous, and in some cases the distinction is important
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TRAVIS V. YALE ft TOWNE MFG. 00. 79
60. Opinion of the Court.
{La T(mrette v. MeMaster, 248 U. S. 405, 470); but a gen-
eral taxing scheme such as the one under oonsiderationy
if it discriminates against all non-residents, has the neces-
sary effect of including in the discrimination those who
are eitizens of other States; and, if there be no reasonable
groimd fbr the diversity of treatment, it abridges the
privileges and immunities to which such dtisens are en-
titled. In Blake v. MeCluag, 172 U. S. 239, 247; 176 U. S.
59| 67, the court held that a statute of Tennessee, declaring
the terms upon which a foreign corporation mif^t carzy
on business and hold property in that State, which gave
to its creditors residing in Tennessee priority ovw all cred-
itors residing elsewhere, without special reference to
whether they were dtiaens or not, must be regarded as con-
travening the ''privileges and immunities" clause.
The nature and effect of the crucial discrimination
in the present case are manifest. Section 362, in the case
of residents, exempts from taxation $1,000 of the income
of a sini^e person, $2,000 in the case of a married person,
and $200 additional for each dq)endent. A non-resident
tajpayer has no similar exemption; but by § 363, if liaUe
to an income tax in his own State, including income de-
rived from sources within New York and subject to taxsr
tion under this act, he is entitled to a credit upon the
income tax otherwise payable to the State of New York
by the same proportion of the tax payable to the State
of his residence as his income subject to taxation by the
New York Act bears to his entire income taxed in his
own State; "provided that such credit shall be allowed
Qofy if the laws of said state . . . grant a substantially
sindlar credit to residents of this state subject to income
tex under such laws." ^
> Reading the statute literaUy, there would appear to be an addi-
tional dieerimination agsinat non-ieeidentB in that under f 366 the
''wMholdhig agent'' (employer) ie required to withhold 2 per oent.
from an salariee, wages, etc., payaUe to any individual non-resideQt
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80 OCTOBER TERM, 1919.
OpDion of ihe Court 2S2U.8.
In the concrete^ the particular inddenoe of the dis-
crimination is upon citizens of Connecticut and New
Jersey, neither of which States has an income tax law.
A considerable number of complainant's employees, resi-
dents and citizens of one or the other of those States,
iqiend their working time at its office in the city of New
York, and earn their salaries there. The case is typical;
it being a matter of common knowledge that from ne-
cessity, due to the geographical situation of that city,
in dose proximity to the neighboring States, many
thousands of men and women, residents and citizass
of those States, go daily from their homes to the city and
earn their livelihood there. They pursue their several
occupations side by side with residents of the State of
New York — ^in effect competing with them as to wages,
salaries, and other terms of employment. Whether they
must pay a tax upon the first $1,000 or $2,000 of income,
while their associates and competitors who reside in New
York do not, makes a substantial difference. Under the
circumstances as disclosed, we are unable to find ade-
quate ground for the discrimination, and are constrained
to hold that it is an unwarranted denial to the citizens
of Connecticut and New Jersey of the privileges and
inmmnities enjoyed by citizens of New York. This is
not a case of occasional or accidental inequality due to
circumstances personal to the taxpayer (see Amoskeag
amounting to SI, 000 or more in the year; whereas by § 351 the tax upon
residents (indeed, upoii non-residents likewise, so far as this section
goes), is only one per centum upon the first S10,000 of net income. It
is said, however, that the discrepancy arose through an amoiidment
made to § 351 while the bill was pending in the logislaturo, no corre-
sponding amendment having been made in § 366. In view of this, and
taking the whole of the act together, the Attorney General has advised
theComptrollerthat§ 366 requires withholding of only one i)er centum
upon the first S10,000 of income. And the Oxnptroller has issued reg-
ulations to that effect. Hence we treat the discrepant as if it did not
exist.
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TRAVIS V. YALE & TOWNE MFG. CO. 81
ea Opinkm of the Ckrart
SaringB Bank v. Purdy, 231 U. S. 373, 393-394; McutwM
V. BugbeCf 250 U* 6. 525, 543) ; but a genial rule, operating
to the disadvuitage (rf all non-residents including those
who are citiz^is of the neighboring States, and favoring
all residents including those who are citizens of the tax-
ing State.
It cannot be deemed to be counterbalanced by the
provision of par. 3 of § 359 which excludes from the in-
come of non-resident taxpayers ''annuities, interest
on bank deposits, interest on bonds, notes or other interest-
bearing obligations or dividends from corporations, esxr
cq>t to the extent to which the same shall be a part of
income from any business, trade, profession or occupation
carried on in this state subject to taxation under this
article." This provision is not so conditioned as probably
to benefit non-presidents to a degree corresponding to the
discrimination against them; it seems to have been
desicpied rather (as is avowed in appellant's brief) to
preserve the preeminence of New York City as a financial
center.
Nor can the discrimination be upheld, as is atWipted
to be done, upon the theory that non-residents have un-
taxed income derived from sources in their home States
or dsewhere outside of the State of New York, correspond-
ing to the amount upon which residents of that State
are exempt from taxation under this act. The discrimina-
tion is not conditioned uix>n the existence of such un-
taxed income; and it would be rash to assume that non-
residents taxable in New York under this law, as a class,
are receiving additional income from outside sources
equivalent to the amount of the ^emptions that are
accorded to citiz^is of New York and denied to them.
In the brief submitted by the Attorney General of
New York in behalf of appellant, it is said that the
framers of the act, in embodying in it the provision for
unequal treatment of the residents of other States with
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82 OCTOBER TERM, 1919.
Opiiiion of the Court 2S2 U. 8,
respect to the exemptions, looked f<»*ward to the epeedy
adoption of an income tax by the adjoining States; in
which event, injustice to their citizens on the part of
New York could be avoided by providing similar exemp-
tions similarly conditioned. This, however, is wholly
speculative; New York has no authority to legislate for
the adjoining States; and we must pass upon its statute
with respect to its effect and operation in the existing
situation. But besides, in view of the provisions of the
Constitution of the United States, a discrimination by
the State of New York against the citizens of adjoining
States would not be cured were those States to establish
like discriminations against citizens of the State of New
York. A State may not bart^ away the right, conferred
upon its citizens by the Constitution of the United States,
to enjoy the privileges and immunities of citiz^is when
they go into other States. Nor can discrimination be
corrected by retaliation; to prevent this was one of the
chief ends sought to be accomplished by the adoption
of the Constitution.
Decree affirmed.
Mb. JtJBncB MgRbtnolds concurs in the result.
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CHBSBROUOH v. NORTHERN TRUST CX). 83
OpisidQ of the Court
CHESBROUGH v. NORTHERN TRUST COMPANY,
EXECUTOR OF SCHREIBER, ET AL.
EBBOB TO THE dBCUIT COURT OF APPBALS FOB THB
SIXTH CIRCUIT.
No. 206. Aigued Jaauary 30, 1920.— Decided March 1, 1820.
Judgment sustained as in accord with a stipulation to abide the final
result of Chesl/raugh v. Woodworth, 244 U. S. 72. P. 83.
In an action in tort the amount involved is the damages claimed if the
declaration discloses nothing rendering such a recovery impossible
and no bad faith appears, P. 84.
After a case of that character has been removed by defendant from a
state court and judgment rendered against him in the District Ck)urt
and Circuit Court of Appeals, it would require veiy clear error to
juslify this court in denying the jurisdiction upon the ground that
the reciuisite amount was not involved. Id,
251 Fed. Rep. 881, affinned.
Thb case is stated in the opinioiL
Mr. Thomas A. E. Weadock for plaintiff in error.
Mr. Edward S. Clarky with whom Mr. John C. Weadock
was on the brief, for defendants in error.
Memorandum qpinion mider direction of the courti
by Mb. Justice McRetnolds.
Each of the three defendants in error instituted a
suit against plaintiff in error for damages suffered by
reason of his action as a director of the Old Second Na-
tional Bank, Bay City, Michigan. These were con-
solidated in the District Court, and thereaf t^ all parties
stipulated that, as the facts were approximately the same
as in WoodworOi v. Cheshrough et al. (No. 137), the
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84 OCTOBER TERM, 1»1».
Opnion of the Court 262U.8.
''causes shall in all respects and as to all parties therein,
be governed and concluded by the final result in the
said case '' and ''that if and when final judgment is
entered upon the verdict heretofore rendered in said
case Number 137, or on any verdict that may hereafter
be rendered th^rdn and when proceedings (if any) for
the review of said judgment have been concluded or
abandoned so that execution may be issued thereon,
then judgment shall be forthwith entered and execution
issued in the above entitled causes/' for specified amounts.
A judgment against Chesbrough in No. 137 having
been affirmed here (244 U. S. 72), the District Court,
purporting to enforce the stipulation, entered judgments
for defendants in error; and this action was properly
approved by the Circuit Court of Appeals. 251 Fed.
Rq[). 881. See 195 Fed. Rep. 875; 221 Fed. Rep. 912.
PLun provisions of the stipulation were rightly i^^plied.
The objection, based upon alleged insufficiency of the
amount involved, which plainti£F in error urges to the
District Court's jurisdiction of the cause first instituted
by Mrs. Smalley in the state court and thereafter re-
moved ui)on his petition, is without merit. The action
is in tort; alleged damages exceed the prescribed amount;
the declaration discloses nothing rendering such a re-
covery impossible; no bad faith appears. At this stage
of the cause it would require very clear error to justify
a negation of the trial court's jurisdiction. SmWhera v.
Smith, 204 U. S. 632, 642, 643.
The judgment of the court below is
Affirmed.
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UNITED STATES v. SCHRADER'S SON, INC. 85
Atgnmeat for the United States.
UNITED STATES v. A. SCHRADER'S SON, INC.
EBBOB TO THE BI8TBICT COTTRT OF TBS UN1T£1> STATES FOB
THE NOBTHSBN BISTBICT OF OHIO.
No. Mr. Argued Januaiy 2% 28, lfi20.--IHM»dedManli 1,1920.
A inaiiiifeetarer of patented artieks sold them to its caetomeni, iriio
mae other manufacturen and jobben in seveial States, under their
agreements to observe eertain resale prises fixed by the vendor. HM
that there was a combination restrakiing trade in violation of § 1 of
the Anti-Trust Act. P. 98. Dr. Mik$ Medieal Co. v. Park A Sana
Co., 220 U. 8. 873rfdlowed; UfdUd Aotet v. Colgate dt Co., 260 U.
8. aOO, dbtinguisbed.
264 Fed. Bap. 176, revened.
T^ case is statod in the opinion.
The Sdieitor Oeneral and Mr. Henry S. MitcheU, Special
Assistant to the Attom^ General, for the United States:
The defendant's patents have no bearing on the case.
On this point we merely refer to the opinion of the Dis-
trict Ck>iirt, holding that the decisions of this court es-
tahlish that patented and unpatented articles are on the
same footing with reqpect to fixing resale prices; that de-
fendant's so-called ''liceuse agreements? were mere sellr-
ing agreements; and that defendant's use of the term
"royalties" was merely intended to give color to its un-
tenable theory that the patents justified what was done.
The conclusive interpretation of the indictment (United
States V. Ccarter, 231 U. S;4«2, 403; United States v. Miller,
223 U. S. 599, 602) was that it charged a etystem of resale
price-fixing contracts, between a manufacturer and whole-
salers of its products, obligating the wholesalers to adhere
to uniform specified resale prices, eliminating competition
between the wholesalers, enhancing their prices to 1*0-
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86 OCTOBEll TERM. 1919.
Aigument for the United States. 2S2 U. S.
tailersy and enhancing the prices paid by the consuming
public.
In Dr. Miles Medical Co. v. Park & Sana Co., 220 U. S.
373y this court vigorously denounced a system of resale
price-fixing contracts between a manufacturer and dealers
in its products, as against the public interest, uix>n the
ground that it was as if the dealers had agreed amongst
themselves, as condemned in United States v. Addystyn
Pipe & Steel Co., 85 Fed Rep. 271; 175 U. 8. 211, to fix
prices and suppress competition.
In United Stales v. Colgate & Co., 250 U. S. 300, the m-
diotment did not charge the defendant with selling its
products to dealers under agreements which obligated the
latter not to resell except at prices fixed by the company.
The District Court erroneously construed § 1 of the
Sherman Act, which prohibits combinations in restraint
of trade, as only applying where there is a violation of § 2,
which prohibits monopolization. That construction U
opposed to the declaration of this coiui^ in Standard Oil
Co. V. United States, 221 U. S. 1, 60, 57; nor is it supported
by the Colgate Case. It is opposed to the Dr. Miles Medi-
cal Case:
If the statute is to be construed according to the Dr.
MUes Medical Case as intended to prevent combinations
tending to enhance prices paid by the public, the construc-
tion adopted by .the District Coiui^ is untenable. For the
tendency to enhance prices paid by the public not only
exists in a combination, but is fulfilled although no re-
tailers are included in the combination, but only whole-
salers; and the District Court so interpreted the present
indictment.' The enhancement of the prices at which the
wholesalers sell to the retailers is, of course, transmitted
' by the retailers to the public; and is idtimately borne by
the public. It is analogous to the case of a price-fixing
agreement between competing manufacturers, which is
unlawful although the enhancement of prices is transmit-
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UNITED STATES ». SCHRADER'S SON, INC. 87
86. Aigument for the United States.
ted to the public through dealers not in the agreement
with the manufacturers.
The District Coiui^ was mistaken in considering that
the construction of the Sherman Act which it adopted was
supported by § 2 of the Clayton Act (38 Stat. 730). That
section has no apparent bearing on resale price fixing.
The District Coiui^ apparently overlooked that the en-
actment deals only with a person's selling prices to his
customers, and in no way touches his fixing their prices
to their customers, which alone is involved in this case.
Large profits can not be justified as reasonable because
they encourage the distribution of articles needed by the
imblic; for the principle of that justification would sanc-
tion taking advantage of the public necessity, e. g., for coal
or food. However, the reasonableness, or unreasonable-
ness, of resale prices does not detennine the legal status
of the combination which fixes them.
In the Dr. MUes Medical Caae the combination was con-
demned, although the ooiui^ had to assume that the prices
fixed were reasonable, as was 6aq[>ressly pointed out. (220
U.S. 412.) See rAoiweenv.Coyeer, 243 U.S. 66; Satt Co.
V. Qutkrie, 36 Oh. St. 666. All such combinations are in-
jurious to the public interest in the extreme facility which
they afford for arbitrarily advancing prices through the
united action of the dealers in obedience to the will of the
manufacturer. Resale price-fixing combinations are not
saved from condenmation by their advantages to the par-
ticipants. We may dismiss as wholly baseless the familiar
contention that to condemn a resale price-fixing oomr
bination deprives the manufacturer of the advantage of
exercising his undoubted ri^t to suggest resale prices
and to select as his customers those dealers who adhere to
the suggested prices.
That undoubted ri^t was referred to by this court in
the Colgate Caae. But that indictment was held bad on
the ground that it did not charge the existence of agree-
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88 OCTOBER TERM, 1919.
Argument for the United States. 252 U. 8.
ments obligating the dealers to adhere to the indicated
resale prices. The manufacturer can, of course, suggest
resale prices and select as his customers dealers who ad-
here to them, without restricting the dealers either by
assurances and promises to so adhere, or by contracts ob-
ligating them to do so.
Anoth^ inadequate argument for resale price-fixing
combinations is that they protect the manufacturer's
legitimate interest in the good will of his products against
a poor opinion of their value created by dealers selling
them at ruinotts prices as a bait to procure sales of other
articles on which to recoup. Let us assume this practice to
be harmful and dishonest, and that the manufacturer may
legitimatdy withhold his goods from dealers addicted
thereto. But, obviously, he may protect himself in that
respect without creating a combination imposing absolute
uniformity of price on all dealers, and thus preventing
deviation from such price by efficient dealers who find
smaller profits adequate and desire to content themselves
with these in a maimer that is fair, and honorable, and
entirely beneficial to the public.
The real advantages of resale price-fixing combinations
to the participants consist in the enhancement of prices
which constitutes a disadvantage to the public. A liberal
part of the enhanced price is distributed to the dealers in
the combination in the form of profits consisting in the
difference between their fixed bu3ring prices and their fixed
selling prices. This induces the dealers to promote the
sales of the articles whose prices are so fixed rather than
of other articles the prices of which are not fixed and are
consequently kept down by competition amongst the
dealers. A manufactiu^r is, of course, benefited when the
dealers promote the sales of his products rath^ than of
other products; and his profits are, of coimse, increased.'
But as for such considerations we merely note what this
court said in the Dr. Miles Medical Case (p. 408), after
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UNITED STATES v. SCHRADER'S SON, INC. 89
86. Argument for Defendant in Error.
condemning resale price-fixing combinations as injurious
to the public interest*
Mr. Frank M. Avery y with whom Mr. Eugene V. Myers,
Mr, Carl Everett Whitney and Mr. Earl A. Dorr were on
the brief, for defendant in error:
The indictment does not chai^ an offense. . There
must be an unreasonable restraint of trade. A covenant
in partial restraint is prima facie reasonable. Narlhweri'
em SaU Co. v. Electrolytic Alkali Co. (1914), A. C. 461;
Haynes v. Daman (1899), 2 Ch. 13. Thomeen v. Cayeer,
243 U. S. 66, showed an imreasonable combination.
The allegation that the defendant's goods are patented
plus an allegation that defendant regularly sells and ships .
large quantities to tire manufacturers and jobbers in the
Northern District of Ohio and throughout the United
States, who in turn resell and reship large quantities (col-
lectively stated) to jobbers, manufacturers, retail dealers
and the public, falls far short of charging facts showing
an unreasonable restraint or combination. The channels
of interstate commerce may be glutted with valves, etc.;
there may be many or few manufacturers thereof; defend-
ant's agreements may be necessary, owing to the state of
the trade in defendant's particular goods; there is no
averment to show how many tire manufactiu'ers or job-
bers there are in Northern Ohio or in the United States,
nor what proportion of them have contracted with de-
fendant; there is nothing to show what percentage of the
goods is handled by the retail trade— this retail trade not
being restricted at all; there is no allegation as to what
percentage of valves is sold by the thre manufacturers or
jobbers to the consuming public. Furthermore, no aUegar
tion of imreasonableness or of facts upon which unreason-
ableness can be predicated is found in the indictment
itself or as interpreted by the District Ck>urt, and the
agreements annexed to the indictment show that defend-
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90 OCTOBER TERM, 1919.
Aigomfioit for Defendant in Enar. 262 U. S.
ant has an mterest in the resale price which itifixes. Dr.
Miles Medical Co. v. Park & Sans Co., 220 U. S. 373, de-
cides that where a vendor has parted with all of his in-
terest, and has also received the full consideration, he can-
not control the resale price. But here, under its license
agreements, defendant has a direct and substantial prop-
erty interest in the resale price, namely, certain percent-
ages of the list prices or gross selling prices, reserved as
royalties under its patents. These royalties are in addi-
tion to the initial price and are not payable unless and
until the goods have been used or sold by the defendant's
vendees; and the percentage of the resale price which de-
fendant is to receive is based on the amount of the resale
price which the vendee actually receives, which must not
be less than a minimum price, but which may be more;
and, therefore, the amount of the defendant's compenssr
tion is dependent upon the amount of the resale price
whentlie resale comes to be made. In none of the cases
which have been before this court did the vendor have
this interest or property in the resale price.
Where a vendor has a pecuniary interest in maintain-
ing the resale price, and no monopoly is effected, he may
lawfully contract with vendees to adhere to find prices.
Dr. Miles Medical Co. v. Pvk & Sons Co., Mpra; Fisher
Flouring Mills Co. v. Swanson, 76 Washington, 649; Banih
high Medical Co. v. Otbome, 177 Iowa, 208.
At common law such agreements are valid; nothing in
the Sherman Act makes them illegal; and this court has
made it clear that in the cases heretofore decided it has
decided no more than was directly in issue in them.
In each of those cases the vendor had received the full
price for his article, all that he ever was to get for it, and
still sougiht to annex ccmditions to the resale. In the case
at bar the defendant has not recdved the full price for it,
since a very substantial part dq)ends upon the resale and
upon the amount of the resale price. The hypothesis of
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UNITED STATES v. SCHRODER'S SON, INC. 91
85. Argument for Defendant in Eirar.
the Government assumes that defendant has parted with
the title to the goods and therefore has no property in-
terest in the goods when resold. This overlooks the fun-
damental fact that the sales are on condition, that, on re-
sale, the vendee will pay the defendant something more.
The defendant, imder the circumstances, may have only
a fanciful interest or no interest in the goods themselves,
but it has a very real, substantial and pecuniary interest
in the resale price.
It must be remembered that the defendant can legally
refrain from any dealing with any person whomsoever and
the consequence of this legal ri^^t is that if it chooses to
deal it can deal on its own terms so long as it does not
seek to project itself beyond that line where it does not
have a property interest in the thing sought to be accom-
plished.
Until d^endant receives its part of the resale price,
the transaction is not without the operation of the patent
law. If, under such circiunstances, the patent law and the
Sherman Law clash, the i>atent law will prevail. Bement
V. NaHanal Harrow Co., 186 U. S. 70.
Whether title passes when the goods reach the whole-
salers is inunatcflial, the real question bdng whether
the patentee has received the full consideration it charges
for releasing the goods from the patent monopoly. In
the present instance, defendant has not received any part
of such consideration ^mtil after the sale by the whole-
saler is made.
We think the District Court overlooked the fact that
the patent right concerns itself exclusively with the right
of a patentee to control goods in which he has no property
interest. It has been decided many times that the law *
grants to the patentee no right of manufacture, use or sale
which he did not have before. In other words, with re-
gard to the patented devices which he owns, the law nei-
ther subtracts from, nor adds to, them. It is solely with
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92 OCTOBER TERM, 1919.
Aigument for Defendant in Error. 2S2 U. 8.
the goods which he does not own that the law concerns
itself.
Bauer V. O'DonnM, 229 U. S. 1, announced no new doc-
trine, but merely an esctension of an old one — ^tfaat a
patentee having unconditionally sold and having received
the consideration for release from the patent monopoly,
could not afterwards control the patented goods. C^.
Bloomer v. McQuewan, 14 How. 539; Adama v. Burke^
17 Wall. 453; MitcheU v. Hawley, 16 Wall. 544. The
monopoly not being dependent upon ownership of the
goods, it is clear that the mere passage of title, if it really
passed in this case,- does not take the goods from undo:
the patent monopoly.
In the Colgate Caee the manufacturer effected a practi-
cal price-fixing for his goods in the hands of his customers
and could enforce these ^xed prices by a refusal to deal
with the customers if they did not adhere to them. Such
price-fixing, in effect, was held reasonable. The question
which then arises is: Woidd it be a crime under the
Sherman Act to secure precisely this effect by means
of a written agreement? \
It seems to us that the Colgate decision is a standard
by which the acts of any defendant charged with price-
fijdng can be measured, and that the Sherman Act should
not be construed to make out a crime where the same
result is secured, and the only difference is that the
customer, instead of acquiescing in what the manufacturer
wishes, merely says that he will acquiesce, in writing.
To put the matter in another way, it is a reasonable
thing to do under the Sherman Act what a man has a
perfect right to do under the general law.
This defendant has effected no result which Ck>lg^te
did not effect. On the contrary, Ck>lga>te went away
beyond the effect produced, or even desired, by this
defendant. Defendant's main purpose is to obtain a
distribution of its goods. When th^ ar^ in the hands
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UNITED STATES v. SCHRADER'S SON, INC. 93
86. Argument for Defendant in Error.
of the retailers and widely distributed, defendaitt's in-
terest ceases. The retailers may freely compete. In the
Colgate Case the goods were in effect controlled by the
manufacturer while in the hands of the retailers.
We are aware that there is a technical difference be-,
tween goods which in theory may be freely sold by the
dealer, and goods which in theory cannot be sold by the
dealer except at a fixed price. But this distinction is
merely a form of words when the actual facts are con-
sidered.
Colgate's dealers had the technical rigiht to sell Colgate
goods at any price they pleased. As a matter of fact,
however, th^ could not sell them at any price they
pleased without incurring the penalty of being unable
to get more goods. Colgate's intent and purpose was to
fix resale prices. Both the indictment itself and the
District Court in the case at bar stated that the effect
of Colgate's act was the fixation of prices and the sup-
pression of competition.
We wish to make perfectly clear this point. Is the
Sherman Act to be interpreted so that it does not cover
this effectual fixation of prices by one who has the intent
and purpose of fixing prices and who proceeds to adopt
means to secure this result, and at the same time inter-
preted to include one who has the same intent and pur-
pose and who chooses the same means with the only
difference that he secures the written agreement of the
dealer to observe the fixed prices? Would this be a rea-
sonable interpretation of the act, to make a man's liberty
depend upon a shadow leaving him scot-free to violate
the substance of the law?
In the Miles Case the price-fibdng contracts were so
ext^ided and so widespread as to include practically
the entire trade, wholesale and retail. Such a complete
and perfected system has the elements of monopoly
within it and would be so dang^ous to the public wel«
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94 OCTOBER TERM, 1919.
Opinion <A the Court 252 U. S.
fare a6 to induce the court to believe it unreasonable,
under the German Act.
Mr. Justice MgRbynoldb delivered the opinion of
the court.
Defendant in error, a New York corporation, manu-
factured at Brooklyn, under letters patent, valves,
gauges and other accessories for use in connection with
automobile tires, and regularly sold and shipped large
quantities of these to manufacturers and jobbers through-
out the United States. It was indicted in the District
Court, Northern District of Ohio, for engaging in a
combination rendered criminal by § 1 of the Sherman
Act of July 2, 1890, c. 647, 26 Stat. 209, which declares
illegal ''every contract, combination in the form of
trust or otherwise, or conspiracy, in restraint of trade
or commerce among the several States, or with foreign
nations." After interpreting the indictment as indicated
by quotations from its opinion which follow, the Dis-
trict Court sustained a demurrer thereto, basiag the judg-
ment upon construction of that act. 264 Fed. Rep. 175.
"The substantive allegations of this indictment are
that defendant is engaged in manufacturing valves,
valve parts, pneumatic-pressure gauges, and various
other accessories; that it sells and ships lak-ge quantities
of such articles to tire manilfacturers and jobbers in the
Northern District of Ohio and throughout the United
States; that these tire manufacturers and jobbers resell
and reship large quantities of these products to (a)
jobbers and vehicle manufacturers, (b) retail dealers,
and (c) to the public, both within and without the
respective States into which the products are shipped;
that these acts have been committed within three years
ne3ct preceding the presentation of this indictment and
within this district; that the defendant executed, and
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UNITED STATES v. SCHRADEB'S SON, INC. 06
86. OpiiSioii of the Court
caused all the said tire manufacturers and jobbers to
whom it sold its said products to execute with it, uniform
contracts concaning resales of such products; that eveiy
manufacturer and jobber was informed by the defend-
ant and well knew when executing such contracts that
identical contracts were being executed and adhered to
by the other manufacturers and jobbers; that these con-
tracts thus executed purported to contain a grant of a
license from the defendant to resell its said products
at prices fixed by it to (a) jobbers and vdiicle manu-
facturers similarly licensed, (b) retail dealers, and (o)
the consuming public; that all these contracts provided
(that the) [concerning] products thus sold to tire manu-
facturers and jobbers (provided) that they should not
resell such products at prices other than those fixed by
the defendant. Copies of these contracts are identified
by exhibit numbers and attached to the indictment.
It is further charged that the defendant fimiished to
the tire manufacturers and jobbers who entered into
such contracts lists of uniform prices, such as are shown
in said exhibits, which the defendant fixed for the resale
of its said products to (a) jobbers and vehicle manu-
facturers, (b) retail dealers, and (c) the consuming
public, respectively; and that the defendant uniformly
refused to sell and ship its products to tire manuf actiurers
and jobbers who did not enter into such "contracts and
adhere to the uniform resale prices fixed and listed by
the defendant. Further, that tire manufacturers and
jobbers in the northern district of Ohio and throughout
the United States imiformly resold defendant's products
at uniform prices fixed by the defendant and uniformly
refused to resell such products at lower prices, whereby
competition was suppressed and the prices of such prod-
ucts to retail dealers and the consuming public were
maintained and enhanced.
''Thus i^ will be observed that the contract, combinap
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96 OCTOBER TERM, 1919.
Opinion of the Court. 252 U. 8.
tion, or conspiracy charged comes merely to this: That
the defendant has agreed, combined, or conspired with
tire manufacturers and with jobbers by the selling or
agreeing to sell valves, valve parts, pneumatic pressure
gauges, ahd various accessories, with the further \mder-
standing or agreement that in making resales thereof
they will sell only at certain fixed prices. It will be
further observed that the retailers, to whom the jobbers
in ordinary course of trade would naturally sell rather
than to the consuming public, and who in turn sell and
distribute these articles to and among the ultimate
consumers, are not included within the alleged combina-
tion or conspiracy. ...
''The so-called license agreements, exhibited with the
indictment, are in my opinion, both in substance and
effect, only selling agreements. The title to the valves,
valve parts, pneumatic pressure gauges, and other auto-
mobile accessories passed to the so-called licensees and
licensed jobbers?'
The court further said:
''Defendant urges that there is a manifest inconsist-
ency between the reasoning, if not between the holdings,
of liiese two cases [Dr. Miles Medical Co. v. Park & Sans
Co., 220 U. S. 373, and United States v. Colgate A Co.,
250 U. S. 300]; that if the basic principles announced in
the latter case are to be taken in the ordinaiy sense im-
ported by the language the present case falls within the
Colgate Case, and that, properly construed, neither sec-
tion 1 nor 2 of the Sherman Anti-Trust Law makes the
defendant's conduct a crime. The Dr. MUes Medical
Company Case standing alone would seem to require that
this demurrer be overruled and a holding that the Sher-
man Anti-Trust Law is violated and a crime committed,
merely upon a showing of the making by defendant and
two or more jobbers of the agreements set up in the indict-
ment, certainly if the jobbers were competitors in the
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UNITED STATES v. SCHRADER'S SON, INC. 97
86. Opinion of the Court.
same territory. That case has been frequently citea as es-
tablishing this proposition. . . . The retailers are not in
the present case included. They may compete freely with
one another and may even give away the articles pur-
chased by them. No restriction is imposed which pre-
vents them from selling to the consmner at any price, even
though it be at a ruinous sacrifice and less than the price
made to them by the jobber. Personally, and witii all
due respect, permit me to say that I can see no real differ-
ence upon the facts between the Dr. MUes Medical Cam-
pany Case and the Colgaie Company Case. The only
difference is that in the former the arrangement for mar-
keting its product was put in writing, whereas in the lat-
ter the wholesale and retail dealers observed the prices fixed
by the vendor. This is a distinction without a difference.
The tacit acquiescence of the wholesalers and retailers in
the prices thus fixed is the equivalent for all practical pur-
poses of an express agreement. . . •
"Granting the fundamental proposition stated in the
Colgate Case, that the manufacturer has an tmdoubted
right to specify resale prices and refuse to deal with any-
one who fails to maintain the same, or, as further stated,
the act does not restrict the long-recognized right of a
trader or manufacturer engaged in an entirely private
business freely to exercise his own independent discretion
as to the parties with whom he will deal, and that he, of
course, may annotmce in advance the circumstances imder
which he will refuse to sell, it seems to me that it is a dis-
tinction without a difference to say that he may do so by
the subterfuges and devices set forth in the opinion and
not violate the Sherman Anti-Trust Act ; yet if he had done
the same thing in the form of a written agreement, ade-
quate only to effectuate the same purpose, he would be
guilty of a violation of the law. Manifestly, therefore, the
decision in the Dr. MUes Medical Case must rest upon
some other groimd than the mere fact that there were
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98 OCTOBER TERM, 1919.
Opinion of the Court 262 U. S.
agreements between the manufacturer and the whole-
salers. .
''The point, however, which I wish to einphasize is that
the allegations of this indictment, not alleging any purpose,
or facts from which such a purpose can be inferred, to
monopolize interstate trade, within the prohibition and
meaning of section 2 of the Sherman Anti-Trust Act and
the last clause of section 2 of the Clayton Act, does not
charge a crime under section 1 of the Sherman Anti-Trust
Act as that act should be construed."
Our opinion in United States v. Colgate & Co. declared
quite plainly:
That upon a writ of error imder the Criminal Appeals
Act, (c. 2564;. 34 Stat. 1246) "we have no authority to
revise the mere interpretation of an indictment and are
confined to ascertaining whether the court in a case \mder
review erroneously construed the statute." "We must
accept that court's interpretation of the indictments and
confine our review to the question of the construction of
the statute involved in its decision." That we were con*
fronted by an uncertain interpretation of an indictment
itself couched in rather vague and general language, the
meaning of the opinion below being the subject of serious
controversy. The "defendant maintains that looking
at the whole opinion it plainly construes the indictment
as alleging only recognition of the manufacturer's im-
doubted rigjit to specify resale prices and refuse to deal
with anyone who failed to maintain the same." "The po-
sition of the defendant is more nearly in accord with the
whole opinion and must be accepted. And as counsel for
the Government were careful to state on the argument
that this conclusion would require affirmation of the judg-
ment below, an extended discussion of the principles in-
volved is imnecessary." And further: "The purpose of
the Sherman Act is to prohibit monopolies, contracts and
combinations which probably would imduly interfere with
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UNITED STATES v. SCHRADER'S SON, INC. 00
85. Opmion of the CkMirt.
the free exesrcise of their rights by those engaged, or who
wish to engage, in trade and commerce — ^in a word to pre-
serve the right of freedom to trade. In the absence of any
purpose to create or maintain a monopoly, the act does
not resttict the long recognized right of trader or manufac-
turer engaged in an entirely private business, freely to
exercise his own independent discretion as to parties
with whom he will deal. And, of course, he may announce
in advance the circumstances under which he will refuse
to sell."
The court below misapprdiended the meaning and ef-
fect of the opinion and judgment in that cause. We had
no intention to overrule or modify the doctrine of Dr.
Miles Medical Co. v. Park & Sons Co., where the effort
was to destroy the dealers' independent discretion through
restrictive agreements. Under the int^retation adopted
by the trial court and necessarily accepted by us, the in-
dictment failed to charge that Colgate & Company made
agreements, either express or implied^ which undertook
to obligate vendees to observe specified resale prices;
and it was treated ''as alle^ng only recognition of the
manufacturer's imdoubted right to specify resale prices
and refuse to deal with anyone who failed to maintain the
same."
It seems imnecessary to dwell upon the obvious differ-
ence between the situation presented when a manufac-
turer merely indicates his wishes concerning prices and
declines further dealings with all who fail to observe them,
and one where he enters into agreements — ^whether ex-
press or implied from a course of dealing or other drcum-
stcmces — with all customers throughout the different
States which undertake to bind them to observe fixed re-
sale prices. In the first, the manufacturer but exercises
his independent discretion concerning his customers and
there is no contract or combination which imposes any
limitation on the purchaser. In the second, the parties
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100 0C3T0BER TERM, 1919.
Syllabus. 252 U.S.
are combined through agreements designed to take away
dealers' control of their own affairs and thereby destroy
comi)etition and restrain the free and natiiral flow of
trade amongst the States.
The principles approved in Dr. MUea Medidd Co. v.
Park & Sons Co., should have been applied. The judg-
ment below must be reversed and the cause remanded for
further proceedings in conformity with this opinion.
Reversed and remanded.
Mr. Justice Clarke concurs in the result.
Mr. Justice Holmes and Mr. Justice Brandeib dis-
sent.
MILWAUKEE ELECTRIC RAILWAY A LIGHT
COMPANY V. STATE OF WISCONSIN EX REL.
CITY OF MILWAUKEE.
ERROR TO THE SUPREME COURT OF THE STATE OF
WISCONSIN.
No. 55. Aigued November 10, 1919.— Decided March 1, 1920.
When it is claimed that the obligation of a contract is impaired by a
state law, this court inclines to accept the construction placed upon
the contract by the Supreme Court of the State, if the matter is
fairly in doubt. P. 103.
A street railway franchise declared it the duly of the grantee company
"at all times to keep in good repair the roadway between the rails
and for one foot on the outside of each rail as laid, and the space be-
tween the two inside rails of its double tracks with the same material
as the city shall have last used to pave or repave these spaces and the
street previous to such repairs," unless the company and the city
agreed on some other material. In the absence of such an agreement,
hdd, that the company's obligation extended to the use of materials
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MILWAUKEE ELEC. RY. CO. v. MILWAUKEE. 101
100. Opinion of the Court.
adopted by the city in repaying the rest of the street miiich were not
the same as the city had last used in repaying between and near the
rails. P. 103.
Where a street railway company by franchise contract with a city
undertakes to repaye between and next its rails .with such material
as the city used in repaying the rest of the street] and the city's leg-
ulatory power in respect of paying has not been precluded by con-
tract, it is for the city to determine in the first instance what kind of
payement the pubUc necessity and conyenience demand. Held, in
such a case, that the court could not say that it was inherently ar-
bitrary and unreasonable to require the company to instal asphalt
on a concrete foundation which the city had adopted to replace
macadam and which was more expensiye. P. 101
A street railway company cannot escape a contractual duty to repaye
between and next its tracks upon the ground that the expense will
reduce its income below six per cent., claimed to be not a reasonable
return upon property used and useful in its business. Id.
The Fourteenth Amendment in guaranteeing equal protection of the
laws does not assure uniformity of judicial decisions; and there is
clearly no ground fpr the contention that such protection is denied
because the state court, after a judgment complained of, rendered
another, claimed to be irreccmdlable with it on a matter of law, in a
suit between strangers. P. 105. Odpcke y. Dubuque, 1 Wall. 175,
and Muhlker y. New York & Harlem B. R. Co., 197 U. S. 544, dis-
tinguished.
166 Wisconsin, 163, affirmed.
Ths case is stated in the opinion.
Mr. Edwin 8. Mack, with whom Mr. Oeorge P. MiQer
and Mr. Arthur W. FairchUd were on the brief, for idain-
tiff in error.
Mr. Clifton WiUiama for defendant in error,
Mb. Justice Brandsis delivered the opinion of the
court.
A petition for a writ of mandamus was brought by the
City of Milwaukee in a lower court of the State df Wis-
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102 OCTOBER TERM, 1919.
Opiiiion of the Cknirt. 252 U.S.
consin to comi>el the Milwaukee Electric Railway and
light Company to pave at its own expense with asphalt
upon a concrete foundation that portion of Center Street,
called the railway zone, which lies between the tracks
and for one foot outside of them. The paving had been
specifically ordered on November 8, 1915, by a city ordi-
nance after the city had laid such a pavement on all of the
street except the railway zone. Theretofore the street had
been paved from curb to curb with macadam. The com-
pany admitted that the railway zone was in need of re-
paving at that time; but it insisted that under an ordi-
nance of January 2, 1900, which constituted its franchise
to. lay tracks on Center Street, it was entitled to repair
with macadam and could not be compelled to repave
with asphalt.
The case was heard in the trial court on a demurrer to
•
the amended return. The demurrer was sustained; and
the decision was affirmed by the Supreme Court (105
Wisconsin, 230). The company having failed after re-
mittitur to file an amended return or take further action,
judgment was entered by the trial court awarding a per-
emptory writ of mandamus directing it to pave the railway
zone as directed in the ordinance; This judgment also was
affirmed by the Supreme Court (166 Wisconsin, 163).
The case comes here on writ of error imder § 237 of the
Judicial Code. The single question presented is whether
the ordinance of November 8, 1915, is void either imder
§ 10 of Article I of the Federal Constitution as unpairing
contract rigihts of the company or under the Fourteenth
Amendment as depriving it of property without due proc-
ess of law. The ordinance of January 2, 1900, which is
the contract alleged to be impaired by the later .ordinance,
provides as follows:
"Sec. 2. ... It shall be the duty of said railway
company at all times to keep in good repair the roadway
between the rails and for one foot on the outside of each rail
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MILWAUKEE ELEC. RY. CO, v. MILWAUKEE. 103
100. Opinion of the Court
as laid, and the space between the two inside rails of its
double tracks with the same material as the city shall
have last used to pave or repave these spaces and the
street previous to such repairs, unless the said railway
company and the board of public works of said city shall
agree upon some other material, and said company shaU
then use the material agreed upon. . . . "
The company contends that when this section is read
in connection with § 9, it clearly appears that the obli-
gation to repave cannot be imposed.
First: The Supreme Coiul; of the State held that the
language of § 2 was not distinguishable from that involved
in earlier cases in which it had held that a duty to keep
''in proper repair " without qualification was broad
enough to require repaving and repairing with the same
material with which the street was repaved. When this
court is called upon to decide whether state- legislation
impairs the obligation of a contract, it must determine
for itself whether there is a contract, and what its obli-
gation is, as well as whether the obligation has been im-
paired. Detroit United Raihoay v. MichigaUf 242 U. S.
238, 249. But, as stated in Southern Wisconsin Ry. Co.
V. Madison, 240 U. S. 457, 461, "the mere fact that with-
out the state decision we migiht have hesitated is not
enough to lead us to overrule that decision upon a fairly
doubtful point." Among the cases relied upon by the
state court is State ez rel. Milwaukee v. MUwavkee Electric
Ry. & Light Co., 161 Wisconsin, 620, which was cited by
this court in the Madison Case (p. 461) as a "persuasive
decision [s] that the obligation to keep the space ' in proper
repair' . • • extends to "repaving the railway zone with
asphalt when the rest of the street is being repaved with
that material. But the company points to the clkuse
in the ordinance of January 2, 1900, which provided for
repair "with the same material as the city shall Ihave
last used to pave or repave these spaces and the street/'
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104 OCTOBER TERM, 1919.
Opinion of the CkHirt. 262 IT. S.
and insists that its obligation is, in any event, limited to
repaying with such material as the city had last used
between the rails. This would put upon the city the bur-
den of paving the whole street in case of any innovation
in paving save by agreement of the company and the city,
it is not a reasonable construction of the provision.
Second: Granted the duty to repave, and to repave
with material other than that last used in the space be-
tween the tracks, was it reasonable for the city to require
that the pavement be of asphalt upon a concrete founda-
tion— a pavement which involved larger expense? The
city alleged in its petition that the use of macadam by
the railway was unreasonable, and that it is physically
impossible to make a water-tight bond between the water-
bound macadam and the asphalt, so as to prevent water
from seeping through imder the asphalt, causing it to
deteriorate in warm weather and to be lifted by freezing
in cold weather. The allegation was not expressly ad-
mitted by the return and must be deemed to have been
covered by its general denial of all allegations not ex-
pressly admitted; but neither party took steps to have
this formal issue disposed of. The case differs, therefore,
in this respect from the Madison CasCf where there was
an express finding that repavement of the railway zone
with stone would have been unsuitable when the rest of
the street was of asphalt (p. 462). The difference is not
material. As the ordinance did not, as a matter of con-
tract, preclude r^ulation in req>ect to paving, it was
for the city to determine, in the first instance, what the
public necessity and convenience demanded. Compare
Fair Haven & WestviUe R. R. Co. v. New Haven, 203 U. S.
379. We cannot say that its requirement that the rail-
way zone be paved like the rest of the street with asphalt
upon a concrete foundation was inherently arbitrary or
unreasonable.
Third: The company insists that the * ordinance of
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MILWAUKEE ELEC. RY. CO. v, MILWAUKEE. 105
100. Opinion of the Court.
November 8, 1915, is unreasonable and void, also, for an
entirely different reason. It alleges in its return that
for a long time prior to that date the earnings from its
street railway system in Milwaukee were considerably
under six per cent, of the value of the property used and
useful in tiie business and were less thtm a reasonable re-
tiun. It contends that this all^ation was admitted by
the demurrer; and that to impose upon the company the
additional burden of paving with asphalt will reduce its
income below a reasonable return on the investment and
thus deprive it of its property in violation of the Four-
teenth Amendment. The Supreme Court of the State
answered the contention by saying, ''The company can
at any time apply to the railroad conunission and have
the rate made reasonable." The financial condition of a
public service corporation is a fact properly to be con-
sidered when determining the reasonableness of an order
directii^ an unremunerative extension of facilities or for-
bidding their abandonment. Missisaippi Railroad Com-
miasum v. MoWfe & Ohio R. R. Co,, 244 U. S. 388; New
York & Queens Gas Co. v. McCaU, 245 U. S. 345, 350.
But there is no warrant in law for the contention that
merely because its business fails to earn full six per cent,
upon the value of the property used, the company can
escape either obligations voluntarily assumed or burdens
imposed in the ordinary exercise of the police power. Com-
pare Missouri Pacific Ry. Co. v. KansaSy 216 U. S. 262,
279; Chicago, Rock^Island & Padfixi Ry. Co. v. Arkansas,
219 U. S. 453; Missouri Pacifi4i Ry. Co. v. Omaha, 235
U. 8. 121.
Fewrth: The company also insists that the ordinance
is void because it denies equal protection of the laws. The
contention rests upon the fact that since entry of the
judgment bdow ihe Supreme Court of the State had
decidied Superior v. DultUh Street Ry. Co., 166 Wisconsin,
487, which the company alleges is not reconcilable with
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100 OCTOBER TERM, IMA
Dissent 262 U. &
its decision in this case. The siimlarity of the ordinances
and conditions in the two cases does not seem to us as
clear as is asserted. But, however that may be, the Four-
teenth Amendment does not in guaranteeing equal pro-
tection of the laws, assure uniformity of judicial decisions,
Backus v. Fart Street Union Depot Co., 169 U. S. 557, 569,
any more than in guarante^ng due process it assures
immunity from judicial error. Central Land Co. v.* Laidleyf
159 U. S. 103; Tracy v. Oinaberg, 205 U. S. 170. Unlike
Oelpcke v. Dvbuque, 1 Wall. 175, and Mvhiher y. New
York A Harlem R. R. Co., 197 U. S. 544, where protection
was afforded to rights acquired on the faith of decisions
later overruled, the company seeks here to base ri^^ts
on a later decision between strangers which, it alleges,
is irreconcilable on a matter of law with a decision thereto-
fore rendered against it. The contention is clearly un-
soimd.
As we conclude that there' was a contractual duty to
repave arising from the acceptance of the franchise, we
have no occasion to consider whether there was, as coiv-
tended, also a statutory duty to do so arising under § 1862,
Wisconsin Statutes, which provides that street r^ways
shall "be subject to such reasonable rules and regula*
tions . . . as the proper mimicipal authorities may by
ordinance, from time to time, prescribe.''
Affirmed.
Mr. Justicb Pitnst and Mb. Juemca McRbynolds
dissent.
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McCLOSKEY v. TOBIN. 107
Opinion of the Court.
McCLOSKEY v. TOBIN, SHERIFF OF BEXAR
COUNTY, TEXAS.
BBROR TO THB COXJRT OF CRIMINAL APPEALS 07 TBS bTATB
OB' TEXAS.
No. 70. Submitted November 12, lOlO.^-Deoided March 1, 1920.
The rights under the Fourteenth Amendement of a layman engaged
in the business of collecting and adjusting claims are not infringed
by a state law prohibiting the solicitation of such employment. P.
108.
Affirmed.
The case is stated in the opinion.
Mr. R. H. Ward for plaintiff in error.
Mr. B. F. Looney, Attorney General of the State of
Texas, and Mr. Luther Nickels, Assistant Attorney General
of the State of Texas, for defendant in error.
Mr. Justice Brandeis delivered the opinion of the
court.
Article 421 of. the Penal Code of Te:as defined, with
much detail, the offence of barratry. In McCloakey v..
San Antonio Traction Co., 192 S. W. Rep. 1116 (Texas),
a decree for an injunction restraining the plaintiff in
error from pursuing the practice of fomenting and ad-
justing claims was rev^^ed on the ground that this section
had superseded the common law offence of barratry and
that by the Code ''only an attorney at law is forbidden
to solicit employment in any suit himself or by an agent.''
Article 421 was then amended (Act of March 29, 1917, c*
133) so as to apply to any person who "shall seek to ob-
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108 OCTOBER TERM, 1910.
Opiniaa of the Gouri. 28217.8.
tain employment in any claim^ to proeecutei defendi
present or collect the same by means of personal solicitar
tion of such employment . • .'' Thereafter McClos-
key was arrested on an information which charged him
with soliciting employment to collect two claims, one for
personal injuries, the other for painting a buggy. He
applied for a writ of habeas corpus which was denied both
by the County Court and the Court of Criminal Appeals,
llie case comes here under § 237 of the Judicial Code,
McCloskey having claimed below as herei that the act
under which he was arrested violates ri^^ts guaranteed
him by the Fourteenth Amendment.
The contention is, that since the State had made
causes of action in tort as well as m contract assignable,
Oaiiveston &c. Ry. Co. v. OirUher, 9 J Tescas, 295, they had
become an article of commerce; that the business of ob-
taining adjustment of claims Ls not inherently evil; and
that, therefore, while r^ulation was permissible, pro-
hibition of the business violates rights of liberty and
property and denies equal protection of the laws. The
contention may be answered briefly. To prohibit solicita-
tion is to r^ulate the business, not to prohibit it. Comr
pare Brazee v. Michigan^ 241 U. S. 340. The evil against
which the regulation is directed is one from which the
English law has long sought to protect the conmnmity
through proceedings for barratry and champerty. Co.
litt. p. 368 (Day's Edition, 1812, vol. 2, § 701 [368, b.]);
1 Hawkins Pleas of the Crown, 6th ed., 524; Peck v.
Heurich, 167 U. S. 624, 630. R^^tion which aims to
bring the conduct of the business into harmony with
ethical, practice of the legal profession, to which it is
necessarily related, is obviously reasonable. Ford v.
Munroe, 144 S. W. Rep. 349 (Texas). The statute is not
open to the objections urged against it.
Affirmed.
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LEE V. CENTRAL OF GA, RY, 00, 109
Opinioii of the Court
LEE V. CENTRAL OF GEORGIA. RAILWAY COM-
PANY ET AL.
CBRTIOBABI TO THB COUBT OF APPEALS OF THB STATE OF
GEOBQIA.
Ko. 160. Argued January 16, 1920.— Decided March 1, 1920.
A rule of state pleading and practice, applied without discriinination
to caaes of personal injury arising under the federal and state em-
ployers' liability laws, which prevents an injured employee from
suing jointly, in a single count, the railroad company under the
federal statute and a co-employee at common law, does not m
fringe any ri^^t of such plaintiff derived from the federal statute.
P. 110.
21 Oa. App. 558, afifirmed.
The case is stated in the opinioiL
Mr. Alexander A. Lawrence^ with whom Mr. Wm. W.
OAome was on the briefs^ for petitioner.
Mr. H. W. Johnson, with whom Mr. T. M. Cunningham,
Jr., was on the brief^ for respondents.
Mr. Jxtbtice Bbandeis delivered the opinion of the
court.
An injured employee brought an action in a state court
of Georgia jointly against a raihx)ad and its engineer, and
sou^t in a single count, which allied concurring negli-
gence, to recover damages from the company under the
Federal Employers' Liability Act, and from the individual
defendant under the common law. Each defendant filed
a special demurrer on the ground of misjoinder of causes
of action and misjoinder of parties defendant. The de-
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110 OCTTOBER TERM, 1919.
Opinion of the Ck>urt. .252U.S.
murrere were overruled by the trial court. The Court of
Appeals — an intermediate appellate court to which the
case went on exceptions — certified to the Supreme
Court of the State the' question whether such joinder was
permissible. It answered in the negative (147 Georgia,
428). Thereupon the Court of Appeals reversed the judg-
ment of the trial court (21 Ga. App. 558) ; and certiorari
to the Supreme Court of the State was refused. The
plaintiff then applied to this court for a writ of certiorari
on the ground that he had been denied rights conferred
by federal law; and the writ was granted.
Whether two causes of action may be joined in a single
count or whether two persons may be sued in a single
count are matters of pleading and practice relating solely
to the form of the remedy. When they arise in state
courts the final determination of such matters ordinarily
rests with the state tribunals, even if the rights there
being enforced are created by federal law. John v. Pavlr
lin, 231 XI. S. 583; NevadorCaliforniarOregon Railway v.
Burrus, 244 U. S. 103. This has been specifically held in
cases arising imder the Federal Employers' Liability Act.
Minneapolis & St. Louis R. R. Co. v. Bombolis, 241 XI. S.
211 ; Atlantic Coast Line R. R. Co. v. Mims, 242 XI. S. 532;
Louisville & NashviUe R. R. Co. v. HoUoway, 246 XI. S.
525. It is only when matters nominally of procedure are
actually matters of substance which affect a federal right,
that the decision of the state court therein becomes sub-
ject to review by this coiuii. Central Vermont Ry. Co. v.
WhiU,73&V.^.mT)N€nv Orleans &N(nihjeaa^
V. Harm, 247 U. S. 367.
The Federal Employers' Liability Act does not modify
in any respect rights of employees against one another
existing at conunon law. To deny to a plaintiff the right
to join in one count a cause against another employee
with a cause of action against the employer, in no way
abridges any substantive right of the plaintiff against the
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LEE 1^. CENTRAL OF GA. RY. CO. Ill
109. Opinioa of the Court.
employer. The argument that plaintiff has been dis-
criminated against becatise he is an interstate employee
is answared^ if answer be n^essary, by the fact that the
Supreme Court of Georgia had applied the same rule in
Western & AHiMiic R. JR. Co. y. Smith, 144 Georgia, 737
(22 Ga. App. 437), where it refused \mdsr the State Em-
ployers' Liability Act to permit the plaintiff to join with
the employer another railroad whose concurrent negli-
gence was alleged to have contributed in producing the
injury complained of. If the Supreme Court of Georgia
had in this case permitted the joinder, we might have
been required to determine whether, in view of the practice
prevailing in Georgia, such decision would not imiMur the
employer's opportunity to make the defences to which
it is entitled by the federal law. For, as stated.by its Su-
preme Court in this case (147 Georgia, 428, 431): ''If
the carrier and its engineer were jointly liable under the
conditions stated in the second question, a joint judgment
would result against them, and they would be equally
bound, regardless of the fact that the duties imposed upon
them are not the same. The jiuy would have no power
in such a case to specify the particular damages to be re-
covered of each, since Civil Code, § 4512 [providing for
verdicts in different unounts against the several defend-
ants] is not applicable to personal torts.''
But we have no occasion to consider this question.
Refusal to permit the joindar did not deny any right of
plaintiff conferred by federal law. Cases upon which
petitioner most strongly relies, Southern Ry. Co. v. Car-
eon, 194 U. S. 136; Alabama Great Southern Ry. Co. v.
Thompeon, 200 U. S. 206; Southern Ry. Co. v. MiUer,217
XJ. S. 209, are inapplical \e to the situation at bar.
A firmed.
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112 OCTTOBER TERM, 101&
Qyilabus. 2B2U.&
GRAND TRUNK WESTERN RAILWAY COMPANY
t;. UNITED STATES.
APPEAL FROM THB COUBT OF CLAIMS.
No. 158. Argued Janiiaiy 21, 22, 1020.— Decided Maroh 1, 1020.
In settling with a railroad company under its current contract for mail
transportation, the Postmaster General may deduct overpayments
made under earlier contracts without waiting for their amount to be
ascertained by suit. P. 120. .
The right of the United States to recover such overpayments is not
barred by time. P. 121.
The rule that a long-continued construction of a statute by a depart-
ment of the Government should not readily be changed to the injury
of parties who have relied upon it in contracting with the Govern-
ment, does not apply to a long-continued practice of making ovei^
payments, due to a mistake of fact. Id.
The obligation to carry the mail at the rates fixed by Congress at*
taches to a land-aided railroad like an easement or charge; a com-
pany purchasing under foreclosure takes the road with notice of
the obligation; and its duty to perform is not affected by the fact
that it received none of the land and obtained no benefit from the
grant. Id,
Where a railway-aid grant is made by act of Ck>ngress to a State with
the provision that over the railway to be aided the mail shall be
transported at such price as Congress may by law direct, a company
which before completion of its road applies to the State for the land
to aid in such completion, receives the State's patent therefor, re-
citing that such is the purpose, and expressly assents to the terms and
conditions of the granting act and proceeds to dispose of the land,
is subject to the duty imposed, whether it was in fact aided by the
grant in building its road or not; nor is its successor in any better
position to question this effect of accepting the grant when it ac-
quires the first company's property throuj^ a foreclosure to which
that company's interest in such lands was made subject as after«o-
quired property covered by the mortgage. P. 122.
Where lands granted as railway-aid lands by Congress to a State are
accepted by a railroad company and aid in the construction of its
railroad, the obligation to carry the mails, as stipulated in the grant-
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GRAND TRUNK WN. RY. CX)- v. UNITED STATES. 113
112. Argument for Appellant.
ing act, attaches to the road so aided, however disproportionate
the aid to the cost of construction, and this notwithstanding the
company, in accepting the land and assuming the burden, may
have relied upon other lands applied for at the same time and in-
cluded in the same state patent, but which it lost through de-
cisions of the state court holdii^ them inapplicable to its road
under the granting act and the state law paraed in pursuance of
it. P. 123.
In such case the obligation respecting the mails cannot be escaped
upon the ground that the contract between the company and the
State, resting on an entire consideration, in part illegal, was void,
where the United States was not a party to the contract and where
its reversionary title was relinquished by Congress to the State. Id.
53 Ct. Qms. 473, affirmed.
The case is stated in the opinion. .
Mr. Theo. D. Halpin, with whom Mr. Harrison Oeer,
Mr. L. T. Michener and Mr. P. 0. Michener were on the
brief s^ for appellant:
The land grant is the consideration for the promise of
the railroad to carry mails at a price fixed by Congress.
Rogers v. P. H. & L. M. R. R. Co., 45 Michigan, 460; Union
Pcunfio R. R. Co. v. United States, 104 U. S. 662; Atchi^
son, Topeka & Santa Fe Ry. Co. v. United StaUs, 225
U. S. 640.
In making contracts, the United States lays aside its
sovereignty and its contracts are tested as to validity by
the same principles which govern in other cases.
The attempted contract between the State and the
Fort Huron & Lake Michigan Railroad Company, whereby
the former xmdertook to grant lands not only east of Flint,
where the railroad had already been constructed, but
lands west of Flint, where it was nevar constructed, was
void for ille^ty, because made in violation of the trust,
in full force and effect at the time, \mder which the State
held the land from the United States. Bowes v. Haywood,
86 Michigan, 241; Fenn v. Kinsey, 45 Michigan, 446;
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114 OCTTOBER TERM, 1919.
Argument for Appellant. 252 XT. S.
Schulenherg v^ Harriman, 21 Wall. 44; Swann v. Miller j 82
Alabama, 530. The acceptance of the railroad company
failed to complete a binding contract because the major
part of the consideration moving to the Port Hmt)n &
Lake Michigan Railroad Ck>mpany was void for illegality
and the consideration was indivisible.
There are no means to ascertain whether the promise of
the railroad was induced by the legal or illegal portion of
the consideration.
The act of Congress making the grant contemplated a
grant of six sections per mile, or 230,400 acres for the
sixty miles of road between Port Huron and Flint. The
available land between Port Huron and Flint was about
three per cent, of this, and less than the amoimt called for
by the act for the construction of two miles of road. To
hold the railroad to its promise in consideration of the
grant of about six thousand acres, is to make an entirely
different contract than that contemplated by all parties
when the ill^&l contract was entered into.
The railroad between Port Huron and Flint was not
constructed in whole or in part by a land grant made by
Congress. United States v. Alabama Great Scuihem R. R.
Co., 142 U. S. 615. The Act of Jime 3, 1856, requires that
the lands granted shall aid or be exclusively applied in the
construction of the road — ^help construct it — and forbids
the application of the statutes to a road not so aided or
helped. The road so constructed is a land aided or land
grant road, and not otherwise. 1 Ops. Asst. Atty. Gen.,
P. 0. Dept., 777, 875, 879; 2 tftid., 312; Coler v. Board of
Commiasumers, 89 Fed. Rep. 257; De Graff v. St. Paul &
Pacific R. R. Co., 23 Minnesota, 144; Chicago, Milwaukee
& St. Pavl R. R. Co. V. United Stales, 14 Ct. Chns. 125; s. c.
104 U.S. 687-689. Such aid must be established as a fact,
to bind the railroad.
When the Act of July 12, 1876, went into ^ect, at a
time when all the facts were fresh and easily ascertained.
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GRAND TRUNK WN. RY. CO. v. UNITED STATES. 116
112« Argument for Appellant.
the Post Office Department commeiiced to treat the road
as a non-land grant road, and so continued for thirtynsix
years. It had 6een treated as a non-land grant road for
twenty-four years when the plaintiff acquired it by pur-
chase, in 1900. The sixty-six miles had been completed
before the land was granted* It had been so far con-
structed and completed by January 1, 18712, that on that
date it conmienced to carry the mail under contract with
the Post Office Department. It is not shown, nor was it
attempted to be, that any part of the proceeds of the land
aided in the construction of the road, or, in fact, ever
reached the railroad company.
The Port Huron & Lake Michigan Railroad took title
to the lands east of Flint as a gift or subsidy under the Act
of the Michigan legislature, approved June 9, 1881, and
not mider the patent of May 30, 1873.
The appellant is not estopped to claim that there is no
valid contract. It did not receive the lands. The reasons
given for holding that the Port Huron & Lake Michigan
Railroad Coihpany was estopped, are unconvincii^ even
as applied to that railroad. It did not seek the convey-
ance of the lands east of Flint exc^t as it sought the con-
veyance of all the lands. It accepted the conveyance of
all the lands "in terms" and proceeded to exercise control
and disposition of all of them, and there is no fact in
the record to show that it ever exercised control and
disposition of the lands east, as separate from the lands
west.
The trustee was a trustee of all the lands and the record
V3 barren of any act of that trustee relating to the lands
east of Flint, although it does show that he acted as to
the lands west, involved in Bowes v. Haywood^ iupra; Fenn
V. Kimeyy supra.
The road did not ask for the lands east of Flint at any
time when the lands west of Flint were not included, and
when it "solemnly accepted the grant," it must be borne
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116 OCTTOBER TERM, 1919.
Opinion of the Cooit. 252 U. 8.
in mind that the acceptance was not of 6,400 acreB, but
of more than 36,000.
We submit that there are here none of the elements of
estoppel. There has been no change of position by this
claimant, or any of the previous owners of the road, to the
detriment of the United States. On the contrary, all of
them and the United States, until November 27, 1912,
acted on the theory and in the belief that the road between
Port Huron and Flint was not a land-aided road. For
forty years all the parties concerned, the owning companies
and tiie United States, acted upon a theory, a practice
and a construction directly contrary to the view that the
road between those points was land-aided. If the doc-
trine of estoppel is applicable here, it is against the United
States alone.
Legal rights are not lost by the silence or inaction of one
party that does not produce a change of position resulting
injuriously to others. Jones v. United States, 96 U. S. 24,
29; Pickard v. Sears, 6 Ad. & EL 469, 474; Hawes v.
Marchant, 1 Curtis C. C. 136, 144.
The Government is bound by the departmental con-
struction extending over forty years. United States v.
Alabama Great Southern R. R. Co., 142 U. S. 615, and other
cases.
Mr. Assistant Attorney Oeneral Spellacy, with whom
Mr. Leonard B. Zeisler and Mr. Charles H. Weston, Special
Assistants to the Attorney General, were on the brief, for
the United States.
Mr. Justice Brandbis delivered the opinion of the
coiui;.
The railroad from Port Huron to Flint, in Michigan,
sixty miles in length, was completed on December 12, 1871.
It was built by the Port Huron and Lake Michigan Rail-
road Company. By foreclosure of a mortgage executed
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GRAND TRUNK WN. RY. CX). v. UNITED STATES, 117
112. Opinion of the Court.
by that corporation and several consolidations it became
on October 31, 1900, the property of the Grand Trunk
Western Railway Company and has since been a part of its
system. For forty-one years after the completion of this
sixty-mile road the mails ware carried over it by the suc-
cessive owners imder the usual postal contracts and pay-
ment was made for the service quarterly at full rates. In
1912 the Postmaster General, concluding that this was a
land-aided railroad within the provisions of § 13 of the
Act of July 12, 1876, c. 179, 19 Stat. 78, 82,^ restated the
account for the twelve full years during which the road
had been operated by the Grand Trunk Western. Twenty
per cent, of the mail pay for that period was found to be
$50,359.70; and this amount he deducted from sums ac-
cruing to the company imder the current mail contract.
He also reduced by twenty per cent, the amount otherwise
payable under the current contract for carrying the maU
over this part of its system. Thus he deducted altogether
$52,566.87 from the amount payable on June 30, 1913.
The road had in fact been built without any aid through
grant of public lands. None had passed to the Grand
Trunk Western when it acqmred the road; and, so far as
appears, that company had no actual knowledge that
any of its predecessors in title had acquired any public
land because of its construction. The company insisted
that the $52,566.87 thus deducted from its mail pay was
withheld without warrant in law, and brought this suit
in the Court of Claims to recover the amount. 53 Ct.
Clins. 473. Its petition was dismissed and the case comes
here on appeal. Whether the company is entitled to re-
lief depends upon the legal effect of the following facts.
^ " Sec. 13. That rail-road-oompanies whoee railroad was constructed
in whole or in part by a land-grant made by Congress on the condition
that the mails should be transported over their road at sueh price lis
Congress should by law direct shall receive only eighty per centum of
the compensation authorised by this act."
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118 OCTOBER TERM, 1919.
Opmioii of the Court. 262 U. EL
By Act of June 3, 1856, c. 44, 11 Stat. 21, Congress
granted to Michigan public land to aid in the construction
of certain lines of railroad, a part extending easterly of
Flint to Port Huron — another part, westerly of Flint to
Grand Haven. The act contained in § 5 the usual mail
provision.^ In 1857 the legislature of Michigan granted
these lands to two companies on condition that th^ ac-
cept the obligations of the grant within sixty days. [Act
of February 14, 1857, Laws Mich., 1857, p. 346.] Each
company filed within the specified time a partial accept-
ance, rcdfusing to accede to the taxation features of the
grant. Thereupon the rights of each to any part of the
public lands was declared forfeited by the state atithori-
ties for failure to comply with the state legislation. Sub-
sequently the companies filed maps of definite location in
the General Land Office of the Interior Department,
which were approved by that office; and on J\me 3, 1863>
the Secretary of the Interior certified to the Governor of
Michigan 30,998.76 acres of land lying west of Flint for
the company which was to build the line from Grand
Haven to Flint, the Detroit and Milwaukee Railway Com-
pany. Chi November 1, 1864, he certified 6,428.68 acres,
all but 97 40/100 acres of which lay east of Flint, for the
company which was to build the line from Flint to Port
Huron, the Port Huron and Milwaukee Railway Company.
Neither company constructed its line nor received any
patent for land. The rights of way and other property of
the Port Huron and Milwaukee Railway Company passed
through a foreclosure sale to the Port Huron and Lake
Michigan Railroad Company; and this corporation built
the road in question during llie years 1869, 1870 and 1871.
1 ''Sec. 5. And he U further enacted, That the United States mall
shall be transported over said roads, under the direction of the Post-
Office Department, at such price as Congress may, by law, direct: Pro>
Med, That until such price is fixed by law, the Postmaster-XSeneral
shall have the power to determine the same."
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GRAND TRUNK WN. RY, CO. v. UNITED STATES. 119
112. Oiumon of Hie Court.
But it made no application for any part of these lands un-
til three weeks before the completion of the road. Then,
on November 18^ 1871, it petitioned the State Board of
Control, which was charged with the disposition of the
public lands, to confer upon it both the 30,998.76 acres
west of Flint and the 6,428.68 acres east of Flmt which
the Secretary of the Interior had certified; and in so ap-
plying it asked for the land ^'for the purpose of aiding in
the construction" of its contemplated railroad which was
described as extending from Grand Haven to Flint and
th^ice to Port Huron. The board approved of. making
the grant ^^for the purpose of aiding in the construction
of the road;" but no further action was taken until May
1, 1873, when upon a new petition of the company which
recited the former proceedings and the completion of
''sixty miles of the unfinished portion of said line" the
board directed the transfer of all the land to it. The reso-
lution of the board was followed on May 30, 1873, by a
patent for all the land from the Grovemor of the State, its
formal acceptance by the company subject to the provi-
sions of the Act of Congress of June 3, 1856, and action by
it to take possession of the land and to dispose of it for
the benefit of the company. In 1877 the Supreme Court
of Michigan held in Bowes v. Haywood^ 35 Michigan, 241,
that the patent so far as it purported to transfer the
30,998.76 acres west of Flint was void under the Michigan
legislation, because there had not, in fact, been any claim
or pretence that the company ever contemplated building
the line west of Flint; and in Fenn v. Kinsey, 45 Michigan,
446, (1881), that court held that an act of the Michigan
legislature passed May 14, 1877, which purported to rat-
ify the patent, was inoperative so far as it concerned the
hmds west of Flint because it impaired rights reserved to
the United States by the Act of Jime 3, 1856. Meanwhile,
Congress had relinquished to Michigan, by Joint Resolu-
tion of March 3, 1879, No. 15, 20 Stat. 490, its reversionary
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120 OCTOBER TERM, 1919. ,
Opmion of the Court. 262 XT. 8.
interest in the lands; ^ and thereafter the legislatiire of
Michigan (Act of June 9, 1881, Laws Mich., 1881, p. 362),
ratified as to the six thousand acres east of Flint, the ac-
tion theretofore taken by the state authorities, declaring
also that ''all deeds and conveyances heretofore executed
by the Port Huron and Lake Michigan railroad company"
"shall be deemed of full force and effect" and that the
''rest and residue of said lands is vested in said company,
its successor or assigns." Whether there remained then any
land which had not been disposed of by that company or
one of its successors does not appear; but it does appear
that when in 1875 proceedings were taken to foreclose the
mortgage imder which the appellant claims title to the road,
the trustee to whom the lands had been transferred for
the company's benefit was joined for the purpose of in-
cluding all such interest in the property to be sold.
The Act of June 3, 1856, had contemplated a grant of
six sections (3,840 acres) per mile of road to be constructed.
That would have been 230,400 acres for the sixty miles.
The company which built them and those claiming \mder
it received at most 6,428 acres. The case is one of appar-
ent hardship. Was the judgment of the Court of Claims
denying relief required by the applicable rules of law?
First: If the railroad was land-aided, payment of more
than eighty per cent, of the full rates otherwise provided
by law was unauthorized; and it was the duty of the Post-
master General to seek to recover the overpayment. Rev.
1 Resolution of March 3, 1879, ''That the United States hereby re-
leases to the State of Michigan any and all reversionary interest in^ch
may remain in the United States in such of the lands granted to, and
acquired by the said State of Michigan by act of Congress of June third,
eighteen hundred and fifty-six, and certified to the said State in ao^
oordance with the said act, as were granted to aid the construction
of the road from Grand Haven to FUnt, and thence to Port Huron.
This release shall not in any manner affect any legal or equitable rights
in said lands, which have been acquired, but all such rights shall be
and remain unimpaired."
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GRAND TRUNK WN. RY. CX). v. UNITED STATES. 121
112. Opinion of the Oourt
Stats., § 4057. He was under no obligation to establish
the illegality by suit. Having satisfied himself of the fact
he was at' liberty to deduct the amount of the overpay-
ment from the monies otherwise payable to the company
to which the overpayment had been made. Wisconsin
Central R. R. Co. v. United States, 164 U. S. 190. .There
was no attempt to include in the deduction any alleged
overpayment to any of appellant's predecessors in title.
Balances due for carrying the mails, although arising
under successive quadrennial contracts, are regarded as
running accoimts, and monies paid in violation of law
upon balances certified by the accoimting officers may be
recovered by means of a later debit in these accounts. It
matters not how long a time elapsed before the error in
making the overpayment was discovered or how 4ong the
attempt to recover it was deferred. The statute of lim-
itations does not ordinarily run against the United States
and ti^ould not present a bar to a suit for the amount.
See United States v. Thompson, 98 U. S. 486. It is true
that when a department charged with the execution of a
statute gives it a construction and acts upon that construc-
tion imiformly for a series of years, the court will look
with disfavor upon a change whereby parties who have
contracted with the Government upon the faith of that
construction would be injured. United States v. Alabama
Great Southern R. R. Co., 142 U. S. 615. But here the
practice long continued of paying the full rate instead of
eighty per cent, thereof was not due to any construction
of a statute which the department later sought to aban-
don, but to what is alleged to be a mistake of fact — due
perhaps to an oversight. To such a case the rule of long-
continued construction has no application. The appdlant
must be held to have taken the road with notice of the
burdens legally imposed upon it.
Second: If the road was land-aided, it is immaterial that
the company which later carries the mail ovar it received
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122 OCTTOBER TERM, 1919,
Opinion of the Court 252 U. 8.
none of the land and obtained no benefit from the grant.
The obligation to carry mails at eighty per cent, of rates
otherwise payable attached to the road like an ease-
ment or chaige; and it affects every carrier who may there-
after use the railroad, whatever the nature of the tenure.
Chicago, St. Paid, etc., Ry. Co. v. United States, 217 U. S.
180. The appellant expreBsly disclaims any contention
that the mail clause should not apply because the quantity
of land covered by the grant was small as compared with
that contemplated by the Act of June 3, 1856, and with
the cost of the road.
Third: It is contended that this railroad was not land-
aided, because it had, in fact, been completed without the
aid either of funds or of credit derived from these public
lands. Whether the Port Huron and Lake Michigan
Company which built the railroad was in fact aided by the
land grant in so doing is immaterial. Before the road had
been fully completed it asked that the land be granted to
it in aid of the construction, and for this purpose only
could the grant be made under tlie act of Ck>ngress. It
accq>ted from the State a patent for the land which re-
cited that such was the purpose of the conveyance; and
it expreBBly assented to the terms and conditions of the
grant imposed by the Act of June 3, 1856. Thereafter it
proceeded to diefpose of the land. Throughout this period
the Port Huron and Lake Michigan Company remained
the owner of the railroad. It had been authorized by its
charter to receive the land-grant and necessarily to assent
to the conditions upon which alone the grant could be
madetoit. It is true that the mortgage upon its property,
under which appellant claims title, was executed before
the company had applied for the grant; and it does not
appear that the mortgage purported specifically to cover
public lands; but the trustee under the mortgage claimed
these lands as after acquired property and the company's
interest in them was, by special proceeding, made subject
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GRAND TRUNK WN. RY. CO. i^. UNITED STATES. 123
112. OjHmon of tlie Court.
to the foreclosure proceedings. The appdlant is there-
fore in no better position than the Port Huron and Lake
Michigan Company to question the chaise upon the rail-
road imposed b^ acceptance of the grant.
Fourth: Appellant points to the fact that the patent to
the lands lying west of Flint was later held to be void by
the Supreme Coiu-t of the State; and insists that thereby
the charge or condition concerning the carriage of the
mail must be held to have been relinquished. But the
patent to the lands east of Flint never was declared void;
the company's title to them never was questioned; and
the objection to the patent to the western lands did not
apply to them. That objection was that the Port Huron
and Lake Michigan Railway Company was not a ''coin-
petent party'' to receive llie western lands within the
meaning of the eleventh section of the Michigan Act of
1857, because it did not propose to construct a line from
Grand Haven to Owosso. Bowes v. Haywood, supra, 246.
And the attempt by the legislature to make it a ^'compe-
tent party" throu^ the Act of 1877 violated the obligar
tions of the Federal Government's grant. Fenn v. Kinsey,
supra. The only flaw in the title to the lands east of Flint
lay in the fact that the railway had not been completed
within ten years of the Act of June 3, 1856, as required by
that act. This requirement, however, was a condition
subsequently annexed to an estate in fee, and the title re-
mained valid until the Federal Government should take
action by legislation or judicial proceedings to enforce a
forfeiture of the estate. Schvlenberg v. Harriman, 21 Wall.
44, 63-64; Railroad Land Co. v. Caurtright, 21 Wall. 310,
316. So far from doing so Congress relinquished by joint
resolution its reversionary interest in the land, and thereby
removed all possibility of objection on its part to the valid-
ity of the p»atent; and the State of Michigan later ratified
the patent by l^islation admitted to be valid.
Fifth: The appellant urges that the illegality of the pat-
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124 OCTOBER TERM, 1919-
Opinion of the Court. 252 U. 8.
ent to the western lands constituted a failure of consid-
eration which voided the contract with the Government.
The burden of the mail clause, it says, could be imposed
only by contract between the Government and Port Hu-
ron and Lake Michigan Company. The contract was for
land west as wdl as east of Flint — and the land west could
legally be granted only if the company contemplated
building the road westward to Grand Haven. As there
was not even a pretence that it contemplated such con-
struction, the contract was illegal. The Government's
claim under the mail clause must fail, because no rights
can be acquired under an illegal contract. So the ap-
pellant contends. Such a view is the result of r^arding
the transaction as a promise by the railway to the Gov-
ernment to cany the mail at a price fixed by Congress,
on consideration of 36,000 acres of public land. A con-
tract of this sort would create a purely personal obligation
attaching "to the company, and not to the prop^ty," —
clearly not to a mere licensee. However, it is settled that
the obligation in question is not of this nature but does
attach to the property, even when used by a licensee.
Chicago, St. Paul, etc., Ry. Co. v. United States, 217 U. S.
180. Tlie obligation of a land-aided railway to carry the
mail at aprice fixed by Congress is a charge upon the prop-
erty. The public lands were granted to Michigan to aid
the construction of certain railways upon certain condi-
tions. The l^islature of Michigan could not dispose of
the lands except in accordance with the terms of the grant.
By the Act of February 14, 1857, it accepted the grant
and enacted legislation to give legal ^ect to the condi-
tions of it. Section 4 of the act is as follows:
"Said raib*oads shall be and forever remain public high-
ways for the use of the government of the United States,
free from toll or other charge upon the transportation of
any property or troops of the United States; and the
United States mail shall be transported over said railroads,
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GRAND TRUNK WN.RY.CX). p. UNITED STATES. 126
112. Opinicm of the Ckxirt
under the direction of the postroffice department, at such
price as Congress may by law direct. • . "
The order of the Board pf Control of May 1, 1873, di-
recting the transfer of the land to the Port Hi^n and Lake
Michigan Company, and the patent issued by the Gover-
nor were founded upon the authority of § 11 of this act;
and under date of May 30, 1873, the company accq>ted
the lands with the burdens they imposed. The riulroad,
whose owners and constructors accepted aid derived from
these lands, became charged by operation of law with the
burden of tranefporting the maUs. The question whether
that compai^ would have accepted the land with its bur-
dens if it had foreseen the invalidity of the title to the
western lands, is wholly immaterial. The bimien at-
tached upon the acceptance of any aid whatsoever no
matter how disproportionate to the cost of constructing
the portion so aided.
The transaction called illegal was one between the com-
pany and the state authorities. The United States was no
party to it. It had merely supplied prop^y which the
parties to it used. The Government never objected to the
disposition made of it; and evidenced its approval by
passage of the Joint Resolution of March 3, 1879. No
reason exists why rights by way of charge upon the rail-
road which were acquired by the Government through
the acceptance of six thousand acres of public land, should
be invalidated by the alleged illegality of the state au-
thorities' action in issuing a patent to a wholly different
tract.
Aprmed.
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/
126 CXTTOBER TERM, 19ia
Aiguiaent for Petitionen. 262 U. B.
CHAPMAN ET AL- v. WINTROATH.
CSRTIOIURI TO THB COX7BT OF APPEALS OF THB DI8TBICT
OF COLUMBIA.
No. 117. Aigued January 9, 1020.— Daoided Marah 1, 1020.
An inventor whose application disclosed but did not claim an invention
which is later patented to another, is allowed by the patent law two
years after such patent issues within which to file a second or divi»-
' ional application claiming the invention; and this period may not
be restricted by the courts upon the ground that so much delay
may be prejudicial to public or private interests. P. 134. Rev.
StaJte, %4a».
Such a second application is not to be regarded as an amendment to
the orginal application and so subject to the one year limitation of
Rev. State., { 4894. P. 138.
Nor can the right to qiake it be deemed lost by laches or abandonment
merely because of a delay not exceeding the two yean allowed by
the statute. P. 139.
4fi App. D. C. 428, reversed.
The case is stated in the opinion.
Mr. John L. Jackson, with whom Mr. Albert H. Adams
was on the brief, for petitioners:
An application for patent is a purely statutory pro-
ceeding, and an applicant is entitled to all the rights con-
ferred by the patent statutes. United States v. American
BeU Tel. Co., 167 U. S. 224, 246.
Under Rev. Stats., § 4886, an inventor may obtain a
patent for his invention provided, among other thingSi
it was not patented more than two years prior to his
application. Therefore, even if their original application
be left out of consideration, the respondent's patent was
not a statutory bar to "the grant of a patent to petitioners.
Rev. Stats., § 4904, which is the statutory authority
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CHAPMAN 9. WINTROATH. 127
128. Aigument for PetitioiiflfB.
for the declaration of interferanceB, fixes no time limit
within which the applicant of a pending aiq>lication must
claim an invention already patented to another in order to
obtain an interference with such patent, other than that
the patent must be une]q>ired. Respondent's patent was
unexpired, and therefore petitioners wer» lawfully en-
titied to contest priority with him.
It is not disputed that petitioners' original application
fully 'discloses the subject-matter of their divisional
application and of the interference issue, and was never
abandoned or forfeited, but was regularly prosecuted
according to law and the rules of the Patent Office. There-
fore, considering their original application merely as proof
of their priority over respondent, th^ are indubitably the
first inventors of the issue of the interference. Victor
TaUcing Mach. Co. v. American Oraphcphone Co., 145
Fed. Rep. 350, 351; AiOomatic Weighing Mach. Co. v.
Pneumatic Scale Co., 166 Fed. Rep. 288; Sundh Elec. Co.
V. Interborough Rapid Traneit Co., 198 Fed. Rep. 94;
LenUey v. DobsonrEvana Co., 243 Fed. Rep. 391.
Interferences are authorised for the sole purpose of de-
termining the question of priority of invention. ^'The
statute is explicit. It limits the declaration of inter-
ferences ^ > the question of priority of invention." Lowry
V. AUer 203 U. S. 476; Emng v. Fowler Car Co., 244 U.
S. 1, 1 .
It ioUows that, inasmuch as petitioners' applications
(divisional as well as original) were filed less than two
years after the grant of respondent's i>atent, and their
priority over respondent is incontrovertibly eifCabUahed,
judgment should have be^i rendered in their favor.
Emng v. Fowler Car Co., supra.
The rule announced in Rowntree v. Sloan, 45 App. D. G.
207, is direct > in conflict with Rev. Stats., §§4886, 4904.
For more than forty years it has been the practice of the
Patent Office to declare interferences between applicants
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128 OCTOBER TERM, 1919.
Azgumeiit for PetitionefB. 252 U. 8.
and patentees where the applicant made affidavit showing
his conception of the invention prior to the filing of the
patentee's application. Rule 51 (1870); Lowery's An-
notated Interference Bnles, p. 7. Mortover, until the
amendment of March 3, 1897, to Rev. Stats., § 4886, which
introduced the words ''or more than two years prior to
his application," a prior miexpired patent was never a bar
to the grant of a patent to an applicant who could prove
his didm to priority over it, regardless of when his appli-
cation was filed. Sckreeve v. Oriasinger, 202 0. G. 951;
C. D., 1914, 49, p. 51.
Rev. Stats., § 4904, provides for the declaration of inter-
ferences betMreen an application and any unes^ired patent,
so that reading the latter section in connection with § 4886,
when the Commissioner is of the opinion that an interfer-
ence exists between an application and any unexpired
patent issued not more than two years before the applica-
tion was filed, the applicant has a statutory right to the
declaration of such interference, and on proving priority,
to receive his patent. Swing v. Fowler Car Co.j supra.
An applicant who prosecutes his application according
to law and the Patent Office rules is not chargeable with
laches. United States v. American Bell Td. Co., 167 IT. S.
224, 246; Crown Cork & Seal Co. v. Aluminum Stopper
Co., 108 Fed. Rep. 845, 851; Columbia Motor Car Co. v.
Duerr & Co., 184 Fed. Rep. 893, 895.
The time when a claim is first made is inmiaterial, as
when made it relates back to the date of filing of the appli-
cation, and if made in a divisional appUcation, it rdates
back to the date of filing of the ori^nal or parent appUca-
tioiT. Lots V. Kenney, 31 App. D. C. 205; Von Bedding-
hauaen v. Dempster, 34 id., 474.
Rev. Stats., § 4894, relates to the prosecution of api^-
cations to save them from abandonment, and has nothing
whatever to do with abandonment of inventions.
The effect of the ruling in this case is that petitioners
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CHAPMAN i;. WINTROATH. 129
120. AxgumeDt for Petitioners.
ooBstructivdy abandoned thdr invention to reepondent,
a later inventor, and that such constructive abandonment
occurred while they had still pending, and were regularly
prosecuting, an application for patent therefor.
Tte patent laws do not recognize such a thing as the
constructive abandonment of an invention for which an '
applicant has lawfully filed, and is regularly prosecuting,
an application for patent. .^U^andonment of an invention
is a question of fact, and must be proven. Ide v. Trarlicht
Co., 115 Fed. Rep. 144; Saunders v. MiUer, 33 App. D. C.
456; Miller v. Eagle Mfg. Co., 151 U. S. 186; Rolfe v. ffojf-
ffion, 26 App. D. C. 336, 340; Kinnear Mfg. Co. v. Wilaon,
142 Fed. Rep. 970, 973.
Abandonment of an invention is a v^y different thing
from abandonment of an application for patent. Western
Eke. Co. V. Sperry Elec. Co., 58 Fed. Rep. 186, 191;
Eayee-Ymng Tie Plate Co. v. St. Louis Transit Co., 137
Fed. Rep. 82; General Elec. Co. v. Continental Fibre Co.,
256 Fed. Rep. 660, 663.
Abandonment of an invention completed and reduced
to practice by the filing of an allowable application for
patent therefor inures to the benefit of the public, and not
to the benefit of a later inventor. Ex parte Qosselin, 97
O. G. 2977 (2979) ; In re MiOett, 18 App. D. C. 186 (96 0.
G. 1241).
Patent Office Rules 31, 68, 77 and 171, which provide
for amendment of applications within one year from the
date of the last official action of the Patent Office, all
relate to abandonment of applications.
The statutes relating to constructive abandonment of
inventions in all cases fix a limit of two years except when
the application is filed in a foreign country more than one
year before application is made in this coimtry. Rev.
Stats., §§ 4886, 4887, 4897, 4920.
The rule as to constructive abandonment in the case of
Implications for reissue, generally, though not invariably^
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130 OCTOBER TERM, 1919.
Argument for Respondent. 252 U. S.
fixes a limit of two years. Miller v. Brass Co., 104 U. S.
350; Mahn v. Harwood, 112 U. S. 354; WoOmsak v.
ReihfT, 115 U. S. 101.
The ruling in Roumbree v. Sloan, that failure of an appli-
cant to make the claim of an unexpired patent within one
year from the date of such patent estops the applicant to
make such claim at all, is arbitrary because it has no
foundation in law, and is illogical because, if there be any
ground for invoking the doctrine of estoppel in such a
case, there is no reason why it should apply in one year
rather than at any other time.
There can be no question of estoppel as between peti-
tioners and respondent because the basic conditions to
create an estoppel do not exist. There was no privity of
relationship between the parties. Petitioners were un-
aware of respondent's application for patent. Respondent
was not misled to his injury by any act or failure of
petitioners.
It was not petitioners' duty, but the Commissioner's,
to ascertain if there was an interference, and to declare it.
Ewing v. Fowler Car Co., supra; Rev. Stats., § 4904; Bige-
low on Estoppel, 5th ed., pp. 26-28, 585, 594-597.
Laches or estoppel in this case is not ancillary to the
question of priority.
The question of actual priority of invention having
been foreclosed by respondent's admission, the Court of
Appeals was without jurisdiction on an interference
appeal to hear and determine petitioners' right to a pat-
ent. Norling v. Hayes, 37 App. D. C. 169; Lowry v. AUen,
supra.
Mr. Paul Synnestvedl, with whom Mr. H. L. Lechner
was on the briefs, for respondent:
While the patenting of an invention is purely statutory,
the statute has been uniformly construed in the light of the
underlying purpose of the patent system — ^the promotion
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CHAPMAN V. WINTROATIT. 131
136. Aigament for ReBpondent..
of the progress of science and the useful arts. Kendall v.
Winaar, 21 How. 322, 328.
Diligence is an axiomatic requirement; and there is a
time limit within which claims to a particular invention
shown, but not claimed, in an application may be added.
Ex parte Dyson, 232 0. G. 755; In re Fritts, 45 App. D.
C. 211 ; Victor Talking Mack. Co. v. Edison, 229 Fed. Rep.
999; Christensen v. Noyes, 15 App. D. C. 94; Bechman v.
Wood, id.y 484; Skinner v. Carpenter, 36 id., 178,
The statute itself lays down a pre-application rule of
diUgence and a poat-application rule. Rev. Stats., §§ 4886,
4887, and § 4894.
Where an applicant has an application, showing, inter
alia, but not at any time claiming, a particular feature,
pending in the Patent Office for years, he should proceed
at least within one year after the issuance of a rival pat^it
for the same invention, to copy claims therefrom for the
purpose of an interference, by analogy with Rev. Stats.,
§4894.
The issue of a patent is constructive notice to the
public of its contents. Boyden v. Burke, 14 How. 575-83.
If petitioners' divisional application be considered in-
dependently of the present application, they are out of
court in their own admission of a prior public use of more
than two years. If considered as a continuation of the
parent application, po^f-application rules of diligence
app^ and they are guilty of lack of diligence.
Petitioners were never ''regularly" prosecuting an
application for the invention, and there is no basis in the
statute or authority for the proposition that the mere
presence of a drawing or description of a feature in an
application constitutes a reduction to practice thereof
such as will defeat a later inventor but earlier patentee.
PittOmrgh Water Healer Co. v. Bder Water Heater Co.,
228 Fed. Rep. 683; Saunders v. Miller, 33 App. D. C.
456.
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132 OCTTOBER TERM, 1919.
Opinkm of the Court. 2fi2n.a
Mr. MdviOe Churchy by leave of court, filed a brief as
amicus curia.
Mr. John C. Pennie, Mr. Dean. S. Edmonds, Mr. Charles
J. O^NeiU and Mr. Edge Murray ^ by leave of courti filed
a brief as amid curiae.
Mb. Justice Clarke delivered the opinion of the court.
In 1909 Mathew T. Chapman and Mark C. Chapman
filed an application for a patent on an ''improvanent in
dieep well pumps." The mechanism involved was conn
plicated, tiie specification intricate and long, and the
claims numbered thirty-four. The application met with
unusual difficulties in the Patent Office, and, although it
had been r^ularly prosecuted, as required by law and the
rules of the Office, it was still pending without having
been passed to patent in 1915, when the controverEy in
this case arose.
In 1912 John A. Wintroath filed am application for a
patent on ''new and usefuil improvements in well mech-
anism," which was also elaborate and intricate, with
twelve combination clauns, but a i>atent was issued upon
it on November 25, 1913.
Almost twenty months later, on July 6, 1915, the Chap-
mans.filed a divisional application in which the claims of
the Wintroath patent were copied, and on this application
such proceedings were had in the Patent Office that on
March 21, 1916, an interference was declared between it
and the Wintroath patent.
The interference proceeding rdated to the combination
of a fluid-operated bearing supporting a downwardly ex-,
tending shaft, and auxiliary bearing means for sustaining
any resultant downward or upward thrust of such shaft.
It is sufficiently described in count three of the notice of
interference:
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CHAPMAN V. WINTROATH. 133
126. OptnioQ of the Court.
Ui
'3. In deep well pumping mechanism, the combina-
tion with pump means including a pump casing located
beneath the surface of the earth and rotary impeller means
in said casing, of a downwardly extencting power shfift
driven from above and adapted to drive said impeller
means, a fluid oi>erated bearing cooperatively to support
said shaft, said fluid operated bearing being located sub-
stantially at the top of said shaft so that the shaft depends
from the fluid bearing and by its own weight tends to dniw
itself into a substantially straight vertical line, means for
supplying fluid'imder pressure to said fluid bearing inde-
pendently of the action of the pump means, auxiliary bear^
ing means for sustaining any resultant downward thrust
of said power shaft and auxiliary bearing means for sus-
taining any resultant upward thrust of said power shaft."
Wintroath admits that the invention thus in issue was
clearly disclosed in the parent application of the Chap-
mans, but he contends that their divisional application,
claiming the discovery, should be denied, because of their
delay of nearly twenty months in filing, after the publica-
tion of his patent, and the Chapmans, while asserting that
their parent application fully disclosed the invention in-
volved, admit that the combination of the Wintroath pat-
^t was not specifically claimed in it.
Pursuant to notice and the rules of the Patent Office,
Wintroath, on April 27, 1916, filed a statement, declar^
ing that he conceived the invention contained in the claims
of his patent ^'on orabout the first day of October, 1910,''
and thereupon, because this date was subsequent to the
Chapman filing date, March 10, 1909, the Examiner of
Interferences notified him that judgment on the re3ord
would be entered against him unless he showed cause
within thirty days why such action should not be taken.
Within the rule day Wintroath filed a motion for judg-
ment in his favor ''on the record," claiming that conduct
on the part of the Chapmans was shown, which estopped
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131 OCTTOBER TERM, 1818.
Opimon of the Court 252n.&
them from making the claims involved in the interference
and which amounted to an abandonment of any ligjits in
respect thereto which th^ may once have had. The Chap-
mans contended that such a motion for judgment could
not properly be allowed ''until air opportunity had been
granted for the introduction of evidence." But the Ex-
aminer of Interferences, without hearing evidence, en-
tered judgment on the record in favor of Wintroath, and
awarded priority to him, on the grqund that the failure
of the Chapmans to make claims corresponding to the in-
terference issue for more than one year after the date of the
patent to Wintroath, constituted equitable laches which
estopped them from successfully making such claims.
This holding, based on the earlier decision by the Court
of Appeals in Rowniree v. Sloan, 45 App. D. C. 207, was
affirmed by the Examiner in Chief, but was reversed by
the Commissioner of Patents, whose decision, in turn, was
reversed by the Court of Appeals in the judgment which
we are reviewing.
In its decision the Court of Appeals holds that an in-r
ventor whose parent application discloses, but does not
claim, an invention which conflicts with {hat of a later
unexpired patent, may file a second application making
conflicting claims, m order to have the question of prior-
ity of invention between the two determined in an inter-
ference proceeding, but only within one year from the
date of the patent, and that longer delay in filing consti-
tutes equitable laches, which bars the later application.
By this holding the court substitutes a one-year rule for
'a two-year rule which had prevailed m the Patent Office
for many years before the Rovmiree decision, rendered in
1016, and the principal reason given for this important
change is that the second application ^ould be regarded
as substantially an amendment to the parent application,
and that it would be inequitable to permit a longer time
for filing it than' the one year allowed by Rev. Stats.,
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CHAPMAN r. WINTROATH. 136
128. Opmion of the Court.
§ 4804, for further proeecution of an application after office
action thereon.
The question presented for decision is, whether this
conclusion is justifiable and sound, and the answer must
be found in the statutes and rules of the Patent Office
made pursuant to statute, prescribing the action neces-
sary to be taken in order to obtain a patent, — ^f or the whole
subject is one of statutory origin and regulation.
The statute which is fundamental to all others in ou?
patent law, (Rev. Stats., § 4886, as amended March 3,
1897, c. 391, 29 Stat. 692,) provides with respect to the
effect of a United States patent upon the filing of a sub-
sequent application for a patent on the same discovery,
which is all we are concerned with here, that any discov-
erer of a patentable invention, not known or used by others
in this country, before his invention or discovery, may
file an application for a patent upon it, at any time within
two years after it may have been patented in this country.
Such a prior patent is in no sense a bar to the granting of
a second patent for the same invention to an earlier in-
ventor, provided that his application is filed not more
than two years after the date of the confficting patent.
The applicant may not be able to prove that he was the
first inventor but the statute gives him two years in which
to claim that he was and in which to secure the institution
of an interference proceeding in which the issue of prior-
ity between himself and the patentee may be determined
in a prescribed maenner.
This section, imless it has been modified l^ other
statutes or; in effect, by decisions of the coiui», is plainly
not reconcilable with the decision of the Ck>urt of Appeals,
and should rule it. Has it been so modified?
The section of the Revised Statutes dealing with in-
ventions previously patented in a foreign country (Rev.
Stats., § 4887, as amended March 3, 1903, c. 1019, 32 Stat.
1225), provides that no patent shall \>e granted on an
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136 OCTOBER TERM, 1919. ,
Opimon of the Court. 262 17. 8.
application for a patent if the invention has been patented
in this or any foreign country mare than two years before
the date of the actual filing of the application in this
country.
Section 4^97 of the Revised Statutes (16 Stat. 202, c.
230, § 35), in dealing with the renewal of an application
in case of failiure to pay the final fee within six months of
notice that a patent had been allowed, provides that
another application may be made for the invention ^'the
same as in the case of an original application.'' But such
application must ''be made within two years after the al-
lowance of the original application."
And in Rev. Stats., § 4920, providing for pleadings and
proofs in infringement suits it is provided that when prop-
erly pleaded and noticed the defendant may prove in de-
fense that the patent declared on had been patented prior
to the plaintiff's supposed invention ''or mare than two
years prior to his application for a patent therefor," and
also that the subject-matter of the patent "had been in
public use or on sale in this country for more than two
years^^ before the plaintiff's application for a patent.
Thus through all of these statutes runs the time limit
of two years for the filing of an application, there is no
modification in any of them of the like provision in Rev.
Stats., § 4886, as amended, and no distinction is made be-
tween an original and a later or a divisional application,
with respect to this filing right.
A brief reference to the decisions will show that until
the Rowntree Case, the courts had left the filing right under
Rev. Stats., § 4886, as untouched as the statutes thus had
left it. . .
There is no suggestion in the record that the original
application of the Chapmans was not prosecuted strictly
as required by the statutes and the rules of the Patent
QflSce and therefore, it is settled, their rights may not be
denied or diminished on the groimd that such delay may
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CHAPMAN V. WINTROATH, 137
126. OpinioiD of the Court .l
have been prejudicial to either public or private interests.
''A party seeking a right under the patent statutes may
avail himself of all their provisions, and the courts may
not deny him the benefit of a single one. These are ques-
tions not of natural but of purely statutory right. Con-
gress, instead of fixii^ seventeen, had the power to fix
thirty years as the Ufe of a patent. No court can disre-
gard any statutory provisions in respect to these matters
on the groimd that in its judgment th^ are imwise or
prejudicial to the interests of the public." United States
v. American Bell Telepfums Co., 167 U. S. 224, 247.
In re-issue cases, where there was no statutory time pr^
scribed for the making of an application for the correction
of a patent, and althougih imusual diligence is required in
such cases, this court adopted the two-year rule as rea-
sonable by analogy to the law of public use before an ap-
pUcation for a patent. Mahn v. Harwood, 112 U. S. 354,
363; WoUeneak v. Reiher, 115 U. S. 96, 101.
To this we must add that not only have later or divi-
sional applications not been dealt with in a hostile spirit
by the courts, but, on the contrary, designed as they are
to secure the patent to the first discoverer, Ihey have been
favored to the extent that where an invention clearly dis-
closed in an application, as m this case, is not claimed
therein but is subsequently claimed in another application,
the original will be deemed a constructive reduction of
the invention to practice and the later one will be given the
filing date of the earlier, with all of its priority of right.
Smith & Origge Mahufacturing Co. v. Sprague, 123 U. 8.
249, 250; Von Reddinghaueen v. Dempefer, 34 App. D. C.
474, 476, 477.
These, a few from many, sufBk^ to show that prior to
the Rowntree Caee, the decisions did not tend to modifica-
tion cd the statutory two-year rule.
The Court of Appeals recognizes all this law as appli-
cable to an original ajiplication, but it finds warrant for
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138 CXTTOBER TERM, 1919.
Opimon of the Court 262 U. S.
cutting the time linut to one year in the case of later ap-
plications in three reasons, viz: Because it is inequitable
to allow so long a time as two years for filing a new applica-
tion, claiming a discovery for which a patent has issued;
because such a time allowance is contrary to public policy,
as unduly extending the patent monopoly if the new ap-
plication should prevail, and, finally and chiefly, as we
have pointed out, because, regarding such a later applica-
tion as substantially an amendment to the original ap-
plication the court discovers, in anak^y to the time
allowed by statute for amendment to applications (Rev.
Stats., § 4894), a reason for holding that the failure fot
more than one year to make a later, in this case a divi-
sional, application, amounts to f a ^al laches.
However meritorious the first two of these grounds may
seem to be they cannot prevail against the provisions 61
the statutes {United Staies v. American Bell Telephone Co.j
supra), and the third does not seem to us persuasive be-
cause of the difference in the kind of notice which is given
to the applicant under Rev. Stats., § 4894, and that given
him when a patent is issued conflicting with his applica-
tion.
The one-year provision of Rev. Stats., §4894, as
amended March 3, 1897, c. 391, 29 Stat. 693, is that an
applicant for a patent, who shall fail to prosecute his ai>-
plication within one year after Patent Office action thereon,
''of which notice shall have been given" him, shall be
regarded as having abandoned his application,. unless the
Conunissioner of Patents shall be satisfied that such de-
lay was unavoidable. But when a conffict between in-
ventions disclosed in applications escapes the attention of
the Patent Office Examiners, Rev. Stats., § 4904, and a
I>atent is issued, with claims confficting with the disclos-
ures of a pending application, the applicant receives only
such notice of the conffict as he is presumed to derive from
the publication of the patent. In the one case the notice
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CHAPMAN V. WINTROATH. 139
126. Dissent.
is actual and specific, in the other it is indefinite and con-
structive only. When the great number of patents con-
stantly being issued is considered, many of them of a vo-
luminous and complicated character, such as we have in
this case, with many and variously worded claims, such
an implied notice must necessarily be precarious and indef-
inite to a degree which may well have been thought to be
a sufficient justification for allowing the longer two-year
period to inventors who must, at their peril, derive from
such notice their knowledge of any conflict with their ap-
plications.
As has been pointed out, the Examiner of Interferences,
did not permit the introduction of any evidence with re-,
spect to laches or abandonment and the Court of Api>eals
rests its judgment, as he did, wholly upon the delay of the
Chapmans in filing their divisional application for more
than one year after the Wintroath patent was issued, as
this appeared "on the face of the record." While not
intending to intimate that there may not be abandonment
which might bar an application within the two-year i)eriod
allowed for filing, yet upon this discussion of the statutes
and decisions, we cannot doubt that upon the case dii^
closed in this record, the Qiapmans were within their
legal rights in filing their divisional application at any
time within two years after the publication of the Wint-
roath patent, and therefore the judgment of the Court of
Appeals must be
Eeversed.
Mr. Jusncio McRbtnolds dissents.
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140 OCTOBER TESM, 1010.
Aigument for AppeUant. 282 U. B.
NATIONAL LEAD COMPANY v. UNITED STATES,
APPBAL FBOM DHB COX7BT OF CLAIIIB.
No. 12a. Aigued Januaiy 12, 13» 192a— Dedded Manh 1, 1920.
Seoticm 22 of thB Act of August 27, 1894, 0. a49, 28 Stkt 509, provides:
''That where imported materials on which duties have been paid
are used in the manufacture of articles manufactured or produced
in the United States, there shall be allowed on the exportation of such
articles a drawback equal in amount to the duties paid on the mate-
rials used, lees one per centum of such duties," to be paid under sudi
regulations as the Secretary of the Treasury shall prescribe. Where
linseed was imported subject to a specific duty of 20 cents per bushd
of 56 pounds, and made Into linseed oil and oil-cake, a by-product
wd^^iing more but worth less than the oil, hdd, that the drawback
on the oil-cake, which alone was exported, should be computed on
the basis of the respective values of the two products and not ao-
ooiding to their respective wei^ts. P. 142.
Much wei^t is given to a contemporaneous and long-ccmtinued con-
struction of an indefinite or ambiguous statute by the executive de-
partment charged with its administration. P. 145.
The repeated leSnactment of a statute without substantial change
may amount to an implied legislative approval of a oonsiiuetion
placed upon it by executive officers. P. 146.
53 Ct. Chns. 635, affirmed.
Thb case is stated in the opinion.
Mr. Alex. BrUlon, with whom Mr. Evana Browne and
Mr. F. W. ClemerUs 'were on the brief^ for appellant:
Levying, in express terms, a specific duty upon linseed
by weight, the act further directly contemplates the pay-
ment of a specific drawback, for ti^e reason that it directs
(§ 22) that the amount of the imported materials con-
tained in the exported article shall be ascertained, and a
drawback equal in amount to the duties paid shall be
allowed. In other words, it directs that the proper govem-
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NATIONAL LEAD CX). 9. UNITED) STATES. 141
140. Aigument for Appellaat.
ment officials estimate how much of the imported material
is used in the exported article.
The duty was levied on a certain ^'quantity'' of seed,
viz.y a bushel of 56 pounds. The drawback by the statute
is allowed on the ^^quantity'^ of the imported material
used in the exported article. In both instances the rule
which governed the computation was that of '^ quantity"
and not of ''quality.'^ Neither the duty nor the drawback
was to be computed on an cul tnlorem basis.
It cannot be successfully claimed that the wording of the
statute '^under such regulations as the Secretary of the
Treasury shall prescribe" authorizes that officer to ascer-
tain anything but the expressly stated '^quantity" of the
imported materials used. A statute which directs that a
'^quantity" be ascertained cannot be understood as
directing that a ''value" be ascertained. The oniy in-
quiry which the statute permits is as to the ''quantity" of
^e imported material in the exported article and the duty
originally paid thereon.
The terms "quantity'' and "value" are far from being
eponymous. The former, as used in the statute, refers to
tlie sise, bulk, or weight of the material, more eefpedally
the wei^t, as the duty which the statute levied was on a
quantity of 56 pounds. The. tax was levied on 56 pounds
6i seed; it was not a tax on $1.62 worth of seed as fixed by
the Treasury R^^tions, and hence not a tax on $1.62
worth of oil and oil-cake material unseparated.
The purpose of the drawback provision is to make "duty
free imports which are numufactured here and then re-
turned" to some foreign country. Campbell v. United
States^ 107 XT. S. 407. Qil-Kiake is a manufacture, of value,
fixim an imported material (CcmpbeU v. United States,
supra), is returned to some foreign country, and hence
should be made "duty free." The duty paid on it, as such
a separate manufacture, has not been determined, al-
though a duty has been collected. Only one material or
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142 OCTOBER TERM, 1919.
Argument for Appellant. 252 U. 8.
article has been imported, on which a single and not a
proportionate duty has been levied and paid. Fifty-six
pounds of material have been imported; 35 and a fraction
pounds of that material are exported; a single duty was
paid on the importation of that 56 pounds of material, paid
according to tiie actual weight of that material, and yet
when 35.87 pounds of that actual weight are exported ihe
defendant offers to refund a proportionate value draw-
back on a quantity, upon the importation of which a
single and inseparable tax was levied and collected.
The ''quantity'' of the imported material in the ex-
ported product is utterly disregarded and a ''relative value''
arbitrarily substituted. It is impossible to admit oil cake
''duty free" if upon its admission a tax of 5/14 cents per
pound on 35.87 pounds, or 13.52 cents, is levied and
collected, and upon its exportation there is a refusal to
allow a drawback of more than about one-third of that
amount, and this in the very face of a statute which di-
rects that the drawback shall be allowed upon the "quan-
tity" composing the exported material. In other words,
while collecting a duty of 7.11 cents on 19.91 pounds of
oil, a refund or drawback of over twice that amount would
be allowed upon the exportation of those same 19.91
pounds, whea, imder the quantity rule of the statute, it
could not be considered as other than 19.91 pounds of the
56 pounds of imported material.
The statute cannot be given a different meaning through
the construction and regulations of the Department.
Campbell v. United States, supra; Dean Linseed OH Co. v.
United States, 78 Fed. Rep. 467, 468; s. c. 87 Fed. Rep.
453, 457; St Paid Ac. Ry. Co. v. Phelps, 137 U. S. 528,
536; MorriU v. Jones, 106 IT. S. 466, 467. The construc-
tion was not continaous and the statute is clear.
Mr. Assistant Attorney General Davis, With whom Mr.
Chas, F, Jones was on tiie brief, for the United States.
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NATIONAL LEAD CO. v. UNITED STATES. 143
140. Opiiuoa of the Court.
Mb. JimTiCB Clarke delivered the opinion of the court.
This is a suit to recover the difference between the
amount of drawback allowed by the Government to the
appellant, a corporation, as an exporter of linseed-oil
cake, and the amount to which it claims to be entitled
under § 22 of the Act of Congress, effective August 27,
1894, c. 349, 28 Stat. 609, which reads as follows:
"That where imported materials on which duties have
been paid are used in the manufacture of articles manu-
factured or produced in the United States, there shall be
allowed on the exportation of such articles a drawback
equal in amoimt to the duties paid on the materials used,
less one per centum of such duties."
It is further provided in ihe section that the drawback
due thereon shall be paid to the manufacturer, producer
or exporter "under such regulations as the Secretary of
the Treasury shall prescribe."
The appellant imported large quantities of linseed upon
which it paid a specific duty of twenty cents per bushel
of fifty-su pounds. This seed, when treated by a simple
process, yielded about twenty pounds of linseed oil and
about thirtynsix pounds of linseed-oil cake, to the bushel.
The oil was much .more valuable than the oil cake, the
latter being composed of the solid substance of the seel
and a small amoimt of oil not recovered which made it
valuable as a feed for stock, — ^it is a by-product, and,
except for the small amount of oil in it, would be mere
waste.
Appellant exported large quantities of oil cake, derived
from seed whidi it had imported^ and made danand in
proper form for the drawback provided for by the act c»f
Congress.
The law providing for such drawbacks has differed in
form of expression from time to time but, since the Act of
August 5, 1861, [c. 45, 12 Stat. 292,1 it has not differed in
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144 OCTOBER TERM, 1010.
Opbion of the Court. 252 U. S.
substance from the Act of 1894, as we have quoted it.
The number of articles to which the law is applicable is
very great, among them, notably, ^'refined sugar and sjrrup
which' come from imported raw sugar and refined sugar,
and syrup which comes from imported molasses."
The Court of Claims found that:
''From August 5, 1861, down to the present time the
practice of the Treasury Department where several arti-
cles are manufactured from the same imported material
has always been to calculate and to pay the drawback by
distributing the duty paid on the imported material be-
tween such articles in proportion to their values and not in
proportion to their weights, as well where the imported
material paid a specific as where it paid an ad valorem
duty. Such calculation and payment has been made un-
der Treasury Regulations."
The claim of the appellant is that the correct construc-
tion of the section, relied upon, requires that the drawback
should be computed on the basis of the weights of the oil
and oil cake derived by the process of manufacture from
the seed, instead of on the basis of the values of the two
products, as it was computed by the Grovemment, and
the question for decision is, whether the department regu-
lation is a valid interpretation of the statute.
The act quoted provides that where imported materials
are used in this country in the manufacture of articles
which are exported, a drawback shall be allowed ^^equal
in amount to the duties paid on the materials used^^ less one
per centum. What was the amoimt of duty paid on the
small amount of oil and on the large amount of solid sub-
stance, the hull and the fiber, which made up the exported
oil cake? Was it substantially two-thirds of the total, de-
termined by weight, — on thirty-six of fifty-six poimds, —
or was it about one-fourth of the total as determined by
the relative values of the oil and of the oil cake derived
from the seed?
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NATIONAL LEAD CO, v. UNITED STATES. 146
14a Opiiuon of the Court.
The tenns of the provision show that the contingency
of having one kind of dutiable material, from which two
or more kinds of manufactured products might be derived,
is not specifically provided for. Obviously only a part,
the least valuable part, of the materials or ingredients of
the linseed were used in the making of oil cake, and there-
fore the problem of determining the "drawback equal in
amount to the duties paid" on the part so used — ^the solid
parts of ihe seed and the small amount of oil in the oil
cake — ^was not a simple or an easy one.
The statute, thus indefinite if not ambiguous, called for
construction by the Department and the regulation
adapted to cases such as we have here, commends itself
strongly to our judgment.
It does not seem possible tiiat Congress could have in-
tended that two^thirds of the duty should be returned
when one-quarter in value of the manufactured product
should be exported; or that the exporter should retain
twenty pounds of oil, estimated in the findings as worth
about seven and a half cents a poimd, derived from each
bushel of seed, and recover two-thirds of the duty paid
when he exported thirty-six pounds of seed cake, worth
slightly more than one cent a pound, derived from the
same bushel of seed. Such results — ^they must follow the
acc^tance of the appellant's contention, — should be al*
lowed only under compulsion of imperative language such
as is not to be f oimd in the section we are considering.
We prefer the reasonable interpretation of the Depart-
ment, which results in a refund of one-quarter of the duty
when one-quarter of the value of the product is exported.
From Edwards v. Darhyj 12 Wheat. 206, to Jacobs v.
Prichard, 223 U. S. 200, it has been the settled law that
when imoertainty or , ambiguity, such as we have here, is
found in a statute great weight will be given to the con-
temporaneous construction by department officials, who
were called upon to act imder the law and to carry its pro-
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146 OCTOBER TERM, 1019.
Opinion of the Court 252 U. 8.
visions into effect, — especially where such construction
has been long continued, as it was in this case for almost
forty years before the petition was filed. United States v.
Hill, 120 U. S. 169.
To this we must add that the Department's interpreta-
tion of the statute has had such implied approval by Con-
gress that it should not be disturbed, particularly as ap-
plied to linseed and its products.
The drawback provision, under which the construction
complained of originated, continued unchanged from 1861
imtil the revision of the statute in 1870, and the Court of
Claims finds that the rule for determining the drawback
on oil cake was applied during the whole of that period of
almost ten years. The Tariff Act, approved July 14, 1870,
c. 255, 16 Stat. 256, 265, expressly provided, in the flax-
seed or linseed paragraph, ''That no drawback shall be
allowe<l on oil cake made from imported seed," and this
provision was continued in the Tariff Act of March 3,
1883, c. 121, 22 Stat. 488, 513, and in the Act of October 1,
1890, c. 1244, 26 Stat. 567, 586. But in the Act of 1894,
28 Stat. 509, 523, the prohibition was eliminated, thus
restoring the law on this subject as applied to this material
to what it was in substance from 1861 to 1870. United
States V. Philbrick, 120 U. S. 62, 59. During all the inter-
vening twenty-four years this rule of the Department
with respect to drawbacks had been widely applied to
many articles of much greater importance than linseed or
its derivatives, and the practice was continued, linseed
included after 1894, imtil the i)etition in this case was filed.
The reenacting of the drawback provision four times,
without substantial change, while this method of deter-
mining what should be paid under it was being constantly
employed, amounts to an implied legislative rec<%nition
and approval of ihe executive construction of the statute,
United States v. PhiJbrick, supra; United States v. G. Folk
& Brother, 204 U. S. 143, 152; United States v. Cereeedo
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KANSAS CITY SO. RY. CO. v. UNITED STATES. 147
140. Syllabus.
'Hermanos y Compania, 209 U. S. 337; for Congress is
presumed to have legislated with knowledge of such an
established usage of an executive department of the Gov-
ernment. United States v. Bailey, 9 Pet. 238, 256.
This case would not deserve even the limited discussion
which we thus have given it were it not for the extensive
and long continued application of the regulation of the
Department to imported and exported materials other
than such as are here involved. This specific case is
sufficiently ruled by the clear and satisfactory decision of
the Circuit Cowrt of Appeals for the Second Circuit, ren-
dered twenty-two years ago, in United Staies v. Dean
LineeedrOil Co., 87 Fed. Rep. 453, in which the Court of
Claims found authority for dismissing the plaintiff's pe-
tition. The judgment of the Court of Claims is
Afflrmed.
KANSAS CITY SOUTHERN RAILWAY COMPANY
V. UNITED STATES.
APPBAL FROM THE COURT OF CLAIliS.
No. 164. Submitted January 19, 1020.— Decided March 1, 1020.
A railroad company which enters into a contract to carry the mails
"upon the conditions piescribed by law/' etc., is liable to fines or
deductions from its compensation for failures to maintain its mail
train schedules (Rev. Stats., §S 3962, 4002; Abt of June 26, 1906,
c. 3546, 34 Stat. 472). P. 149.
The fact that the Post Office Department long abstained from making
such deductions under Rev. Stats., § 3962, where delays were less
than 24 hours, does not amount to construing that section as inap-
plicable to shorter delays. P. 150.
And in any event, the right to such a construction could not be claimed
by a company whose contract was made soon after the Postmaster
General had issued an order for deductions in future when trains
arrived fifteen or more minutes late a designated number of times
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148 ^ (XTTOBER TERM, lOlS.
OpbioQ of the Court. 262 U. 8.
per quarter, and soon after the approval of the Act of June 26, 1006,
rnpra, directing him to impose and collect reasonable fines for fail-
ure of railroads to comply with their contracts respecting the times
of arrival and departure of trains. P. 150.
53 Ct. Clms. 630, affirmed.
The case is stated in the opinion.
Mr. Alex. BriUon and Mr. Evans Browne for appellant.
Mr. Assistant Attorney General Speliacy, Mr. Leonard
B. Zeisler and Mr. Charles H. WesUm^ Special Assistants
to the Attorney General, for the United States.
Mr. Benjamin Carter, by leave of court, filed a brief as
amicus cwruB.
Mr. Justigb Clarke delivered the opinion of the court.
The appellant, in its petition, alleges: That in June,.
1906, it entered into contracts with the Post Office De-
partment to transport the mails over three designated
routes ''upon the conditions prescribed by law and the
regulations of the Department applicable to railroad mail
service;" that during Ihe fiscal year 1907 (the petition
was not filed xmtil December 19, 1912), the Department
withheld from its stipulated pay $3355.48, ''as a penalty
imposed on account of late arrivals of • • . trains
and failure to perform service on the . • . mail
routes," and that such deductions were "unlawfully with-
held." The prayer was for judgment for the full amount
of the deductions, — ^which are also designated in the rec-
ord as fines or p^ialties. The petition was dismissed by
the Court of Claims. .
The appellant acquiesced in the deductions when they
were made, accepted the reduced compensation without
protest or objection, except in one instance, wbesa the
item complained of was adjusted to its satisfaction, and
continued to perform the contracts to the end of their
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KANSAS CITY SO. RY. CJO. v. UNITED STATES. 149
147. Opinion of the Court
four-year periods without complaint as to the reasonable-
ness of the deductions involved. And thus it comes ad-
mitting that it freely entered into the contracts, fully
performed them and accepted pay for such performance,
but asking judgment for deductions which it avers were
^'unlawfully withheld'' more than five years before the
petition was filed.
The contracts were of the type, familiar in many re-
ported cases, evidenced by ^'distance circulars/' orders
establishing the routes, specific i^reements on the part of
the contractor that it would perform the service ''upon
the conditions presdibed by law and the regulations of the
Department applicable to railroad miul service" and that
the "adjustment'' should be "subject to future orders,
and to fines and deductions."
Among the applicable "conditions prescribed by law"
were: Rev. Stats., §3962, that the Postmaster General
might "make deductions from the pay of contractors,
for failures to perform service according to contract, and
impose fines upon them for other delinquencies"; Rev.
Stats., § 40Q2, authorizing contracts for the conveyance
of the mails "with due frequency and speed"; and the
Act of June 26, 1906, c. 3546, 34 Stat. 467, 472, command-
ing the Postmaster General to require all railroads cany-
ing mafl to comply with the terms of their contracts "as
to time of arrival and departure of said mails" and "to
impose and collect reasonable fines for delay" when not
caused by unavoidable accidents or conditions.
It is conceded by the appellant that the Postmaster
General had authority under Rev. Stats., § 3962, to make
deductions from the pay when a "trip was not performed"
within twenly-f our hours of the stipulated time for per-
formance. But it is contended that he had no authority
to make deductions or impose fines for shorter delays, —
and this is the sole question upon which this appeal is
pursued into this court.
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150 OCTOBER TERM, 1019.
Opinion of the Court. 262 U. &
It is argued for the appellant: That power to make the
disputed deductions must be found, if at all, in the pro-
vision of Rev. Stats., § 3962, that the Postmaster GeiUBral
may ''make deductions from the pay of contractors, for
failures to perform service according to contract^^and im-
pose fines upon them for other delinquencies ''; that when
the contracts were made, long departmental construction
had limited the failure to perform service, described in
the act, to twenty-four hours of delay in the arrival of
trains; and that failure, from 1872, when the section was
enacted, to 1907, to impose fines or deductions for shorter
delays, amounted to a construction by the Department
that authority to impose fines upon contractors for de-
linquencies did not warrant deductions for failure to main-
tain train schedules when the delay was less than twenty-
four hours.
We need consider only this last contention, and in reply
it is pointed out that the findings of fact show: that the
amount and rates of compensation were determined by
the Department for the various routes, between the 10th
and 26th of September, 1906, though effective as of the
first day of the preceding July; that in October, 1905, the
Postmaster General, ' ' on account of the • • . failures
to observe the schedule on routes, or parts of routes,"
issued an order that deductions should be made, in sums
stated, after December 31, 1905, when trains arrived at
termini or junction points fifteen or more minutes late, 4
designated number of times in a quarter; and that the Act
of Congress, approved June 26, 1906, referred to, declared
it to be the duty of the Postmaster General to impose and
collect reasonable fines for failure of railroads to comply
with the terms of their contracts with respect to the time
of arrival and departure of mails. This act was repealed
in the following year, but the substance of it was immedi-
atdy reenacted in a more adaptable form.
Thua, the appellant had notice before it made the oon-
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KANSAS CITY SO. RY. CO. v. UNITED STATES. 161
147. Opinioii of the Court.
tracts under, discussion that failure to maintain train
schedules was regarded by Congress and the Department
as a violation of mail-carrying contracts, justifying the
imposition of fines or deductions, and that both believed
there was authority under the customary contracts and
the law to impose such deductions. The Act of Jipe 26,
1906, was not a grant of new power to the Postmaster
General to impose such fines or deductions, but was an
imi)erative direction to him to exercise the power which,
it assumes, he already had for that purpose.
This action of Congress and of the Department is suf-
ficient answer to the claim, if it were otherwise soimd, that
failure to exercise the power to impose fines for such a
cause amounted to a departmental declaration that no such
power existed.
But the contention is not sound. Failure, within mod-
erate limits, to maintain train schedules may well have
been regarded by the Postmaster General as a necessary
evil to be tolerated and not to call for the exercise of his
power to impose fines imder the statute, when more fla-
grant neglect to maintain such schedules might very justly
require him to exercise such authority in order to prevent
intolerable public inconvenience. We cannot doubt sthat
the contracts of the appellant, and the law which w^a
part of them, furnished ample authority for the action of
tiie Department in this case and that omission to exercise
such power did not make against the proi)er use of it when,
in the judgment of the Postmaster General, adequate oc-
casion for its use should arise.
We need not pursue the subject further. The pnnciples
involved are adequately and admirably discussed by the
Court of Claims in its opinion, rendered in tiie case of
LouimOe & NaahtriUe R. R. Co. v. United Staies, 63 Ct.
Clms. 238, upon authority of which this case was decided.
The judgment of the Court of Claims is
Afbrmed.
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Ifi2 OCTOBER TERM, 1019.
Opinion of the Court. 2fi2U.8.
NEW YORK CENTRAL RAILROAD COMPANY v.
MOHNEY.
CERTEORABI TO THE COUBT OF AFPBAIB OF LUCAS COXTNTTy
STATE OF OHIO.
No. 196. Ai^ed January 27, 1920.— Decided March 1, 1990.
A raflroad employee was injured through a oolliaion while traveling on
his oompany's line between points in Ohio by means of a pass, good
only between those points and. within that State and containing a
release from liability for negligence. His purpose was to continue
the journey, partly over a line of another carrier in Ohio on which he
would pay fare, and thence over one of his company into another
State by means of another pass, the terms of which were not dis-
closed by the evidence. HMf that his travel, at time of injury, was
intrastate, so that the validity of the release depended on the laws of
Ohio. P. 156.
A stipulation on a free pass purportmg to release the carrier from all
liability for ne^^igence is ineffective where injury to the passenger
results from the wilful and wanton nqj^igenoe of the earner's serv-
ants. P. 167.
Affirmed.
The case is stated in the opinion.
Mr. Howcard Lewis, wiih whom^Afr. Frederick W. Oaines
was on the brief, for petitioner. \
Mr. Albert H. MiUer, with whom Mr. A. Jay Miller and
Mr. Charles H. Brady were on the brief , for respondent.
Mb. Jxtsticb Clabxb delivered the opinion of the oourt.
The respondent, whom we shall refer to as the plaintiff,
brought suit against the petitioner, defendant, to recover,
damages for severe injuries which he sustained in a rear-
end collision on defendant's railroad, which he averred
was caused by tiie gross negligence of the engines of the
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NEW YORK CENT. R. R. 00. v. MOHNEY. 153
152. Opinion of the Court.
train following that on which he was a passenger, in fail-
ing to look for and heed danger signals, which indicated
that the track ahead was occupied. The plaintiff was
employed by the defendant as an engineer, with a run
between Air line Junction, at Toledo, and Collinwood, a
suburb of Cleveland, wholly within the State of Ohio. As
an incident to his employment he was given an annual
pass, good between Air Line Junction and Collinwood,
which contained the release following: ''In consideration
of receiving this free pass, each of the persons named
thereon, using the same, volimtarily assumes all risk of
accidents, and expressly agrees that the company shall
not be liable under any circiunstances, whether of negli-
gence of itself, its agents, or otherwise, for any injiuy to
his or her person, or for any loss or injiuy to his or her
property; and that as for him or her, in the use of this
pass, he or she will not consider the company as a common
carrier, and liable to him or her as such.
/'And, as a condition precedent to the issuing and use
thereof, each of the persons named on the face of this pass
states that he or she is not prohibited by law from re-
caving free transportation, and that the pas9 will be law-
fully used.''
Having been informed that his mother had died at her
home near Pittsburgh, Pennsylvania, the plaintiff, desiring
to attend her funeral, applied to the defendant for, and
obtained, a pass for himself and wife from Toledo to
Yoimgstown, Ohio, via Ashtabula, and was promised that
another pass for himself and wife would be left with the
agent of the company at Youngstown, gpod for the re-
mainder, the interstate part, of the journey to Pitts-
burghs But the line of the defendant via Ashtabula to
Youngstown was much longer and required a number of
hours more for the journey than it did to go via Cleveland,
using the Erie Railroad from that city to Yo\mgi?town, and
for this reason, the record shows, the plaintiff Mohn^,
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154 OCTOBER TERM, 1919.
Opinion of the Court. 252 U.S.
'^before leaving home, decided that his wife should not
accompany him and that he would make the journey by a
train of the defendant, which used its own rails to Cleve-
land, and from Cleveland to Yoimgstown used^the tracks
of the Erie Railroad Company, and at Yoimgstown r^
tui^ni^ {o th^ road of the defendant, over which it ran to
Pittsburgh. The transportation which he had received
via Ashtabula could not be used over the shorter route
and therefore the plaintiff presented his annual pass for
transportation from Toledo to Cleveland, intending to
pay his fare from Cleveland to Youngstown over the Erie
Railroad, leave the train at ^e Erie station at Yo\mg&-
to¥m, inquire by telephone as to the time and place of the
burial of his mother, and then go to the New York Central
station, a half mile away, obtain the pass which was to be
left there for him, and go forward to Pittsburg on the
next convenient train.
The train on which Mohney was a passenger was
wrecked between Toledo and Cleveland. It had come
to a stop at a station and the second section of the train
ran past two block signals, indicating danger ahead, and
collided with the rear car of the first section, in which
Mohney was riding, causing him serious injury.
The case was tried on stipulated facts and the testi-
mony of the plaintiff. The trial court concluded that
Mohney, at the time he was injured, was on an intrastate
joiuney using an intrastate pass, and that by the law of
Ohio the release upon it was void as against public policy.
Thereupon, a jury being waived, the court entered judg-
ment in plaintiff's favor.
The State Court of Appeals, differing with the trial
court, concluded that Mohney was an interstate passenger
when injured and that the release on the pass was valid,
under the ruling in CharlesUm & We^em Carolina Ry. Co.
V. Thompson, 234 IT. S. 576. But the court went further
and affirmed the judgment on two grounds; by a divided
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NEW YORK CENT. R. R. 00. v. MOHNEY. 156
152. Opimon of the Court.
court, on the ground that the pass was issued to Mohney
as part consideration of his employment, and, all judges
concurring, for the reason that "we are clearly of the
opinion that the n^igence in this case, imder the evidence,
was willful and wanton." For these reasons it was held
that the release on the pass did not constitute a defense to
the action.
The Supreme Court of the State denied a motion for an
order requiring the Court of Appeals to certify the record
to it for review and the case is here on writ of certiorari.
The propriety of the use of the annual pass by Mohnqr
for such a personal journey and that the release on it was
not valid imder Ohio law, were not questioned, and the
sole defense urged by the Railroad Company was, and
now is, that his purpose to continue his journey to a
destination in Pennsylvania rendered him an interstate
passenger, subject to federal law from the time he entered
the train at Toledo and that the release on the pass was
valid, imder 234 U. S. 576, Bwpra.
The three freight cases on which the defendant reUes
for its contention that the plaintiff was an interstate
passenger when injured, all proceed upon the principle
that the essential character of the transportation and not
the purpose, or mental state, of the shipper determines
whether state or national law applies to the transaction
involved.
Thus, in Coe v. Errol^ 116 U. S. 517, the owner's state
of mind in relation to the logs, his intent to export them,
and even his partial preparation to do so, did not exempt
them from state taxation, because they did not pass
within the domain of the federal law imtil th^ had "been
shipped, or entered with a common carrieir for transpor-
tation to another State, or [had] been started upon such
transportation in a continuous route or journey.''
In Sculhem Pacific Terminal Co. v. Interstate Commerce
Commission and Youngs 210 U. 8. 498, 527, the cotton seed
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166 OCTOBER TERM, 1919.
Opinion of the Court. 2S2 XT. S.
cake and meal, although billed to Galveston, were ''all
destined for export and by their delivery to^ ^e Galveston,
Hanisburg and San Antonio Railway they must be con-
sidered as having been delivered to a carrier for transpor-
tation to their fordgn destination. . . • The case,
^ therefore, ^comes imder Coe v. Errol, 116 XT. S. 517."' The
mental purpose of Young, and/hp attempted practice by
intrastate billing, was to keep within the domain of the
state law, but his contracts, express and implied, brought
the discrimination complained of in the case within the
scope of the Interstate Commerce Act.
Li Ohio Railroad Commission v. WorthingUm, 226 XT. S.
101, the Commission attempted to regulate the rate on
''lake-cargo coal," because it was often billed from the
mines to Huron, or other ports within the State, but this
court foimd that the established "lake-cargo coal" rate
was intended to apply, and in practice did apply, only
"to such coal as [was] in fact placed upon vessels for
carriage beyond the State" and obviously "by every fair
test the trsmsportation of this coal from the mine to the
upper lake ports is an interstate carriage." For this
reason the enforcement of the order of the state commis-
sion was enjoined as an attempt to regulate and control
interstate commerce. Here again it was the committing
of a designated kind of coal to a carrier for transportation
in interstate commerce that rendered the federal law ap-
plicable.
To what extent the analc^ between the shipments of
property and the transportation of passengers may profit-
ably be pressed, we need not inquire, for in this case the
only contract between the carrier defendant and the
plaintiff was the annual pass issued to the latter. This
written contract, with its release, is the sole reliance of the
defendant. But that contract in terms was good only
between Air lire Junction and Collinwood, over a line
of track wholly within Ohio, and the company was charged
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NEW YORK CENT. R. R. (X). v. MOHNEY. 157
152. Opinion of the Court.
with notice when it issued the pass that the public policy
of that State rendered the release upon it valueless. The
puri>ose of the plaintiff to continue his journey into Penn-
sylvania would have been of no avail in securing him
transportation over the Erie line to Youngstown, for that
he must pay the published fare and very surely the re-
lease on the pass to Collinwood would not have attached
to the ticket to Yoimgstown. Whether there was a
similar release on the pass to Pittsburgh, which Mohney
expected to get at Youngstown, the record does not dis-
close and it is of no consequence whether there was or not.
The contract which the defendant had with its passenger
was in writing and was for an intrastate journey; and it
cannot be modified by the purpose of Mohney to continue
lus joiuney into another State, imder a contract of carriage
with another carrier, for which he would have beef', obliged
to pay the published rate, or by an intended second con-
tract with the defendant in terms which are not disclosed.
The mental purpose of one of the parties to a written con-
tract cannot change its terms. Southern Pacific Co. v.
Arvsona, 249 U. Q. 472. For these reasons the judgment
of the trial court was ri^t and should have been affirmed.
But the Court of Appeals aflSrmed the judgment on two
grounds, one of which was that all of the judges were
''clearly of the opinion that the negligence in the case,
under the evidence, was willful and wanton.'' This court
does not wdgh the evidence in such cases as we have here,
but it has been looked into sufficiently to satisfy us that
the argument that there is no evidence whatever in the
reccHti to support such a finding cannot be sustained.
A carrier by rail is liable to a tresspasser or to a mere li-
censee wilfully or wantonly injured by its servants in charge
of its train (Commentaries on the Law of Negligenoe,
Thompson, §§ 3307, 3308, and 3309, and the same sections
in White's Supplement thereto), and a sound public policy
forbids that a less onerous rule should be applied to a
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158 OCTOBER TERM, 1919.
Opinion of the Cburt. 252 U. 8.
passenger injured by like negligence when lawfully upon
one of its trains. This much of protection was due the
plaintiff as a human being who had intrusted his safety
to defendant's keeping. Southern Pacific Co. v. Schuyler,
227 XT. S. 601, 603; Chicago, Rock hland & Pacific Ry. Co.
V. Mauchcr, 248 XT. S. 359, 363.
The evidence in the record as to the terms and condir
tions upon which the pass was issued to the plaintiff is so
meager that, since it isnot necessary to a decision of the
case, we need not and do not consider the esctent to which
the case of Charlerion & Western Carolina Ry. Co. v.
Thompson, 234 U. S. 576, is applicable to an employee
using a pass furnished to him seeming as a necessary
incident to his employment.
The judgment of the Court of Appeals is
Affirmed.
Mb. Jtjbticb Day and Mb. Jubticb Van Devanteb
concur in the result, being of opinion that Mohney was
using the annual pass in an interstate journey and that
to. such a use of the pass the Ohio law was inapplicable,
but that the releasing clause on the pass did not cover or
embrace his injury because the latter resulted from wilful
or wanton n^^igence, as to which such a clause is of no
force or effect.
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ASH SHEEP 00. v. UNITED STATES. 169
Argument for Ash Sheep Ck>.
ASH SHEEP COMPANY v. UNITED STATES.
APPEAL PROM AND ERROR TO THE CIRCXnT COURT OP AP-
PEALS POR THE NINTH CIRCUIT.
Nos. 212» 286. Aigued January 80, 1920.— Decided Maroh 1, 1020.
Whether or not l^ a cession of lands from an Indien tribe the United
States becomes trustee for the Indians or acquires an unrestricted
title depends in each case upon the terms of the agreement or treaty
by 'which the cession is made. P. 164.
rhe Act of April 27, 1004, c. 1624, 83 Stat. 362, amending and ratify-
ing an agreement with Uie Crow Indians, established the relation of
trustee and beneficiary, ^ Indians ceding their possessory ri|^ts
in certain lands of which the fee was in the United States and the
United States undertaking to sell them (sections 16 and 36 excepted)
to settlers and to apply the proceeds in specified ways for the benefit
of the Indians. Id,
Such lands, therefore, are not "jmblic lands" of the United States, but
are Indian lands, within the meaning of Rev. Stats., f 2117, which
imposes a penalty for driving stock to range and feed on any Umd
belonging to any Indian or Indian tribe without the tribe's consent.
P. 166.
C!onsidered in the light of its purpose, early origin and long practical
construction. Rev. Stats., {2117, includes sheep under tiie term
"cattle." Id.
The rule of strict construction is not violated by allowing the words
of a penal statute to hiave full meaning or the more extended of two
meanings, where such construction best harmonises with the con-
text and most fully promotes the objects of the legislation. P. 170.
An action by the United States to recover a statutory penalty for a
trespass is not barred by an earlier decree in equity awarding it an
injunction and nominal damages but denying a claim for the penalty
as incompatible with the equi^ iurisdiotion. Id.
260 Fed. Rep. 501; 254 id. 60, afBxmed.
The cases are stated in the opinion.
Mr. C B. Nolan, with whom Mr. Wm. ScaUony was on
the brief, for appellant and plaintiff in error:
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160 OCTOBER TERM, 1919.
Argument for Ash Sheep Co. 252 U. S.
When the Act of 1904 was passed, the title to the land
was in the United States, and the only right of the Indians
was a possessory ri^t, Johnson v. Mcintosh^ 8 Wheat.
543; Spatdding v. Chandler, 160 U. S. 394; which could
be terminated by act of Congress as well as by treaty or
agreement with the Indians, Beecher v. Wetherhy, 95 IT.
S. 517; BvMz v. Northern Pacific Ry. Co., 119 U. S. 73;
Lone Wolf v. Huchcocky 187 U. S. 553. When this right
of occupancy terminated or was abandoned with the ap-
proval of the United States, all of the Indian ri^ts were
extinguished. Buttz v. Northern Pacific Ry. Co., supra;
United States v. Cook, 19 Wall 591.
The cession to the United States is unqualified and un-
conditional. The manner of the disposal of the land,
practically, under all of the land laws of the United States,
rendering necessary its examination by the public, would
preclude the idea that the Indian Department should ex-
ercise jurisdiction over it. It was the intention that every
portion should at all times be accessible to the public, so
that settlements might be made by those intending to do
so under the homestead and other laws, and leasing by
the Indian Department nectesarily would interfere with
this being done. If any trust arose at all, it attached to
the money which was to be paid, and not to the land itsdf •
United States v. Choctaw Nation, 179 U. S. 494; Bean v.
Aforrts, 159 Fed. Rep. 651; s. c. 221 U. S. 485.
It is also, needless to say that when lands are thrown
open to exploration and settlement th^ are no longer
xesenised. So far as we know, no definition of the term
''public lands'/ requires that the lands should be open to
entry under all of the general laws relating to public lands.
NewaU v. Sanger, 92 U. S. 761; Northern Lumber Co. v.
O'Brien, 139 Fed. Rep. 614; United Stales v. Blendaur,
128 Fed. Rep. 910; Jackman v. Atchisori, Topeka & Santa
Fe Ry. Co., 24 N. Mex. 278. If the land is reserved under
the jurisdiction of the Indian Bureau, what is the position
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ASH SHEEP 00. v. UNITED STATES. 161
IW* Aigmnoit.for A«h Sheep Oo.
of the homesteader or the purchaser from the State? The
xigjit of the State to the school sections or to sections ac-
quired in lieu thereof attached and became fixed before
the land was thrown open to settlement. The State could
sellthese. The luid of the homesteader or of the purchaser
from the State might be surrounded by lands not yet sold
Such person might find access to his land ban^ by a
lessee of the Indian Department, who, under its reguli^
tions might fence up all of the leased lands. Tliese lands
are dther reservation lands or public bmds. Th^ cannot
be both. The statutes relating to public lands aiid those
rdating to reservation lands are so different that they
cannot be ^[>plied at the same time and in the same dis-
trict. Great confusion would result from such an attempt.
Even if held in trust the lands would be no long^ ''re-
served'' or "reser\^i^tion" or "Indian'' lands. Quoad the
public^ they are open to homesteaders; to exploration and
location 1^ prospectors; the title of the State to the school
sectionsi or to lieu sections, has become fixed. These can
be sold or leased by the State. It goes without saying,
that the homesteader or locator or the purchaser from
the State has a right of ingress and egress not resting
on permission from an Indian agoit or the Indian De-
partment.
But no trust affecfts the land. Congress did not intend
to limit or modify the title of the United States, — already
the owner in fee absolute. Tlie Indians ceded only the
ri^t of occupancy, which Congress might have ended
without their agreement. How can it be maintained that
Congress intended to give the Indians an equitable rig^t
in the lands themselves?
It is not the policy of the United States to give Indians
any title except upon the breaking up of the tribal reli^
tions, and then only in severalty. The correct view is that
the trust was simply an undertaking to treat the proceeds
as trust funds and to act in the matter of the sale as a
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162 OCTOBER TERM, 1919.
Argument for Ash Sheep Go. 252 U. 8.
trustee might act. Such a course cannot properly be held
to affect the title of the sovereign or to affect the land at
all. No trust is expressed to hold, care for, manage or
lease for the Indians.
Section 2117, Rev. Stat?., is penal, and the rule of strict
construction applies. United States v. Lacher, 134 U. S.
624; Sarlls v. United States, 152 U. S. 570; United States
V. Harris, 177 U. S. 305; United States v. Gooding, 12
Wheat. 460; Oreely v. Thompson, 10 How. 225; Baldwin
V. Franks, 120 U. S. 678; Tiffany v. National Bank of
Missouri, 18 Wall. 409.
The t€rm ''cattle'' in ordinary usage never includes
sheep. If the act intended otherwise, why mention horses
and mules specifically? The term ''cattle" as generally
imderstood is confined to animals of the bovine species.
Esser v. District Court, 42 Nevada, 218; Rosshach v.
United States, 1 16 Fed. Rep. 781 ; United States v. SchmoU,
154 Fed. Rep. 734; United States v. Ash Sheep Co., 229
Fed. Rep. 479; Keys v. United States, 2 Okla. Crim. Rep.
647. In the original act horses and cattle only were men-
tioned. The amendment of 1834 added mules, unneces-
sarily, if the Government's contention is correct.
In the equitable action the Government insisted that
the statute fixed the amount of the damage, and that it
was entitled to recover one dollar per head. The trial
ooiui) decided against it, and that decision stands unap-
pealed from and is final. Forsyth v. Hammond, 166 U. 8.
606; Southern Pacific R. R. Co. v. United Stales, 168 U. 8.
1; Wabash Gas Light Co. v. District of Columbia, 161 U. S.
316; United States v. Ash Sheep Co,, 229 Fed. Rep. 479;
Kendall v. Stoker, 3 How. 87; Union Central lAfe Ins. Co.
V. Drake, 214 Fed. Rep. 536.
Mr. Assistant Attorney Oenerdl Nebdcer, with whom Mr.
W. W. Dyar, Special Assistant to the Attorney General,
was on the brief, for the United States.
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ASH SHEEP 00. v. UNITED STATES. 168
150. Opinion of the Court.
Mr. Jubticb Clarkb delivered the opinion of the court.
These two cases were argued and will be decided to-
gether.
No. 212 is an appeal from a decree, entered in a suit in
equity, in favor of the Government granting a pennanent
injunction restraining the appellant from trespassing .
upon described lands in Montana by grazing sheep thereon
and for nominal damages for such trespass.
No. 285 is a proceeding in error, in which reversal is
sou^t of a judgment rendered in an action at law against
plaintiff in error, appellant in the equity suit, for a penalty
for the same trespass.
The validity of the right asserted by the Government,
in both cases, ttuns upon whether the lands involved were
*' Indian lands'' or "Public lands.'' If they were the
former, the decree in the equity case should be affirmed,
but in the law case there would remain the question as to
whether ''sheep" were within the terms of the act under
which the penalty was imposed.
In both cases the Government contends that the appel-
lant violated § 2117 of the Revised Statutes of the United
States, which reads as follows:
"Every person who drives or otherwise conveys any
stock of horses, mules, or cattle, to range and feed on any
land belonging to any Indian or Indian tribe, without the
consent of such tribe, is liable to a penalty of one dollar
for each animal of such stock."
The company admits that it pastured 5,000 sheep on the
described lands without the consent of the Crow tribe of
Indians or of the United States, but denies that they were
''Indian lands" and contends that they were "Public
lands," upon which it was lawful for it to pasture its stock.
Whether the described lands were Indian or Public lands
depends upon the construction to be given the Act of Con-
gress, approved April 27, 1904, c. 1624, 33 Stat. 352, en-
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164 OCTOBER TERM, 1919.
Opinion of the Court 262 U. 8.
titled ''An Act To ratify and amend an agreement with
the Indians of the Crow Reservation in Montana, and
making appropriations to carry the same into effect."
The agreement embodied in this act of Congress pro-
vided for a division of the Crow Indian Rieservation in
Montana on bomidaiy lines which were described, and
the lands involved in this case were within the part of the
Reservation as to which the Indians, in terms, ''ceded,
granted, and relinquished" to the United States all of
their "right, title and interest."
Theai^ument of the Sheep Company is that the United
States being owner of the fee of the land before the agree-
ment, the effect of this grant and release of their possessory
right by the Indians, was to vest the complete and per-
fect title in the Government, and thereby make the terri-
tory a part of the public lands with the interest of the
Indians transferred to the proceeds to be derived from
them. For this conclusion the following cases are cited:
United States v. Choctaw Nation, 179 U. S. 494; Bean v.
Morris, 159 Fed. Rep. 651; s. c. 221 U. S. 485. But in the
first of these cases the Indians parted with their possessoiy
rights for a cash payment by the United States (p. 527),
and in the second, the character of the agreement under
which the Indian title was said, incidentally, to have ter-
minated, does not appear.
Whether or not the Government became trustee for the
Indians or acquired an imrestricted title by the cession of
their lands, depends in each case upon the terms of the
agreement or treaty by which the cession was made.
Minnesota v. Hitchcock, 185 U. S. 373, 394, 398; United
States V. MiUe Lac Band of Chippewa Indians, 229 U. S.
498,509.
The agreement we have in this case is elaborate and,
in consideration of the grant by the Ipdians of their pos-
sessory right, the Govemm^it assumed many obligations
with respect to the lands and the proceeds of them, — not-
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ASH SHEEP 00. v. UNITED STATES. 165
159. Opinion of the Court.
ably, that it would sell the land to settlers, except sections
16 and 36, for not less than four dollars per acre and would
pay the proceeds to the Indians, under the direction of
the Secretary of the Interior, in a manner prescribed.
Thus, the Government contracted to expend; $90,000 of
the proceeds of the land in the eictension of the irrigation
system on the reservlktion remaining; $295,000 in the pur-
chase of stock to be placed on the reservation, with a fur-
ther contingent purchase in contemplation of $200,000;
$40,000 in fencing; $100,000 fw schools, and $10,000 for a
hospital for the bdians, for the maint^iance of which
$50,000 additional was to be held in trust. It was further
provided, that to the extent that feasible irrigation pros-
pects could be found, parts of the released lands should be
withdrawn undor the Reclamation Act and be disposed of
within five years, but not for less than four dollars an acre.
There were many other like provisions, all intended to
secure to the Indians the fullest possible value for what
are referred to in the agreement as ''their lands" and to
make use of the proceeds for their benefit.
It was provided that semi-annual reports should be
made by the Secretary of the Interior to the Indians,
showing the amounts expended from time to time and the
amounts remaining in each of the several funds.
It is obvious that the relation thus established by the
act between the Govemm^it and the tribe of Indians was
essentially that at trustee and beneficiary and that the
agreement contained many features appropriate to a trust
agreem^it to sell lands and devote the proceeds to the
interests of the cestui que tmet. Minneeota v. Hitchcock^
185 U. S. 373, 394, 398. And that this was precisely the
li|^t in which the Congress regarded the whole transac-
tion, is clear from the terms of the concluding section, the
dghth:
''That nothing in this Act contained shall in any manner
bind the United States to purchase any portion of the land
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166 OCTOBER TERM, 1919.
Opmion of the Court. 262 U. 8*
herein described, except sections sixteen and thirtyHEOX
or the equivalent in each township, or to dispose of said
land except as provided herem, or to guarantee to find
purchasers for said lands or any portion thereof, it being
the intention of this Act that the United States shall act
as trustee for said Indians to disposb of said lands and to
expend and pay over the proceeds received from the sale
thereof oroly as received, as herein provided.'' (33 Stat,
352, 361.)
Taking all of the provisions of the agreement together
we cannot doubt that while the Indians by the agreement
released their i)08sessory right to the Government, the
owner of the fee, so that, as their trustee, it could make
perfect title to pim^hasers, nevertheless, until sales should
be made any benefits which might be derived from the
use of the lands would belong to the beneficiaries and not
to the trustee, and that they did not become "PubHc
lands" in the sense of being subject to sale, or other dis-
position, under the generalland laws. Union Pacific JS.
R. Co. V. Harris, 215 U. S. 386, 388. They were subject
to sale by the Government,, tq be sure, but in the manner
and for the purposes providea *f or in the special agreement
with the Indians, which was embodied in the Act of April
27, 1904, 33 Stat. 352, and as to this point the case is
ruled by the Hitchcock and Chippewa Ca^es, mpra, Thus,
we conclude, that the lands described in the bill were '' In-
dian land^" when the company pastured its sheep upon
them, in violation of § 2117 of Revised Statutes, and the
decree in No. 212 must be affirmed.
There remains the question as to the construction of
Rev. Stats., §2117.
In the law case it is admitted in the bill of exceptions
that the Sheep Company, without the permission of the
Crow tribe of Indians or of the United States, drove,
ranged and grazed 5,000 ^^head of she^p on the land de-
scribed in the complaint, and that at the time no. settle-
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ASH SHEEP C». V. UNITED STATES. 167
159. Opinion of the Court
ment or entries thereon had been authorized under acts
of Congress. The judgment against the company was for
S5,000, — one dollar for each sheep pastured on the land.
The company contends that the judgment should be
reversed tor the reason that Rev. Stats., §2117, imposes
the penalty prescribed, only, for ranging and feeding on
the lands of an Indian tribe without permission ''any
stock of horses, mules, o^ cattle" and liiat ''sheep" are
not within its terms.
If this were a recent statute and if we were giving it a
first interpretation we might hesitate to say that by the
use of the word "cattle" Congress intended to include
But the statute is an old one which has been intetpi*eted
in published reports of the courts for almost fifty years,
and in an opinion by the Attorney General of the United
States, rendered in 1884, as fairly comprehending '^' sheep "
within the meaning of the word "cattle" as used in it.
The statute first appears as § 2 of an "Act to regulate
Trade and Intercourse with the Indian Tribes, and to
preserve Peace on the Frontiers," enacted in 1796 and was
ihen applicable only to '*any stock of horses or cattle,"
etc. (1 Stat. 469, 470). The section was reSnacted with-
out change in 1802 (2 Stat. 139, 141). In 1834 [Act June
30, 1834, c. 161, § 9, 4 Stat. 729, 730] it was given its pres^
ent form, which was carried into the Revised Statutes,
without change in the wording we are considering (Rev.
Stats., § 2117).
In 1871 suit was brought in the United States District
Court for the District of Oregon, claiming that penalties
under the section had been incurred by pasturing "sheep,"
as in this case, on Indian lands without the consent of the
tribe. In a carefully prepared and clearly reasoned opin-
ion Judge Deady overruled a demurrer to the complaint,
and hehl that "sheep" were dearly within the miadiicf
to be remedied and f airiy within the language of the act.
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168 OCTOBER TERM, 1918.
Opinkmoftfae Court 262U.B.
This case has not been overruled or modified by any later
decision. The court quotes definitions of the word ''cattle"
from several dictionaries^ famphasiging eepedallyi this
from the 1837 edition of Webster:
''In its primary sense, the word includes camelsi horses,
asses, all the varieties of domesticated homed beasts of
the bovine genus, sheep of all kinds and goats, and per-
haps swine. . • . Cattle in the United States, in
common usage, signifies only beasts of the bovine genus."
Upon this authority and applying the rule that in de-
termining the l^pblative intent the mischief to be pre-
vented should be looked to and saying that "it will not
be denied that sheep are as much with the mischief to be
remedied as horses or oxen," the court concludes:
"I have no hesitation in coitiing to the conclusion that
the word cattle, as used in the Indian Intercourse act of
1834, includes, and was intended to include sheep, as well
as cows and oxen." United Siatea v. Mattock, 2 Sawy. 148.
Twelve years later, in 1884, the Attorney General of
the United States, in an opinion to the Secretary of War,
legarded the question as so little doubtful that he dis-
posed of it in this smgle sentence:
"The standard lexicographers place sheep under the
head of cattle, and it would seem to be in derogation of the
manifest intention of Congress to take the word in a more
confined sense." 18 Ops. Atly. Gen. 91.
In 1874, in Decatur Bank v. ^ Louis Bank, 21 Wall
294, this court held that the word "cattle" in a letter of
credit guaranteeing "drafts on shipments of cattle" was
comprehensive enouj^ to justify the giving of credit on
shq>ments of "hogs." This pertinent paragraph is from
the opinion:
"That stock of some kind fanned part of the guarantee
is quite plain, but is the word 'cattle' in this connection
to be confined to neat cattle alone, that is, cattle of the
bovine genus? It is often so applied, but it is [quoting
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ASH SHEEP CO. v. UNITED STATES. 169
160. OpioKm of the Court.
from Worcestor's Dictionary] 'also a collective name for
domestic quadrupeds generidly, including not only the
bovine tribe^ but horses, asses, mules, sheep, goats, and
swine.' In its limited sense it is used to designate the
different varieties of homed animals, but it is also fre-
quently used with a broader signification as embracing
animals in general which serve as food for man. In Eng-
land, even in a criminal case, where there is a greater
strictness of construction than in a civil controven^, pigs
were held to be included within the words 'any cattle.'"
The most recent definition^ of the dictionaries are as
follows:
Webster's New International Dictionary defines ''cat-
tle" thus: "Collectively, live animals held as property ot
raised for some use, now usually confined to quadrupeds
of the bovine family, but sometimes including all domes-
tic quadrupeds, as sheep, goats, horses, mules, asses, and
swine, etc."
The Standard Dictionary defines the word as meaning:
"Domesticated bovine animals, as oxen, cows, bulls, and
calves; also, though seldom now as compared with former
times, any live stock kept for use or prc^t, as horses, cam-
els, sheep, goats, swine, etc."
Thus, although the word "sheep" is not in the section,
and although in present day usage the word "cattle"
would rarely be used with a signification sufficiently broad
to include them, nevertheless: since the pasturing of sheep
is plainly within the mischief at which tiiis section aimed;
since the word "cattle," which is used, may be given, say
aU the authorities, a meaning comprehensive enough to
include them; and since the courts and the Department
of Justice for ahnost fifty years have interpreted the sec-
tion as applicable to "^eep," we accept this as the in-
tended meaning of the section, — for had it been otherwise
Congress, we must assume, would long since have cor-
rected it.
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170 OCTOBER TERM, 1919.
Opjnkm of the Court S62D.8.
It 18 argued that the rule that penal statutes must be
strictly construed forbids such latitude of construction.
But this is sufficiently and satisfactorily answered by re-
peated decisions of this court.
''The admitted rule that penal statutes are to be strictly
construed is not violated by allowing their words to have
full meaning, or even the more extended of two meanings,
where such construction best harmonizes with the con-
text, and most fully promotes the policy and objects of
the legislature." United States v. HartweU, 6 Wall. 385;
United States v. Freeman, 3 How. 566, 665; United States
V. Lacher, 134 U. S. 624, 628.
It is also contended, far from confidently, that the re-
covery of nominal damages in the equity suit is a bar to
the recovery of the penalty in the case at lavf^ While the
amount of the statutory penalty for the trespass was
prayed for in the equity suit, yet the trial court, saying
that equity never aids the tollection of such penalties,
MarshaUv. Vicksburg, 16 Wall. 146, 149, and that no evi-
dence of substantial damage had been introduced, limited
the recovery to one dollar and costs. Rejection of a claim
because pursued in an action in which it cannot be enteiv
tained does not constitute an estoppel against the pursuit
of the same ri{^t in an appropriate proceeding. We agree
with the Court of Appeals that ''a judgment is not ooiv^
elusive on any question which, from the nature of the case
or the f oim of the action, could not have been adjudicated
in the case in which it was rendered.''
It results that the decree in No. 212 and the judgment
in No. 285 must both be
Affirmed.
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GAYON V. McCarthy. 171
OpinioiioftheCkNirt
GAYON V. McCarthy, united states mar-
shal FOR the southern DISTRICT OF NEW
YORK, ET AL.
APPEAL FROM AND SRROB TO THE DISTRICT COURT OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK.
No. 54a Aigued January 6, 1920.— Decided March 1, 1920.
Engaging another to go to Mexico to join revolutionaiy forces, under
promise of a oommission and probable reimbursement for expenses,
is a "retaining/' within the meaning <tf § 10 of the Criminal Ckide.
P. 177.
Evidence hdd sufficient to show probable cause, and sustain an order
of removal.
Affirmed.
The case is stated in the opinion.
Mr. Wittiam S. Bennet with whom Mr. A. M. Watter^
herg was on the brief, for appellant and plaintiff in error.
Mr. Assistant Attorney Oeneral Stewart^ with whom Mr.
W. C. Herron was on the brief, for appellees and defend-
ants in error.
Mr. Justice Clarke delivered the opinion of the
court.
The appellant, Gayon, was indicted in the Southern
District of Texas for conspiring (§ 37 of the Criminal
Code) with one Naranjo, of San Antonio, Texas, and with
one Mendoza, of Laredo, Te^ias, about January 1st, 1919,
to hire and retain Foster Averitt, a citizen of the United
States, to go to Mexico, there to enlist in military forces
organized in the interest of Felix Diaz, then in revolt
against the Government of Mexico, with which the United
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172 OCTOBER TERM, 1919.
Opinion of the Court. 262 XT. 8.
States was at peace, in violation of § 10 of the CSriminal
Code, as amended May 7, 1917, (40 Stat. 39, c. 11).
Gayon was arrested in New York, and, after a full
hearing before a Conunissioner of the United States, was
held subject to the order of the District Court for his re-
moval to Texas.
Thereupon, by petition for writs of habeas corpus and
certiorari, the case was removed to the District Court for
the Southern District of New York, and, upon a hearing on
a transcript of the evidence before the Conmiissioner, that
court discharged the writ of habeas corpus and entered an
order that a warrant issue for the removal of the appel-
lant to Texas. An appeal brings this order here for review.
The principles and practice applicable to this case are
abundantly settled: Greene v. Henkel, 183 U. S. 249, 261;
Beavers v. Havbert, 198 U. S. 77; Hyde v. Shine, 199 U. S.
62, 84; Tinsley v. Treat, 205 U. S. 20; Haas v. ilen*el, 216
U, S. 462, 475; Price v. Henkel, 216 U. S. 488, 490; Hyde v.
United States, 225 V. S. 347;Brotiw v.i^IKott, 225U.S. 392;
Henry v. Henkel, 235 U. S. 219.
Of many errors assigned only two are argued, vis: That
the court erred in holding: (1) That the acts committed by
the appellant '^of which there was any evidence before the
Commissioner'' constituted a crime under § 10 of the
Penal Code, and (2) that the evidence before the Com-
missioner showed probable cause for believing the defend-
ant guilty of the crime charged in the indictment.
By these assignments of error the correct rule of de-
cision is recognized, that if there was before the Commis-
fdoner or District Court evidence showing probable cause
for believing the defendant guilty of having conspired with
Naranjo or Mendoza, when ^ther was in the Southerd
District of Texas, to hire or retain Averitt to go to Mexico
to enlist in the insurgent forces operating under General
Diaz against the Mexican Government, the order of the
District Court must be affirmed.
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QAYON V. McCarthy. its
171. Opinkm of the Ck)uri.
The evidence before the Gommissionery carried to the
District Court, may be summarized as follows:
The Govermnent introduced the indictment and, with
the admission by Gayon that he was the person named
therein, rested. This established a prima/ocie case in the
absence of other evidence* Tindeyv rr0a<, 205 U. S: 20,
31, and cases cited.
Thereupon the testimony of the accused and of one Del
Villar was introduced by appellant, and that of Averitt
by the Govenunent, which we condense into narrative
foim:
For five jeaxs before the arrest, Del Villar, a political
exile £rojn Mexico, had maintained offices in New York,
from which he had conducted a systematic propaganda in
the interest of Felix Dias and against the Mexican Govon-
ment*
The accused, Gayon, is a Mexican citizen, and during
several administrations prior to that of Carranza had
served as consul for the Mexican Government at Roma,
Texas, and at other places within and without the United
States. For about two years he had been secretary to Del
Villar and for some time prior to his arrest was in the
joint service and pay of Del Villar and General Aurelio
Blanquet, the latter then in Mexico serving with the
forces of Diaz.
Naranjo was editor and publisher of a newqiaper at San
Antonio, Texas, called ^'Revista Mexicana" (Mexican
Review), which was opposed to the established Mexican
Government and favorable to the revolutionists operating
in the interest of Diaz.
On December 12, 1918, Gaycm wrote from New Ycnrk to
Naranjo at San Antonio to secure an advertisement in the
Review for ''my work 'M General Blanquet,'" saying:
''There are some reasons that you may know in the next
few days vdiy I want a big circulation of the book,'' asking
K he migjbt send some copies to be sold at the newqiaper
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174 OCTOBER TERM, 1918.
OpiDion of the Court 262 U.S.
office, and concluding^ ^'I will await your letters hoping to
give you good news in my next letter."
On December 23, 1918, Gayon wrote Naranjo, ad-
dressing him as ''My dear Friend," and saying that he had
received his letter of the 18th instant. In this letter a
discussion of the sale of his book ''El General Blanquet"
is followed by comment on the activities of other persons,
in which he discourages new projects and urges joining
"with the National Union Committees," which he states
had already passed the embryonic state and now consti-
tute a reality. He concludes : ' ' God grant us, now that we
are on the threshold of success, we may leave aside pur
obstinate custom of projecting, and go ahead to produce
results exclusively."
On January 14, and again on January 21, 1919, he
addressed Naranjo as "My dear Friend" and discussed
further advertising and circulating of his book.
This correspondence makes it clear enou^ that Gayon,
although in New York, in December, 1918, and January,
1919, was in close association with Naranjo, and that the
two were actively engaged in promoting opposition to the
established Mexican Government.
On January 5, 1919, Foster Averitt, an American citi-
zen, whose home was in Texas, called at the office of
Gayon, and what passed between them is derived from
the testimony of the two, as follows:
Averitt had recently resigned from the United States
Naval Academy at Annapolis and, being without employ-
ment, says that he called at the office of Gayon, for the
purpose of securing, if possible, a position in Mexico or
Central America as an engineer. He was wearing his
uniform as midshipman of the United States Navy and he
first showed Gayon some official papers, which the latter
did not read^ and then said that he was of the United
States Navy, and that he must go at once to Mexico to see
Generals Edas and Blanquet personally. He did not ^ve
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GA\oN V. McCarthy. its
17L Opnucm of the Court
any reason for desiiing to see these men but asked for
letters of introduction to them, which Gayon refused
until he could confer with Dei Villar. Averitt returned the
next day and, after discussing with Gayon conditions in
MexicO; the location of the several armed forces near the
border, and whether he should ^ by sea to Vera Cms or
overland, he again left for the day. On returning the next
day he received from Gayon two letters, one addressed to
Naranjo, at San Antonio, and one to '^G^ieral Aurelio
Blanquet, General Headquarters, Mexico/'
Gayon had no knowledge of or acquaintance with
Averitt before his first call at his office and he did not
present any letters of introduction, but in the letter to
Naranjo, Gayon introduced him as '^ undertaking a trip
to Mexico on special mission to Generals Felix Dias and
Aurelio Blanquet,^' and requested that he ''supply him
the necessary information to enable him to make his trip
as quickly as possible/'
Tlie letter which he gave to Averitt addressed to Gen-
eral Blanquet opens with this paragraph:
''The bearer, Mr. Foster Averitt, Marine Guard of the
United States, will inform you about the reasons for. his
trip and of the work we are undertaking here. I kindl;^
request from you, after meeting Mr. Foster [sic], to b)
good eoQough to introduce him to General Felix Diaz, as h«)
wants to take \sp some matters with both cf you*''
H^e remainder of the letter eiqdains how he had given
publicity to "the recent successful arrival" of the General
in Mexioo and the motives inspiring the movement of
reorganijBatkm under the leadership of General Dias. It
predicts early recognition by our Government of tha
belligerency of the Dias insurgents and urges the General
to write as often as possiUe to enaUe "us to contmue our
^lyfipoign of propaganda."
Supiified with these letters^ Averitt straightway went to
San Antonio and presented his letter to Naranjo who.
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176 OCTOBER TERM, 1919.
Opinion of the Court 2S2V.B.
after some oonferenees with him, gave him a letter to
General Santiago Mendoza, at Laredo, on the border.
This lett^ was presented to Mendoza and through him
arrangements were made for Averitt's crossing into
Mexico with two or three others, but they were arrested
by customs guards and the proceedings we are considering
followed.
In the interviews in New York there was suggestion of
payment of expenses and a commission for Averitt, but
Gayon, saying that the furnishing of either would violate
the neutrality laws of the United States, told him there
would be no difficulty in his getting a commission from
General Blanquet on his arrival in Mexico and the last
thing he said to him when leaving was ''that he expected
that he should be at least a Colonel when he saw him again
down there." He told him it might be possible to have his
expenses made up to him when he arrived in Mexico, and,
as a matter of fact, he received $15 from G^ieral Mendoza
at Laredo.
The statute which Gayon is charged with violating
provides that '' whoever, within the tenitoty or jurisdic-
tion of the United States . . . hires or retains
another ... to go b^ond the limits or jurisdiction
of the United States with intent to be enlisted ... in
the service of any foreign • . • people" shall be
punished as provided. And the overt acts chained in the
indictment are; that Gayon delivered to Averitt at New
York a letter addressed to Naranjo, and at the same time
gave him instructions with respect to presenting it and
impliedly promised Averitt that upon his arrival in Mexico
he would be given a commission in the army of Goderal
Blanquet; that at the same time he delivered to Averitt a
letter addressed to General Blanquet, who was then in
Mexico in command of revolutionary forces; that Averitt
visited and held conferences with Naranjo who gave him a
letter to Mendosa, at Laredo, in the Southern District of
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QAYON t^. McCarthy. 177
171. Opinkm of the Court
Texas; and that Averitti under instructions received from
Naranjo, called upon and conferred with Mendosa at
Laredo and with him arranged to enter Mexico witii
others, with intent to j oin the forces of Diaz under General
Blanquet.
While the narration of what took place between Gayon
and Averitt does not show a hiring of the lattar in the
ordinary sense of the word, yet, when taken with the con-
duct of Averitt in going immediatdy to Texas, and in
attempting to cross into Mexico, plainly, it tends to show
that Gayon retained Averitt in the sense of engaging him
to go to Mexico, that he was induced to enter into that
engagement by the promise that he would be given a com-
mission in the forces of Dias when he arrived there and
that he would probably be reimbinrsed for his expenses.
fThere was also evidence tending to show that by comr
munication and concerted action between Gayon, Naranjo
and Mendosa, Averitt was induced to go from New York
to the border and would have succeeded in reaching
Mexico and joining the insurgent forces but for the vigi-
lance of the United States officers who arrested him. The
evidence also is that Mendosa conferred witii Averitt and
acted in promotion of the conspiracy when in the Southern
District of Texas, thus establishing the jurisdiction of the
court to which the indictment was returned, under Hyde
V. United SUUes, 225 U. S. 347, and Brown v. EUUM, 225
U. S. 392.
The word ''retain" is used in the statute as an alterna-
tive to ''hire'' and means something different from the
usual employment with payment in mon^. One may be
retained, in the sense of engaged, to render a service as
effectivdy by a verbal as by a written promise, by a pros-
pect for advancement or payment in the future as by the
iounediate payment of cash. As stated long ago by a
noted Attoniey Generali in an opinion dealing with this
statute:
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178 OCTOBER TERM, 1918.
Qjrllabitt. 2S2V.B.
''A party may be retained by verbal promise^ or by
invitation, for a declared or known purpose. • If such a
statute could be evaded or set at naiij^t by elaborate
contrivances to engage without enlisting, to retain with-
out hiring, to invite without recruiting, ... it would
be idle to pass acts of Congress for the punishment of this
or any other offence." 7 Ops. Atty. Gen. 367, 378, 379.
This discussion of the record makes it sufficiently clear
that there was substantial evidence before the Commis-
sioner and the court tending to show that § 10 of the
Criminal Code had been violated and that th^re was
probable cause for believing the appellant guilty of con-
spiring with Naranjo and Mendoza to compass that
violation, as charged in the indictment, and therefore
the order of the District Court must be
Afbrmed.
UNITED STATES AT THE RELATION OF KAN-
SAS CITY SOUTHERN RAILWAY COMPANY v.
INTERSTATE COMMERCE COMMISSION.
BBROR TO THE COURT OF APPEALS OF THE DISTRICT OF
COLUMBIA.
No. 418. AfKued Deoember 10, 1919.— Deoidod Maivli 8, 1930.
The Valuation Act dt March 1, 1913, requirea the Interatate Commerae
Ckunmission to asoertain and report, inUgr aXia, the proBent cost of
oondemnation and damages or of purchase of the lands, rights of way
and terminals of carriers in excess of their original cost or present
value, apart from improvements. HM, that a refusal of the Com-
miasion to receive and act upon evidence to this end was not justi-
fied by the supposed impossibility of performing the statutoiy duty
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KANSAS CITY SO. RY. v. INT. COM. COMM. 179
178. Axsumeat for Defeadant in Error.
or the diffioulties involved in so doing, and that a railroad company
ivfaose interests were affected was entitled to the writ of mandamus.
P. 187.
Beversed.
The case is stated in the opinion.
Mr. Louis Marshall and Mr. Samuel W. MoctSj with
whom Mr. Samuel Untermyer was on the brief, for plain^
tiff in error.
Mr. P. J. FarreH for defendant in error:
To esthnate the present cost of condemnation and dam-
ages or of purchase of lands included in plaintiff in error's
raihroad is impossible, because it necessarily involves un-
v^arrantable and unlawful assumptions.
In the Minnesota Rate Cases, 230 IT. S. 352, this court
entertained the opinion that an estimate of the present
cost of acquisition of the lands included in the right of way,
yards, and terminals of a carrier could be made only upon
the theory that the railroad would be removed before the
estimate would be made, and it is apparent that no other
theory would be tenable. The court points out that upon
the assumption of the nonexistence of the railroad it is
impossible for anyone to describe either the conditions
that would exist or the exigencies of the hypothetical
owners of the property, and says in emphatic language
that an attempt to estimate what would be the actual cost
of acquiring the right of way under such cifbumstances
would be to indulge in mere speculation. In other words,
this court says that what plaintiff in error is asking the
court to require the Commission to do cannot, as a matter
of law, be done. The court, however, does not stop here.
It proceeds to demonstrate why such an estimate cannot
be made. It shows that the uses and values of lands in the
vicinity of the raiboad are largely the result of the con-
struction and operation of the raUroad; that it would be
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180 OCTOBER TERM, 1919.
Argument for Defendant in Enor, 252 U. 8.
impossible to determine the extent to which such uses and
values have been so influenced, and that to assume that
they would not be affected if the raiht)ad were removed,
and base upon that theory an estimate of reacquiring the
lands, or its equivalent, an estimate of the present cost of
condemnation and damages, or of purchase, would be
improper and unjustifiable and produce a result which
could not be accepted as evidence by a court. This court
clearly states, in substance, that the estimate of present
cost of condemnation and damage^, or of piurchase, which
plaintiff in error is asking the court to compel the Commis-
sion to make is an estimate which is wholly beyond reach
of any pi-ocess of rational determination. In tiiis connec-
tion it points out that the appraisers of the lands involved
in the Minnesota Rate Cases, in an attenq)t to estimate
the cost of acquiring the lands, were presented with an
impossible hypothesis.
As shown in the answer herein, the evidence introduced
before the Commission in connection with the valuation
of the lands included in plaintiff in error's railroad estab-
lishes that at the time the railroad was constructed a por-
tion of said lands was donated to, and another portion
purchased by, plaintiff in error, and that plaintiff in error
obtained title to still another portion through condemna-
tion proceedings. It is evident that, upon the assumption
of the removal of the railroad and its reproduction, it is
impossible to ascertain the portion of said lands which
would be so donated, or the portion thereof which would
have to be purchased by plaintiff in error, or the portion
thereof plaintiff in error would have to acquire title to
throu^ condemnation proceedings.
It is further i^parent that the removal of the railroad
and its immediate reproduction would not damage in any
manner or to any extent any of the lands adjoining or
adjacent to the railroad or the owners of such adjoining
or adjac^it lands.
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KANSAS CITY SO. RY, v. INT. CX)M. COMM. 181
178. Aigument for Defendant in Error.
It is also dear that to determine, upon the assumption
of the removal of the raihroad, that the title to the lands
included therein would revert to or be vested in the owners
of said adjoining lands, would be unjustifiable and im-
proper.
The court will not, by issuing a writ of mandamus, re-
quire something to be done which it is impossible to do.
SiMyy Mfg. Co. v. AUentown, 153 Pa. St. 319.
The decision of this court in the Minnesota Rate Cases
is directly in point and should be given tontrolling influ-
ence. Chicago & Northwestern Ry. Co. v. Smithy 210 Fed.
Rep. 632; LouisviUe & NashviUe R. R. Co. v. Railroad
Commission, 208 Fed. Rep. 35; Ann Arbor R. R. Co. v.
Fellows, 236 Fed. Rep. 387.
This court has approved the Commission's interpreta-
tion of the court's decision in the Minnesota Rate Cases.
See Denver v. Denver Union Water Co., 246 U. S. 178.
In finding the present market value of plainti£F in error's
common-carrier lands, as measured by the ''fair average
of the normal market value of lands in the vicinity having
a similar character," the Commission must of course con-
sider conditions as they now are, including the existence
of the railroad, but in estimating what it would cost to
reacquire such lands, that is, the reproduction cost, or the
present cost of condemnation and damages or of purchase,
of the lands, the Commission would have to treat the rail-
road as nonexistent and speculate, enter into the realm
of mere conjecture, as to what the market value of the
lands would be under such circmnstances.
Plaintiff in error's contention that it will lose something
to which it is entitled, unless the remedy it asks for is ap-
plied, is based upon speculation, and is not justified by
the facts. It is asking the court to assist it in obtaining
for its common-carrier lands a special railway value, in
excess of the amount invested in them and b^ond the
value of similar property owned by others.
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Ig2 OCTOBER TERM, 1919.
Opiiuon of the Court. 262 U. 8.
Mr. W. 0. BranSey, Mr. Sanfard BdbiMon and Mr.
Ledie Craven^ by leave of courti filed a brief as amici curuB.
Mr. CmBF JusncB Whitb delivered the opinion of the
court.
The Act of Congress of March 1, 1913, c. 92, 37 Stat.
701, amending the "Act to regulate commerce," imposed
the duly upon the Interstate Commerce Commission
(§ 19a) to ''investigate, ascertain, and report the value
of all the property owned or used by every common carrier
subject to the provisions of this Act." Specifying the
steps to be taken in the performance of the general duties
thus imposed, the same section commanded as follows:
''First. In such investigation said commission shall
ascertain and report in detail as to each piece of property
owned or used by said common carrier for its purposes as
a common carrier . • . the cost of reproduction new,
the cost of reproduction less depreciation, and an analy-
sis of the methods t^ which these several costs are ob-
tained, and the reason for their differences, if any. . . .
"Second. Such investigation and report shall state in
detail and separately from improvements the original
cost of aU lands, rights of way, and terminals owned or
used for thepurposes of a common carrier, and istscer-
tained as of the time of dedication to public use, and the
presait value of the same, and separately the original
and present cost of condemnation and damages or of pur-
chase in excess of such original cost or present value.
<n
'Fifth. • . [7th par.]. Whenever the commission
shall have completed the tentative valuation of the
property of any common carrier, as herein directed, and
before such valuation shall become final, the commission
shall give notice by registered letter to the said car-
rier, • . . stating the valuation placed upon the sev-
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KANSAS CITY SO, RY. v. INT. COM. COMM. 183
ITS. Opinion of the Court
eral classes of property of said carrier, and shall allow
thirty days in which to file a protest of the same with the
commission. . . .
"If notice of protest is filed the commission shall fix a
time for hearing the same, and shall proceed as promptly
as may be to hear and consider any matter relative and
material thereto. ... All final valuations by the
conmiission and the classification thereof shall be pub-
lished and shall be prima facie evidence of the value of the
property in all proceedings under the Act to regulate
commerce as of Uie date of the fixing thereof, and in all
judicial proceedings for the enforcement of the Act ap-
proved February fourth, righteen hundred and ei^ly
seven, commonly known as ' the Act to regulate commerce '*
and tiie various Acts amendatory thereof, and in all ju-
dicial proceedings brought to enjoin, set aside, annul, or
suspend, in whole or in part, any order of the Interstate
Commerce Conunission.''
Pursuant to these requirements the Commission pro-
ceeded to investigate and report the value of the property
of the Kansas City Southern Railway Company. Upon
completing a tentative valuation, the Commission gave
the notice required by the statute to the Railway Ccnn-
pany, which thereupon filed a protest against such valuar
tion on the ground that in making it the Commission had
failed to consider and include the ''present cost of conr*
demnation and damages or of purchase in excess of such
original cost or present value.'' Upon the subject of the
protest, the Railway Company took a large amount of
testimony and much was also takm by the Commission,
both parties having incurred considerable expense in the
matter.
Pending this situation, in order that the excessive ex-
pense of taking each individual parcel and showing what
it would cost to acquire It or a ri{^t of way over it by pur-
ehase or condemnation might be avoided, an agreemmt
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184 OCTOBlSR TERM, 1919.
Opimm of tiie Court. S52n.8.
was entered into between the Director of the Bureau of
Valuation of the Commission, C. A. Proulyi and the Rail-
way Company, that in the event the Commission should
decide that evidence upon the cost of acquiring land by
purchase or condemnation would be rec^ved by it, the
Bureau of Valuation would recommend to the Commission
the percentage or multiplier of the naked value of the
land, to be used for the purpose of reaching the railway
cost of acquiring the same.
At that time there was also pending a protest conoem-
ing a tentative valuation made by the Commission as to
the property of the Texas Midland Railroad Company,
raising the same question as to error committed in failing
to carry out the provisions of the statute concerning the
present cost of condemnation, etc., in which case the Comr
mission overruled the protest, holding that the provision
of the statute in question was not susceptible of being en-
forced or acted upon for reasons stated by the Commis-
sion in part as follows (1 1. C. C. Val. Rep. 54 et 9eq.) :
''However, the direction in paragn^ 'Second' for the
ascertainment of the present cost of condemnation and
damages or of purchase in effect calls for a finding as to
the cost of reproduction of these lands. Must this be
done, and can this be done? It seems elementary that
the cost of reproduction can be estimated only by assum-
ing that the thing in question is to be produced again, and
that if it is to be produced again, it is to be taken as not
existent. It seems sophistry to contend that the lands of
the railroad can be produced again at a cost to the rail-
road without first making the assumption that they are
no longer lands of the railroad; and this necessary assump-
tion carries with it the mental obliteration of the railroad
itself.
''Considerable testimony was produced to the effect
that in the acquisition of a railroad right of way it is nec-
essary for the carrier to pay sums in excess of the value of
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KANSAS CITY 80. RT. v. INT. OOM. COMM. 185
178. QpinioiiofibBOiwrt
the land if measured by the present or market value of
similar contiguous lands, and this because of the elements
which have been enumerated and embraced in the pro-
test, such as cost of acquisition, damages to the severed
property, cost of buildings and other improvements, ao-
orued taxes and various incidental rights.
♦ ♦♦♦♦♦««
''We are unable to distinguidi between what is sug-
gested by the carrier in this record and ncmunally required
by the act and what was condemned by the court [in the
Mmnewta Bate Cmbs] as beyond the possibility of rational
determination; nor is there any essential difference in the
actual methods there employed and those now urged
upon us. Before we can rqx>rt figures as ascertained, we
must have a reasonable foundation for our estimate, and
when, as here, if the estimate can be made only upon in-
admissible assumptions, and upon inq>ossible hypotheses,
such as those pointed out by the Supreme Court in the
opinion quoted, our duty to abstain from reporting as an
ascertamed fact that whkdi is inci^ble of rational ascer-
tainment, is clear. .
m m « « « « '« «
''Because of the impossibility of making the self-con-
tradictory assumptions which the theory requires when
appUed to the carrier's lands, we are unable to report the
reproduction cost of such lands or its equival&it, the
present cost of acquisition and damages, or of purchase in
excess" of present value. The present value of lands as
found by us. appears in the final valuation, appended
hereto."
Applying the ruling thus made to the protest which was
pending in this case, the Commission gave notice to the
Railway that the agreement made with the Director of
the Bureau of Valuation concerning the method of proof
would be treated as not further operative; and thereafter
whai an offer was made by the Railway before an exam-
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186 OCTOBER TERM, 1919.
Opinion of the Court 262 U. 8.
iner of the Commission of further testimony concerning
the subject in hand, it was excluded because in conflict
with the ruling announced in the Midland CoBe. The
Conunission sustained this action of the eitaminer on the
ground that that officer had rightly held that the ruling
in the Midland Case was controlling; and the Commission
therefore decided that no further testimony on the par-
ticular subject would be heard in this case, and that it
would make no report concerning that subject.
This suit was then brought to obtain a mandamus to
compel the Commission to hear the proof and act upon It
under the statute. The amended i)etition, after reciting
the facts as we have outlined them and making the appro-
priate formal averments to justify resort to mandamus,
alleged:
''That the retusai of respondent to investigate and find
such present cost of condemnation and damages or of pur-
chase in excess of original cost or present value of relator's
lands will result in great wrong and injury to relator; by
way of illustration, such refusal will result in a finding by
respondent of a value of but $60,000 with respect to par-
cels of latid acquired by relator by judicial award in con-
demnation proceedings during four years immediatdy
preceding such valuation at an actual cost to rdator of
$180,000; and in the aggregate will result in a finding with
respect to said lands at least $5,000,000 less than the
value so directed by the Act of Congress above mentioned
to be foimd."
It was further averred, witjat considerable daboration,
that the petitioner stood ready to produce proof to meet
the requirements of the statute which was neither spec-
ulative nor impossible to be acted upon, since it would
conform to the character of proof usually recdved in
judicial proceedings involving the exercise of eminent
domain.
The Commission in its answer, either stating or con-
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KANSAS CITY 80. RY. v. INT. CX)M. CX)MM. 187
ITS. Opinion of the Court.
ceding the history of the case as we have recited it, and
sununarily reiterating the grounds for the refusal 1^ the
Ck>mmis8ion to receive the proof or report concerning it,
challenged the right to the rdief sought. A demurrer to
the answer as stating no drfense was overruled by the
trial court, which denied relirf without opinion. In the
Court of Appeals, two judges atting, the judgment of
the trial court was affirmed by a divided court, also with-
out opinion, and the case is here on writ of error to review
that judgment.
It is obvious from the statement we have made, as wdl
as from the character of the remedy invoked, mandamus,
that we are required to decide, not a controversy growing
out of duty performed under the statute, but one solely
involving an alleged refusal to discharge duties which the
statute exacts. Admonishing, as this does, that the issue
before us is confined to a consideration of the face of the
statute and the non-action of the Commission in a matter
purely ministerial, it serves also to furnish a ready sdur
tion of the question to be decided, since it brings out in
bold contrast the direct and express command of the
statute to the Commission, to act concerning the subject
in hand, and the Commission's unequivocal refusal to
obqr such command.
It is true that the Commission held that its non-action
was caused by the fact that the command of the statute
involved a consideration by it of matters ^'beyond the
possibility of rational deta!piination,'' and called for "in-
admissible assumptions," and the indulging in '^ impossible
hypotheses" as to subjects '^ incapable of rational ascer-
tainment," and that such condudons were the necessary
consequence of the Minnewta Rate Cases, 230 XT. S. 352.
We are of opinion, however, that, considering the face
of the statute and the reasoning of the Commission, it
results that the conclusion of the Commission was em>n&-
ous, an error which was exclusively caused by a mistaken
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188 OCTOBER TERM, 1919.
Opinion of tte Court 2iS2 U. B.
conception by the Commission of its relation to the sub-
ject, resulting in an unconscious disregard on its part of
the power of Congress and an unwitting assumption l^
the Conumssion of authority which it did not possess.
And the significance which the Commission attributed to
the ruling in the Minnewta Rate Caaes^ even upon the as-
sumption that its view of the ruling in those cases was not
a mistaken one, but illustrates in a different form the dis-
regard of the power of Congress which we have just
pointed out, since, as Congress indisputably had the aur
thority to impose upbn the Commission the duty in ques-
tion, it is impossible to conceive how the Minnewta Bate
ruling could furnish ground for refusing to carry out the
commands of Congress, the cogency of which considenir
tion is none the less manifest thou|^ it be borne in mind
that the Minneaota Bate Caees were decided after the
passage of the act in question.
Finally, even if it be further conceded that the subject-
matter of the valuations in question which the act of Ccm-
gress expressly directed to be made necessarily opened a
wide range of proof and called for the exercise of dose
scrutiny and of scrupulous analysis in its consideration
and application, such assumption, we are of opinion, af-
fords no basis for refusing to enforce the act of Congress,
or what is equivalent thereto, of exerting the general
power which the act of Congress gave, and at the same
time disregarding the essential conditions imposed by
Congress upon its exercise.
The judgment of the Court qf Appeals ie ther^ore reveraed
with directions to reverse that qf the Supreme Court and
direct the Supreme Court to grant a writ of mandamus
in conformity with this opinion.
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EISNER v.. MACX)MBER. 180
ByOabm.
EISNER, AS COLLECTOR OF UNITED STATES
INTERNAL REVENUE FOR THE THIRD DIS-
TRICT OF THE STATE OF NEW YORK, v. MA-
COMBER.
XBBOB TO THE DISTRICT COURT OF THE UNITED STATES FOB
THE SOUTHBIiN DISTRICT OF NEW YORK*
No. 318. Axgued April 16^ 1919; restored to docket for reaxgameQi
May 10, 1019; reargued October 17, 20, 1010.— Decided March 8^ 1020.
Congress was not empowered by the Sixteenth Amendment to tax, as
income of the stockholdei*, without apportionment, a stock dividend
made lawfully and in* good faith against profits accumulated by the
corporation since March 1,1913. P. 201. TowMy.Eiimer,245V.&.
418.
The Revenue Act of Septonber 8, 1916, c. 463, 39 Stat. 756, plainly
evinces the purpose of Congress to impose sudi tiLxes and is* to that
extent in conflict with Art. I, § 2, d. 3, and Art. 1, { 9, d. 4, of the
Constitutipn. F)p.l99,217.
These provisions of the Constitution necessarily limit the extmunon,
by construction, of the Sixteenth Amendment. P. 205.
What is or is not "incon^e" within the meaning of the Amendment
must be determined in each case according to truth and substance,
without regard to form. P. 206.
Income may be defined as the gain derived from capital, from labor,
or from both combined, including profit gained through sale or con-
version of ca|»tal. P. 207.
Mere growth or increment of value in a capital investment is not in-
come; income is essentially a gain or profit jn itself of exchangeable
value, proceeding from capital, severed from it, and derived or re-
ceived by the taxpayer for his separate use, benefit and disposal. Id.
A stock dividend — evincing merdy a transfer of an accumulated sur-
plus to the capital account of the corporation— takes nothing from
the property of the corporation and adds nothing to that of the diar&-
hokier; a tax on such dividends is a tax on capital increase and not
on income, and to be valid under the Constitution such taxes must
be apportioned according to population in the several States. P. 206.
A^rmed.
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190 0C5T0BER TERM. 1919,
Atgument for Plaintiff in Error. 252 U. 8.
The case is stated in the opinion.
Mr. Asaiatant Attorney General Frieraon for plaintiff in
orror:
Stockholders have such an interest in the earnings and
profits of a corporation that the same are within the power
of Congress to tax as income even before they are divided.
CoUedor v. Hvbbard, 12 Wall. 1; SoiUhem Pacific Co. v.
Lowe, 247 U. S. 330, 336; Ijynch v. Turriah, 247 U. S. 221,
228; Bailey v. Railroad Co., 22 Wall. 604, 635, 636; Lynch
v. Hornby, 247 U. S. 339, 343.
The right of Congress to tax undivided profits cannot
be destroyed by the issuance of stock certificates to rep-
resent them; and, since the certificates of stock in this case
represent earnings of the corporation accrued subsequently
to March 1, 1913, they are clearly made taxable as in-
come by the Act of 1916, c. 463, 39 Stat. 756. Peabody
v. Eianer, 247 U. S. 347; Bailey v. Railroad Co., 22 Wall.
604, 635; Swan Brewery Co., Ltd., v. Rex, [1914] A. C.
231, 234-236.
Towne v. Eianer, 245 U. S. 418, does not control this .
case. (1) It merely decides that the stock dividends then
before the court, paid out of earnings accrued prior to
March 1, 1913, were not income within the meaning of the
Act of 1913. Nothing said in the opinion can be construed
as challenging the power of Congress to tax, as the in-
come of stockholders, the profits of a corporation even
before they are divided, and much less to tax a certificate
of stock issued to represent such profits. (2) The most
that can be said of the opinion is that it holds that the
'term '^dividend*' in its ordinary acceptation does not in-
clude stock dividends, and that since the Act of 1913 used
the term "dividend " without qualification stock dividends
were not taxable under it. Gibbona v. Malum, 136 U. S. 549,
559, 560. (3) The Actof 1916, however, expressly taxes stock
dividends, and hence Towne v. Eianer is not controlling.
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EISNER V. MACX)MBEB. 191
189. Aigument for Plaintiff in Bnor.
The case of Lynch v. Hornby, 247 U. S. 339, holding
that cash dividends are to be treated as income for the
year in which received, whether paid out of earnings ac-
cruing before or after March 1, 1913, in view of the reasons
stated for the holding, would not have been inconsistent
with a holding that stock dividends were taxable when
repres^iting earnings accruing after March 1, 1913, but
not taxable when representing earnings accruing before
that, date.
But whether such holdings would have been inconsist-
ent or not, the holding in Lynch v. Homby is not con-
trolling in this case, since the Act of 1916 makes it plain
that dividends, whether paid in cash or stock, are to be
taxed only when they represent earnings accruing after
March 1, 1913.
While Gibbons v. Mahon, supra, holds that as between
a life tenant and a remainderman stock dividends are not
income, that case arose in the District of Columbia, in-
volves no federal question, and is not controlling in similar
cases arising in the state courts. As a matter of fact, most
of the state courts have adopted a different ruling and
hold that stock dividends are income. In the Act of 1916,
therefore, Congress was clearly within its power when it
declared that by '^ dividends" it meant either cash or
stock dividends in accordance with the meaning of the
term as imderstood and construed by the cotu1;s of most
oftheStates. PritcfvUtv.Nashtnlle Trust Co., 96Termea8ee,
472; Thomas v. Oregg, 78 Maryland, 545 ; McLouth v. Hunt,
154 N. Y. 179; WiU of Pabst, 146 Wisconsin, 330; Lord v.
Brooks, 52 N. H. 72; Hite v. Hite, 93 Kentucky, 257;
Moss's Appeal, 83 Pa. St. 264; Paris v. Paris, 10 Ves. Jr.
184; Tax Commissioner v. Putnam, 227 Massachusetts,
522; Matter of Osborne, 209 N. Y. 450; Goodwin v. Mo-
Gaughey, 108 Minnesota, 248.
The ultimate object of corporate business is gain to the
stockholders. This gain always and necessarily first ap-
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192 OCTOBER TERMi 1919.
Aigument for Plaintiff in Error. 262 U.S.
pears in the shape of undivided profits which are held in
trust for them. When, later, dividends are declared, the
cash or stock received by a stockholder is the same gain
converted into a concrete form for the convenient pay-
ment, transfer, or definite assignment to him of his share
of the previously undivided profits.
The Government is under no delusions as to the nature
of a stock dividend, or as to what it accomplishes. It
serves to readjust the evidence of ownership by which the
stockholder previously held his share of both capital and
undivided profits. His share of profits is invested for
him in the stock of the company. The profits are segre-
gated from his former capital and he has a separate certif-
icate representing his invested profits or gains. It is, of
course, conceded that this transaction does not, of itself,
make the stockholder richer than he was before. The
Government readily agrees that there has been a mere
change in form of that which ab'eady belonged to the stock-'
holder and that what was not income before is not income
after a stock dividend. But this contention of defendant
in error proves too much and destroys her case. Her share
of undivided profits which has, by undergoing a mere
change of form, become 198 shares of stock, was itself
income within the power of Congress to tax. Unless its
change of form destroyed its previous character it was still
income. It is drfendant in error and not the Government
who must rely upon the change of form for Buccess in this
case. The Government claims the right to tax gains when
wearing a new dress only when they were taxable in their
old dress. The defendant in error's contention cannot
succeed unless the new dress destroys the power to tax
which existed before it was put on.
So far as what they serve to transfer or assign to stock-
holders is concerned, there are but two points of difference
between cash dividends and stock dividends. By a cash
dividend, a corporation transfers to a stockholder his
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EISNER V. MACOMBER. 103
189. Afgament for Plaintiff in Enor.
share of corporate earnings in money, while, in the case
of a stock dividend, it first invests the eamingp in its busi-
ness and then issues to eadi stockholder new shares of
stock of the same par value as his share of the earnings or,
to use other words, invests each stockholder's share of the
earnings in its own stock at par and delivers to him the
stock so purchased. In either case, he simply gets, in a
concrete form, the actual gains he has derived from his
invested c^>ital.
The other point of difference is that a cash dividend
may serve either to distribute profits or return capital. A
stock dividend, on the other hand, never contemplates a
reduction in capital but, on the contrary, necessarily im-
plies an increase in capital to be represented by the new
shares. It can never, therefore, serve to return capital,
but that which, in the form of new stock, it assigns to each
stockholder, is always a share of corporate earnings or
gains. In other woitls, a cash dividend may or may not
distribute gains, but a stock dividend cannot, under eaxy
circumstances, distribute, assign, or transfer anything
else.
If the constitutional power exists to tax corporate earn-
ings when th^ are passed to the stockholder by means
of a cash dividend, no reason is perceived why tiie same
ixywer does not exist to tax the same earnings when they
are passed to him, in an equally concrete form, by means
of a stock dividend.
Stock issued as a dividend is property in every sense
that any other thing of value is property.
The Act of 1916 taxes gains derived from capital in-
vested in corporate stocks, that is, shares of corporate
gains or profits. It does not tax dividends per ae but
merely uses them to indicate the form in which such gains
shall be taxed and to mark the time when the tax shall be
collected. And, in the case of stock dividends, it uses the
stock issued to measure the amount of the gains.
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104 OCTOBER TERM, 191%
Aigument for Defendant in Error. 252 U. 8.
The substance of the Act of 1916 is that no corporate
earnings are taxed as distributed gains which might not
have been taxed as undivided profits when they accrued,
and all such earnings which might have been taxed as un-
divided profits are taxed when distributed.
Before a dividend, one certificate is the evidence oi a
stockholders ownership of a share of capital and also a
share of profits. When he receives a cash dividend the
value of his certificate is reduced and the money received
measures the gain which his investment has yielded.
When he receives a stock dividend, the par value of his
new certificate measures his gains. As the fruit or result
of his investment, somethiii^ of value, which is distinct
from his original capital and distinct from the corporar
tion's ownership of its assets, has come to him.
The fact that a stockholder is no richer immediately
after than immediately before a stock dividend is wholly
unimportant. Neither is he made richer by a cash divi-
dend.
The important fact is that, assuming the profits have
been earned since March 1, 1913, he has, in either case,
become richer since that date through the earnings of his
invested capital. Congress has seen fit to say that these
earnings may accumulate free from tax until they are de-
livered to him either as cash or in stock. His gain comes,
not from the declaration of a dividend of any kind, but
from what his capital has earned. The only effect of the
dividend is to fix the date upon which, under the law, his
share of corporate earnings, previously accrued, becomes
taxable.
Mr. Charles E. Hughes, with whopi Mr. Gearffe Welwood
Murray was on the briefs, for defendant in error:
The tax in question is not laid with respect to the tax-
payer's interest in undivided corporate profits as constitu-
ting income to the taxpayer, or upon the *' stock dividend"
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EISNER V. MACOMBER. 195
180. Argument for Defendant in Erot.
as the f onn or dress in which a previous gain or income to
the taxpayer appears. The tax is laid upon the ''stock
dividend'' as constituting income in itsdf.
Undivided corporate profits are not income to the stock-
holder. It is of the essence of income that it should be
realized. Potentiality is not enough. Book entries or
opinions of increase are not income. Income necessarily
implies s^aration and realization. The increase of the
forest is not income until it is cut. The increase in the
value of lands due to the growth and prosperity of the
community is not income imtil it is realized. Wh^re in-
vestments are concerned, there is no income until there has
been a separate, realized gain. When a corporation earns
profits, it recdves money over the amount of its expendi-
tures. The money belongs to the corporation; the profits
are the property of the corporation. If the corporation
distributes its earnings in dividends, properly so-called,
that is, in money, or in prop«*ty in specie, the stockholder
has realized a gain and that gain is income. The shar&>
holder has simply his share, his interest, in the corporate
enterprise. The corporation must, of course, pay its in-
come tax upon its profits, but there is no income to the
shareholder unless he receives it. His share interest is a
''capital" interest.
This distinction is not a form or technicality. It is a
vital distinction inherent in corporate organization. The
interest of the shareholder is a distinct interest. The
profits of the corporation are not his profits. This dis-
tinction between tiie title of a corporation and the interest
of its shareholders in the property of the corporation, in-
cluding its earnings, has been authoritatively established
by two lines of decisions of this coiurt in cases involving
the power of taxation:
(1) Van AUen v. The Assessors, 3 Wall. 573, 684; People
V. Comndssumere, 4 Wall. 244; Bradley v. People, 4 Wall.
450; National Bank v. Commonwealth, 9 Wall. 353, 358,
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196 CXTTOBER TERM, 1919.
Argoment for Defendant in Enor. 252 U. 8,
369; Owemhoro National Bank v. OwembarOf 173 IT. S. 664,
680; EvansmUe Bank v. Brittan, 105 U. S. 322; Cleveland
Trust Co. V. Lander J 184 U. S. Ill; Home Savings Bank.v.
Des Moines, 205 U. S. 503; Rogers v. Hennepin County,
240 U. S. 184.
(2) Bank of Commerce v. Tennessee, 161 U. S. 134, 146;
SheXby County v. Union & Planters' Bank, 161 U. S. 149,
163-154; Wright v. Georgia R. R. & Banking Co., 216 U.
S. 420, 425; Farrington v. Tennessee, 95 U. S. 679; Sturges
V. Carter, 114 U. S. 511; Tennessee v. Whiiworth, 117 U.
S. 129; New Orleans v. Houston, 119 U. S. 265; New Or-
leans V. CiHeens' Bank, 167 U. S. 371; Powers v. Detroit,
Grand Haven Ac. Ry. Co., 201 U. S. 543.
When the question of the nature of the shareholder's
interest in undivided profits came before this court in
GMons V. Mahon, 136 U. S. 549, the question was carefully
considei-ed and explicitly determined. The court pointed
out the distinction between the money earned by the cor-
poration and the shareholder's income, and ruled ex-
pressly that the interest of the shareholder in the accumu-
lated earnings of the corporation, as a part of his share
interest, was capital and not income, so long as the earn-
ings were held and invested by the corporation as a part
of its corporate property. See Towns v. Eisner, 245 U.
S. 418.
The case of Collector v. Hubbard, 12 Wall. 1, arose under
a provision that gains and profits of certain companies
shoidd be included in estimating the annual gains, profits
or income of any person entitled to the same, whether
divided or otherwise. The object was to insure the pay-
ment of the tax upon the earnings of the corporation (see
Gibbons v. Mahon, 136 U. S. 549, 560). It was a crude
method of reaching the corporate eamingB and was the
only tax imposed with respect to those earnings. A
shareholder was to be taxed upon the increment supposed
to have been added to the value of his share by his pro-
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EISNER r. MACOMBER, 197
189. Aigument for Defendant in Error.
portionate interest in the undivided profits. This, as a
matter of Statutory construction, is clear enough. But it
by no means. follows that this increment was income to
the sharehold^, when it becomes necessary to distinguish
between a tax on income and a direct tax on the capital
investment.
The Hvbbard Ca»e was dealing with the mere fact c>f
the increment and did not deal with its nature, as the
court in the Gibbana Case was called upon to deal. The
reason why the court in the Hubbard Case was not called
upon to define the nature of the increment, beyond tlie
fact that it was property, is apparent from the absence of
any controversy over a constitutional question, and frotn
the opinion entertained at the time with respect to what
was a direct and what was an indirect tax und^ the
Federal Constitution; accepting the view then enter-
tained of direct and indirect taxes, the decision was
xmassailable.
It was not necessary for Mr. Justice Clifford, in the ab-
sence of the debate which about twenty-^five years later
took place in PoUodc v. Farmers^ Loan & Trust Co., 157
U. S. 429; 158 U. S. 601, to go further. When, however,
the court had occasion to deal with the precise question,
in Gibbons v. Mahon, it stated its conclusion emphatically,
and without the slightest reservation, that whatever in-
crement there was, through undivided profits held and
invested by the corporation, to the share of the stock-
holder, was capital and not income. But the increment
in the Hvbbard Case was nothing but an accretion to cap-
ital. It was not a separated, realized gain. It was not
income. Hence, under the doctrine of the Pollock Case
and the doctrine now applicable to all cases where a cap-
ital interest is taxed, the tax could not validly be laid
except as an apportioned direct tax. [Bailey v. Railroad
Co., 22 Wall. 604, and recent cases cited by the Govern-
ment, distinguished.]
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196 OCTOBER TERM, 1919.
Aigument of amid curie* 252 U. 8.
Income is the gain, come to fruition, from capital, from
labor, or from both combined. This is sound doctrine
both in law and in economics. Income of a corporation
is not income of a shareholder until distributed. A " stock
dividend'' is not income. It does not constitute a distri-
bution of anything; it is a mere readjustment of capital.
Strattan'a Independence v. Hawbert, 231 U. S. 399, 415;
Doyle V. MitcheU Bros. Co., 247 XJ. S. 179, 185; Lynch v.
Hornby, 247 U. S. 339, 343; Lynch v. Turrish, 247 U. S.
221, 231; Commissioners of Iniand Revenue v. Blott [re-
ported in the London Times of July 25, 1919]; Seligman,
Income Tax, p. 19; "The Economic Nature of the Stock
Dividend," by Fairchild, Bulletin of National Tax Assn.,
vol. Ill, No. 7, April, 1918, p. 163; Seligman, "Are Stock
Dividends Income," American Economic Review, vol.
IX, No. 3, p. 517; Peobody v. Eisner, 247 U. S. 347;
Towne v. Eisner, 245 U. S. 418, 426; Union Trust Co. v.
Coleman, 126 N. Y. 433, 438.
The tax in question is an income tax and cannot be
sustained as anything else.
Mr. George W. Wickersham and Mr. Charles Robinson
Smith, by leave of court, filed a brief as amid curice:
The principle laid down by this court in two well-con-
sidered cases (Gibbons v. Mahon, 136 U. S. 549, and
Toume v. Eisner, 245 U. S. 418), that stock dividends rep-
resent capital and do not constitute income is based on
sound economic reasoning.
Although Collector v. Hubbard, 12 Wall. 1, is plainly
distinguishable from the case at bar, it is inconsistent both
with other and later rulings of this court and with sound
economics. It tends to block the way to a consistent, har-
monious and logical system of income taxation and it
should be expressly overruled. As upholding a tax on
property except by apportionment under Art. I, § 2, of the
C!onstitution, it has been overruled by Pollock v. Farmers'
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EISNER V. MACOMBER. 190
189. Opinion of the Court. .
Loan (J^Trual Co., 157 U.S. 429; 158 U.S. 601. Insofar
as it assumes an equivalency between the property and
the income of the corporation and the shares of stock in
the names of the stockholders for taxation purposes, it
has been implicitly overruled by a long series of authorities
in this court. The suggestion that this court has in other
cases cited CcUectar v. Hubbard or its principle with
approval except upon altogether minor points is er-
roneous.
The stock dividend is in reality not a dividend at aU.
It is a m^re certified expression of a^ undivided surplus
and its capitalization. Whatsoever gain there may be in
dther case to the stockholder is a capital gain. Capital
gains (being mere increases in valuation) are not income
until realized. The gains that come with stock dividends
when stock is sold are realized capital guns — ^the same in
natiu-e and similarly taxable as those gains that are made
with any stock that is sold at an advance. Inasmuch as
undivided corporate eamingB cannot be taxed as income
against the stockholder — so the stock certificates issued
merely to represent these may not be so taxed, until the
gain be realized in some form by sale.
Mb. Justice Pitnbt ddivered the opinion of the
court.
This case presents the question whether, by virtue of
the Sixteenth Amendment, Ck)ngre8s has the power to
tax, as income of the stockholder and without apportion-
ment, a stock dividend made lawfully and in good faith
against profits accumulated by the corporation since
March 1, 1913.
It arises imder the Revenue Act of September 8, 1916,
c. 463, 39 Stat. 756, et 9eq., which, in our opinion (notwith-
standing a contention of the Government that will be
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200 OCTOBER TERM, 1919.
Opinion of the Court. 252 U. 8.
notioed), plainly evinceB the purpose of Coogrees to tax
stock dividends as income.^
The facts, in outline, are as follows:
On January 1, 1916, the Standard Oil Company of
Califomia, a corporation of that State, out of an author-
ised capital stock of $100,000,000, had shares of stock
outstanding, par value $100 each, amounting in round
fig*ires to $50,000,000. In addition, it had surplus and
undivided profits invested in plant, property, and business
and required for the purposes of the corporation, amount-
ing to about $45,000,000, of which about $20,000,000 had
been earned prior to March 1, 1913, the balance thereafter.
In January, 1916, in order to readjust the capitalization,
the board of directors decided to issue additional shares
sufficient to constitute a stock dividend of 50 per cent, of
the outstanding stock, and to transfer from surplus ac-
count to capital stock account an amount equivident to
such Jssue. Appropriate resolutions were adopted, an
amoimt equivalent to the par value of the proposed new
stock was transferred accordingly, and the new stock
duly issued against it and divided among the stockholders.
Defendant in error, being the owner of 2,200 shares of
the old stock, received certificates for 1,100 additional
» TITLE I.~INCOME TAX.
PART I. — ON INDIVIDUALS.
Sec. 2 (a)'That, subject only to such exemptions and deductions as
are hereinafter allowed, the net income of a taxable person shall include
g^UDS, profits, and income derived . . . , also from interest, rent,
dividends, securities, or the transaction iA any business carried on for
gain or profit, or gains or profits and income derived from any source
whatever: Pnmded, That the term "dividends" as used in this title
shall beheld to mean any distribution made or ordered to be made by a
corporation, . . . out of its earnings or profits accrued since
March first, nineteen hundred and thirteen, and payable to its share-
holders, whether in cash or in stock of the corporation, . . which
stock dividend shall be considered income, to the amount of its cash
value.
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EISNER V. MACOMBER. 301
180. Opinion of the Ckmrt.
8hare6; of which 18.07 per cent., or 198.77 shares, par
value SI9377, were treated as representing surplus earned
between March 1, 1913; and January 1, 1916. She was
called upon to pay, and did pay under protest, a tax un-
posed under the Revenue Act of 1916, based upon a sup-
posed income of $19,877 because of the new shares; and
an appeal to the Commissioner of Internal Revenue having
been disallowed, she brought action against the Collector
to recover the tax. In her complaint she allied the above
facts, and contended that in imposing such a tax the Rev-
enue Act of 1916 violated Art. I, § 2, cL 3, and Art. I, § 9,
d. 4, of the Constitution of the United States, reqijuring
direct taxes to be apportioned according to population,
and that the stock dividend was not income within the
meaning of the Sixteenth Amendment. A general de-
murrer to the complaint was overruled upon the authoritj^
of Taiwne v. Eisner ^ 245 tJ. S. 418; and, defendant having
failed to plead further, final judgment went against him.
To review it, the present writ of error is prosecuted.
The case was argued at the last term, and reargued at
the present term, both orally and by additional briefs.
We are constrained to hold that the judgment of the Dis-
trict Court must be afSrmed: First, because the question
at issue is controlled by Towne v. Eisner ^ supra; secondly,
because a reexamination of the question, with the addi-
tional light thrown upon it by elaborate arguments, has
confirmed the view that the underlying ground of that de-
cision is sound, that it disposes of the question here pre-
sented, and that other fundamental consid^ations lead
to the same result.
In Towne v. Eisner; the question was whether a stock
dividend made in 1914 against surplus earned prior to
Jantiary 1, 1913, was taxable against the stockholder imder
the Act of October 3, 1913, c. 16, 38 Stat. 114, 166, which
provided (§B, p. 167) that net income should include
''dividends," and also "gains or profits and income de-
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202 OCTOBER TERM, UHS.
OiMiiioQoftheOoiirt 9BU.&
rived bom any source whatever." Suit having been
farougjlit I7 a stockholder to recover the tax anwwnfjd
against him by reason of the dividend, the District Ckmt
sustained a dionurr^ to the comfriaint. 242 Fed. Bq>.
702. The court treated the construction of the act as in-
separable from the interptetaticHi of the Sixteenth Ameodr
mait; and, having refened to PcOoA v. Farmer^ Loan A
Trust Co., 158 U. S. 601, and quoted the Amendment^
I»oceeded very prc^>eriy to say (p. 701): ''It is manifest
that the stock dividend in question cannot be readied t^
the Income Tax Act, and coukl not, even thou^ CongreBS
expressly declared it to be taxable as income, unfess it is
in fact income/' It declined, however, to accede to the
contention that in (?tb6ou v. If oAon, 136 n. S. 549, ''stock
dividends'' had received a definition sufficiently dear to
be controlling, treated the language of this court in that
case as obiter didum in reqiect of the matter then before
it (p. 706), and emmined the questioil as rto nan, witik
the result stated. When the case came here, after ovemdr
ling a motion to dismiss made I7 the Government upon
the ground that the ofoiy question involved was the con-
struction of the statute and not its constitutionality, we
dealt upon the merits with the question of construction
only, but disposed of it upon consideration of the essential
nakure of a stock dividend, disrqjarding the fact that the
one in question was based upon surplus eamings that ac-
crued before the Sixteenth Amendm^it took effect. Not
onlty so, but we rejected the veasomng of the District
Court, saying (245 U. S. 426): ''Notwithstanding the
thoui^tful discussion that the case received below we
cannot doubt that the dividend was capital as well for the
purposes of the Income Tax Law as for distribution be-
tween tenant for life and remainderman. What was said
by this court upon the latter question is equally true for
the form^. 'A stock dividend really takes nothing from
the property of the corporation, and adds nothing to the
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EISNER V. MACOMBER. 203
180. Opinion of the Court.
interests of the shareholders. Its property is not dimin-
ished, and their interests are not increased. . . . The
proportional interest of each shareholder remains the same.
The only change is in the evidence which represents that
interest, the new shares and the original shares together
representing the same proportional interest that the orig-
inal shares represented before the issue of the new ones.'
GSthms V. Mdhmiy 136 U. S. 549, 559, 560. In short, the
corporation is no poorer and the stockholder is no richer
than they were before. Logan County v. United States,
169 U. S. 255, 261. If the plaintiff gained any small ad-
vantage by the change, it certainly was not an advantage
of $417,450, the sum upon which he was taxed. . . .
What has hapi)ened is that the plaintiff's old certificates
have been split up in effect and have diQiinished in value
to the ejctent of tiie value of the new."
This language aptly answered not only the reasoning of
the District Court but the argument of the Solicitor Gen-
eral in this court, which discussed the essential nature of
a stock dividend. And if, for the reasons thtcs expressed,
such a dividend is not to be regarded as "income" or
"dividends" within the meaning of the Act of 1913, we
are imable to see how it can be brought within the mean-
ing of "incomes" in the Sixteenth Amendment; it being
very clear that Congress intended in that act to exert its
power to the extent permitted by the Amendment. In
Towne v. Eisner it was not contended that any construc-
tion of the statute could make itoiarrower than the con-
stitutional grant; rather the contrary.
The fact that the dividend was charged against profits
earned before the Act of 1913 took effect, even before the
Amendment was adopted, was neither relied upon nor
alluded to in our consideration of the merits in that case.
Not only so, but had we considered that a stock dividend
constituted income in any true sense, it would have been
held taxable under the Act of 1913 notwithstanding it was
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201 OCTOBER TERM, 1919.
Opinion of the Court. 262 U. 8.
based upon profits earned before the Amendment. We
ruled at the same term, in Lynch v. Hornby^ 247 U. S. 339,
that a cash dividend ejctraordinary in amount, and in
Peabody v. Eisner, 247 U. S. 347, that a dividend paid in
stock of another company, were taxable as income al-
though based upon earnings that accrued before adoption
of the Amendment. In the former case, concerning ''cor-
porate profits that accumulated before the Act took
effect,'' we declared (pp. 343-344) : ''Just as we deem the
legislative intent manifest to tax the stockholder with re-
spect to such accumulations only if and when, and to the
extent that, his interest in them comes to fruition as in-
come, that is, in dividends declared, so we can perceive no
constitutional obstacle that stands in the way of carrying
out this intent when dividends are declared out of a pre-
existing surplus. . . . Clongress was at liberty imder
the Amendment to tax as income, without apportion-
ment, everything that became income, in the ordinary
sense of the word, after the adoption of the Amendment,
including dividends received in the ordinary course by a
stockholder from a corporation, even though they were
extraordinary in amount and might appear upon analy-
sis to beamere realization in possession of an inchoate and
contingent interest that the stockholder had in a surplus
of corporate assets previously existing.'' In Peabody v.
Eimer (pp. 349-350), we observed that the decision of the
District Court in Towne v. Eisner had been reversed "only
upon the groimd that it related to a stock dividend which
in fact took nothing from the property of the corporation
and added nothing to the interest of the shareholder, but
merely changed the evidence which represented that in-
terest;" and we distinguished the. Peabody Case from the
Towne Case upon the ground that "the dividend of Balti-
more & Ohio shares was not a stock dividend but a distribu-
tion in specie of a portion of the assets of the Union Pacific."
Therefore, Towne v. Eisner cannot be regarded as turn-
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EISNER V. MAOOMBER. 205
180. Opinion of the Court.
mgupon the point that the surplus accrued to the company
before the act took effect and before adoption of the
Amendment. And what we have quoted from the opinion
in that case cannot be regarded as obiter dictum^ it hav-
ing furnished the entire basis for the conclusion reached.
We adhere to the view then expressed, and might rest the
present case there; not because that case in terms decided
the constitutional question, for it did not; but because
the conclusion there reached as to the essential nature of
a stock dividend necessarily jnrevents its being regarded
as income in any true sense.
Nevertheless, in view of the importance of the matter,
and the fact that Congress in the Revenue Act of 1916
declared (39 Stat. 757) that a ''stock dividend shall be
considered income, to the amount of its cash value," we
will deal at lengtii with the constitutional question, in-
cidentally testing the soundness of our previous conclusion.
The Sixteenth Amendment must be construed in con-
nection with the taxing clauses of the original Constitu-
tion and the effect attributed to them before the Amend-
ment was adopted. In PcUodc v. Farmers^ Loan & TtubI
Co., 158 IT. S. 601, under the Act of August 27, 1894, c. 349,
§ 27, 28 Stat. 509, 553, it was hdd that taxes upon rents
and profits of real estate and upon returns from invest-
ments of personal property were in effect direct taxes ipon
the property from which such income arose, imposed by
reason of ownership; and that Congress could not inpose
such taxes without apportioning them among the States
according to population, as required by Art. I, § 2, 31. 3,
and § 9, cl. 4, of the original Constitution.
Afterwards, and evid^itiy in recognition of the lunitsr
tion upon the taxing power of Congress thus determined,
the Sixteenth Am^idment was adopted, in words lucidly
expressing the object to be accomplished: ''The Congress
shall have i)ower to lay and collect taxes on incomes, from
whatever source derived, without apportionment among
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ao6 ocrroBER term, ma
Opinion of the Court. 252 U. &
the several States, and without regard to any census or
enumeration/' As repeatedly held, this did not extend
the taxing power to new subjects, but merely removed the
necessity which otherwise might exist for an apportion-
ment among the States of taxes laid on income* Bruahr
aber v. Union Pacific R. R. Co., 240 U. 8. 1, 17-19; Stanton
V. BaUic Mining Co., 240 U. S- 103, 112 et «eg.; Peck A
Co. V. Lam, 247 U. S. 165, 172-173.
A proper regard for its genesis, as well as its very clear
language, requires also that this Amendment shall not be
extended by loose construction, so as to repeal or modify,
except as applied to income, those provisions of the Con-
stitution that require an apportionment according to poi>-
ulation for direct taxes upon property, real and personal.
This limitation still has an appropriate and important
fimction, and is not to be overridden by Congress or dis-
regarded by the courts.
In order, therefore, that the clauses cited from Article I
of the Constitution may have proper force and ^ect,
save only as modified by the Amendment, and that the
latter also may have projier effect, it becomes essential
to distinguish between what is and what is not 'income,''
as the term is there used; and to apply the distinction, as
cases arise, according to truth and substance, without re-
gard to form. Congress cannot by any definition it may
adopt conclude the matter, since it cannot by legislation
alter the Constitution, from which alone it derives its
power to legislate, and within whose limitations alone that
power can be lawfully exercised.
The fimdamental relation of "capital" to ''income"
has been much discussed by economists, the former bdng
likened to the tree or the land, the latter to the fruit or
the crop; the former depicted as a reservoir supplied from
springs, the latter as the outlet stream, to be measured
by its flow during a i)eriod of time. For the present pui^
pose we require only a clear definition of the term ''in-
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EISNER V. MACX)MBER. 207
189. Opinion of the Court.
oome/' %A used in oommon speech, in order to determine
its meaning in the Amen^ent; and, having formed
also a oonrect judgment as to the nature of a stock
dividend, we. shall find it eaqr to decide the matter at
issue.
After examining dictionaries in common use (Bouv.
L. D.; Standard Diet.; Webster's Intemat. Diet.; Century
Diet.), we find little to add to the succinct definition
adopted in two cases arising under the Corporation Tax
Act of 1909 (Stratum' 8 Independence v. Hmbert, 231 U. 3.
399, 415; Diyyle v. MUchea Bras. Co., 247 U. S. 179, 186)—
''Income may be defined as the gain derived from capital,
from labor, or from both combined," provided it be imder-
stood to include profit gained through a sale or conversion
of capital assets, to which it was applied in the Doyle Case
(pp. 183, 186).
Brief as it is, it indicates the characteristic and dis-
tinguishing attribute of income essential for a coirect
solution of the present controversy. The Government, al-
tfaoug^i basing its argument ui)on the definition as quoted,
placed chief emphasis upon the word ''gain,'' which was
extended to include a variety of meanings; while the sig-
nificance of the next three words was either overlooked
or misconceived. '* Derived— from— capital'^- — ''ihegain —
derived— frorif^—capitalj'* etc. Here we have the essential
matter: not a gain accruing to capital, not a growth or tn-
crement of value in the investment; but a gain, a profit,
something of exdiangeable value proceeding from the
property, severed from the capital however invested or
employed, and coming in, bang ^^derived,'' that is, received
or dnxum hy the recipient (the taxpayer) for his eeparaie
use, bwefit and disposal; — that is income derived from
property. Nothing else answers the description.
The same fundamental conception is clearly set forth
in the Sixteenth Amendment — ^"incomes, from whatever
eowree derived*' — ^the essential thouc^t being expressed
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208 OCTOBER TERM, 1910.
Opimon of the Court. 252 U. &
with a conciseness and lucidity entirely in harmony with
the form and style of the Constitution.
Can a stock dividend, considering its essential charact^,
be brought within the definition? To answer this, r^ard
must be had to the nature of a corporation and the stock*
holder's relation to it. We refer, of course, to a corpora-
tion such as the one in the case at bar, organized for profit,
and having a capital stock divided into shares to which a
nominal or par value is attributed.
Certainly the interest of the stockholder is a capital
interest, and his certificates of stock are but the evidence
of it. They state the number of shares to which he is en-
titled and indicate their par value and how the stock may
be transferred. They show that he or his assignors, imr
mediate or remote, have contributed capital to the ent^-
prise, that he is entitled to a corresponding interest pro-
portionate to the whole, entitled to have the propei'ty and
business of the company devoted during the corporate
existence to attainment of the common objects, entitled
to vote at stockholders' meetings, to receive dividends
out of the corporation's profits if and when declared, and,
in the event of liquidation, to receive a proportionate
share of the net assets, if any, remaining after payix^ cred-
itors. Short of liquidation, or until dividend declared,
he has no right to withdraw any part of either capital or
profits from the common enterprise; on the contrary, his
interest pertains not to any part, divisible or indivisible,
but to the entire assets, business, and affairs of the comr
pany. Nor is it the interest of an owner in the assets
themsdves, since the corporation has full title, legal and
equitable, to the whole. The stockholder has the right
to have the assets employed in the enterprise, with the
incidental rights mentioned; but, as stockholder, he has
no right to withdraw, only the right to persist, subject
to the risks of the enterprise, and looking only to divi-
dends for his return. If he deeores to dissociate himself
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EISNER V. MACOMBER. 209
189* Opinkm of the Court
from the compaay he can do so only by dispoedng of his
stock.
For bookkeeping purposes, the company acknowledges
a liability in form to the stockholders equivalent to the
aggr^ate par value of their stock, evidenced by a ''cap>
ital stock accoimt/' If profits have been made and not
divided they create additional bookkeeping liabilities
under the head of ^'profit and loss/' '^undivided profits/'
''surphis account/' or the like. None of these, however,
gives to the stocldiolders as a body, much less to aiiy one
of them, either a claim against the going concern for any
particular sum of mon^, or a right to any particular por-
tion of the assets or any share in them unless or until the
directors conclude that dividends shall be made and a
part of the company's assets s^regated from the common
fimd for the purpose. The dividend normally is payable
in money, under exceptional circumstances in some other
divisible property; and when so paid, then only (excluding,
of course, a ix)ssible advantageous sale of his stock or wind-
ing-4ip of the company) does the stockholder realise a
profit or gain which becomes his separate proi)erty, and
thus derive income from the capital that he or his prede-
cessor has invested.
In the present case, the corporation had surplus and
undivided profits invested in plant, property, and busi-
ness, and required for the purposes of the corporation,
amounting to about $45,000,000, in addition to outstand*
ing capital stock of $50,000,000. In this the case is not
extraordinary. The profits of a corporation, as th^ ap-
pear upon the balance sheet at the end of the year, need
not bein the form of money on hand in excess of what is
required to meet current liabilities and finance current
cq>erations of the company. Of ten, especially in a growing
business, only a part, sometimes a small part, of the year's
profits is in property capable of division; the remainder
having been absorbed in the acquiedtion of increased plants
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210 OCTOBER TERM, 1919.
Opinion of the Court 252 U. &
equipment, stock in trade, or accounts receivable, or in
decrease of outstanding liabilities. When only a part is
available for dividends, the balance of the year's profits
is carried to the credit of undivided profits, or surplus, or
some other account having like significance. If thereafter
the company finds itself in funds beyond current needs
it may declare dividends out of such surplus or undivided
profits; otherwise it may go on for years conducting a
successful business, but requiring more and more working
capital because of the extension of its operations, and
therefore unable to declare dividends approximating the
amount of its profits. Thus the surplus may increase
imtil it equals or even exceeds the par value of the out-
standing capital stock. This may be adjusted upon the
books in the mode adopted in the case at bar — by declar-
ing a ''stock dividend." This, however, is no more than
a book adjustment, in essence not a dividend but rather
the opposite; no part of the assets of the company is sep-
arated from the common fimd, nothing distributed except
paper certificates that evidence an antecedent increase
in the value of the stockholder's capital interest resulting
from an accumulation of profits by the company, but
profits so far absorbed in the business as to render it im-
practicable to separate them for withdrawal and distribu-
tion. In order to make the adjustment, a charge is made
against surplus accotmt with corresponding credit to cap-
ital stock accoimt, equal to the proposed ''dividend''; the
new stock is issued against this and the certificates de-
livered to the existing stockholders in proportion to their
previous holdings. This, however, is merely bookkeep-
ing that does not affect the aggr^ate assets of the cor-
poration or its outstanding liabilities; it affects only the
form, not the essence, of the "liability" acknowledged by
the corporation to its own shareholders, and this through
a readjustment of accoimts on one side of the balance
sheet only, increasing "capital stock" at the expense of
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EISNER V. MAGOMBER. 211
189. Opinion of the Court
''surplus^'; it does not alter the pre&dsting proportionate
interest pf any stockholder or increase the intrinsic value of
his holding or of the aggregate iioldings of the other stock-
holders as they stood before. The new certificates simply
increase the number of the shares, with consequent dilu-
tion of the value of each share.
A ''stock dividaxd" shows that the company's accumu-
lated profits have been capitalized, instead of distributed
to the stockholders or retained as surplus available for
distribution in mon^ or in kind should opportunity offer.
Far from being a realization of profits of the stocldbolder,
it tends rath^ to postpone such realization, in that the
fund represented by the new stock has been transferred
from surplus to capital, and no longer is available for actual
distribution.
The essential and controlling fact is that the stockholder
has received nothing out of the company's assets for his
fil^parate use and benefit; on the contrary, every dollar of
his original investment, together with whatever accretions
and accumulations have resulted from employment of
his money and that of the other stockholders in the busi-
ness of the company, still r^oiains the property of the
company, and subject to business risks which may result
in wiping out the entire investment. Having r^^ard to
the very truth of the matter, to substance and not to form,
he has recdved nothing that answers the definition of in-
come within the meaning of the Sixteenth Amendment.
Being concerned only with the true character and effect
of such a dividend wbm lawfully made, we lay aside the
question whether in a particular case a stock dividend
may be authorized by the local law governing the corpora-
tion, or whether the capitalization of profits may be the
result of correct judgment and proper business policy on
the part of its management, and a due regard for the in-
terests of the stockholders. And we are considering the
taxability of bona fide stock dividends only.
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212 OCTOBER TERM, 1919. ^ - .^ - -
Opinion of the Court 252 U. 8.
We are clear that not only does a stock dividend reaUy
take nothing from the property of the corporation and
add nothing to that of the shareholder, but that the an-
tecedent accumulation of profits evidenced thereby,
while indicating that the shareholder is the richer be-
cause of an increase of his capital, at the same time
shows he has not realized or recdved any income in the
transaction.
It is said that a stockholder may sell the new shares ac-
quired in the stock dividend; and so he may, if he can find
a buyer. It is equally true that if he does sell, and in do-
ing so realizes a profit, such profit, like any other, is
income, and so far as it may have arisen since the Six-
teenth Amendment is taxable by Ck)ngress without ap-
portionment. The same would be true were he to sell
some of his original shares at a profit. But if a shardiolder
sells dividend stock he necessarily disposes of a part of
his capital interest, just as if he should sell a part of
his old stock, either before or after the dividend. What
hi) retains no longer entitles him to the same proportion
of futiu^ dividends as before the sale. His part in the
control of the company likewise is diminished. Thus, if
one holding $60,000 out of a total $100,000 of the capital
stDck of a corporation should receive in common with
other stockholders a 50 per cent, stock dividend, and
should sell his part, he thereby would be reduced from a
majority to a minority stockholder, having six-fifteenths
instead of six-tenths of the total stock outstanding. A
corresponding and proportionate decrease in capital in-
terest and in voting power would befall a minority holder
should he sell dividend stock; it being in the nature of
things impossible for one to dispose of any part of such
an issue without a proportionate disturbance of the dis-
tribution of the entire capital stock, and a like diminution
of the seller's comparative voting power — ^that *'right
preservative of rights" in the control of a corporation.
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EISNER V. MACOMBER. 213
188. Opinion of the Court
Yet, without seUing, the sharehold^, unless possessed of
other resources, has not the wherewithal to pay an in-
come tax upon the dividend stock. Nothing could more
clearly show that to tax a stock dividend is to tax a capital
increase, and not income, than this demonstration that
in the nature of things it requires conversion of capital in
order to pay the tax*
Throughout the argument of the Government, in a
variety of forms, runs the fundamental error already m^i-
tioned — a failure to appraise correctly the force of the
term '^income'' as used in the Sixteenth Amendment, or
at least to give practical ^ect to it. Thus, the Govern-
ment contends that the tax ^'is levied on income derived
from corporate earnings,'' when in truth the stockholder
has ''derived" nothing except paper certificates which,
so far as they have any effect, deny him present participa-
tion in such earnings. It contends that the tax may be
laid when earnings "are received by the stockholder,''
whereas he has received none; that the profits are ''di&>
tributed by means of a stock dividend," although a stock
dividend distributes no profits; that imder the Act of 1916
"the tax is on thd stockholder's share in corporate earn-
ings," when in truth a stockholder has no $uch share, and
receives none in a stock dividend; that "the profits are
s^r^ated from his former capital, and he has a separate
certificate representing his invested profits or gains,"
whereas ttxesre has been no segr^ation of profits, nor has
he any separate certificate representing a personal gain,
since the certificates, new and old, are alike in what th^
represent — a capital interest in the entire concerns of the
corporation^
We have no doubt of the power or duty of a court to
look throi^ the form of the corporation and determine
the question of the stockholder's right, in order to ascer-
tain whether he has received income taxable by Congress
without ai^rtionment. But, looking through the form,
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214 OCTOBER TERM, 1918.
OpinioQ of the Court. 252 U. 8.
we cannot disregard the essential truth disclosed; ignore
the substantial difference between corporation and stock-
holder; treat the entire organization as unreal; look upon
stockholders as partners, when they are not such; treat
them as having in equity a right to a partition of the cor-
porate assets, when they have none; and indulge the fic-
tion that they have received and realized a share of the
profits of the company which in truth they have neitlier
received nor realized. We must treat the corporation as
a substantial entity s^arate from the stockholder, not
only because such is the practical fact but because it is
only by recognizing such separateness that any dividend —
even one paid in money or property — can be r^arded as
income of the stockhold^. Did we regard corporation
and stockholders as altogether identical, there would be
no income except as the corporation acquired it; and
while this would be taxable against the corporation as in-
ccnne imder appropriate provisions of law, the individual
stockholders could not be separately and additionally
taxed with respect to th^ several shares even when di-
vided, since if there were entire identity between them
and the company they could not be regarded as receiving
anything from it, any more than if one's money were to
be removed from one pocket to another.
Conceding that the mere issue of a stock dividend
makes the recipient no richer than before, the Grovem-
ment nevertheless contends that the new certificates
measure the extent to which the gains accumulated by
Hie corporation have made him the richer. There are
two insuperable difficulties with this: In the first place, it
would depend upon how long he had held the stock whether
the stock dividend indicated the extent to which he had
been enriched by the operations of the company; unless
he had held it throughout such operations the measure
would not hold true. Secondly, and more important for
present purposes, enrichment through increase in value
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EISNER V. MAOOMBER. 215
180* Opinion of the Goiurt.
of capital investment is not income in any proper meaning
of the term.
The complaint contains averments respecting the mar-
ket prices of stock such as plaintiff held, based upon sales
before and after the stock dividend, tending to show
that the recdpt of the additional shares did not sub*
stantially change the market value of her entire hold-
ings. This tends to show that in this instance market
quotations reflected intrinsic values — a thing ihey do
not always do. But we r^jard the market prices of
the securities as an unsafe crit^on in an inquiry such
as the present, when the question must he, not what will
the thing sdl for, but what is it in truth and in essence.
It is said there is no difference in principle between a
simple stock dividend and a case where stockholders use
money received as cash dividends to piurchase additional
stock contemporaneously issued by the corporation. But
an actual cash dividend, with a real option to the stock-
holder either to keep the money for his own or to reinvest
it in new shares, would be as far removed as possible from
a true stock dividend, such as the one we have under con-
' sideration, where nothing of value is taken from the com-
pany's assets and transferred to the individual ownership
of the several stockholders and thereby subjected to their
disposal.
The Government's reliance \xpon the supposed analogy
between a dividend of the corporation's own shares and
one made l^ distributing shares owned l^ it in the stock
of another company, calls for no comment b^ond the
statement that the latter distributes assets of the com-
pany among the shareholders while the former does not;
and for no citation of authority except Pedbody v. Eisner^
247 U. 8. 347, 34»-350.
Two recent decisions, proceeding from courts of high
jurisdiction, are cited in support of the position of the
Government.
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216 OCTOBER TERM, 1919.
Opinion of the CkNirt. 252 U. 8.
Swan Brewery Co., Ltd., v. Rex, [1914] A. C. 231, arose
under the Dividend Duties Act of Western Australia^
which provided that ''dividend" should include "every
dividend, profit, advantage, or gain intended to be paid
or credited to or distributed among any members or di-
rectors of any company," except, etc. There was a stock
dividend, the new shares being allotted among the share-
holders pro rata; and the question was whether this was a
distribution of a dividend within the meaning of the act.
The Judicial Committee of the Privy C!ouncil sustained
the dividend duty upon the ground that, althou^ ''in
ordinary language the new shares would not be called a
dividend, nor would the allotment of them be a distribu-
tion of a dividend," yet, within the meaning of tlie act, such
new shares were an "advantage" to the recipients. Thero
being no constitutional restriction upon the action of the
lawmaking body, the case presented merely a question of
statutory construction, and manifestly the decision is not
a precedent for the guidance of this court when acting
under a duty to test an act of Congress by the limitations
of a written Constitution having superior force.
In Tax Commieeioner v. Putnam (1917), 227 Massar
chusetts, 522, it was held tiiat the 44th Amendment to
the constitution of Massachusetts, which conferred upon
the l^islature full power to tax incomes, "must be inter-
preted as including every item which by any reasonable
understanding can fairly be regarded as income" (pp. 626,
531); and that under it a stock dividend was taxable as
income, the court saying (p. 535): "In essence the thing
which has been done is to distribute a symbol representing
an accumulation of profits, which instead of being jiaid
out in cash is invested in the business, thus augtnimting
its durable assets. In this aspect of tiie case the substance
of the transaction is no different from what it woidd be
if a cash dividend had been declared with the privilege of
subscription to an equivalent amount of new shares."
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EISNER V. MACX)MBER. 217
180. Opinkm of the Ckmrt.
We cannot accept this reasoning. Evidently, in order to
give a sufficiently broad sweep to the new taxing provision,
it was deemed necessary to take the symbol for the sub-
stance, accumulation for distribution, capital accretion
for its opposite; while a case wh^re money is paid into the
hand of ilie stockholder with an option to buy new shares
with it, followed by acceptance of the option, was re-
garded as identical in substance with a case where the
stockholder receives no money and has no option. The
Massachusetts court was not under an obligatioUi like
the one which binds us, of applying a constitutional
' amoidment in the li^t of other constitutional provisions
that stand in the way of esctending it by construction.
Upon the second argument, the Government, recog-
nizing the force of the decision in Towne v. Eimer^ supra,
and virtually abandoning the contention that a stock
dividend increases the interest of the stockholder or otheiv
wise enriches him, insisted as an alternative that by the
true construction of the Act of 1916 the tax is imposed
not upon the stock di\'idend but rather upon the stock-
holder's share of the undivided profits previously accmnu-
lated by the cojporation; the tax being levied as a matter
of convenience at the time such profits become manifest
through the stock dividend. If so construed, would the
act be constitutional?
That Ck)ngress has power to tax shareholders upon
their property interests in the stock of corporations is
beyond question; and that such interest^ migiht be
valued in view of the condition of the company, inr
eluding its accumulated and undivided profits, is equally
clear. But that this would be taxatioQ of property
because of ownership, and hence would require appor-
tionment under the provisions of the Constitution, is
settled b^ond peradventure by previous decisions of
this court.
The Government relies upon Collector v. Hyhbard (1870),
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218 OCTOBER TERM, 191&
Opinion of the Court 262 U. 8.
12 Wall. 1, 17, which arose under § 117 of the Act of June
30, 1864, c. 173, 13 Stat. 223, 282, providing that ''the
gains and profits of all companies, whether incoii)orated or
partnership, other than the companies specified in this
section, shall be included in estimating the annual gains,
profits, or income of any person entitled to the same,
whether divided or otherwise/' The court held an in-
dividual taxable upon his proportion of the earnings of a
corporation althou^ not declared as dividends and air
though invested in assets not in their nature divisible.
Conceding that the stockholder for certain purposes had
no title prior to dividend declared, the court nevertheless
said (p. 18) : ''Grant all that, still it is true that the owner
of a share of stock in a corporation holds the share with
all its incidents, and that among those incidents is the right
to receive all future dividends, that is, his proportional
share of all profits not then divided. Profite are incident
to the share to which the owner at once becomes entitled
provided he remains a member of the corporation until a
dividend is made. Regarded as an incident to the shares,
undivided profits are property of the shardiolder, and
as such are the proper subject of sale, pit, or devise. Un-
divided profits invested in real estate, machinery, or raw
material for the purpose of being manufactured are in-
vestments in which the stockholders are interested, and
when such profits are actually appropriated to the pay-
ment of the debts of the corporation they serve to in-
crease the market value of the shares, whether held by
the original subscribers or by assignees." In so far as this
seems to uphold the right of Congress to tax without
apportionment a stockholder's interest in accumulated
earnings prior to dividend declared, it must be regarded
as overruled by PoUodc v. farmers* Loan & Trust Co.^ 168
U. S. 601, 627, 628, 637. Conceding Collector v. Hvbbard
was inconsistent with the doctrine of that case, because
it sustained a direct tax upon property not apportioned
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EISNER V. MACX)MBEIL 219
189. Holmes and Dat, JJ., dtSBentiDg.
among the States, the Government nevertheleBS insists
that tiie Sixteenth Amendment removed this obstacle, so
that now the Hubbard Case is authority for the power of
(Congress to levy a tax on the stockholder's share in the
accumulated profits of the corporation even before division
by the declaration of a dividend of any kind. Manifestly
this argument must he rejected, since the Amendment
applies to income only, and what is called the stockholder's
share in the accumulated profits of the company is capital,
not income. As we have pointed out, a stockholder has
no individual share in accumulated profits, nor in any par-
ticular part of the assets of the corporation, prior to divi-
dend declared.
Thus, from every point of view, we are brought irre-
sistibly to the conclusion that neither under the Six-
teenth Amendment nor otherwise has Congress power to
tax without apportionment a true stock dividend made
lawfully and in good faith, or the accumulated profits
behind it, as income of the stockholder. The Revenue
Act of 1916, in so far as it imposes a tax upon the stock-
holder because of such dividend, contravenes the pro-
visions of Article I, § 2, cl. 3, and Article I, § 9, cl. 4, of the
Constitution, and to this extent is invalid notwithstand-
ing the Sixteenth Amendment.
JudgmerU affirmed.
Mr. Justice Holmes, dissenting.
I think that Towne v. Eimer, 245 U. S. 418, was right
in its reasoning and result and that on sound principles
the stock dividend was not income. But it was clearly
intimated in that case that the construction of the statute
then before the Court might be different from that of the
Constitution. 245 U. S. 425. I think that the word ''in-
comes" in the Sixteenth Amendment should be read in
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220 OCTTOBER TERM, 1919.
Bhandsib and Clabxb, JJ., diSBoitiDg. 252 U. 8
"a sense most obvious to the common understanding at
the time of its adoption." Bishop v. Stale, 149 Indiana,
223, 230; State v. BuO&r, 70 Florida, 102, 133. For it was
for public adoption that it was proposed. McCvUoch v.
Maryland, 4 Wheat. 316, 407. The known purpose of
this Amendment was to get rid of nice questions as to
what migiht be direct taxes, and I cannot doubt that most
people not lawyers would suppose when they voted for
it that they put a question like the present to rest. I am
of opinion that the Amendment justifies the tax. See
Tax Cammimoner v. Putnam, 227 Massachusetts, 522,
532,533.
Mb. JuancB Day concurs in this opinion.
Mr. Jttbticb BBAin>iii8, dissenting, delivered the fol-*
lowing opinion, in which Mb. Justice Clabkb concurred.
Financiers, with the aid of lawyers, devised long ago
two different methods by which a corporation can, with-
out increasing its indebtedness, keep for corporate puh-
poses accumulated profits, and yet, in effect, distribute
these profits among its stockholders. One method is a
simple one. The capital stock is increased; the new stock
is paid up with the accumulated profits; and the new
shares of paid-up stock are then distributed among the
stockholders pro rata as a dividend. If the stockholder
prefers ready money to increasing his holding of the stock
in the company, he sells the new stock received as a divi-*
dend. The otiier method io slightly more complicated.
Arrangements are made for an increase of stock to be
offered to stockholders pro rata at par and, at the same
time, for the payment of a cash divid^id equal to the
amount which the stockholder will be required to pay to
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EISNER.r MAOOMBER. 231
180. Bbandbis and Clabxs, JJ., <
the company^ if he avails himself of the right to subecnribe
for his juro rata of the new stock. If ih« stockholder takes
the new stock, as is expected, he may endorse the divi-
dend check received to the corporation and thus pay for
the new stock. In order to ensure that all the new stock
so offered will be taken, the price at which it is offered is
fixed far below what it is believed will be its market value.
If the stockholder prefers ready money to an increase of
his holdingEi of stock, he may sell his right to take new
stock pro ratay which is evidenced by an assignable in-
strument. In that event the purchlu9er of the rights re-
pays to the corporation, as the subscription price of the
new stock, an amount equal to that which it had paid as
a cash dividend to the stockholder.
Both of these methods of retaining accumulated profits
while in effect distributing them as a dividend had been
in comnum use in the United States for many years prior
to the adoption of the ISbcteenth Amendmoit. They were
recognised equivalents. Whether a particular corporation
employed one or the other method was determined some-
times by requirements of the law under which the corjMira-
Hon was organised; sometimes it was determined by
preferences of the individual officials of the corporation;
and sometimes l^ stock market conditions. Whichever
method was employed the resultant distribution of the
new stodc was commonly referred to as a stock dividend.
How these two methods have been employed may be il*
histrated by the action in this reepect (as reported in
Moodys Manual, 1918 Industrial, and the Conunercial
and Financial Qironicle), of some of the Standard Oil
companies, since the dicdnt^^tion pursuant to the de-
cision of this court in 1911. Standard OH Co. v. United
States, 221 U. S. 1.
(a) Standard Oil Co. (of Indiana), an Indiana cor-
poration« It had on Decemb^ 31, 1911, $1,000,000 cap-
ital stodc (all common), and a large surplus. On May 15,
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222 OCTOBER TERM, 1919.
BaANDBiB aad Glabkb, JJ., dineiitiiig. 252 U. S.
1912, it increased its capital stock to $30,000,000, aad
paid a simple stock dividend of 2900 per cent, in stock. ^
(b) Standard Oil Co. (of Nebraska), a Nebraska cor-
poration. If had on December 31, 1911,- 1600,000 capital
stock (all common) , and a substantial surplus. On April 15,
1912, it paid a simple stock dividend of 33 1/3 per cent.,
increasing the outstanding capital to $800,000. During
the calendar year 1912 it paid cash dividends aggr^^ting
20 per cent.; but it earned considerably more, and had at
the close of the year again a substantial surplus. On
June 20, 1913, it declared a further stock dividend of 25
per cent., thus increasing the capital to $1,000,000.^
(c) The Standard Oil Co. (of Kentucky), a Kentucky
corporation. It had on December 31, 1913, $1,000,000
capital stock (all common), and $3,701,710 surplus. Of
thiis surplus $902,457 had been earned during the calendar
year 1913, the net profits of that year having be^i $1,002,-
457 and the dividends paid only $100,000 (10 per cent.).
On Decemb^ 22, 1913, a cash dividend of $200 per share
was declared payable on Fd:)ruary 14, 1914, to stock-
holders of record January 31, 1914; and these stockholders
were offered the right to subscribe for an equal amount of
new stock at par and to apply the cash dividend in pay-
ment therefor. The outstanding stock was thus in-
creased to $3,000,000. During the calendar years 1914,
1915 and 1916, quarterly dividends were paid on this
stock at an annual rate of between 15 per c^it. and 20 per
cent., but the company's siuplus increased by $2,347,614,
so that on Decemb^ 31, 1916, it had a large surplus over
its $3,000,000 capital stock. On December 15, 1916, the
company issued a circular to the stockholders, saying:
''The company's business for this year has shown a
^ Moodys, p. 1544; Commercial and Finimcial Chronicle, Vol. 94,
p. 831; Vol. 98, pp. 1005, 1076.
' Moodys, p. 1548; Commercial and Financial Chronicle, VoL 94^
p. 771; Vo). 96, p. 1428; Vol. 97, p. 1434; Vol. 08, p. 1541.
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EISNER V. MACOMBER. 223
180. Bbandsib and Clabkb, JJ., (fisBentiiig.
very good increase in volume and a proportionate in*
crease in profits, and it is estimated that by Jan. 1^ 1917,
the company will have a surplus of over $4,000,000. The
board feek justified in stating that if the proposition to
increase the capital stock is acted on favorably, it will be
proper in the near future to declare a cash dividend of
100%; and to allow the stockholders the privilege pro
rata according to their holdings, to purchase the new
stock at par, the plan being to allow the stockholders, if
they desire, to use their cash dividend to pay for the new
stock."
The increase of stock was voted. The company then
paid a cash dividend of 100 per cent., payable May 1,
1917, again offering to such stockholders the right to sub-
scribe for an equal amount of new stock at pap and to
apply the cash dividend in payment therefor.
Moodys Manual, describing the transaction with ex-
actness, says first that the stock was increased from
13,000,000 to $6,000,000, ''a cash dividend of 100%,
payable May 1, 1917, bdng exchanged for one share of
new stock, the equivalent of a 100% stock dividend." But
later in the report giving, as customary in the Manual,
the dividend record of the company, the Manual says:
''A stock dividend of 200% was paid Feb. 14, 1914, and
one of 100% on May 1, 1917." And in reporting specif-
ically the income account of the company for a series of
years ending December 31, covering net profits, dividends
paid and surplus for the year, it gives, as the aggr^ate of
dividends for the year 1917, $660,000; (which was the
aggregate paid on the quarterly cash dividend — ^5 per
cent. January and April; 6 per cent. July and October);
and adds in a note: '^In addition a stock dividend of 100%
was paid during the year." * The Wall Street Journal of
1 Moodys, p. 1647; Commercial and Fmancial Chronicle, Vol. 97,
pp. 1689, 1827, 1903; Vol. 98, pp. 76, 467; Vol. 103, p. 2348. Poor's
Manual of Industrials (1918), p. 2240, in giving the ''Comparative
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224 OCTTOBER TERM. 1919.
Bbandsib and Clabu, JJ., dlsBeatiiig. 252 U. 8.
May 2, 1917, p. 2, quotee the 1917''High''pricefor Stand-
ard Oil of KeatuclQr as ''375 Ex. Stock Dividend.''
It thus appearo that among financiers and investors the
distribution of the stock by whichever method effected
is called a stock dividend; that the two methods by which
accumulated profits are legally retained for corporate
purposes and at the same time distributed as dividends
are recognized by th^ to be equivalents; and that the
financial results to the corporation and to the stockholders
of the two methods are substantially the same— unless a
difference results from the application of the federal in-
come tax law.
Mrs. Macomber, a citizen and resident of New York,
was, in the year 1916, a stockholder in the Standard Oil
Company (of California), a corporation organized under
the laws of California and having its principal place of
business in that State. During that year she received
from the company a stock dividend representing profits
earned since March 1, 1913. The dividend was paid by
direct issue of the stock to her according to the simple
method described above, pursued also by the Indiana and
Nebraska companies. In 1917 she was taxed under the
federal law on the stock dividend so received at its par
value of $100 a diare, as income received during the year
1916. Such a stock dividend is income as distinguished
from capital both imder the law of New York and under
the law of California; because in both States every divi-
dend representing profits is deemed to be income whether
paid in cash or in stock. It had been so held in New York,
where the question arose as between life-tenant and re-
mainderman, Lawry v*. Farmers' Loan d: Trust Co., 172 N.
Y. 137; Matter of Osborne, 209 N. Y. 450; and also, where
the question arose in matters of taxation. People v. Glynn,
Income Account" of the company describes the 1914 dividend as
''Stock Dividend paid (200%)— $2,000,000"; and describes the 1917
dividend as "S3,000,000 special cash dividend."
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EISNER V. MACOMBER. 225
180. BtLAmmm and Clabkb, JJ., dissentaog.
180 App. Div. 382; 196 N. Y. 605. It has been so held
in Calif omia^ where the question appears to have arisen
only in controversies between life-tenant and remainder^
man. Estate cf Dt^ffiU, 58 Cal. Deo. 97; 180 California,
748.
It is conceded that if the stock dividend paid to Mrs.
Macomber had been made by the more complicated method
pursued by the Standard Oil Company of Kentucky, that
is, issuing rights to take new stock pro rata and paying to
each stockholder simultaneously a dividend in cash suf-
ficient in amount to enable him to pay for this pro rata
of new stock to be purchased — ^the dividend so paid to
him would have been taxable as income, whether he r^
tained the cash or whether he returned it to the corpora-
tion in paynient for his pro rata of new stock. But it is
contended that, because the simple method was adopted
of having the new stock issued direct to the stockholders
as paid-up stock, the new stock is not to be deemed in^
come, whether she retained it or converted it into cash by
sale. If such a different result can flow merely from the
difference in the method pursued, it must be b^use Con-
gress is without power to tax as income of the stockholder
dither the stock received under the latter method or the
proceeds of its sale; for Congress has, by the provisions in
the Revenue Act of 1916, expressly declared its purpose
to make stock dividends, by whichever method paid,
taxable as income.
The Sixteenth Amendment proclaimed February 25,
1913, declares:
"The Congress shall have power to lay and collect taxes
on incomes, from whatever source derived, without ap-
portionment among the several States, and without r^
gard to any census or eniuneration.''
The Revenue Act of September 8, 1916, c. 463, 39 Stat.
756, 757, provided:
''That the term 'dividends' as used in this title shall
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226 OCTOBER TERM, 19ia
Bbamdsib and Clabkb, JJ., dinenting. 262 U. 8.
be held to mean any distribution made or ordered to be
made by a corporation, . . . out of its earnings or
profits accrued since March first, nineteen hundred and
thirteen, and payable to its shareholders, whether in
cash or in stock of the coiporation • • . which
stock dividend shall be considered income, to the amoimt
of its cash value."
Hitherto powers conferred upon Congress by the Con-
stitution have been liberally construed, and have been
held to extend to every means appropriate to attain the
end sought. In determining the scope of the power the
substance of the transaction, not its form has been re-
garded. Martin v. Hunter, 1 Wheat. 304, 326; McCvttcch
y. Maryland, 4 Wheat. 316, 407, 415; Brawn v. Mary-
land, 12 Wheat. 419, 446; Craig v. Missouri, 4 Pet. 410,
433; JarroU v. Moberly, 103 U. S. 580, 585, 587; Legal
Tender Case, 110 U. S. 421, 444; BurrauhGiies Lithographic
Co. v. Sarony, 111 U. S. 53, 58; United States v. RedUy
Co., 163 U. S. 427, 440, 441, 442; South Carolina v. United
States, 199 U. S. 437, 448-9. Is there anything in the
phraseology of the Sixteenth Amendment or in the nature
of corporate dividends which should lead to a departure
from these rules of construction and compel this court to
hold, that Congress is powerless to prevent a result so ex-
traordinary as that here contended for by the stockholder?
First: Tlie term "income" when applied to the invest-
ment of the stockholder in a corporation, had, before the
adoption of the Sixteenth Amendm^it, be^i commonly
understood to mean the returns from time to time received
by the stockholder from gains or eamingp of the corpora-
tion. A dividend received by a stockholder from a corpora-
tion may be either in distribution of capital assets or in dis-
tribution of profits. Whether it is the one or the other is
in no way affected by the medium in which it is paid, nor
by the method or means through i^ch the particular
thing distributed as a dividend was procured. If the
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EISNER V. MAOOMBER. 227
189. Brandbib and Claxke, JJ., diaBoitiDg.
dividend is declared payable in cash, the mon^ with
which to pay it is ordinarily taken from surplus cash in
the treasury. But (if there are profits legally available
for distribution and the law under which the company
was incorporated so permits) the company may raise the
money by discounting negotiable paper; or by selling
bonds, scrip or stock of anoHier cori)oration then in the
treasury; or by selling its own bonds, scrip or stock then
in the treasmy; or by selling its own bonds, scrip or
stock issued expressly for that purpose. How iJhe mon^
shall be raised is wholly a matter of financial mani^e^
ment. The manner in which it is raised in no way affects
the question whether the divid^id received by the stock-
holder is income or capital; nor can it conceivably affect
the question whether it is taxable as income.
Likewise whether a dividend declared payable from
profits shall be paid in cash or in some other medium is
also wholly a matter of financial management. If some
other mediimi is decided upon, it is also wholly a question
of financial management whether the distribution shall be,
for instance, in bonds, scrip or stock of another corporation
or in issues of its own. And if the dividend is paid in its
own issues, why should there be a difference in result de-
pendent upon' whether the distribution was made from
such securities then in the treasury or from others to be
created and issued by the company expressly for that pur-
pose? So far as the distributicm may be made from its
own issues of bonds, or prrferred stock created expressly
for the purpose, it clearly would make no difference in the
decision of the question whether the dividend was a dis-
tribution of profits, that the securities had to be created
expressly for the purpose of distribution. If a dividend
paid in secmities of liiat nature represents a distribution
of profits Congress may, of course, tax it as income of the
stockholder. Is the result difierent where the security
distributed is common stock?
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228 OCTOBER TEBM, 19191
BmAmma and Cuugg, JJ^ yTmm iitii^ 2S2U.a
Suppoae that a eorpcxration having power to buy and
fldi its own stock, purchases, in the interval b^ween its
regalar dividend dates» with monies derived horn current
profits, soDoe of its own common stod^ as a temporary
investment, intending at the time of purchase to sdl it
before the next dividend date and to use the iMvceeds in
paying dividends, but later, deeming it inadvisable either
to sdl this stock or to raise by borrowing the nKHiey neo-
essaiy to pay the regular dividsod in cash, declares a
dividend payable in this stock: — Can anyone doubt that
in such a case the dividend in common stock would be
income of the stockholder and constitutionally taxable
as such? See Green v. BiseeU, 79 Ccmnecticut, 547; Le-
land v. HapdeUf 1Q2 ^^^fassachuaetts, 542. And would it
not likewise be income of the stockholder subject .to taxar
tion if the purpose of the company in buying the stock so
distributed had been from the banning to take it off the
maiket and distribute it among the stockholders as a
dividend, and the company actuaUy did so? And pro-
ceeding a short step further: Suj^Kiee that a coii)oration
decided to ci^talise some of its accumulated profits by
creating additional common stock and selling the same to
raise working ci4>ital, but after the stock has be^ issued
and certificates therefor are delivered to the bankers for
sale, general financial conditions make it undesirable to
market the stock and the company concludes that it is
wiser to husband, for working capital, the cash which it
had intended to use in paying stockhcdders a dividend,
and, instead, to pay. the di\ddend in the common stock
which it had planned to sell: Would not the stock so dis-
tributed be a distribution of profits — and, hence, when
received, he income of the stockholder and taxable as
such? If this be conceded, why should it not be equally
income of the stockholder, and taxable as such, if the
common stock created by capitalizing profits, had been
originally created for the express purpose of being dis-
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EISNER V, MACOMBER. 229
189. Bbandbis and Clabkb, JJ , dissenting.
tributed as a dividend to the stockholder who afterwards
received it?
Second: It has been said that a dividend .payable in
bonds or preferred stock created for the purpose of dis-
tributing profits may be income and taxable as such, but
that the case is different where the distribution is in com-
mon stock created for that purpose. Various reasons* are
assigned for making this distinction. One is that thc^
proportion of the stockholder's ownership to the aggregate
number of the shares of the company is not changed b}'
the distribution.. But that is equally true where the divi-
dend is paid in its bonds or in its preferred stock. Further-
more, neither maintenance nor change in the proportion-
ate ownership of a stockholder in a corporation has any
bearing upon the question here involved. Another reason
assigned is that the value of the old stock held is reduced
approximately by the value of the new stock received, so
that the stockholder after receipt of the stock dividend
has no more than he had before it was paid. That is
equally true whether the dividend be paid in cash or in
other property, for instance, bonds, scrip or preferred
stock of Uie company. The payment from profits of a
large cash dividend, and even a small one, customarily
lowers the then market value of stock because the undi-
vided property represented by each share has been cor-
respondingly reduced. The argument which appears to
be most strongly urged f oi: the stockholders is, that when
a stock dividend i& made, no portion of the assets of the
company is thereby segregated for the stockholder. But
does the issUe of new bonds or of preferred stock created
for use as a dividend result in any s^regation of assets for
the stockholder? In each case he receives a piece of paper
which entitles him to certain rights in tiie undivided
property. Clearly segr^ation of assets in a physical
sense is not an essential of income. The year's gains of a
partner are taxable as income, although there, likewise, no
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230 OCTOBER TERM, 1919.
Bbandsis and Clabkb, JJ., dissenting. 252 IT. S.
aegr^ation of his share in the gains from that of his part-
ners is had.
The objection that there has been no segregation is
presented also in another form. It is argued that imtil
there is a s^regation, the stockholder cannot know
whether he has really received gains; since the gains may
be invested in plant or merchandise or other property and
perhaps be later lost. But is not this eqxially true of the
share of a partner in the year's profits of the firm or, in-
deed, of the profits of the individual who is engaged in
business alone? And is it not true, also, when dividends
are paid in ca6h? The gains of a business, whether con-
ducted by an individual, by a firm or by a corporation,
are ordinarily reinvested in large part. Many a cash
dividend honestly declared as a distribution of profits,
proves later to have been paid out of capital, because
errors in forecast prevent t)orrect ascertainment of values.
Until a business adventure has been completely Uqui-
dated, it can never be determined with certainty whether
there have been profits imless the returns have at least
exceeded the capital originally invested. Business men,
dealing with the problem practically, fix necessarily peri-
ods and rules for determining whether there Jiave been
net profits — ^that is income or gains. They protect them-
selves from being seriously misled by adopting a system
of depreciation charges and reserves. Then, they act upon
their own determination, whether profits have been made.
Congress in legislating has wisely adopted their practices
as its own rules of action.
Third: The Government urges that it would have been
within the power of Congress to have taj^ed as income of
the stockholder his pro rata share of undistributed profits
earned, even if no stock dividend representing it had been
paid. Strong reasons may be assigned for such a view.
8ee Collector v.Hvbbard, 12 WbH.!. The undivided share
of a partner in the year's undistributed profits of his firm
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EISNER V. MACX3MBER. 231
189. BsAUDSiB and Clajbxb, JJ., diasentiog.
is taxable as income of the partner, although the share in
the gain is not evidenced by any action taken by the firm.
Why may not the stockholder's interest in the gains of
the company? The law finds no difficulty in disregarding
the corporate fiction whenever that is deemed necessary
to attain a just result. Linn & Lam Timber Co. v. United
States J 236 U. S. 5Tt; see Morawetz on Corporations, 2d
ed., §§227-231; CJook on CJorporations, 7th ed., §§663,
664. The stockholder's interest in the property of the
corporation differs, not fundamentally but in form only,
from the interest of a partner in the property of the firm.
There is much authority for the proposition that, \mder
otir law, a partnership or joint stock company is just as
distinct and palpable an entity in the idea of the law, as
distinguished from the individuals composing it, as is a
corporation.^ No reason appears, why Congress, in leg-
islating imder a grant of power so comprehensive as that
authorizing the levy of an income tax, should be limited
by the particular view of the relation of the stockhbldCT
to the corporation and its property which may, in the ab-
sence of legislation, have been taken by this court. But
we have no occasion to decide the question whether Con-
gress might have taxed to the stockholder his undivided
share of the corporation's earnings. For Congress has in
this act limited the income tax to that share of the stock-
holder in the eamingB which is, in effect, distributed by
means of the stock dividend paid. In other words, to
render the stockholder taxable there must be both earn-
ings made and a dividend paid. Neither earnings without
dividend — ^nor a dividend without earnings — subjects the
^See "Some Judicial Myths/' by Francis M. Burdick,22 Harvard
Law Review, 393, 394-396; The Firm as a Legal Person, by. William
Hamilton Cowles, 57 Cent. L. J., 343, 348; The Separate Estates of
Non-Bankrupt Partners, by J. D. Brannan, 20 Harvard Law Review,
589-592; oompaie Harvard Law Review, Vol. 7, p. 426; Vol. 14, p. 222;
Vol. 17, p. 194.
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282 OCTOBER TERM, 1919.
Bbanbsis and Clabkb, JJ., dianiitint. 252 U* 8.
stockholder to taxation under the Revenue Act of 1916.
Fourth: The equivalency of all dividends representing
profits, whether paid in cac^ or in stocky is 80 complete that
serious question of the taxability of stock dividends
would probably never have been made, if Congress had
undertaken to tax only those dividends which represented
profits earned during the year in which the dividend was
paid or in the year preceding. But this court, construing
liberally not only the constitutional grant of power but
also the Revenue Act of 1913, held that Congress might
tax, and had taxed, to the stockholder dividends received
during the year, although earned by the company long
before; and even prior to the adoption of the Sixteenth
Amendment. Lynch v. Hornby, 247 U. S. 339.^ That
rule, if indiscriminatingly applied to all stock dividends
representing profits earned, might, in view of corporate
practice, have worked considerable hardship, and have
raised serious questions. Many corporations, without
legally capitalimig any part of thdr profits, had assigned
definitely some part or all of the annual balances remain-
ing after paying the usual cash dividends, to the uses to
which permanent capital is ordinarily applied. Some of
the corporations doing this, transferred such balances on
their books to "Surplus" account, --distinguishing be-
tween such permanent ''Surplus" and the '* Undivided
Pftxfits" account. Other corporations, without this
formality^ had assumed that the annual accumulating
balances carried as undistributed profits were to be treated
as capital permanently invested in the business. And
still others, without dfidSnite assumption of any kind, had
ift,, .
1 The hardship supposed to have resulted from such a decidon has
been removed in the Revenue Act of 1916, as amended, by providing
in { 31 (b) that such cash dividends shall thereafter be exempt from
taxation, if heiore they are made, all earnings made since February 28,
1913, shall have been distributed. Act of October 3, 1917, c. 63, § 1211,
40 Stat. 338; Act of February 24, 1919, c. 18, { 201 (b), 40 Stat. 1059.
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EISNER V. MACOMBER. 283
189. Bbanaub and Clabu, JJ., <
80 uaed undivided profits for capital purpoaeB. To have
made the revenue law apply retroactively so as to reach
such accumulated profits, if and whenever it should be
deemed desirable to capitalize them legally by the issue
of additional stock distributed as a dividend to stock-
holders, would have woiked great injustice. Congress
endeavored in the Revalue Act of 1916 to guard against
any serious hardship which might otherwise have arisen
from making taxable stock dividends representing ac-
cumulated profits. It did not limit the taxability to stock
dividends representing profits earned within the tax year
or in the year preceding; but it did limit taxability to
such divi<tends representing profits earned since March
1, 1913. Thereby stockholders were given notice that
their share also in undistributed profits accumulating
thereafter was at some time to be taxed as income. And
Congress sought by § 3 to discoiutige the postponement
of distribution for the illq^timate puri)oee of evading lii^
bility to surtaxes.
Fifth: The decision of this court, that eamingR made
before the adoption of the Sixteenth Amendment but
paid out in cash dividend after its adoption were taxable
as income of the stockholder, involved a very liberal con-
struction of the Amttidment. To hold now that earnings
both made and paid out after the adoption of the Six-
teenth Amendment cannot be taxed as income of the
stockholder, if paid in the form of a stodc dividend,
involves an exceeding narrow construction of it. As said
l^ Mr. Chief Justice Marshall in Brawn v. Maryland,
12 Wheat. 419, 446: "To construe the power so as to
impair its efficacy, would tend to defeat an object, in
the attainment of which the American public took, and
justiy took, tiiat strong interest which arose from, a full
conviction of its necessity.''
No decision heretofore rendered by this court requires
us to hold that Congress, in providing for the taxation of
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284 OCTTOBER TERM, 1919.
BsAMDXiB and Ci.iUiKB, JJ., diBBeatiiig. « 262 IT. 8.
stock dividends, exceeded the power conferred upon it by
. the Sixteenth Amendment. The two cases mainly relied
upon to show that this was b^ond the power of Congress
are Tawne v. Eianer^ 245 U. S. 418, which involved a
question not of constitutional power but of statutory con-
struction, and Gibbons y. Mahouy 136 U. S. 649, which
involved a question arising between life-tenant and re-
mainderman. So far as concerns Towne v. Eisner, we
have only to bear in mind what was there said (p. 426) :
''But it is not necessarily trae that income means the
same thing in the Constitution and the [an] act." ^ (Ttb-
hwis V. Mahon is even less an authority for a narrow
construction of the power to tax incomes conferred by the
Sixteenth Amendment. In that case the court was re-
quired to deteratiine how, in the itdministration of an es-
tate in the District of Colimibia, a stock dividend, repre-
senting profits, received after the decedent's death, shoidd
be disposed of as between life-tenant and renuunderman.
TEe question was in essence: What shall the intuition of
the testator be presumed to have been? On this question
there was great diversity of opinion and practice in the
courts of EngUshnspealdng countries. Three well-defined
rules were then competing for acceptance; two of these
involve an arbitrary rule of distribution, the third equi-
table apportionment. See Cook on Corportions, 7th ed.,
§§662-668.
1. The so-called En^^ rule, declared m 1799, by
JEfrander v. Brander, 4 Ves. Jr. 800, that a dividend rep-
1 Compare Rugg, C. J., in Tax Commiationer v. jPuffiom, 227 Maaoft-
ohusetts, 522, 633: "However strong such an argument might be^vidieQ
urged as to the interpretation of a statute, it is not of prevailing force
as to the broad considerations involved in the int^pretation of an
amendment to the Constitution adopted under the conditions preced-
ing and attenidant upon the ratification of the Forty-fourth Amend-
ment''
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EISNER V. MACOMBER. 235
189. Bbamdsib and GLABxa, JJ., diifinting
resenting profits, whether m cash, stock or other property,
belongs to the life-tenant if it was a r^ular or ordinary
dividend, and belongs to the remainderman if it was an
extraordinary dividend.
2. The so-<^ed Massachusetts rule, declared in 1868
by Minol y. Paine, 09 Massachusetts, 101, that a dividend
representing profits, whether regular, ordinary or extraor-
dinary, if in cash belongs to the life-tenant, and if in stock
belongs to the remaindaman.
3. The so-called Pennsylvania rule declared in 1857
by Earp's Appeal, 28 Pa. St. 368, that where a stock divi-
dend is paid, the court shall inquire into the circumstances
under which the fund had been earned and accumulated
out of which ibe dividend, whether a regular, an ordinary
or an extraordtataxy one, was paid. If it finds that the
stock dividend was paid out of profits earned since the
decedent's death, the bto£k dividend belongs to the life-
tenant; if the court finds that the stock dividend was
paid from capital or from profits earned before the dece-
dent's death, the stock dividend belongs to the remainder-
This court adopted in Oibbons v. Mahon as the rule of
administration for the District of Colmnbia the so-called
Massachusetts rule, the opinion being delivered in 1890
by Mr. Justice Gray. Since then the same question has
come up for decision in many of the States. The so-
called Massachusetts rule, although approved by this
court, has found favor in only a few States. The so-called
Pennsylvania rule, on the other hand, has been adopted
since by so many of the States (including New York and
California), that it has come to be known as the ''Ameri-
can Rule." Whether, in view of these facts and the prac-
tical results of the operation of the two rules as shown by
the experience of the thirty years which have elapsed since
the decision in Gibbons v. Mahon, it might be desirable
for this court to reconsider the question there decided, as
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236 OCTOBER TERM, 1919.
Bbanmub and Clammx, 33., dinoatiiig, 262 IT. S.
some other courte have done (8ee 29 Harvard Law Review,
551), we have no occasion to consider in this case. For,
as this court there pointed out (p. 560), the question in-
volved was one ' ' between the owners of successive interests
in particul^ shares,'' and not, as in BaUey v« BaUroad Co.,
22 Wall. 604, a question ''between the corp<Hration and
the govemm^it, and [which] depended upon the terms
of a statute carefully framed to prevent corporations from
evading payment of the tax upon their eaminp."
We have, however, not merely argument, we have ex-
amples which should convince us that ''there is no inher-
ent, necessary and inmiutable reason why stock dividends
should always be treated as capital." Tax Cammissianer
V. Putnam, 227 Massachusetts, 522, 533. The Supr^ne
Judicial Coiurt of Massachusetts hta steadfastly adhered,
deepite ever-renewed protest, to the rule that every stock
dividend is, as between life-tenant and remainderman,
c^>ital and not income. But in construing the Massa*
chusetts Income Tax Amendment, which is substantially
identical with the Federal Amendment, that court held
that the legislature was thereby empowered to levy an
income tax upon stock divid^ids representing profits.
The courts of England have, with some relaxation, ad-
hered to their rule that every extraordinary dividend is,
as between life-tenant and remainderman, to be deemed
capital. But in 1913 the Judicial Committee of the Privy
Council held that a stock dividend representing accumu-
lated profits was taxable like an ordinary cash dividend,
Su)an Brew&Ti Co., Ltd., v. Rex, [1914] A. C. 231. In dis-
missing the appeal these words of the Chief Justice of
the Supreme Court of Western Australia were quoted
(p. 236), which show that the facts involved w^re identical
with those in the case i^t bar: "Had the company distrib-
uted the 101,450£ among the shareholders and had the
shareholders repaid such sums to the company as the
price of the 81,160 new shares, the duty on tihe 101,450£
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EISNER V. MACX)MBER. 237
189. BRAMDsm an4 Cuarke, JJ., diaaenting.
would dearly have been payable. Is not this virtually
the effect of what was actually done? I think it is."
Sixth: U stock dividends representing profits are held
exonpt from taxation under the Sixteenth Amendment,
the owners of the most successfid businesses in America
will, as the facts in this case illustrate, be able to escape
taxati<m on a large part of what is actually their income.
So far as th^ profits are represented by stock received as
dividends th^y will pay these taxes not upon their income
but only upon the income of their income. That such a re-
sult was intended by the people of the United States when
adopting the Sixteenth Amendment is inconceivable.
Our sole duty is to ascertain their intent as therein ex-
pressed.^ In terse, comprehensive language befitting the
Constitution, they empowered Congress ''to lay and col-
lect taxes on incomes, from whatever soiuxe dmved."
They intended to include thereby everything which by
reasonable understanding can fairly be r^arded as in-
come. That stock dividends representing profits are so
regarded, not only by the plain people but by investors
and financiers, and l^ most of the courts of the country,
is shown, beyond peradventiu-e, by their acts and by t^eir
utterances. It seems to me clear, therefore, that Congress
possesses the power which it exercised to make divideads
representing profits, taxable as income, whether the me-
dium in which the dividend is paid be cash or stock, and
that it may define, as it has done, what dividends rer^re-
1 Compare Rugg, C. J., Tax Commiationer v. IhUnam, 237 Mas8£ chu-
setts, 522, 524: " It is a grant from the sovereign people and not th 3 ex-
ercise of a delegated power. It is a statement of general principle and
not a specification of details. Amendments to such a charter of go^ "em-
ment oui^t to be construed in the same spirit and according t<» the
same rules as the original. It is to be interpreted as the Constitution
of a State and not as a statute or an ordinary piece of legislation. Its
words must be given a construction adapted to cany into effect its
purpoee."
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238 OCTOBER TERM, 1919.
Bbandbib and Clarxs, JJ., dissentiiig. 262 U. S.
Benting profits shall be deemed income. It surely is not
clear that the enactment exceeds the power granted by
the Sixteenth Amendment. And, as this court has so
often said, the high prerogative of declaring an act of
Congress invalid, should never be exercised except in a
clear case.^ '' It is but a decent respect due to the wisdom,
the int^rity and the patriotism of the legislative body,
by which any law is passed, to presume in favor of its
validity, until its violation of the Constitution is proved
beyond all reasonable doubt." Ogden v. Saunders, 12
Wheat. 213, 270.
Mr. Justice Clarke concurs in this opinion.
^"Itia our duty, when required in the regular course of judicial
proceedings, to declare an act of Congress void if not within the legis-
lative power of the United States; but this declaration should never be
made except in a clear case. Every ])08sible presumption is in favor
of the validity of a statute, and this continues until the contrary is
shown beyond a rational doubt. One branch of the government can-
not encroach on the domain of another without danger. The safety
of our institutions depends in no small degree on a strict obaervanee of
:his salutary rule." Sinking-Fund Cases, 99 U. S. 700, 718 (1878).
See also Legal Tender Cases, 12 Wall. 457, 531 (1870); Trade-Mark
Cases, 100 U. S. 82, 96 (1879). See American Doctrine of Constitu-
tional Law, by James B. Thayer, 7 Harvard Law Review, 129, 142.
"With the exception of the extraordinary decree rendered in the
Dred Scott Case, . . . all of the acta or the portions of the acts
of Congress invalidated by the courts More 1868 related to the or-
ganisation of courts. Denying the power of Congress to make notes
legal tender seems to be the first departure from this rule." Haines,
American Doctrine of Judicial Supremacy, p. 288. Hie first legal ten-
der decision was overruled in part two years later (1870), Legal Tender
Cams, 12 Wall. 457; and again in 1883, Legal Tender Case, 110 U. S. 421.
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PIERCE r. UNITED STATES. 239
Qyllabua.
PIERCE ET AL. v. UNITED STATES.
BBBOB TO THE DISTRICT COURT OP THE UNITED STATES
FOR THE NORTHERN DISTRICT OF NEW YORK.
No. 234. Argued November 18, 19, 1919.— Decided March 8, 1920.
The dedsioii in another case of a constitutional question which formed
the jurisdictional basis for a direct writ of error previously sued out
under Jud. Code, § 238, does not divest this court of its jurisdiction
to determine the other questions raised in the record. P. 242.
In order to constitute a conspiracy, within § 4 of the Espionage Act,
to commit a substantive offense defined in § 3, it is not essential that
the conspirators shall have agreed in advance upon the precise
method of violating the law; and, while the averment of the con-
spiracy cannot be aided by the allegations of overt acts and the
conspiracy is not punishable unless such acts were committed, they
need not be in themselves criminal, still less constitute the very
crime idiich is the object of the conspiracy. P. 243.
Averments in such an indictment that defendants unlawfully, wilfully
or felonioi.vsly committed the forbidden acts import an unlawful
motive. P. 244.
Whether statements contained in a pamphlet circulated t^ defendants
tended to produce the consequences forbidden by the Equonage Act,
({ 3) , as alleged, A^M a matter to be determined by the jury , and not
by the court on demurrer to the indictment. Id.
Evidence in the case examined and hdd sufficient to warrant the jury's
finding that defendants, in violation of the Espionage Act, ccm-
spired to commit, and committed, the offense of attempting to cause
insubordination and disloyalty and refusal of duty in the military
and naval forces, and made and conveyed false statements with
intent to interfere with the operation and success of those forces, in
the war with Germany, by dreulating pamphlets and other printed
matter tending in the circumstances to produce those results. P.245.
The fact that defendants distributed such pamphlets with a full under-
standing of their contents furnished of itself a ground for attributing
to them an intent, and for finding that they attempted, to bring
about any and all such consequences as reasonably might be antici-
pated from their distribution. P. 249.
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2«D OCTOBER TERM, 1919.
Opuiioii of the Court 2I82U.8.
In a {MTOflecation for circulating false statements with intent to inter-
fere with the operation and sacoess of the military and naval forces,
in violation of the Espionage Act, { 3, where the falsity ^ the state-
ments in question appears plainly, as a matter of common knowledge
and public fact, other evidence on that subject is not needed in order
to sustain a verdict of guilty. P. 250.
In such cases it is for the juiy to detennine whether the statements
circulated should be taken literally or in an innocent, figurative
sense, in view <tf the class and character of the people among whom
the statements were circulated. P. 251.
To circulate such false statements recklessly, without effort to ascertain
* the truth, is equivalent to circulating them with knowledge of their
falsity. Id.
The fact that the statements in question do not, to the common under-
standing, purport to convey anything new but only to interpret or
comment on matters pretended to be facts of public knowledge, does
not remove them from the purview of § 3 of the Espionage Act.
P. 252.
Tlie insufficiency of one of several counts of an indictment upon which
concurrent sentences have been impased does not necessitate re-
versal where the other counts sustain the total punishment inflicted.
Id.
Affirmed.
Thb case is stated in the opinion.
Mr. Frederick A. Mokr for plaintiffs in error.
Mr. Assistant Attorney General Stewarty with whom
Mr. W. C. Herron was on the brief, for the United States.
Mr. Justice Pitney delivered the opinion of the court.
Plaintiffs in error were jointly indicted October 2, 1917,
in the United States District Court for the Northern Dis-
trict of New York, upon six counts, of which the 4th and
5th were struck out by agreement at the trial and the 1st
is now abandoned by the Government.
The 2d count charged that throughout the period from
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PIERCE V. UNITED STATES, 241
239. Opinion <tf the Court
April 6, 1917, to the date of the presentation of the indict*
ment, the United States being at war with the Imperial
German Government, defendants at the City of Albany,
in the Northern District of New York and within the
jurisdiction, etc., unlawfully and feloniously conspired
together and with other persons to the grand jurors un-
known to-commit an o£Fense against the United States,
to wit, ''The offense of unlawfiilly, feloniously and willr
fully attempting to cause insubordination, disloyalty and
refusal of duty in the military and naval forces of the
United States when the United States was at war and to
the injury of the United States in, through, and by per^
sonal solicitations, public speeches and distributing and
publicly circulating throughout the United States certain
articles printed in pamphlets called 'The Price We Pay,'
which said paitphlets were to be distributed publicly
throughout the Northern District of New York, and
which said solicitations, speeches, articles and panqddets
would and should i)ersistent]y urge insubordination, dis-
loyalty and refusal of duty in the said military and naval
forces of the United States to the injury of the United
States and its military and naval service and failure and
refusal on the part of available persons to enlist therein
and should and would through and by means above men--
tioned obstruct the recruiting and enlistment service of
the United States when the United States was at war to
the injury of that service and of the United States." For
overt acts it woe allq^ that certiun of the defendants,
in the City of Albany at times specified, made persoDal
solicitations and public speeches, and especially that th^
published and distributed to certain persons named and
other persons to the grand jurors unknown certain pamr
phlets headed "The Price We Pay," a copy of which was
annexed to the indictment and made a part of it.
The 3d count charged that during the same period and
on August 26, 1917, the United States being at war, etc.,
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24^ OCTOBER TERM, 1919.
Opinion of the Court. 252 IT. S.
defendants at the City of Albany, etc., wilfully and felo-
niously made, distributed, and conveyed to certaiu persons
named and others to the grand jurors unknown certain
false reports and false statements in certain pamphlets
attached to and made a part of the indictment and headed
"The Price We Pay," which false statements were in
part as shown by certain extracts quoted from the pamph-
let, with intent to interfere with the operation and success
of the miUtary and naval forces of the United States.
The 6th coimt charged that at the same place, during
the same period and on August 27, 1917, while the United
States was at war, etc., defendants willfully and felo-
niously attempted to cause insubordination, disloyalty,
mutiny, and refusal of duty in the military and naval
service of the United States by means of the publication,
circulation, and distribution of "The Price We Pay "
to certain persons named and others to the grand jurors
unknown.
A general demurrer was overruled, whereupon defend-
ants pleaded not guilty and were put on trial together,
with the result that Pierce, Creo, and Zeilman were found
guilty upon the 1st, 2d, 3d and 6th counts, and Nelson
upon the 3d coimt only. Each defendant was separately
sentenced to a term of imprisonment upon each count on
which he had been found guilty; the several sentences of
Pierce, Creo, and Zeilman, however, to run concurrently.
The present direct writ of error was sued out under
§238, Judicial Code, because of contentions that the
Selective Draft Act and the Espioni^ Act were un-
oonstitutionai. These have since been set at rest. Select'
ive Draft Law Cases, 245 U. S. 366; Schenck v. United
States, 249 U. S. 47, 51; Frohwerk v. United States, 249
U. S. 204; D(^ v. United States, 249 U. S. 211, 215.
But our jurisdiction continues for the purpose of dispos-
ing of otiier questions raised in the record. Brolan v.
United States, 236 U. S. 216.
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PIERCE V. UNITED STATES. 243
389. Opniion of the Gourl.
It ia insisted that there was error in refusing to sustain
tiie demurrer, and this on the groimd that (1) the facts
and (drcumstances uix>n which the all^;ation of con-
spiracy rested were not stated; (2) there was a failure to
set forth facts or circumstances showing unlawful motive
or intent ; (3) there was a failing to show a clear and pres-
ent danger that the distribution of the pamphlet would
faring about the evils that Congress sought to prevent by
the enactment of the Espionage Act; and (4) that the
statements contained in the pamphlet were not such as
would naturally produce the forbidden consequences.
What we have recited of the 2d count shows a suffi-
ciently definite averment of a conspiracy and overt acts
under the provisions of Title I of the Espionage Act.^
The 4th section makes criminal a conspiracy ''to violate
the provisions of sections two or three of this title/'
provided one or more of the conspirators do any act to
^ Eztmct from Act of June 15, 1917, c. 30, 40 Stat. 217, 219.
Sec. 3. Whoever, when the United States is at war, shall willfully
make or convey false reports or false statements with intent to inter-
fere with the operation or success of the military or naval forces of the
United Stctes or to promote the success of its enemies and whoever^
when the United States is at war, shall willfully cause or attempt to
cause insubordination, disloyalty, mutiny, or refusal of duty, in the
militaiy or naval forces of the United States, or shall willfully obBtruel
the recruiting or enlistment service of the United States, to the injuiy
of the service or of the United States, shall be punished by a fine of not
more than $10,000 or imprisonment for not more than twenty years, or
both.
Sec. 4. If two or more persons conspire to violate the provisions of
sectioas two or three of this title, and one or more of such persons does
any act to effect the object of the conspiracy, each of the parties to such
WDBpuwcy shall be punished as in said sections provided in the case of
the doing of the act the accomplishment of which is the object of such
conspiracy. Except as above provided conspiracies to commit offenses
under this title shall be pumshed as provided by section thirtynseven of
the Act to codify, revise, and amend the penal laws of the United States
i^)proved March fourth, nineteen bundled and nine.
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244 OCTOBER TERM, 1919.
Opinion of the Court. 252 U. S.
effect the object of the conspiracy. Such a conspiracy,
thus attempted to be carried into effect, is none the less
punishable because the conspirators fail to agree in
advance upon the precise method in which the law shall
be violated. It is true the averment of the conq>iracy
cannot be aided by the all^ations respecting the overt
acts. United States v. Brittm, 108 U. S. 199, 206; Joplin
Mercantile Co. v. United States, 236 U. S. 531, 536. On
the other hand, while under § 4 of the Espionage Act, as
under § 37 of the Criminal Code, a mere conspiracy, with-
out overt act done in pursuance of it, is not punishable
criminally, yet the overt act need not be in and of itself
a criminal act; still less need it constitute the very crime
that is the object of the conspiracy. United States v.
Rahinowich, 238 U. S. 78, 86; Goldman v. United States,
245 U. S. 474, 477.
Ab to the second point: Averments that defendants
unlawfully, willfully, or feloniously committed the for-
bidden acts fairly import an unlaxvful motive; the 3rd
cbimt specifically avers such a motive; the conspiracy
charged in the 2d and the willfid attempt charged in the
6tli necessarily involve unlawful motives.
'^rhe third and fourth objections point to no infirmity
in the averments of the indictment. Whether the state-
ments contained in the pamphlet had a natural tendency
to produce the forbidden consequences, as alleged, was
a question to be determined not upon demurrer but by
the jury at the trial. There was no error in overruling
the demurrer.
Upon the trial, defendants' counsel moved that the
jury be directed to acquit the defendants, upon the
ground that the evidence was not sufficient to sustain a
conviction. Under the exceptions taken to the refusal
of this motion it is urged that there was no proof (a) of
conspiracy, (b) of criminal purpose or intent, (c) of the
falsity of the statements contained in the iMumphlet oir-
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PIERCE V. UNITED STATES. 245
230. Opinion of tho Court.
ciliated, (d) of knowledge on defendants' part of such
falsity, or (e) of circumstances creating a daoiger that its
circidation would produce the evib which Congress
sought to prevent; and further (f) that the pamphlet it-
self could not legitimately be construed as ten(Ung to
produce the prohibited consequence.
The pamphlet— "The Price We Pay "—was a highly
colored and sensational document, issued by the na-
tioniJ office of the Socialist Party at Chicago, Illinois,
and fairly to be construed as a protest against the further
prosecution -of the war by the United States. It con-
tained much in the way of denunciation of war in general,
the pending war in particular; something in the way of
assertion that under Socialism things would bet better;
little or nothing in the way of fact or argument to support
the assertion. It is too long to be quoted in full. The
following extracts will suffice; those indicated by italics
being the same that were set forth in the body of the 3d
count:
/'Conscription is upon us; the draft law is a facti
*'Inio your homes the recruiting officers are coming,
they win take your eons of mUitary age and impress them
into the army;
''Stand them up in long rows, break them into squads
and platoons, teach them to deploy and wheel ;
"Guns will be put into their hands; they will be taught
not to think, only to obey without questioning.
"Then they will be shipped thru the submarine zone
by the hundreds of thousands to the bloody quagmire of
Europe.
"Into that seething, heaving swamp of torn flesh and
floating entrails they will be plunged, in regiments, divi-
a^>ns and armies; screaming as they go.
"Agonies of torture will rend their flesh from their sin-
ews, will crack their bones and dissolve their Itrngs; every
pang will be multiplied in its passage to you.
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24C OCnX)BER TERM, 1919.
Opiiiion of the Court. 252 U. S.
''Black death will be a guest at every American fire-
aide. MotherB and fathers and sisters, wives and sweet-
hearts will know the weight of that awful vacancy left by
the bullet which finds its mark.
"And 9tUl the recruiting officers vnU come; setting age
after age, mounting up to the elder ones and taking the
younger ones as they grow to soldier size;
''And still the toll of death will grow.
♦ ♦ ♦ ** * « «
"The manhood of America ^ses at that seething,
heaving swamp of bloody canion in Europe, and say
'Must we— be that! '
"You cannot avoid it; you are being dragged, whipped,
lashed, hurled into it; Your flesh and brains and entrails
must be crushed out of you and poured into that mass of
festering decay;
"It is the price you pay for your stupidity— you who
have rejected Socialism.
"Food prices go up like skyrockets; and show no sign
of biu'sting and coming down.
'T^ Attorney General of the United States is so busy
sending to prison men who do not stand up when the Star
Spangled Banner is played, that he has no time to protect
the food supply from gamblers.
"This war began over commercial routes and ports
and rights; and underneath all the talk about democracy
versus autocracy, you hear a continual note, and under-
current, a subdued refrain;
"'Get ready for the commercial war that will follow
this war.'
"Commercial war preceded this war; it gave rise to this
war; it now gives point and meaning to this war;
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PIERCE V. UNITED STATES, 347
239. Opinion of the Ck>urt.
'^This, you say, is a war for the rights of small nations
and the first land sighted when you sail across the At-
lantic is the nation of Ireland, which has suffered from
England for three centuries more than what Germany
has inflicted upon Belgixmi for three years.
"But go to it! Believe everything you are told — you
always have, and doubtless always will, believe them.
"For this war — as every one who thinks or knows
anjrthing will say, whenever truth-telling becomes safe
and possible again, — ^This war is to determine the que»*
tion, whether the chambers of commerce of the allied
nations or of the Central Empires have the superior right
to eaq>loit undeveloped countries.
"It is to determine wheth^ interest, dividends and
profits shall be paid to investors speaking German or
those epeaking English and French.
^'Our entry into it was determined by the certainty that
if the aOies do not trin, J. P. Mcrgan^a loans to the aiiies
mU he repudiated^ and those American investors who bit an
kis promises would he hooked.^'
These expressions were interspersed with suggestions
that the war was the result of the rejection of Socialism,
and that Socialism was the "salvation of the himian race.''
It was in evidence that defendants were members of
the Socialist Party— a party " organised in locals through-
out the country" — and affiliated with a local 'branch
in the City of Albany. There was evidence, that at a
meeting of that brandi, held July 11, 1917, at which
Pierce was i^esent, the question of distributing "The
Price We Pay " was brou^t up, sample copies obtained
from the national organisation at .Chiisago ha\ing been
produced for examini^tion and consideration; that the
pamphlet was discussed*, as well as the question of order-
ing a large number of copies from the national organiza-
tion for distribution; it was stated that criminal proceed*
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248 OCTOBER TERM, 19191
OpmioQ of the Court 252n.a
ingB were pending in the United States District Court
for the District of Maryland against jMurties indicted for
distributing the same pamphlet; some of the members
present, one of them an attorney, advised against its
distribution, and a motion was adopted not to distribute
it until it was known to be legal. However, some action
appears to have been taken towards procuring copies for
distribution, for on July 17ih a large bundle of them,
said to have been 5,000 copies, was delivered at Kerce's
house by the literature ag^it of the Albany local. At a
meeting held July 25 the subject was again brought up,
it having become known that in the criminal proceedings
before mentioned the court had directed a v^rdict-irf ac-
quittal; thereupon the resolution of July 11 was rescinded
and distributors were called for. On July 29, defendants
Pierce, Creo, and Zeilman met at Piece's house about
half past 5 o'clock in the morning, and immediately began
distributing the pamphlets in large numbers throughout
the City of Albany. Each of them took about 500 copies,
and having agreed among themselves about the division
of the territory, they went from house to house, leaving
a copy upon each doorstep. They repeated this on suc-
cessive Sundays until August 26, when they were arrested.
Nelson acted with them as a distributor on the latter
date, and perhaps on one previous occasion.
There was evidence that in some instances a leaflet en-
titled ''Protect Your Rights," and bearing the Chicago
address of the national office of the Socialist Party, was
folded between the pages of the pamphlet. The leaflet
was a fervid appeal to the reader to join the Socialist
Party, upon the ground that it was the only organization
that was opposing the war. It declared among other
things: "This organization has opposed war and con-
scription. It is still opposed to war and conscription.
. . • Do you want to help in this struggle? . • . The
party needs you now as it never needed you before. You
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PIERCE V. UNITED STATES. 249
289. Opinion of the Court.
Bieed 'the party now as you nev^ needed it before. Men
are going to give up their lives for a cause which ^u are
convinced is neither great or noble, will you then be-
grudge your best efif orts to the cause that you feel certain
is both great aud noble and in which lives the only hope
and promise of the future? '' And there was evidence
of declarations made by Pi^x» on the 16th and 17th of
Augtist, amoimting to an acknowledgment of a treason-
able purpose in (^posing the draft, which he sought to
excuse on the ground that he had ''no use for England."
It was shown without dispute that defendants dis-
tributed the pamphlet— "The Price We Pay "—with
full understanding of its contents; and this of itself fur-
nished a ground for attributing to them an intent to bring
about, and for finding that they attempted to bring about,
any and all such consequences as reasonably mie^t be
anticipated from its distribution. If its probable efifect
was at all disputable, at least the jury fairly might believe
that, under the circumstances existing, it would have a
tendency to cause insubordination, disloyalty, and refusal
of duty in the military and naval forces of the United
States; that it amoimted to an obstruction of the recruit-
ing and enlistment service; and that it was intended to
interfere with the success of our military and naval forces
in the war in which the United States was then engaged.
Evidently it was intended, as the jury found, to interfere
with the conscription and recruitment services; to cause
men eligible for the service to evade the draft; to bring
home to them, and especially to thdr parents, sisters,
wiM|8, and sweethearts, a sense of impending personal
loss, calculated to discourage the young men froiK^ enter-
ing the service; to arouse su£fpicion as to whether the
chief law officer of the Government was not more con-
cerned in enforcing the strictness of military discipline
than in protecting the i>eople against improper q)eculation
in their food lAipply; and to produce a belief that our
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2S0 OCTOBER TEBM; 1919.
OpimoQ of the Court. 2S2U.&
participation in the war was the product of sordid and
BUiister motives, rather than a design to protect the in-
terests and maintain the honor of the United States.
What interpretation ought to be placed upon the pamph-
let, what would be the probable ^ect of distributing it
in the mode adopted, and what were defendants' motives
in doing this, were questions for the jury, not the court,
to decide. Defendants took the ^tness-stand and sever-
ally testified, in effect, that thdr sole purpose was to gain
converts for Socialism, not to interfere with the operation
or success of the naval or military forces of the United
States. But their evidence was far from conclusive, and
the jury very reasonably mic^t find — as evidentiy thqr
did — ^that the protestations of innocence were insincere,
and that the real purpose of defendants — ^indeed, the
real object of the pamphlet— was to hamper the Govern-
ment in the prosecution of the war.
Whether the printed words would in fact produce as a
proximate result a material interference with the recruiting
or enlistment service, or the operation or success of the
forces of the United States, was a question for the jury to
decide in vie^ of all the circumstances of the time and con-
sidering the place sjfd manner of distribution. Schenck
V. United States, 249 U. S. 47, 52; Frokwerk v. United \
States, 249 V. 8. 2M,2(»;Deb8y. United States, U9V.S.
211, 216.
• Ck>ncert of action on the part of Pierce, Greo, and Zeil-
man clearly, appeared, and, taken in connection with the
nature of the pamphlet and their knowledge of its con-
tents, furnished abundant evidence of a conspiracy and
overt acts to sustain their conviction upon the second
count.
The validity of the conviction upon the third count ^
(the only one that includes Nelson) , depends upon whether
there was lawful evidence of the falsity of the statements
contained in the pamphlet and tending to sho^ that,
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PIERCE V. UNITED STATES. 261
239. Opinion of the Court
knowing ihey were false, or disregarding thdr probable
falsity, defendants willfully circulated it, with intent to
interfere with the operation or success of the military or
naval forces of the United States. The criticism of the
evidence admitted to show the untruth of the statements
about the Attorney General and about J. P. Morgan's
loans to the Allies is not well founded; the evidence was'
admissible; but we hardly see that it was needed to con-
vince a reasonable jury of the falsity of these and other
statements contained in the pamphlet. Common knowl-
edge (not to mention the President's Address to Congress
of April 2, 1917, and the Joint Resolution of April 6 de-
claring war, which were introduced in evidence) would
have sufficed to show at least that the statements as to the
causes that led to the entry of the United States into the
war against Germany were grossly false; and such common
knowledge went to prove also that defendants knew th^
were untrue. That they were false if taken in a Uteral
sense hardly is disputed. It is argued that they ought not
to be taken literally. But when it is remembered that the
pamphlet was intended to be circulated, and so far as
defendants acted in the matter was circulated, among
readers of all classes and conditions, it cannot be said as
matter of law that no considerable number of them would
imderstand the statements in a literal sense and take them
seriously. The jury was warranted in finding the state-
ments false in fact, and known to be so by the defendants,
or else distributed recklessly, without ^ort to ascertain
the truth (see Cooper v. SMesinger^ 111 U. S. 148, 1S5),
and circulated willfully in order to interfere with the suc-
cess of the forces of the United States; This is sufficient
to sustain the conviction of all of the defendants upon the
third count.
There being substantial evidence in support of the
charges, the court would have erred if it had peffen4>torily
directed an acquittal upon any of Uie counts. The
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252 OCTOBER TERM, 1919.
Opimon of the Court 262 U. &
question whether the effect of the evidence was such as to
overcome any reasonable doubt of guilt was for the jury,
not the court, to decide.
It is suggested that the clause of § 3 — ^''Whoever, whm
the United States is at war, shall willfully make or con-
vey false reports or false statements with intent to inter-
fere with the operation or success of the military or naval
forces of the United States or to promote the success of its
enemies'' — cannot be construed to cover statanents that
oh their face, to the common understanding, do not pur-
port to convey anything new, but only to interpret or
coDunent on matters pretended to be facts of public
knowledge; and that hojvever false the statements and
with whatever evil purpose circulated, th^ are not
punishable if accompanied with a pretense of commenting
upon them as matters of public concern. We cannot
accept such a construction; it unduly restricts the natural
meaning of the clause, leaves little^or it to operate upon,
and disregards the context and the circumstances under
which the statute was*passed. In effect, it would allow the
professed advocate of disloyalty to escape responsibility
for statements howev^ audaciously false, so long as he
did but reiterate what had been said before; while his
ignorant dupes, believing his statements and thereby per-
suaded to obstruct the recruiting or enlistment service^
would be punishable by fine or imprisonment under the
same section.
Other assignments of error pointing to ruling9 upon
evidence and instructions ^ven or refused to be given to
the jury are sufficiently disposed of by what we have said.
The conceded insufficiency of the first count of the in-
dictment does not warrant a reversal, since the sentences
imposed upon Pierce, Oreo, and Zeilman did not raceed
that which lawfully might have been imposed und^ the
second, third, or sixth counts, so that the concurrent sen-
tence under the first cc *nt adds nothing to their punish-
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PIERCE t;. UNITED STATES. 253
280. Bbaivdsib and Hqlues, JJ., diasentiiig.
mentt. ClacMm v. United States, 142 U. S. 140, 146;
Evans v. United States, (2 cases) 153 U. S. 584, 595, 608;
Putnam v- United States, 162 XJ. S. 687, 714; Ahrams v.
United States, ^ U. B. 616, 619.
Judgments affiarmed,
Mr. Jt78TICB Brandbis, dissenting, delivered the f oUoWr
ing opinion in which Mb. Justicb Holmes concurred.
What is caUed ''distributing literature'' is a means
commonly used by the Socialist Party to increase its
membership and otherwise to advance tihe cause it advo-
cates. To this end the national organization with head-
quarters at Chicago publishes such ''literature'' from
time to time and sends sample copies to the local organi-
sations. These, when they approve, purchase copies and
call upon members to volunteer for service in making the
distribution locally. Sometime before July 11, 1917, a
local of the Socialist Party at Albany, New York, re-
ceived from the national organization sample copies of a
four-page leaflet entitled "The Price We Pay," written
by Irwin St. John Tucker, an Episcopal clergyman and a
man of sufficient prominence to have been included in the
1916-1917 edition of "Who's Who in America." The
proposal to distribute this leaflet came up for action at a
meeting of the Albany local held on July 11, 1917. A
member who was a lawyer called attention to the fact
that the question whether it was legal to distribute this^
leaflet was involved in a case pending in Baltimore in the
District Court of the United States; and it was voted "not
to distribute 'The Price We Pay' until we know if it is
legal." The case referred to was an indictment under the
Selective Draft Act for conspiracy to obstruct recruiting by
means of distributing the leaflet. Shortly after the July
11th meeting it became known that District Judge Rose
had directed an acquittal in that case; and at the next meet-
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254 OCTOBER TERM, 1919.
Brandbis and Hqlmbb, JJ., diaeiitmg. 252 U. 8.
ing of the local, held July 25th, it was voted to reseiiid
the motion ^'against distributing 'The Price We Pay' and
call for distributors." Four members of the local, two of
them native Americans, one a naturalized citizen, and the
fourth a foreigner who had filed his first naturalization
papers, volunteered as distributors. They distributed
about five thousand copies by hand in Albany.
District Judge Rose in directing an acquittal had said
of the leaflet in the Baltimore case:
''I do not think there is anything to go to the jury in
this case.
''You may have your own opinions about that circular;
I have very strong individual opinions about it, and as to
the \^isdom and fairness of what is said there; but so far as
I can see it is principally a circular intended to induce
I>eople to subscribe to Socialist newspapers and to get
recruits for the Socialist Party. I do not think that we
ought4;o attempt to prosecute people for that kind of thing.
It may be very unwise in its efifect, and it may be unpa-
triotic at that particular time and place, but it would be
going very far indeed, further, I think than any law that
I know of would justify, to hold that there has been made
out any case here ev&i tending to show that there was an
att^npt to persuade men not to obey the law."
In New York a different view was taken; and an inr
dictmenl in- six counts was found against the four dis-
tributors. Two of the coimts were eliminated at the triaL
On the other four th^re were convictions, and on each a
sentence of fine and imprisonment. But one of the four
counts was abandoned by the Government in this court.
Ther6 remain for consideration count three, which <{harges
a violation of § 3 of the Espionage Act by making false re-
ports and false statements, with the, intent "to interfere
with the operation and success of the military and naval
forces"; and counts two and six, also. involving § 3 of the
Espionage Act, the one for conspiring, the other for at-
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FIERCE V. UNITED STATES. 255
239. Bbamdsib and Holmes, JJ., dianntiog.
tempting, ''to cause insubordination^ disloyalty and re-
fusal of duty in the military and naval forces." Demurrers
to the several counts and motions that a verdict be directed
for the several defendants were overruled.
In considaing the several counts it is important to note
that three classes of offences are included in § 3 of the
Espionage Act, and that the essentials of liabiUty under
them differ materially. The first class, under which
count three is drawn, is the offence of making or con-
vQring false statements or reports with intent to interfere
with the operations or success of the military and naval
forces. The second, involved in counts two and six is that
of attempting to cause insubordination, disloyalty, mu-
tiny, or refusal of duty. With the third, that of obstruct-
ing the recruiting and enlistment service, we have, since
the abandonment of the first count, no conccsm here. Al-
though the uttering or publishing of the words charged be
admitted, there necessarily arises in every case — ^whether
the offence charged be of the first class or of the second —
the question whether the words were used ' ' in such circum-
stances and are of such a natiu^ as to create a dear and
present danger that they wiU bring about the substantive
evil that Congress has a right to prevent," Sekenck v.
United States, 249 IT. S. 47, 52; and also the question
whether the act of uttering or publishing was done will-
fully, that is, with the intent to produce the result which
the Congress sought to prevent. But in cases of the first
class three additional elements of the crime must be estab-
lished, namely:
(1) The statement or report must be of something
capable of being proved false in fact. The expression of
an opinion, for instance, whether sound or unsound,
might conceivably afford a sufficient basis for the charge
of attempting to cause insubordination, disloyalty or
refusal of duty, or for the charge of obstructing recruiting;
but, because an opinion is not capable of being proved
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266 OCTOBER TERM, 1919.
Bbandbis and Houcbs, JJ., diiwwiting 252 U. B.
false in fact, a statement of it cannot be made the basis of a
prosecution of the first class.
(2) The statement or report must be proved to be
false.
(3) The statement or report must be known by the
defendant to be false when made or conveyed.
In the case at bar the alleged offence consists wholly in
distributing leaflets which had been written and publidied
by others. The fact of distribution is admitted* But
every other element of the two classes of crime charged
must be established in order to. justify conviction. With
unimportant raceptions to be discussed later, the only
evidence introduced to establish the several elements of
both of the crimes charged is the leaflet itself; and the
leaflet b unaffected by extraneous evidence which might
l^ve to words used therdn special meaning or effect. In
order to determine whether the leaflet furnishes aixy
evidence to establish any o{ the above enumerated ele-
ments of the offences charged, the whole leaflet must
necessarily be read. It is as follows:
''THE PRICE WE PAY.
By Irwin St. John Tucker.
I.
''Conscription is upon us: the draft law is a factl
Into your homes the recruiting oflicers are coming.
They will take your sons of military age and impress them
into the army;
Stand them up in long rows, break them into squads and
platoons, teach them to deploy and wheel;
Guns will be put into their hands; they will be taught
not to think, only to obey without questioning.
Then they wUl be shipped thru the submarine zone 1^
the himdreds of thousands to the bloody quagmire ci
Europe.
Into that seething, heaving swamp of torn flesh and
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FIERCE r. UNITED STATES. 267
239. Bbaivdbib and Bxxjob, JJ., disseatmg.
floating entrails they will be plunged, in re^ments, divi-
sions and armies, screaming as th^ go.
Agonies of torture will rend their flesh from their sinews,
will crack their bones and dissolve their lungs; every pang
will be multiplied in its passage to you.
Black death will be a guest at every American fireside.
Mothers and fathers and sisters, wives and sweethearts
will kndw the weight of that awful vacancy lef 1 1^ the
bullet which finds its mark.
And still the recruiting officers will come; seizing age
after age, mounting up to the dder«ones and taking the
younger ones as th^ grow to soldier size;
And still the toll of death will grow.
Let them come! Let death and desolation make barren
every Homel Let the agony of war crack every parent's
heart! Let the horrors and miseries of the world-downfall
swamp the happiness of every hearthstonel
Then perhaps you will believe what we have been
telling you! For war is the price of your stupidity, you
who have rejected Socialism!
n.
''Testeiday I saw moving pictures of the Battle qf the
Somme. A company of Highlanders was shown, yoong
and handsome in their kilts and brass hehnets and bri{^t
plaids.
They laughed and joked as they stood on the screen in
their ranks at ease, waiting the command to advance.
The camera shows rank after rank, standing strong a;nd
erect, smoking and chaffing with one another;
Then it shows a sign: 'Less than 20 per cent, of these
soldiers were alive at the close of the day.'
Only one in five remained of all those laddies, when
sunset came, the rest were crumpled masses of carrion
under thdr torn plaids.
Many a highland home will wail and eroon for many a
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268 OCTOBER TERM, 1919.
Bbandsib and Holmss, JJ., disBentiiig. 252 U. 8.
year, because of these crumpled masses of carrion, wrapped
in their plaids, ui)on a far French hillside.
I saw a regiment of Germans charging downhill against
machine gunfire. They melted away like anowflakes
falling into hot water.
The hospital camps were shown, with hundreds and
thousands of wounded men in all stages of pain and
suffering, herded like animals, milling aroimd like cattle
in the slaughter pens.
All the horror and agony of war were esdubited; and at
the end a flag was thrown on the screen and a proclama-
tion said: 'Enlist for your Country I' The applause was
very thin and scattering; and as we went out, most of the
men shook their heads and said:
'That's a hell of a poor recruiting scheme!'
' For the men of this land have been fed full with horror
during the past three years; and tho the call for volunteers
has become wild, frantic, desperate; tho the posters scream
from every billboard, and tho parades and red fire inflame
the atmosphere in every town;
The m£mhood of America gazes at that seething, heav-
ing swamp of bloody carrion in Europe, and say 'Must
we — be that!'
You cannot avoid it; you are being dn^ged, whipped,
lashed, hurled into it; Your flesh %nd brains and entrails
must be crushed out of you and poured into that mass of
festering decay;
It is the price you pay for yotir stupidity — you who have
rejected Socialion.
III.
''Food prices go up like skyrockets; and show no sign of
bursting and coming down.
Wheat, com, potatoes, are far above the Civil War
mark; ^gs, butter, meat — ^all these things are almost
b^ond a poor family's reach.
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PIERC5E V. UNITED STATES. 269
239. Bbandsts and Holmib, JJ., diflBenting.
The Attorney General of the United States is so busy
sending to prison men who do not stand up when the Star
Spangled Banner is played, that he has no time to protect
the food supply from gamblers.
Starvation begins to stare us in the face — and we, people
of the richest and most productive land on earth are told
to starve ourselves yet further because our allies must be
fed.
Submarines are steadily sending to the fishes millions of
tons of food stuffs; and still we build more ships, and send
more food, and more and more is sunk;
Frantically we grub in the earth and sow and tend and
reap; and then as frantically load the food in ships, and
then as frantically sink with them —
We, the 'civilized nations' of the world!
While the children of the poor clamor for their bread and
the well to do shake their heads and wonder what on earth
the poor folks are doing;
The poor folks are growling and muttering with savage
side-long glances, and are rolling up thdr sleeves.
For the price they pay for their stupidity is getting
b^ond their power to payl
IV.
'^Frightfid reports are being made of the ravages of
venereal diseases in the army training camps, and in the
barracks where the girl munition workers Uve.
One of the great nations lost more men thru loathsome
immoral diseases than on the firing line, during the first
18 months of the war.
Back from the Mexican border our boys Qome, spreading
the curse of the great Black Plague among hundreds of
thousands of homes; blasting the lives of innocent women
and unborn babes.
Over in Europe ten miUions of women are dqxrived of
their husbands, and fifty millions of babies can never be;
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260 OCTOBER TERM, 1919.
Bbandbis and HoiiiiBS, JJ., diasentiog. 263 U. B.
Of thoae wcnneii who will have their mates given back
to them, there are twenty millions who will have mined
wrecks of men; mentally deranged, physically broken,
morally rotten;
Future generations of families are made impossible;
blackness and desolation instead of happiness and love will
reign where the homes of the future diould be;
And all because you believed the silly lie, that 'Social-
ism would destroy the homel'
Pound on, guns of the embattled host; wreck yet more
homes, kill yet more husbands and fathers, rob yet more
maidens of their sweethearts, yet more babies of their
fathers;
That is the price the world pays for believing the mon-
strous, damnable, outrageous lie that Socialism would
destroy the home!
Now the homes of the world are being destroyed; every
one of them woidd have been saved by Socialism. But
you would not believe. Now pay the price!
V.
''This war, you say, is aU caused by the Kaiser; and we
are fighting for d^nocracy agsdnst autocracy. Once
dethrone the Kaiser and there will be permanent peace.
That is what they said about Napoleon. And in the
centmy since Napoleon was overthrown there has be^i
more and greater wars than the world ever saw before.
There were wars before Germany ever existed; before
Rome ruled; before Egypt dominated the ages.
War has been universal; and the cause of war is always
the same. Somebody wanted something somebody else
possessed and th^ fought over the ownership of it.
This war began over commercial routes and ports and
rights; and underneath all the talk about democracy
versus autocracy, you hear a continual note, and und«f<-
current, a subdued refrain;
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PIERCE V. UNITED STATES. 261
239. Brandbis and Holmes, JJ., diasentiiig.
'Get ready for the commercial war that will follow this
war.'
Commercial war preceded this war; it gave rise to thijs
war; it now ^ves point and meaning to this war;
And as soon as the guns are stilled and the dead are
buried, commercial forces will prepare for the next bloody
struggle over routes and ports and ri^ts, coal mines ard
raibx)ads;
For these are the essence of this, as of all other wars!
This, you say, is a war for the ri^t« of small nations and
the first land sifted when you sail across the Atlantic is
the nation of Ireland, which has suffered from England ior
three centuries more than what Germany has inflicted
upon Belgium for three years.
But go to it! Believe everything you are told — you
always have and doubtless always will, believe them.
Only do retain this much reason; when you have pud
the price, the last and uttermost price; and have not re-
cdved what you w^re told you were fighting for — ^namely
Democracy-^
Then remember that the price you paid was not the
purchase price for justice, but the penalty price for your
stupidity 1
VI.
^'We are beholding the spectacle of whole natioiis
working as one person for the accomplishment of a single
end — ^namely killing.
Ev^y man, every woman, every child, must 'do his
bit' in the service of destruction.
We have been telling you for, lo, these many years that
the whole nation could be mobilized and every man, wo-
man and child induced to do his bit for the service of
humanity but you have laughed at us.
Now you call every person traitor, slacker, pro-enemy
who will not go crazy on the subject of killing; and you
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262 OCTOBER TERM, 1919.
Bbamdbib and Houobs, JJ.^ diaaentiiig. 252 U. S.
have turned the whole energy of the nations of the world
mto the service of their kings for the purpose of killing —
killing — ^killing.
Why would you not believe us when we told you that
it was possible to codperate for the saving of life?
Why were you not interested when we b^ged you to
work all together to build, instead to destroy? To pre-
serve, instead of to murddr?
Why did you ridicule us and call us impractical dream-
ers when we prophesied a world-state of f ellowworkers,
each man creating for the benefit of all the world, and
the whole world creating for the benefit of each man?
Those idle taunts, those thoughtless jeers, that refusal
to listen, to be faii^minded— you are paying for them
now.
— Lo, the price you payl Lo, the price your children
will pay. Lo, the agony, the death, the blood, the un-
forgettable sorrow,—
The price of your stupidity I
For this war — as every one who thinks or knows any-
thing will say, whenever truth-telliDg becomes safe and
possible again, — ^This war is to determine the qu^tion,
whether the chambers of commerce of the allied nations
or of the Central Empires have the superior right to ex-
ploit undeveloped countries.
It is to determine whether interest, dividends and prof-
its shall be paid to investors speaking German or those
speaking English and French.
Our entry into it was determined by the certainty that
if the allies do not win, J. P. Morgan's loans to the allies
will be repudiated, and those American investors who
bit on his promises wotild be hooked.
Socialism would have settled that question; it woidd
determine that to every producer shall be given all the
value of what he produces; so that nothing would he left
over f OaT exploiters or investors.
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PIERCE V. UNITED STATES. 263
239. Brambeib and Holmxs, JJ., disBentiiig.
With that great question settled there would be no
cause for war.
Until the question of surplus profits is settled that way,
wars will continue; each war being the prelude to a still
vaster and greater outburst of hell;
Until the world becomes weary of paying the stupen-
dous price for its own folly;
Until those who are sent oiit to maim and murder one
another for the profit of bankers and investors determine
to have and to hold what they have fought for;
Until money is no more sacred than human blood;
Until human life refuses to sacrifice itself for private
gain;
Until by the explosion of millions of tons of dynamite
the stupidity of the hiunan race is blown away, and Social-
ism is known for what it is, the salvation of the hiunan
race;
Until then — ^you will keep on pajdng the price!
IF THIS INTERESTS YOU, PASS IT ON.
*♦♦♦♦♦♦*
Subscribe to The American Socialist, pubUshed' weekly
by the National Office, Socialist Party, 803 West Madison
Street, Chicago, 111., 50 cents per year, 25 cents for 6
months. It is a paper without a muzzle.
♦ * *^* « « « «
Cut this out or copy it and send it to us. We will see
that you promptly receive the desired information.
♦ * ♦ « ♦ ♦ * 4i/^.
To the National Office, Socialist Party, 803 W. Madison
St., Chicago, 111.
I am interested in the Socialist Party and its principles.
Please send me samples of its literature.
Name
Address
City State .."
First: From this leaflet, which is divided into six
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264 OCTOBER TERM, 1919.
Bbandbis and Holmbs, JJ., dinwntmg. 252 U. S.
chapterBi there aie set forth m count three, five sentences
as constituting the false statements or reports wilfully
conv^ed by defendants with the intent to interfere with
the operation and success of the miUtary and naval
forces of the United States.
(a) Two sentences are culled from the first chapter.
Th^ follow immediately after the words: ''Conscription .
is upon us; the draft law is a fact'' — and a third sen-
tence culled follows a little later. They are:
''Into your homes the recruiting officers are coming.
They will take your sons of military age and impress them
into the army. . . . And still the recruiting officers
will come; seizing age after age, mounting up to the elder
ones and taking the younger ones as they grow to soldier
size.''
To prove the all^^ falsity of these statements the
Government gravely called as a witness a major in the
regular army with 28 years' experience, who has been
assigned since July 5, 1917, to recruiting work. He
testified that "recruiting " has to do with the volunteer
service and has nothing to do with the drafting system
and tha.t the word impress has no place in the recruiting
service. The subject of his testimony was a matter not
of fact but of law: and as a statement of law it was erro-
neous. That "recruiting is gaining fresh supplies for the
forces, as well by draft as otherwise " had be^i assumed
by the Circuit Court of Appeals for that circuit in Ifodsea
PtMishing Co. v. Patten, 246 Fed. Rep. 24 (decided eleven
days before tins testimony was given), and was later ex-
pressly held by this court in Schenck v. United States, 249
U. S. 47, 53. The third of the sentences charged as false
was obviously neither a statement nor a rq)ort, but a
prediction ; and it was later verified. ^ That the prediction
^ On May 20,. 1918, c. 79, 40 Stat. 557, OmgreBS, by joint reeolutipn,
extended the draft to- males who had sinoe June 5, 1917, attained the
age of twenty-one and authorised the President to extend it to thoea
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PIERCE V. UNITED STATES. 286
239. Bramdbis and Holmsb, JJ., diBBenting.
made in the leaflet was later verified is, of eouiBe, im-
material; but the fact shows the danger of extending
beyond its appropriate sphere the scope of a charge of
falsity.
(5) The fourth sentence set forth in the third count
as a false statement was culled from the third chapter of
the leaflet and is this:
"The Attorney General of the United States is so buiE^
sending to prison men who do not stand up when the Star
Spangled Banner is played, that he has not time to pro-
tect the food supply from gamblers.''
To prove the falsity of this statement the Government
called the United States Attorney for that district who
testified that no federal law makes it a crime not to stand
up when the ''Star Spangled Banner " is played and that
he has no knowledge of any one bdng prosecuted for fail-
ure to do so. The presiding judge supplemented this
testimony l^ a ruling that the Attorney General, like
every officer of the Government, is presumed to do his
duty and not to violate his duty and that this presumption
shoidd obtain unless evidence to the contrary was adduced.
The Regulations of the Army (No. 378, Edition of 1913,
p. 88) provide that if the National Anthem is played in
any place those present, whether in imif orm or in civilian
dotiies, shall stand until the last note of the anthem: The
regulation is expressly limited in its operation to those
belonging to the military service, although the practice
was commonly observed by civilians throughout the war.
thereafter attainiDg that age. Under.th]8 act, June, 5, 1918, was fixed
as the date for the Second Registration. Subsequently, August 24,
1918, was fixed for the supplemental registration of all coming of age
between June 5, 1918, and August 24, 1918. 40 Stat. 1834j 40 Sm.
1781. By Act of August 31, 19l!(, c. 166, 40 Stat. 955, the provisions
<rf the draft law were extended to persons between the ages of eighteen
and forfy-five. Under this act, September 12, 1918, was fixed as the
date for the Third Registration. 40 Stat. 1840. .
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266 OCTOBER TERM, 1919.
Bbandbib and Houubs, JJ., diasenting. 252 U. 8.
There was no federal law impoBing such action upon t^enu
The Attorney General, who does not enforce Army Regar
lations, was, therefore, not engaged m sending men to
prison for that offence. But when the passage in question
is read in connection with the rest of the chapter, it seems
clear that it was intended, not as a stat^nent of fact, but
as a criticism of the Department of Justice for devoting
its efforts to prosecutions for acts or omissions indicating
lack of sympathy with the war, rather than to protect-
ing the community from profiteering by prosecuting vio-
lators of the Food Control Act. (August 10, 1917, c. 53,
40 Stat. 276.) Such criticisms of governmental operations,
though grossly nmf air as an interpretation of facts or
even wholly unfounded in fact, are not ''false rq)orts or
false statements with intent tp interfere with the opera-
tion or success of the military or n ival forces,"
(c) The remaining sentence, set forth in count three
as a false statement, was culled from the sixth chapter
of the leaflet and is this:
''Our entry into it was determined by the certainty
that if the aUies do not wia, J. P. Morgan's loans to the
allies will be repudiated, and those American investors
who bit on his promises would be hooked."
To prove the falsity of this statement the Government
introduced the address made by the President to Congress
on April 2, 1917, which preceded the adoption of the
Joint Resolution of April 6, 1917, declaring that a state
of war exists between the United States and the Imperial
German Government (c. 1, 40 Stat. 1). This so-caUed
statem^xt of fact — ^which is allied to be false — is merely
a conclusion or a deduction from facts. True it is
the kind of conclusion which courts call a conclusion
of fact, as distinguished from a conclusion of law; and
which is sometimes spoken of as a finding of idtimate
fact as distinguished from an evidentiary fact. JBut, in
its essence it is the expression of a judgment — like the
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PIERCE V. UNITED STATES. 267
239. Bbandbib and Holmes, JJ., dissentitig.
statemeats of many so-called historical facts. To such
conclusions and deductions the declaration of this court
in American School of Magnetic HeAding v. McAnnuUy,
187 U. 8. 94^ 104, is applicable:
^' There is no exact standard of absolute truth by which
to prove the ass^ion false and a fraud. We mean by
that to say that the claim of complainants cannot be the
subject of proof as of an ordinary fact; it cannot be proved
as a fact to be a fraud or false pretense or promise, nor
can it properly be said that those who assume to heal
bodily ills or infirmities by a resort to this method of cure
are guilty of obtaining money under false pretenses,
such as are intended in the statutes, which evidently do
not assume to deal with mere matters of opinion upon
subjects which are not capable of proof as to their falsity."
The cause of a war — as of most human action — ^is
not single. War is ordinarily the result of many cooperat-
ing causes, many different conditions, acts and motives.
Historians rarely agree in their judgment as to what was
the determining factor in a particular war, even when they
write under circumstances where detachment and the
availability of evidence from all sources minimize both
prejudice and other sources of error. For individuals,
and classes of individuals, attach significance to those
things which are significant to them. And, as the con-
tributing causes cannot be subjected, like a chemical
combination in a test tube, to quahtative and quantitar
tive analysis so as to weigh and value the various ele-
ments, the historians differ necessarily in their judgments.
One finds the determining cause of war in a great man,
another in an idea, a beUef, an economic necessity, a
trade advantage, a sinister machination, or an accident.
It is for this reason lai^ely that men seek to intehpre^
anew in each age, and often with each new generation.
the important events in the world's history.
That all who voted for the Joint Resolution of April 6,
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268 OCTOBER TERM, 1910.
Bbandbib and HolmbSi JJ., diaaenting. 252 U. S.
1017, did not do so for the reasons assigned by the Plresi-<
dent in his address to Congress on April 2, is demonstrated
by the discussions in the House and in the Senate.^ That
debate discloses also that both in the Senate and in the
House the loans to the Allies and the desure to ensure
their repayment in full were declared to have be^i instru-
mental in bringing about in our country the sentiment in
favor of the war.' However strongly we may believe
' See 55 Cong. Rec. 253, 254, 344, 354, 357, 407.
* Discussion in the Senate April 4, 1917:
'* . . . there iB no doubt in any mind but the enormous amount
of money loaned to the allies in this country has been instrumental in
bringing about a public sentiment in favor of our country taking a
course that would make every bond worth a hundred cents on the
dollar and making the payment of every d<)bt certain and sure." (55
Ckmg. Rec. p. 213.)
Discussion in the House April 5, 1917.
"Since the loan of $500,000,000 was mmle by Moi^m to the allies
their efforts have been persistent to land our soktisrs in the FVenoh
trenches." (55 Ck>ng. Rec. p. 342.)
"Already we have loaned the allies, through ouir banking system, up
to December 31, 1916, the enormous sum of S2,325,900,000 in formal
loans. Other huge sums have been loaned and millions have been
added dnce that date. 'Where your treasures are, there wiU be your
heart also.' That is one of the reasons why we are about to enter
this war. No wond^ the Morgans and the munition maken desire
war. . . . Our fiqanders desire that Uncle Sam underwrite these
and other huge loans and fight to defend their financial xnterests, that
there may be no final loss." (55 Cong. Rec. p. 362.)
"I believe that all Americans, except that limited althou^ influei^
tial class which is willing to go on shedding other men's blood to protect
its investoKents and add to its accursed profits, have abhorred the
thought of war." (55 C>)ng. Rec. p. 386);
"likewise, Mt, Chairman, the J. Fierpont Morgans and their
associates, who have floated war loans running into millions whidi
th^ now want the United States to guarantee by entering the European
war. . . ." (55 Cong. Rec. p. 372.)
"These war genns are both epidemic and contagious. They are in
the air, but somehow or other th^ multiply fastest in the fumes
around the munition factories. You wiU not &id many in our dinmte.
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PIERCE V. UNITED STATES. 269
239. Bbandbib and Holmss^ JJ.^ diasenting.
that these loans were not the slightest makeweight, much
less a determining factor, in the country's decision, the
fact that some of our representatives in the Senate and
the House declared otherwise on one of the most solemn
occasions fn the history of the Nation, shotild help us to
understand that statements like that here charged to
be false are in essence matters of opinion and judgment,
not matters of fact to be determined by a jury upon or
without evidence; and that even the President's address,
which set forth hi^ moral groimds justifying our entry
into the war, may not be accepted as establishing beyond
a reasonable doubt that a statement ascribing a base
motive was criminally false. All the alleged false state-
ments were an inteq>retation and discussion of public
facts of public interest. If the proceeding had been for
libel, the defence of privilege might have been interposed.
Gandia v. PettingiU, 222 U. S. 452. There is no reason
to believe that Congress, in prohibiting a special class of
false statements^ intended to interfere with what was ob-
viously comment as distinguished from a statement.
Ihe presiding judge ruled that expressions of opinion
were not punishable as false statements under the act; but
he left it to the jury to determine whether the five sen*
tences in question were statements of facts or expressions
of opinion. As this determiiuition was to be nuade from
the reading of the leaflet imaff ected by any extrinsic evi-
dence the question was one for the court. To hold that
a jury may make punishable statements of conclusions or
of opinion, like those here involved, by declaring them
to be statements of facts and to be false would practically
deny manbers of small political parties freedom cf criti-
cism and of discussion in times when feelings run hi^
and the questions iiivolved are deemed fimdainental.
They also multiply pretty fast in Wall Street and other nume}' oenten.
I am opposed to dedaring war to save the speoulaton.^' (55 Cong.
Rec. p. 376.)
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270 OCTOBER TERM, 1919.
Braiidbis and Hchjibs, JJ., diBBentiiig. 252 U. S.
There is nothing in the act compelling or indeed justify-
ing such a construction of it; and I cannot believe that
Congress in passmg, and the President in approving, it
conceived that such a construction was possible.
Second: But, even if the passages from the leaflet set
forth in the third count could be deemed false statements
within the meaning of the act, the convictions thereon
were unjustified because evidence was wholly lacking
to prove any one of the other essential elements of the
crime charged. Thus there was not a particle of evidence
that the defendants knew that the statements were false.
They were mere distributors of the leaflet. It had been
prepared by a man of some prominence. It had been
published by the national organization. Not one of the
defendants was an officer even of the local organization.
One of them, at least, was absent from the meetings at
which the proposal to distribute the leaflet was discussed.
There is no evidence that the truthfulness of the state-
ments contained in the leaflet had ever been questioned
before this indictment was found. The statement mainly
relied upon to sustain the conviction — ^that concerning
the effect of our large loans to the Allies — ^was merely a
repetition of what had been declared with great solemnity
and earnestness in the Senate and in the House while
the Johit Resolution was under discussion. The fact that
the President had set forth in his noble address worthy
grounds for our entry into the war, was not evidence that
these defendants knew to be false the charge that base
motives had also been operative. The assation that
the great financial interests exercise a potent, subtle and
sinister influence in the important decisions of our Govern-
ment had often been made by men hi^ in authority.
Mr. Wilson, himself a historian, said before he was Pre^
dent and repeated in the New Freedom that: "The
masters of the Government of the United States are the
combined capitalists and manufacturers of the United
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PIERCE V. UNITED STATES. 271
230. Bbandbib and Holmbs, JJ., disseniizig.
States.'' ^ We may be convinced that the decision to
enter the great war was wholly free from such base in-
fluences but we may not, because such is our belief, per-
mit a jury to find, in the absence of evidence, that it was
proved beyond a reasonable doubt that these defendants
knew that a statement in this leaflet to the contrary was
false.
Nor was there a particle of evidence that these state-
ments were made with intent to interfere with the opera-
tion or success of the military and naval forces. So far as
there is any evidence bearing on the ma,tter of intent, it
is du-ectly to the contrary. The fact that the local refused
to distribute the pamphlet until Judge Rose had directed
a verdict of acquittal in the Baltimore case shows that its
members desired to do only that which the law permitted.
The tenor of the leaflet itself shows that the intent of the
writer and of the publishers was to advance the cause of
Socialism; and each defendant testified that this was
his only purpose in distributing the pamphlet. Further-
more, die nature of the words used and the circumstances
under which they were used showed aflSrmatively that
they did not ^'create a clear and present danger," that
thereby the operations or success of our iiiiUtary and
naval forces woidd be interfered with.
The gravamen of the third count is the charge of wil-
fully conv^ng in time of war false statements with the
intent to interfere with the operation and success of our
military or naval forces. One who did that would be
called a traitor to his coimtry. The defendants, htunble
members of the Socialist Par^, performed as distributors
of the leaflet what would ordinarily be deemed m^:^ly
a menial service. To hold them guilty under the third
^ P^ 57. Then follows: " It is written over every intimate page of
the records of Congress^ it is written all through the history of oooh
ferences at the White House, that the suggestions of eoonomic policy in
thie country have come from one source, not many sources."
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272 OCTOBER TERM, 1910.
Bbandbis and Houobs, J J., diiMntinK. 252 U. 8.
count is to convict not them alone, but, in effect, their
party, or at least its responsible leaders, of treason, as that
word is commonly understood. I cannot believe that
there is any basis in our law for such a condemnation on
this record.
Third: To sustain a conviction on the second or on
the sixth count it is necessary to prove that by cooperating
to distribute the leaflet the defendants conspired or at-
tempted wilfully to ''cause insubordination, disloyalty,
mutiny, or refusal of duty, in the military or naval forces/'
No" evidence of intent so to do was introduced unless it
be found in the leaflet itself. What has been said in
respect to the third count as to the total lack of evidence
of evil intent is equally applicable here.
A verdict should have been directed for the defendants
on these counts also because the leaflet was not distributed/
under such circumstances, nor was it of such a nature, as
to create a clear and present danger of causing either in-
subordination, disloyalty, mutiny or refusal of xiuty in
the military or naval forces. The leaflet contains lurid
and perhaps exaggerated pictures of the horrors of war.
Its arguments as to the causes of this war may appear to
us shallow and grossly unfair. The remedy proposed
may seem to us worse than the evil which, it is argued,
will be thereby removed. But the leaflet, far from coun-
selling disobedience to law, points to the hopelessness of
protest, under the existing system, pictures the irresistible
power of the military arm of the Government, and in-
dicates that acquiescence is a necessity. Insubordina-
tion, disloyalty, mutiny and refusal of duty in the mili-
tary or naval forces are very serious crimes. It is not
conceivable that any man of ordinary intelligence and
normal judgment would be induced by anything in the
leaflet to commit them and thereby risk the severe punish-
ment prescribed for such offences. Certainly there was
no clear and present danger that such wotild be the result.
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MINNESOTA v. WISCX)NBIN. 273
230. Syllabufl.
The leaflet was not even distributed among thoee in the /
military or the naval service. It was distributed among
civilians; and since the conviction on the first count has
been abandoned here by the Government, we have no
occasion to consider whether the leaflet might have dis-
couraged voluntary enlistment or obedience to the pro-
visions of the Selective Draft Act.
The fundamental ri^t of free men to strive for better
conditions throu^ new legislation and new institutions
will not be preserved, if efforts to secure it by argument
to fellow citizens may be construed as criminal incite-
ment to disobey the existing law — ^merely, because the
argument presented seems to those exercising judicial
power to be imf air in its portrayal of existing evils, mis-
taken in ite. assumptions, unsound in reasoning or in-
temperate ii. language. No objections more serious than
these can, in my opinion, reasonably be made to the
arguments presented in ''The Price We Pay."
STATE OF MINNESOTA v. STATE OF WISCONSIN.
IN BQUITY.
No. 16, OriginaL Aigued October 16, 17, 1919.— Deoidod
MarehS, 1920.
Put of the booodaiy between X^sconsm and Mmneeota is deeoribed
in the Wisoonsin Enabling Act of August 6, 1846, as running west-
wanUy, throui^ Lake Superior "to the mouth of the St. Louis River;
thenoe up the main diannel of said river to the first rapids in the
same, above the Indian village, . . . ; thence due south/' etc.
As given in the Minnesota Enabling Act of February 26, 1857, from
the opposite direction, the line follows the boundary of Wisconsin
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274 OCTOBER TERM, 1919.
SyllabuB. ' 252 U.S.
until the same inteiBects the St. Louis River, "thence down said
river to and through Lake Superior/' etc. The St. Louis River
loses its well-defined banks, deep, narrow channel, and obvious
current, characteristic of a river, before reaching Lake Superior
proper, emptying or merging into Upper St. Louis Bay, which joins
with Lower St. Louis Bay and this with Allouez and Superior Bays,
all of the same level as Lake Superior and connected with it by a
narrow "entry." HMf upon historical and other facts and cir-
cumstances, that the mouth of the river, as intended by the Wiscon-
sin Enabling Act, is this "entry" or opening and not where the
river, in a stricter sense of the term, debouches into Upper St.
Louis Bay. P. 279.
At the date of the Wisconsin Enabling Act, Upper and Lower St.
Louis Bays, parts of St. Louis River as herein defined, were broad
sheets with irregular, indented shores, with no definite, uninter-
rupted channel extending throughout their entire length, and with
no steady current controlling navigation. Such vessels as plied there
then and long thereafter, until dredging improvements intervened,
moved fr3ely in different directions, and drew less tlian 8 feet, the
depths of the entry from Lake Superior and of the waters of the
Lower Buy being too slight for vessels drawing more. The Lower
Bay was shallow, with a ruling depth of eight feet, and hod no well-
defined channel. In the Upper Bay there was a narrow, winding
channel near the Minnesota shore with a ruling depth of ten, possibly
eight, feet; but a more direct, median course could be and custom-
arily wa£ pursued by vessels for approximately one mile until a
deeper cluuinel was encountered, and this was long regarded by
officers and representatives of the two States as approximately the
boundary. Hdd, that the boundaiy runs through the middle of the
Lower Bey to a deep channel leading into the Upper Bay, to a point,
thence westward along the aforesaid more direct median course
through waters not less than eight feet deep, approximately one
mile to the deep channel to which it leads, and thence, following
this, up-stream. P. 280.
In applying the rule of the Thalweg {Arkantaa v. Tennessee, 246 U. S.
158), the deepest water and the principal navigable channel are not
necessarily the same. It refers to actual or probable use in the
ordinary course; and to adopt in this case a narrow, crooked channel
close to shore in preference to a safer and more direct one with suffi-
cient water would defeat its purpose. P. 281.
The case is stated in the opinion.
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MINNESOTA v. WISCONSIN. 275
273. Opinion of the Court.
Mr. W. D. BaxUy and Mr. H. B. Fryherger^ with whom
Mr. Clifford L. Hilton, Attorney General of the State of
Mmnesota, Mr. Oscar MiUJieU and Mr. Louis Hanitch
were on the briefs, for complainant.
Mr. M. B. OJhfichy Deputy Attorn^ General of the
State of Wisconsm, with whom Mr. John J. BUnne,
Attorney General of the State of Wisconsin, was on the
brief, for defendant.
Mb. Jttstige MgRxtnolds delivered the opinion of the
court.
We are asked to ascertain and establish the boundary
line between the parties in Upper and Lower St. Louis
BayB. Complainant claims to the middle of each bay —
haU^ay between the shores. The defendant does not
seriously question this claim as to the lower bay, but
eamestfy maintrfjiuR that in the upper one the line follows
a sinuous course near complainant's shore. Since 1893 a
deep channel has been dredged through these waters and
harbor lines have been established. According to Wis-
consin's insistence, its border crosses and recrosses this
channel and intersects certain docks extending from the
Minnesota shore, leaving i)ortions of them in each State.
See TTtJcoimn v.Dtrfiitt, 96U. S. 379; Norton v. Whiteside,
239 U. S. 144.
^'An Act to enable the People of Wisconsin Territory to
form a Constitution and State Government, and for the
Admission of such State into the Union," approved
August 6, 1846, c. 80, 9 Stat. 56, described the boundary
in part as follows: ''Thence [with the northwesterly
boundary of Michigan] down the main channd of the
Montreal River to the middle of Lake Superior; thence
[westwardly] through the centre of Lake Superior to the
mouth of the St. Louis River; thence up the main channel
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276 OCTOBER TERM, 1010.
Opinion of the Cknirt 252 U. 8.
of said river to the first rapids in the same, above the
Indian village, according to Nicollet's map; thence due
south to the main branch of the River St. Croix," etc., etc.
With the boimdaries described by the Enabling Act, Wis-
consin entered the Union May 29, 1848 (c. 50, 9 Stat. 233) .
^'An Act to authorize the people of the Territory of
Minnesota to form a Constitution and State Government,
preparatory to their Admission in the Union," approved
February 26, 1857, c. 60, 11 Stat. 166, specifies a portion
of the boundary thus: ''Thence by a due south line to the
north line of the State of Iowa; thence east along the
northern boundary of said State to the main channel of the
Mississippi River; thence up the main channel of said
river, and following the boundary line of the State of
Wisconsin, imtil the same intersects the Saint Louis River;
thence down said river to and through Lake Superior ^ an the
l)oundary line of Wisconsin and Michigan, until it inter-
aects the dividing line between the United States and
:he British possessions." With boundaries as therein de-
»cribed, Minnesota became a State May 11, 1858 (c. 31,
11 Stat. 285).
The present controversy arises from conflicting inter-
pretations of the words — "thence [westwardly] througih
the centre of Lake Superior to the mouth of the St. Louis
River; thence up the main channel of said river to the first
rapids in the same, above the Indian village, aocording to
Nicollet's map." The situation disclosed by an accurate
survey gives much room for differences concerning the
location of the "mouth of the St. Louis River" and "the
main channel of said river." Nicollet's Map of the
"Hydrographical Basin of the Upp^ Mississippi River,"
published in 1843, and drawn upon a scale of 1 :1,200,000—
approximately twenty miles to the inch — is too small
either to reveal or to give material aid in solving the
difi&culties. A sketch from it-^-approximately on original
scale — ^is printed on the nesct page.
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273.
MINNESOTA v. WISCONSIN.
Opinion of the Court.
277
During 1823-1825 Lieutenant Bayfield of the British
Navy surv^ed and sounded the westerly end of Lake
Skxtch reoM Sbgtion of Nicollet's Map.
On original scale: 20 miles to 1 inch.
Superior and the lower waters of St. Louis River. A chart
compiled from data so obtained (1 :49;300;— 4108 feet to
the inch) and published in 1828, shows the general con-
figuration and lays the proper sailing course southward of
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278 OCTOBER TERM, 1919.
Opinion of the Court. 252 U. 8.
Big Island. Prior to 1865 this was the only available
chart and navigators often xised it.
The first accurate map of these waters was drawn from
surveys and soundings made under direction of Captain
George W. Meade in 1861 and is now on file in the Lake
Survey Qfiice at Detroit. After being reduced one-half^
to a scale of 1 :32;000 or approximately two inches to a
mile — ^it was engraved and published in 1865 or 1866.
Known as the Meade Chart, this reproduction is accepted
by both parties as adequately disclosing conditions
existing in 1846. A rough sketch based upon the chart-
about one-third of its size — and also a photographic
reproduction of a portion of the original map, are printed
on succeeding pages [284, 285.]
Minnesota and Wisconsin Points are low narrow stripe
of sand — ^the former six miles in length, the latter approxi-
mately three. Between them there is a narrow opening
known as ''The Entry," and inside lies a bay (Allouez and
Superior) nine miles long and a mile and a half wide. A
narrow channel between Rice's Point and Connor's
Point leads into Lower St. Louis Bay, approximately a
mile and a half wide and three miles long. Passing south
of Grassy Point another channd leads, into irregular
shaped Upper St. Louis Bay with Big Island at its south-
westerly end. Southeast of this Island begin the well
defined banks, deep narrow channel and obvious current
characteristic of a true river; these continue through many
windings to the falls above the Indian village noted on
Nicollet's Map. .
Meade's Chart indicates: A depth of not over eight feet
across the bar at ''The Entry." A deep channel through
Superior Bay; rather .shallow water with a ruling depth of
eight feet in Lower St. Louis Bay; eight ieet of water on a
fairly direct course, about a mile in length, from the deep
channel south of Grassy Point and east of Fisherman's
Island to the deep water inunediately westward of the
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MINNESOTA t^. WISCONSIN. 279
273. Opinion of thQ Court
bar, about seven-eighths of a mile northeast of Big Island.
It further discloses a curving channel along the west side
of Grassy Point and thence close to the Minnesota shore
and around Big Island, with a depth of fifteen or more
feet except at the bar, where there are only ten, possibly
eighty feet. To the south of Big Island lies the .well-known
and formerly much used course indicated on Lieutenant
Bayfield'9 Map.
The level of the water within all the bays is substantially
the same as in Lake Superior; such current as exists flows
in opposite directions according to the wind and move-
ment within the Lake. The shores are irregular and much
indented.
Since 1893 the United States iiave dredged a twenty-two
foot channel through Upper St. Louis Bay and around
Grasi^ Point; thence through Lower St. Louis Bay (where
there are two branches) and between Rice's and C!onnor's
Points; thence through Superior Bay to ''The Entry" and
into the Lake. Extensive docks have been constructed
finom the Minnesota shore in both the upper and lower
bays; those extending southwest from Grassy Point cross
the boundary claimed by Wisconsin. The general situa-
tion of 1846 continued until long after 1861, but during the
last thirty years extensive improvements required for a
large and busy harbor have produced great changes.
The complainant maint>ains that within the true intend-
ment of the statute the ''mouth of the St. Louis River"
is southeast of Big Island, where end the banks, channel
and current characteristic of a river and lake features
begin. On the other hand the defendant insists, and we
think correctly, that sudi mouth is at the jimction of
Lake Superior and the deep channel between Minnesota
and Wisconsin Points— " The Entry/'
It is unnecessary to specify the many facts and drcumr
stances, historical and otherwise, which lead to the conr
elusion stated. They seem adequate notwithstanding
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280 OCTOBER TERM, 101ft
Opinion of the Court. 2S2 U. S.
some troublesome objections based upon the peculiar
hydrographic conditions.
Treating ''The Entry" as the mouth of the St. Louis
River, where is the line ''thence up the main channel of
said river to the first rapids/' e^c.? This must be deter-
mined upon consideration of the situation existing in 1846,
which the parties admit remained substantially unchanged
until after the Meade survey. No alterations now mate-
rial have come about through accretion or erosion.
The line through Superior Bay is not here called in
question. But let it be noted that no vessel drawing more
than eig^t feet could have passed into that bay from Lake
Superior; that within "The Entry" th^re were only
small boats of light draft; and that navigation long r^
mained rather primitive.
Lower St. Louis Bay was shallow, with a ruling depth of
dght feet, and had no well-defined channel. From the
deep water at the southern tip of Grassy Point a vessel
drawing less than eig^t feet bound norUi of Big Island
and beyond could have tui^ed northwest and followed the
narrow winding channd near the Minnesota shore with a
ruling depth of ten, possibly eight, feet. Or it could have
proceeded westward, approximately one mile, over a more
direct course with a depth of dght feet or more, until it
came to the deeper channel about seven-eigjiths of a mile
northeast of Big Island. This latter course is indicated
by the red trace "A, B, C" on Minnesota's Exhibit No.
1 — Meade's Chart. For many years officers and represen-
tatives of both States regarded the boundaiy as on or
near this line. And, considering all the circumstances,
we think it must be accepted as the main channel within
intendment of the statute. No current controlled navi-
gation and vessels proceeding in opposite directions
followed the same general course.
Both parties say that in 1846 "practically all of Upper
and Lower St. Louis Bays between the shores were nav>-
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MINNESOTA v. WISCONSIN. 281
373. Opinion of the Court
gable for such vessels as were accustomed to use said bays
at said time for the purpose of navigation, and there was
no defined course, or channd, in said bays, which said
vessels followed, but, owing to the depth of the water,
tiiey were permitted and accustomed to travel across
said bays m any direction." For v&ry many years subset
quent to 1846 tiiere were no vessels with ^ght foot draft
upon these waters; and probably none of such sise r^gCh
hilly plied there until 1^ or later.
llie course south of Big Island shown on the Bayfield
map was never accepted as the boundary and need not
be further considered. Wisconsin's claim to that island
is not denied.
Manifestly, from the description heretofore given, the
waters between Big Island and Lake Superior were broad
sheets without any definite uninterrupted de^ channel
extending throughout tiieir entire length. Also, there
was no steady, controlling current. Such vessels as plied
there in 1846 and long thereafter moved with freedom in
different directions. The evidence convinces us that as
navigation gradually increased prior to 1890, the north-
erly courae in Upper St. Louis Bay conunonly followed
by vessels going to or coming from points above Big
Island was not along the narrow curving channel skirt-
ing Grassy Point but over the shorter one near the middle
of the bay.
This court approved the doctrine of Thalweg as opposed
to the physical middle line, in Iowa v. lUinoiSj 147 U. S.
1, and has adhered thereto. Lcuiaiana v. Missisdppif
202 U. S. 1; Waahington v. Oregariy 211 U. S. 127; 214
U. S. 205; Arkansas v. Tennessee, 246 U. S. 158. '"When
a navigable river constitutes the boundary between two
independent States, the line defining the point at which
the jurisdiction of the two separates is well established
to be the middle of the main channel of the stream. The
interest of each State in the navigation of the river admits
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282 OCTOBER TERM, 1019.
. OpinioQ of the Ckmrt. 262 U. EL
of no other line. The preservation I:>y each of its equal,
right in the navigation of the stream is the subject of
paramount interest. . . . Thusthe jurisdiction of each
State extends to the thread of the stream, that is, to the
'mid-channd/ and, if there be several channels, to the
middle of the principal one, or, rather, the one usually
followed." {Iowa v. lUinais, wpra^ pp. 7, 13.) "As to
boundaiy lakes and landlocked seas, where there b no
necessary track of navigation, the line of demarcation
is drawn in the middle, and this is true of narrow straits
separating the lands of two different States.'^ {Louisiana
V. Mimarippi, supra, p. 50.)
The doctrine of Thalweg ^ a modification of the more
ancient principle which required equal division of territory,
was adopted in order to preserve to each State equality
of right in the beneficial use of the stream as a means of
conmiimication. Accordingly, the middle of the prin-
cipal channel^ of navigation is commonly accepted as the
boundary. Equality in the beneficial use often would
be defeated, rather than promoted, by fixing the boundary
on a giv^i line merely because it connects points of great:,
est depth. Deepest water and the principal navigable
channel are not necessarily the same. The rule has direct
reference to actual or probable use in the ordinary comrse,
and common experience shows that vessels do not follow
a narrow crooked channd close to shore, however deep,
when they can proceed on a safer and more direct one
with sufficient water.
As we view the whole record, the claim of Wisconsin
cannot prevail xmless the doctrine of Thalweg requires
us to say that the main channel is the deepest one. So
to apply it here would defeat its fundamental purpose.
The ruling depth in the waters below Upper Bay was
eight feet, and practically this limited navigation to
vessels of no greater draft. For these there was abui^dant
water near the middle Une. Under such circumstances
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MINNESOTA v. WISCONSIN. 283
273. Opinion of the Court.
Minnesota would be deprived of equality of right both
in navigation and to the surface if the boundary line were
drawn near its shore.
A decree will be entered declaring and adjudging as
follows: That the boundary line between the two States
must be ascertained upon a consideration of the situa-
tion existing in 1846 and accurately disclosed by the
Meade Chart. That when traced on this chart the bound-
ary runs midway between Rice's Point and Connor's
Point and throu^ the middle of Lower St. Louis Bay to
and with the deep channel leading into Upper St. Louis
Bay and to a point therein immediately south of the
southern extremity of Gras&y Point; thence westward
along the most direct course, through water not less than
eight feet deep, eastward of Fisherman's Island and as
indicated by the red trace ''A, B, C," on Minnesota's
Exhibit No. 1, approximately one mile, to the deep chan-
nel and immediately west of the bar therein; thence with
such channel north and west of Big Island up stream to
the falls.
Within thirty days counsel may present a proper decree
for carrying this opinion into dSTect. The costs will be
equally divided between the States.
It seems appropriate to repeat the suggestion, made
in WashingUm v. Oregon^ supra^ 217, 218, that the parties
endeavor with consent of Congress to adjust their bound-
aries.
Mr. Justicb Brandbis concurs in the result.
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SflOBx LiNX— Skstghsd from Msadx'b Chart.
Soak: About two-ihirds qf an inch to 1 mile.
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• Fbom a Photogeaph— Portion op Original Meade Map Wbbt of
Gbabst Point, on File in Ofhcb XT. S. Enoinbbrs.
ScdU: About 1 mile to S indieB.
0 (The words *' Fishermana Island" have been added.)
-To The FaUs To Lake Superior-
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286 OCTOBER TERM, 1919.
Syllabus. 2d2U.&
COLE ET AL. v. RALPH.
CEBnORABI TO THB CIRGXTIT COURT OF APPEALS FOR THE
NINTH GIRCniT
Nos. 172, 173. Argued Deoember 8, 1919.— Decided Maroh 15, 1920.
Where judgments of the District Court, rendered for the plaintiff on
verdicts in certain adverse suits, were reversed by the Circuit Court
of Appeals upon a construction and application of the mining laws
without disposing of other questions presented; and, because of the
general interest of the federal questions so decided, writs of certiorari
were allowed to review such judgments of reversal, held, that this
court, althou^ it might confine itself to the matters considered by
the Circuit Court of Appeals, would proceed to a complete decision,
since the parties united in presenting all the questions and the.
litigation had been protracted. P. 290.
Assertion, of defendant's possession, in the answer, cures omission to
aver it in the complaint, in ejectment. Id.
To avoid a waiver, objections to defects of pleading should be timely
and not deferred for advantage at the trial. Id,
A contract for a specified shfu^ in the proceeds pi a mining location
with a right to have it woriced and made prdductive need not be
recorded, in Nevada, to be good inter partes, P. 291.
One who has such a contractual interest is a proper party to an adverse
suit brought to protect the claim, and, under tiie law of Nevada,
may be allowed to come in as a plaintiff before the trial. Id,
In Nevada, an interest in a mining claim arising from a husband's
location and deeded by him to his wife for a recited present mon^
consideration is community property, where it does not appear that
the consideration came from her separate property, or that the min-
ing interest was treated ss such, or that a gift to the wife was in-
tended; and the husband may file an adverse claim against a hostile
application for patent, and sue to protect the claim in his own name.
P. 292.
The right of a mining locator to file an adverse claim and maintain an
adverse suit is not divested by prior attachment of his interest, but
his acts in that regard inure to the benefit of those who afterwards,
through the attachment case, succeed to his interest; and they may
be substituted as plaintiffs when such interest has fully passed to
them. Id.
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COLE V. RALPH. 287
286. Syflabus.
An advene claim is not invalidated by a misnomer of a claimant due
to an inadvertence, by which no one is misled or harmed. P. 298.
Absence of revenue stamps does not make a deed invalid or inadmissible
in evidence under the Act of October 22, 1914. Id.
Rules of the mining law re-stated, respecting the rights of explorers,
those of lode locators and of placer locators, significance and dis-
tinction of discovery and assessment work, and the nature and effect
of adverse proceedings. Pp.294,6<^.
A placer discovery will not sustain a lode location, nor a lode discovery
a placer location. P. 295.
Location — the act or series of acts whereby the boundaries of the claim
are marked, etc., — confers no rights in the absence of discovery.
P. 296.
Assessment work does not take the place of discovery. Id.
A junior placer location with earlier placer discovery prevails over a
senior lode location with later lode discovery. P. 297.
Evidence reviewed and hdd sufficient to go to the jury on the question
of prior disoovety as between lode and placer claims, and as to
whether the latter were initiated by trespass or peaceably and
openly or ^ven with acquiescence of the lode claimant. P. 299.
Evidence that placer claimants entered openly upon lode claims, where
some prospecting had recently been done and where there were
buildings, in charge of a watchman, which had been used by the
lode claimant in operations on other claims and which the placer
claimants did not appropriate or disturb; and that th^ made their
discoveries and locations and remained several months, work-
ing and mining, — hdd enough, in the absence of any proof that they
met with resistance or resorted to hostile, fraudulent acts, to war-
rant a jury in finding no trespass upon the actual possession of the
lode claimant and acquiescence by him. Id.
The presence of buildings owned by a mining claimant, oti his claim
but not used in connection with it, hdd evidence of his actual pos-
session of the place where they stood and, in less degree, of the re-
mainder of the claim; but ineffectual to prevent others from entering
peaceably and in good faith under the mining laws. P. «^U)0.
An adverse placer dajmant does not admit the validity of a pre-existing
lode location by posting a lode location notice through a mistake,
promptly corrected and not misleading. P. 303.
G^eraUy, and specifically in Nevada, recitals of discovery, in location
notices, are sdf-serving declarations, not evidence against adverse
claimants. Id.
Revised Statutes, f 2332, provides that where a mining claim has been
held and worked for a period equal to the time prescribed 1^ the
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X
288 OCTOBER TERM, 1919.
Opinion of the Court. 252 U. 8.
local state or territorial statute of limitations for mining claims,
evidence of such possession and working for such period shall be
sufficient to establish a right to a patent in the absence of any ad-
verse claim. HMy that it does not dispense with, or cure the ab-
sence of, discovery. P. 305.
To ''work" a mining claim is to do something toward making it pro-
ductive, such as developing or extracting an ore body after it has
been discovered. P. 307.
249 Fed. Rep. 81, reveroed.
The case is stated in the opinion.
Mr. Oearge B. Thatcher^ with whom Mr. WiUiam C.
Prentiss was on the briefs, for petitioners.
Mr. Samuel Herridc and Mr. P. G. EUis^ with whom
Mr. Edwin W. Senior was on the briefs, for respondent:
Among the authorities relied on in support of their
claim imder Rev. Stats., § 2332, and Nev. Rev. Laws,
1912, § 4951, were the following : Belk v. Meagher, 104
U. S. 279, 287; Glacier Mountain Min. Co. v. Wittis, 127
U. S. 471; Reams v. Fiama, 215 U. S. 16, 25; C3ostigan,
Mining Law, § 153, note 52; Bujfalo Zinc Co. v. Crump, 70
Arkansas, 525; Harris v. Equator Min. Co., 8 Fed. Rep.
863; Four Hundred TwenJIy Min. Co. v. BvXLion Min. Co.,
3 Sawy. 634; Lindley on Mines, § 865, note 3; id., § 688;
Gulden Y. Murphy, 31 Nevada, 395; Anthony v. Jillson, 83
Califomia, 296; Altoona Min. Co. v. Integral Min. Co.,
114 Califomia, 100; Upton v. Santa Rita Min. Co., 14
N. Mex. 96; Vogel v. Warsing, 146 Fed. Rep. 949; Risch
V. Wiseman, 36 Oregon, 484; Snyder on Mines, §§ 353, 672;
Thomas v. South Butte Min. Co., 211 Fed. Rep. 105, 107,
108.
Mb,^ Justice Van Devantbb delivered the opinion of
the court.
These suits relate to conflicting mining locations in
/Nevada and are what are conunonly called adverse suits.
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COLE V. RALPH. 289
286. Opinion of ihe Court.
The locations set up on one side are lode aiid those on the
otlier placer, the former being designated as Salt Lake
No. 3, Midas, and Evening Star and the latter as Guy
Davis and Homestake. Joseph Ralph is the lode claimant
and the other parties are the placer claimants.
Ralph made application at the local land office for the
issue to him of a patent for the three lode claims, along
with thirteen others not here in question, and in due lime
two adverse claims were filed in that proceeding, one
based upon the Guy Davis and covering most of the
ground within the Salt Lake No. 3, and the other based
upon the Homestake and covering a considerable portion
of the ground within the AGdas and Evening Star. These
suits were brou^t in a state court in support of the ad*
verse claims, and Ralph, the sole defendant, caused th^n
to be removed into the federal court, the parties being
citizens of different States. Afterwards some of the orig-.
inal plaintiffs were eliminated and others broxight in, but
the citizenship remained diverse as before.
The cases were tried together to the court and a jiury,
the latter returning general verdicts for the plaintiffs and
special verdicts finding that when the placer locations
were made no lode had been discovered within the limits
of any of the lode locations. Judgments for the plaintiffs
were entered upon the verdicts and motions by the de-
fendant for a new trial were overruled. Upon writs of
error the Circuit Court of Appeals reversed the judgments
and ordered a new trial, one judge dissenting. 249 Fed.
Rep. 81. The cases are here upon writs of certiorari
which were granted because the ground upon which, the
Circuit Court of Appeals put its decision — ^the construc-
tion and application of some of the mineral land laws — was
deemed of general interest in the regions where those
laws are operative.
The defendant does not rely entirely upon the ground
of decision advanced by the Circuit Court of Appeals,
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290 OCTOBER TERM, 1910.
Opiiiion of the Court 22S2 U. &
but urges at length that, if it be not well taken, the record
discloses other grounds, not considered by that court, for
reversing the judgments and ordering a new trial. And
he further urges that, if the decision of the Circuit Court
of Appeals be right, it is not sufficiently comprehensive
to serve as a guide to the court and tiie parties upon
another trial. The plaintiflPs insist that the judgments in
the District Court were ri^t and should be affirmed.
In the circumstances it is open to us to deal only with
the matter considered by the Circuit Court of Appeals
and to remand the cases to it for any needed action upon
other questions, or to proceed ourselves to a complete
decision. The latter course seems the better inasmuch as
counsel have united in presenting to us all questions
thought to arise upon the record and the litigation already
has covered a considerable period*
Criticism is made of the complaints. As presented in
the state court they fully met the requirements of the
local code, Rev. Laws 1912, § 5526, and there was no re-
quest after the removal into the federal court that they be
recast to meet any further requirements prevailing there.
Apart from the local code, each sufficiently stated a cause
of action in the nature of ejectment, save as some allega-
tions were wanting in precision and it was left uncertain
whether the defendant was in possession. The latter
defect was cured by an affirmative statement in the an-
swer that the defendant was in possession. Texa» & New
Orleans R. R. Co. v. AfiOer, 221 U. S. 4D8, 416. If the
other defects embarrassed the defendant he should have
interposed a timely objection, which doubtless would
have resulted in appropriate amendments. Instead, he
permitted the matter to pass until the trial was in prog-
ress and then sought to obtain some advantage from it
This he could not do; by his failure to make timely ob-
jection the defects had been waived. We h^e dispose of
a rdsted question 1^ saying that, in our opinion, the
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C!OLB V. RALPH. 291
286. Opmion of the Coori.
complaints, with the answers, put in issue the validity of
the lode locations, including the lequiate mineral di»*
eovery.
The defendant inausts that necessary parties did not
join in filing the adverse claims in the land office, that in
the suits there was a misjoinder of plaintiffs and a failure
to join essential plaintiffs, and that deeds showing title
in some of the plaintiffs were erroneously admitted in
evidence in that they were without the requisite revenue
stamps. We think this inastenoe is untenable in all its
Ab respects the Ouy Davie placer, Davis and Faubert
were the origmal locators and Faubert soon conveyed a
fraction of his interest to Thatcher* These three filed the
adverse claim and brou^t the suit, the title bdng in
them at the time. Thereafter Faubert transferred his
remaining interest to Ck)le, Mall^ and Ross, and Thatcher
conv^ed a fraction of his interest to Healey. Because of
these transfers, and with the court's approval, Faubert
was elimmated as a party and Cole, Mall^, Ross and
Heal^ came in as plaint^s. Thus the changes in title
pending the suit were followed by corresponding changes
in the parties plaintiff.
At all the times mentioned the title was in a sense af-
fected by an outstanding contract, executed by the original
locators, which invested Thatcher and Forman with a
right to a specified share in the output or proceeds of the
claim, and possibly with a ri^t to have it worked and
thereby made productive. The contract-was not recorded,
but this is not material, for the contract was good between
the parties and no subsequent purchaser is calling it in
question. See Rev. Laws. 1912, §§ 103&-1040. Unlike
Thatcher, Forman had no interest in the claim othar than
under this contract. He did not join in filing the adverse
claim or in bringing the suit, but with the court's approval
came in as a plaintiff before the trial. We think his iiH
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202 OCTOBER TERM, 1919.
Opiiiioii of the Court 252U.8.
terest was not such as to make him an essential party to
the adverse claim or to the suit, and yet was such as to
make him an admissible party to either. Of course the
acts of those having the title in filing the adverse claim
and bringing the suit inured to his benefit. And had they
proceeded in his absence to a judgment in their favor ibe
same would have been true of it. But this does not prove
that he could not be admitted as a plaintiff. He had an
interest — a real interest — ^in the maintenance and protec-
tion of the claim \idiich was the subject of the suit, and in
view of the liberal provisions of the local statute, Rev.
Laws 1912, §§ 4998, 5000, we think the court did not &rr
in allowing him to come in as a plaintiff. It is not asserted
that his presence was prejudicial to the defendant and we
percdve no ground for thinking it could have been.
As respecia the Homestake placer j Murray Scott and John
J. Healey were the original locators and the title was still
in them when the adverse claim was filed and when the
suit was begun, Unless there be merit in the defendant's
contention that Scott's interest had then passed to others
under attachment proceedings and that Healey's interest
had then passed to his wife. Neither branch of the con-
tention is, in our opinion, well groimded. The attach-
ment proceedings, althou^ commenced before the adverse
claim was filed, did not result in a transfer of Scott's title
until after the present suit was begun. The purported
conveyance of Healey's interest to his wife, to which the
defendant directs attention, recites that it was made upon
a consideration paid in money at the time, and this is in
no wise ^qplained. There is no evidence that the con-
sideration was paid out of any separate property of the
wife, or that the conveyance was intended as a gift to her,
or that she ever listed the subject of the conveyance as
her separate property. In these circumstances, according
to the laws of the State, the Healey interest was com-
munitjr property, of which the husband had the ''entire
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COLE V. RALPH. 293
286. Opinion of the Court.
management and control" and the ''absolute power of
disposition." He could lease or convey it without the
wife's concurrence and could sue in respect of it ii^ his ^
name alone. Rev. Laws 1912, §§2155-2160; Crow v.
Van SidcU, 6 Nevada, 146; Lake v. Bender, 18 Nevada,
361, 384-385; Adams v. Baker, 24 Nevada, 375; Maletrcm
V. PeapU'e Ditch Co., 32 Nevada. 246, 260.
There was here a contract with Thatcher and Forman
like that relating to the Guy Davis, and this gave them a
real interest in the claim, as already explained.
The adverse claim was filed and the suit was brou^t
by Scott, Healey, Thatcher and Forman. Afterwards,
and following the consummation of the attachment pro-
ceedings, the entire interest of Scott was transferred to
Cole, MaU^, Ross and Davis, and by reason of ttiis, and
with the court's approval, Scott was eliminated as a
party and Cole, MaUey, Ross and Davis came in as plain-
tiffs. Thus there was no misjoinder of plaintiffs, nor any
failure to join an essential party. Of course, those who
succeeded to Scott's interest pending the suit were en-
titled to the benefit of what he had done while he held the"
title.
In one of the adverse claims Healey's name was given
as Frank J. instead of John J., but this was a mere inad-
vertence, did not mislead or prejudice anyone, and ri^tiy
was disr^arded by the District Court.
As to the absence of revenue stamps, it is true that the
deeds showing title in some of the plaintiffs — ^they were
produced in evidence over the defendant's objection —
were without the stamps required by the Act of October
22, 1914, c. 331, § 22, Schedule A, 38 Stat. 762. But this
neither invalidated the deeds nor made them inadmissible
as evidence. The relevant provisions of that act, while
otherwise following the language of earlier acts, do not
contain the words of those acts which made such an in-
strument invalid and inadmissible as evidence while not
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294 OCTOBER TERM, 1919.
Opinion of the Court. 252 U. EL
pioperiy stamped. Those words were canfuUy omitted,
as will be seen by contrasting §§ 6, 11, 12 and 13 of the
Act of 1914 with §§ 7, 13, 14 and 15 of the Act of 1898, c
448, 30 Stat. 454. From this and a comparison of the acts
in other particulars it is apparent that Congress in the
later act departed from its prior practice of making such
instruments invalid or inadmissible as evidence while re-
maining imstamped and elected to rely upon other means
of forcing this stamp provision, such as the iniposition
of mon^ penalties, fines and imprisonment. The de-
cisions upon which the defendant relies arose under the
earlier acts and were based upon the presence in them ci
what studiously was omitted from the later one.
As a preliminary to considering other contentions it
will be helpful to refer to some features of the mineral
land laws, Rev. Stats., § 2318, et mq., about which there
can be no controversy, and also to what actually was in
dispute at the trial and what not in dispute.
By those laws public lands containing valuable mineral
dq>0Bits are opened to exploration, occupation and ao-
quisition for mining purposes; and as an inducement to
effective exploration the discoverer is pven the right to
locate a substantial area embracing his discovery, to hold
the same and extract the mineral without payment of
rent or royalty, so long as he puts one hundred obUars'
worth of labor or improvements — called assessment
work— ^pon the claim each year, and to demand and re-
ceive a patent at a small sum per acre after he has put
five hundred dollars' worth of labor or improvements
upon the claim.
In advance of discov^y an explorer in actual occupi^
tion and diligently searching for mineral ^ is treated as a
licensee or tenant at will, and no ri^t can be initiated or
^ As to the status of an explorer or locator on oil-bearing land in ad-
vance of disooveiy, see the special provisions in Acts of June 25, 1910^
c. 421, S 2, 36 Stat. 847, and March 2, 1911, c. 201, 36 Stat 1015.
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(X)LE V. RALPH. 296
286. Opinioii of the Goiiri.
acquired through a forcible, frauduleat or clandeetine
intrusion upon his possession. But if his occupancy be
relaxed, or be merely incidental to something other than
a diligent search for mineral, and another enters peace-
ably, and not fraudulently or clandestinely, and makes a
mineral discovery and location, the location so made is
valid and must be respected accordingly. Belk -v. Meagher,
104 U. S. 279, 287 ; Unwn OU Co. v. SmUh, 249 U. S. 337,
34&-348, and cases cited.
A location based upon discovery ^ves an exclusive
right of possession and enjoyment, is property in the
fullest sense, is subject to sale and other forms of dis-
posal, and so long as it is kept alive by i>erformance of
the required annual assessment work prevents any ad-
verse location of the land. GwQlvn v. DcnnetUmy 115 U.
S. 45, 49; Swanson v. /Sears, 224 U. S. ISO.
While the two kinds of location — ^lode and placer —
differ in some respects,^ a discovery within the limits of
the claim is equally essential to both. But to sustain a
lode location the discovery must be of a vein or lode of
rock in place bearing valuable mineral (§ 2320), and to
sustain a placer location it must be of some other form
of valuable mineral deposit (§2329), one such being
scattered particles of gold foimd in the softer covering of
the eartii. A placer discovery will not sustain a lode
location, nor a lode discovery a placer location. As is
said by Mr. lindley,^ § 323, ''Gold occurs in veins of rod:
in place, and when so found the land containing it must be
appropriated imder the laws applicable to lodes. It is
also found in placers, and when so found the land contain-
ing it must be appropriated under the laws applicable to
* Clipver Mining Co. v. Eli Mining Co.y 194 U. S. 220, 229; Webb v.
American AsphaUum Co., 157 Fed. Rep. 203; San Francisco Chemical
Co. V. Duffield, 201 Fed. Rep. 830; Harry Lode Mining Claim, 41 L. D.
403.
'Lindley on Mines, 3d ed.
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296 OCTOBER TERM, 1919.
Ol»nion of the Court. 252 Uw 8.
placers"; and i^^ain, § 419, ''It is the mode of occurrenoei
whether in place or not in place [meaning in rock in placed
which determines the manner in which it should be lo-
cated.'^
Location is the act or series of acts whereby the bomid-
aries of the claim are marked, etc., but it confers no right
in the absence of discovery, botiii being essential to a
valid claim. Waskey v. Hammer, 223 U. S. 85, 90-91;
BedU V. Com, 27 Colorado, 473, 484, 495; Round Mountain
Mining Co. v. Round Mountain Sphinx Mining Co., 36
Nevada, 543, 560; New England Ac. OH Co. v. Congdon,
152 California, 211, 213. Nor does assessment work take
the place of discovery, for the requirement relating to
such work is in the nature of a condition subsequent to a
perfected and valid claim and has ''nothing to do with
locating or holding a claim before discovery." Union Oil
Co. V. Smith, Mpra, p. 350. In practice discovery usually
pre^cedes location, and the statute treats it as the initial
act. But in the absence of an intervening right it is no
objection that the usual and statutory order is reversed.
In such a case the location becomes effective from the
date of discovery; but in the presence of an intervening
ri^t it must remain of no effect. Creeds & Cripple Creek
Mining Co. v. Uinta Tunnel Mining Co., 196 U. S. 337,
348-351, and cases cited; Union OH Co. v. Smilh, supra,
p. 347.
When an application for a patent to mineral land is
presented at the local land ofiEioe and an adverse claim is
filed in response to the notice required by the statute
(§2325) further proceedings upon the application must
be suspended to await the determination by a court of
competent jurisdiction of the question whether either
party, and, if so, which, has the exclusive right to the
possession arising from a valid and subsisting location. A
suit appropriate to the occasion must be brought by the
adverse claimant, and in that suit each party is denned an
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COLE V. RALPH, 297
286. Opinion of the Court.
actor and must show his own title, for the suit is ''in aid
of the land department/' If neither establishes the req-
uisite title the judgment must so declare. Rev. Stats.,
§ 2326; Act March 3, 1881, c. 140, 21 Stat. 505; Jackson
V. Roby, 109 U. S. 440; Perego v. DodgCy 163 U. S. 160, 167;
Brcmn v. Gumey, 201 U. S. 184, 190; Eealey v. Rupp, 37
Colorado, 25, 28; Tonopah Fraction Mining Co. v. Dcuglaaa,
123 Fed. Rep. 936, 941. If final judgment be given m
favor of either party — ^whether the applicant for patent
or the adverse claimant — ^he may file in the land office a
certified copy of the judgment and then will be entitled,
as respects the area awu*ded to him, to go f om^ard with
the patent proceedings and to have the judgment recog-
nized and respected as a binding adjudication of hilSi ex-
clusive right to the possession. Rev. Stats., § 2326; Richn
mond Mining Co. v. Rose, 114 U. S. 576, 585; Wolverton
V. Nichols, 119 U. S. 485, 489; Iron Silver Miping Co. v.
Campbell, 135 U. 8. 286, 299; Last Chance Mining Co. v.
Tyler Mining Co., 157 U. S. 683, 694 ; Perego v. Bodge, supra;
Clipper Mining Co. v. Eli Mining Co., 194 U. S. 220, 232.
The situation developed by the evidence presented and
admissions made in the course of the trial was as follows:
At the outset the land was public and unappropriated,
and at remained such save as the locations in question or
some of them may have changed its status. The lode
locations were made, one in 1897 and the other two in
1907, and the placer locations in September, 1913. The
title imder the latter aheady has been sufficiently traced.
That under the lode locations passed to the Glasgow 4;
Western Exploration Company soon after they were
made, and the defendant, Ralph, claims under a deed
executed by that company's liquidator in 1914. The
principal controversy was over the presence or absence of
essential discoveries withiii the lode locations, it being
denied on one hand and affirmed on the other that a vein
or lode of rock in place bearing valuable mineral was dis^
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298 (XrrOBER TERM, 1910.
Opiiuoii of the Court. 252 U. 8.
covered in each location before the placer locations were
made. It was not controverted, but, on the contrary,
conceded, that that point of time was the important one
in the inquiry. Thus when the presiding judge indicated
his view by saying, "My idea is that you can't take ad-
vantage of any discoveries made since the placer locations;
and I don't believe there can be any dispute about that,"
counsel for the defendant responded, "No, your Honor,
th^re is none," and on another occasion counsel said, "We
are undoubtedly limited to proving that there was a
discovery of mineral in place on each of our lode claims
prior to the location of the placer claims." In all partic-
vlars other than discovery the regularity and perfection
oa the lode locations were conceded* Closely connected
with the controversy over lode discovmes was another
over the applicability and effect oJ § 2332 of the Revised
Statutes, but it will be passed for the moment and sep-
arately considered later. As to the placer claims, it was
shown that they w^e based upon adequate discoveries
of placer gold within their limits, and counsel for the de-
fendant annoimced, "We don't deny this ground is of
placer character." Their boundaries were properly
marked and the requisite notices were posted and certif-
icates recorded. The only questions respecting their
validity that were presented and need present mention
were, first, whether at the time the placer locations were
made the lode locations had become valid and effective
claims, thereby precluding any adverse location of the
same groimd, and next, if the lode locations had not th^i
become vaUd and effective, whether the placer locations
were initiated and made through wrongful intrusions or
trespasses upon any actual possession of the lode claimant.
The defendant, as is admitted in his brief in this court,
did not claim that any lode or vein was or should be ex-
cepted from the placer claims, but only that they were of
no effect for the reasons just indicated.
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COLE t;. RALPH. 299
288. Opinion of .the Court
The evidence bearing upon the presence or absence of
lode discoveries ^ was conflicting. That for the plaintiffs
tended persiuusively to show the absence of any such dis-
covery before the placer claims were located, while that for
the defendant tended the other way. Separately consid-
ered, some portions of the latter were persuasive, but it was
not without noticeable infirmities, among them the follow-
ing: The defendant testified that no ore was ever mined
upon any of the lode claims, and that '^ there was no min-
enl exposed to the best of my [his] knowledge which would
stand the cost of mining, transportation and reduction at
a commercial prc^t." In the circumstances this tended
to discredit the asserted discoveries; and of like tendency
was his unexplained statement, referring to the claims
grouped in this patent application, that ''some of them
have not a smell of ore, but they can be located and held
on the principle of being contiguous to adjacent claims," —
an obviously mistaken view of the law, — and his further
statement, referring to vein material particularly relied
upon as a discovery, that he ''would hate to try to mine
it and ship it."
As respects the initiation and working of the placer
» The following extracts from Chriaman v. Miller, 197 U. S. 313, 322,
show what constitutes an adequate discoveiy:
''The mere indication or presence of gold or silver is not sufficient to
estab]]^ the existence of a lode. .The mineral must exist in such
quantities as to justify expenditure of mon^ for the development of
Ihe mine and the extraction of the mineral."
"Where minerals have been found and the evidence is of such a
character that a person of ordinary prudence would be justified in the
further expenditure of his labor and means, with a reasonable prospect
of success, in developing a valuable mine, the requirements of the
statute -have been met."
"The facts which are within the observation of the discoverer, and
which induce him to locate, should be such as would justify a man of
Cffdinary prudence, not necessarily a skilled miner, in the expenditure
of his time and money in the development of the property.^
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300 OCTOBEH TERM, 1919.
Opinion of the Court 252 U. 8.
clatms, the plaintiffs' evidence indicated that the locaton
entered openly, made placer discoverieB, performed the
requisite acts of location, excavated several shafts in the
^'wash" from 35 to 57 feet in depth, ran drifts from the
bottom along the bed-rock, and mined a considerable
amount of pUcer gold; and that these acts covered a
p^od of between two and three months. None of this
was contradicted; and there was no evidence that the
locator's met with any resistance or resorted to any hostile,
fraudi lent or deceptive acts. But there was evidence df
such ownership of buildings, comparatively recent pros-
pecting, and maintenance of a watchman, on the part of
the lode claimant ^ as made it a fair question whether he
was in actual possession when the placer locators entered.*
That he was in possession of the buildings and the ground
where they stood was made certaui, but that he had any
actual possession beyond that was reasonably debatable
under the evidence.
The buildings were all on the same claim and covered
only a part of it. One was a mill formerly in use but then
dismantled and stripped of its machinery. All had been
used in connection with mining operations upon other
claims, but the operations had then been suspended. The
buildings were not disturbed by the placer locators, nor
was there any attempt to appropriate them. A watch-
man was in charge, but so far as appears he made no ob-
jection to what was done. Although a witness for the
defendant and in his employ, he was not interrogated
upon this point. Of course, ownership of the buildings
did not in itself give the lode claimant any right in the
land or prevent others from entering peaceably and m
good f aitii to avail themselves of privileges accorded by
the mineral land laws; but the presence of the buildings
^The lode claimant at that time was cither the liquidator oLthe
Glasgow & Western Exploration Company or the compmy itself.
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COLE V. RALPH. 301
286. Opudon of the Court.
and his relation to them did have a beiuing upon the
question of actual possession — ^a pronounced bearing as
respects the place where the buildings stood and a lesser
bearing as respects the other ground.
Even if the lode claimant was in actual possession of
all, it still was a disputable quertion under the evidence
whether there had not been such acquiescence in the acts
of the placer locators in going upon the ground, making
placer discoveries and marking their locations as gave
them the status of lawful discoverers and locators rather
than wrongful intruders or trespassers, that is to say, the
status of explorers entering by permission and then mak-
ing discoveries. See Cro9sman v. Pendery, 8 Fed. Rep. 693.
The questions of fact to which we have adverted were
all submitted to the jury under a charge which was com-
prdiensive, couched in plaio terms, and in substantial
accord with the legal principles hereinbefore stated. And,
while the defendant criticises some portions of the charge,
we think th^ neither included nor omitted anything of
which he ri^tly can complain. As has been said, the
jury returned general v^icts for the plaintiffs, and also
special verdicts finding that no lode had been discovered
within any of the lode locations before the placer ones were
made.
But it is objected that the court, instead of requiring
the plaintiffs to take the burden of proving the absence of
essential lode discoveries, subjected the defendant to
the burden of proving that there were such discoveries.
This is not in accord with the record. It there appears
that the plaintiffs undertook at the outset to establish
the absence of any lode discovery and persisted in that
course, a iaige, if not the larger, part of their case in chief
being directed to that point. When they rested the de-
fendant moved that the evidence produ(»ed by them ''as
to Ibe absence ci lodes, or the failure or inability of the
witnesses to find or discover lodes, or mineral-bearing
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303 OCTOBER TERM, 1919.
Opinion of the Court. 252 U. S.
rock in place*' within the lode locations be stricken out
because not within the issues tendered by the plaintiflfs'
complaints. The motion was denied and in that connec-
tion the court observed that the burden "imdoubtedly"
was on the plaintiffs not only to show their own placer
discoveries, acts of location, etc., but also ''that the
groimd in dispute was open to location"; and the court
added, "Plaintiffs have, so far as the record discloses^
always insisted that there was no lode discovery, and that
the only discovery was of placer." There was also an
admission in the defendant's requested instructions that
the plaintiffs "in their case in chief" introduced evidence
tending to show that "the ground comprised in the lode
mining claims . . . contained no lodes, veins or
mineral-bearing rock in place, and . . . that said
lode locations were therefore invalid." And the court in
charging the jury said, "The biutlen is on the plaintiffs
in the first instance to show that when they went on these
claims to locate the placers the ground was open to locar
tion, and that there were at the time no valid, subsisting
locations where their discoveries were made." It there-
fore is plain th&t the burden of proof was dealt with and
carried in a manner which does not admit of criticism by
the defendant.
It is objected also that the court refused to direct
verdicts for the defendant. But what has been said suf-
ficiently shows that, in our opinion, the evidence presented
several disputable questions of fact which it was the
province of the jury to determine. This was the view not
only of the judge who presided at the trial but of another
judge who in overruling the motion for a new trial said,
"I think that not only is there substantial evidence to
support the verdict, but the preponderance is upon that
side. " Were we less satisfied than we are upon the point
we should hesitate to disturb the concurring conclusions
of those judges.
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COLE V. RALPH. 303
280. Opiiuan of the Court.
It is iiif^ that the court erred in not holding that the
placer claimants had admitted the validity of one of the
lode locations by relocating the 9t>imd as a lode claim.
A short statement of what was done will show, as we think,
that it did not involve any such admission. After the
placer claimants made their placer discovery a representa-
tive of theirs posted on the gromid a notice stating that
th^ had relocated it as a lode claim. The next day he
substituted another notice stating that they had located it
as a placer claim. The first notice did not accord with
their discovery and the other did. Nothing was done or
claimed imder the first and all the subsequent steps were
in accord with the other. Evidently the first was posted
l^ mistake and the other as the true notice. No one was
misled by the mistake and it was promptly corrected.
In these circumstances, the first notice was of no effect
and no admission could be predicated of it. Zeiger v.
Dowdy, 13 Arizona, 331.
The further objection is made that no probative force
was g||ven to recitals of discovery in the recorded notices
of location of the lode claims. Tlie notices were admit"^
in evidence and no instruction was asked or given respect-
ing the recitals. In one nothing is said about discovery,
and what is said in the other two b meager. But, passing
this, the objection is not tenable. The general rul( is
that such recitals are mere ex parte, self-serving deckrar
tions on the part of the locators, and not evidence of
discovery. Creede & Cripple Creek Mining Co. v. U'knta
Tunnd Mining Co., 196 U. S. 337, 352; lindley on Mines,
3d ed., § 392; Mutchmor v. McCarty, 149 California, 603,
607; Strepey v. Stark, 7 Colorado, 614, 619; Magruder v.
Oregon & Califomia R. B. Co., 28 L. D. 174. This rule
is recognised and applied in Nevada. Fox v. Myers, 29
Nevada, 169, 186; Round Mountain Mining Co. v. Round
Mountain Sphinx Mining Co., 36 Nevada, 543, 560.
Complaint is made because the defendant was not per-
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304 CKTTOBER TERM, 1919.
Opinion of the Court. 252 U. S.
mitted on the cro8&«xamination of a witness for the
plaintiffs to show the contents of certain assay reports.
In his examination in chief the witness told of taking
twelve samples from openings made by the lode claimant
in the lode locations and of having the samples assayed.
Seven of the assay reports were produced at tiie plaintiffs'
request and put in evidence. They attributed to one
sample a mineral value of sixty-three cents per ton and to
the other six only a trace of mineral. In cross-examining
the witness the defendant called for the remaimng reports
or their contents, but the plaintiffs objected and the
objection was sustained. In other respects the cross-
examination proceeded without restriction and included
a full interrogation of the witness about the points from
which each of the twelve samples was taken. This in-
terrogation disclosed that one of the reports put in evi-
dence covered a sample taken from an opening made after
the location of the pliacer claims; and because of this that
report was stricken out at the defendant's request and
with the plaintiffs' consent. Near the dose of the trial
the court recalled its prior ruling and announced another
more favorable to the defendant. The witness was then
recalled and, after some further examination, three of the
remaining reports were put in evidence. They attributed
to one sample a mineral value of one dollar and thirty-
four cents per ton and to the other two only a trace of
mineral. Thus of the twelve reports all but two were
produced. These two, like the one stricken out, covered
samples taken from openings made after the pku^r daims
were located. The defendant did not call for them when
the witness was recalled or reser\'e any exception to the
new ruhng, and it is more than inferable from the record
that he acquiesced in it. Of course, there is no merit in
the present complaint.
What we have said sufficiently disposes of all questions
other than that before mentioned respecting the applica-
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COLE V. RALPH. 806
286. Opjnion of the Ck>urt.
bility and effect of § 2332 of the Revised Statutes, which
provides:
"Where such person or association, they and their
grantors, have held and worked their claims for a period
equal to the time prescribed by the statute of limitations
for mining-claims of the State or Territory where the
same may be situated, evidence of such possession and
working of the claims for such period shall be sufficient to
establish a right to a patent thereto under this chapter,
in the absence of any adverse claim."
The defendant, conceiving that the section could be
invoked in the absence of a mineral discovery, requested
the court to instruct the jury that if the lode claimant
held and worked the lode claims for a period of two years —
the local prescriptive period for adverse possession, Rev.
Laws, 1912, §4951, — ^before the placer claims were in-
itiated, such holding and working were the full equivalent
of all tiiat was essential to the validity of the lode claims,
including discovery. That request was refused and others
were tlien presented which differed from it only in that
they treated discovery as essential by coupling it with
holding and working. These were .also refused, but no
complaint is made of this, — obviously because the jury
were told that under the evidence the lode claims should
be regarded as valid, if only the requisite discoveries were
made at any time before the placer claims were initiated.
The jury, as we have seen, found as matter of fact that
there was no such discovery.
The effect which must be given to § 2332 in circum-
stances such as are here disclosed — ^whether it substitutes
something else in the place of discovery or cures its ab-
sence— ^is the matter we have to consider. That the seo-
tion is a remedial provision and designed to make proof
of holding and working for the prescribed period the legal
equivalent of proof of acts of location, recordii^ and
transfer, and thereby to relieve against possible loss or
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306 OCTOBER TERBf, 1919.
Opinkm of the Court 252U*S.
destruction of the usual means of establishing such acts,
is attested by repeated rulings in the land dqiartment
and the courts. But those rulings give no warrant for
thinking that it disturbs or qualifies important provisions
of the mineral land laws, such as deal with the character
of the land that may be taken, the discovery upon which
a claim must be founded, the area that may be included in
a sin^e daim, the citizenship of claimants, the amount
that must be expended in labor or improvements to en-
title the claimant to a patent, and the purchase price to
be paid before the patent can be issued. Indeed, the rul-
ings have been to the contrary.
The view entertained and applied in the land depart-
ment is shown in the following excerpt from a decision
by the Secretary of the Interior:
"Otke purpose of section 2332, . . . clearly shown
in the history of the proceedings in Congress attending
its consideration and passage there, was to lessen the
burden of proving the location and transfers of old claims
concerning which the possessory right was not contro-
verted but the record title to which had in many instances
been destroyed by fire or otherwise lost because of the
insecurity and difficulty necessarily attending its preserva-
tion during the early days of mining operations. . . .
''The section was not intended as enacted, nor as now
found in the Revised Statutes, to be a wholly separate
and independent provision for the patenting of a mining
claim. As carried forward into the Revised Statutes it
relates to both lode and placer claims, and being in pari
materia with the other sections of the Revision concerning
such claims is to be construed together with them, and
so, if possible, that they may all stand together, form*
ing a harmonious body of mining law." Barklage v.
Ru89eU, 29 L. D. 401, 405^06.
The views entertained by the courts in the mining
r^ons are shown in Harris v. Equator Mining Co., 8
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(X)LE V. RALPH. 307
288. Opuiion of the Court.
Fed. Rep. 863, 866, where the court ruled that holding
and working a claim for a long period were the equivalent
of necessary acts of location, but added that ''this,' of
course, was subject to proof of a lode in the Ocean Wave
ground, of which there was evidence"; in Humphreys v.
Idaho Gold Mines Co., 21 Idaho, 126, 140, where the
section was held to obviate the necessity for proving the
posting, etc., of a location notice, but not to dispense with
proof of discovery; in Upton v. Santa Rita Mining Co.,
14 N. Mex. 96, where the court held that the section
should be construed in connection with other provisions
of the mineral land laws, and that it did not relieve a
claimant coming within its terms from, continuing to do
the assessment work required by another section; and in
AnOumy v. JHUon, 83 Califomia, 296, where the section
was held not to change the class who may acquire mineral
lands or to dispense with proof of "citizenship.
As repects discovery, the section itsdf indicates that
no change was intended. Its words, ''have held and
worked their claims/' presuppose a discovery; for to
''work" a mining claim is to do something toward mak-
ing it productive, such as developing or extracting an ore
body after it has been discovered. Certainly it was not
intended that a right to a patent could be founded upon
nothing more than holding and prospecting, for that
would subject non-mineral land to acquisition as a mining
claim. Here, as the verdicts show, there was no discovery,
so the working relied upon could not have been of the
charact^ contemplated by Congress.
The defendant places some reliance upon the decisions
of this court in B^ v. Meagher, 104 U. S. 279, and Reams
V. Fianza, 215 U. S. 16, but neither contains any state-
ment or suggestion that the section dispenses with a min-
eral discovery or cures its absence. The opinion in the
first shows aflirmatively that there was a discovery and
that in the other shows that the controversy, although of
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808 OCTOBER TERM, 1919,
Syllabus. 252 U.S.
recent origin, related to "gold mines" which had been
worked for many years.
The only real divergence of opinion respecting the sec-
tion has been as to whether it is available in an adverse
suit, such as these are, or is addressed merely to the land
department. Some of the courts have held it available
only in proceedings in the department, McGowan v.
Maclay, 16 Montana, 234, and others in greater number
have held it available in adv^*se suits. Upton v. Santa
Rita Mining Co., supray and cases cited. The latter view
has received the approval of this court. Reavis v. FiamOj
mipra; BeVc v. Meagher, supra.
We conclude that the defendant was not entitled to any
instruction whereby he could receive the benefit of § 2332
in the absence of a discovery, and therefore that the
District Ck)urt rightly refused to give the one in question.
The Circuit Court of Appeals held that the instruction
should have been given, and in this we think it erred.
Judgments of Circuit Court of Appeals reversed.
Judgments of District Court affirmed.
PANAMA RAILROAD COMPANY v. TOPPIN.
ERROR TO THE CIRCUIT COURT OF APPEALS FOR THE
FIFTH circuit-
No. 147. Argued Januaiy 16, I020.--Dccided March 15, 1920.
By the ktws of Panama, a railroad company is liable for personal in*
juries resulting from the criminal nogligence of its servant in running
an engine at a rate prohibited by the Panama Police Code. P. 310.
The rule of respondeat superior applies in Panama, in such cases, and
due care in selecting the servant is not a defense for the railroad
company. P. 311.
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PANAMA R. R. CO. i;. TOPPIN. 309
308. Opiiiion of the Ck>urt.
In Paiuima, under Civil Code, Art. 2341, as well as in the Canal Zone,
damages for physical pain are allowable in a personal injury case.
P. 313. Panama R. R. Co. v. Bosse, 249 U. S. 41.
250 Fed. Rep. 969, affirmed.
The case is stated in the opinion.
Mr. Frank FeuiUe and Mr. Walter F. Van Dame, for
plaintiff in error, submitted.
Mr. Wm. C. Maclntyre, with whom Mr. W. C. Todd
and Mr. T. C. Hinckley were on the brief, for defendant
in error.
Mr. Justice Bbandeis delivered the opinion of the
court.
Toppin was struck by a locomotive of the Panama
Raihroad Company while riding a horse in the City of
Colon. He sued the company for damages in the District
Court of the Canal Zone, allegLng negligence, and recov-
ered a verdict. The judgment entered thereon was af-
firmed by the Circuit Court of Appeals for the Fifth
Circuit (250 Fed. Rep. 989), and the case is here on writ
of error.
The main contentions of the company are here, as in
Panama R. R. Co. v. Bosse, 249 U. S. 41, that the trial
court erred in holding applicable the rule of respondeat
eupericr and the rule permitting recovery for physical
pain suffered. The important difference in the two cases
is this: There the accident occurred in the Canal Zone;
here, in the Republic of Panama. The company insists
that the Basse Case is not controlling, becatise the ques-
tions affecting liability must here be determined by the
law of that Republic, — the place where the accident
occurred. Slater v. Mexican National R. R. Co., 194 U.
8. 120; Cvba R. R. Co. v. Crosby, 222 U. S. 473. The law
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310 OCrrOBER TERM, 1919.
Opinioa of the Court. 262 U. GL
of Panama is pleaded by both parties and evidence thereon
was introduced by both; but we are not limited to this
evidence, as they agree that we may take judicial notice
of the law of Panama existing February 26, 1904, when
the Canal Treaty was proclaimed, and that, in liie ab-
sence of e\ddence to the contrary, the law then prevailing
there will be presumed to have continued in force.
First: The company contends that the jury should have
been instructed that under the law of Panama the com-
pany was not liable if the accident resulted from a criminal
act of its employees, there being evidence that it was due
to running the locomotive at a rate of speed prohibited
under pienalty by the Police Code of Panama. That code,
ioiown as Ordinance No. 87 of the year 1896, provides
(Articles .488, 489):
''When a tramway crosses a town, as well as when it
passes by a gate or viaduct, it shall not travel at a greater
^ epeed than that of a wagon drawn by horses at a mod-
erate trot; in case of an infraction the conductor or the
administrator of the company subsidiarily shall pay a
fine of 10 to 100 pesos, without prejudice to the responsi-
bility, civil or penal, to which he may be subjected by
reason of the damage, fault or tort. . . ."
''This article . . . shall be applied to railroads
when they enter cities or towns."
The Panama Law, No. 62, of 1887, had provided in
Article 5:
"Raihoad companies are responsible for the wrongs
and injuries which are caused to persons and properties
by reason of the service of said railroads and which are
imputable to want of care, neglect, or violation of the
respective police regulations which shall be issued by the
government as soon as the law is promulgated."
And Article 2341 of the Civil Code provides:
"He who shall have been guilty of an offense or fault,^
which has caused another damage, is obliged to repair it,
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PANAMA R. R. CO. v. TOPPIN. 311
306. Opinion of the Ck>urt.
without prejudice to the principal penalty which the law
imposes for the fault or offense committed.''
It would seem clear from a reading of these provisions
that the company would not be relieved from liability in
damages for injiu-ies resulting from the negligence of its
employee^ merely because the negligent act was also
punishable as a crime. And the Colombian authorities
to which oiu* attention has been called tend to confirm this
construction.^ There seems to have been a rule of prac-
tice under the Colombian Judicial Code (Article 1501 *)
by which, if the civil action and the criminal action aris-
ing out of the same acts are not brought at the same time,
the civil action cannot be prosecuted imtil the conclusion
of the criminal action with the condemnation of the de-
linquent. But such rule obviously can have no applica-
tion here; among other reasons because it refers to the
case where the same person is liable both ci\'illy and crim-
inally. Here it is the engineer who is liable criminally
under the Police Code and the company against whom
civil liability is being enforced.
Second: The company contends that by the law of
Panama it cannot be held liable for the injury caused by
the negligence of its engineer if it was careful in selecting
him, because the law of Panama does not recognize lia-
bility without fault. This contention was made and re-
jected by the Supreme Couj-t of Colombia in a case similar
to the case at bar.' There suit was brought against the
empresario of a railway to recover for the loss of a house
by fire due to the n^ligent operation of a locomotive.
1 CedUa JaramiUo de Cancino v. Railroad of the North. Supreme
Ckmrt of Justice of the Republic of Colombia, XIII Judicial Gazette,
No6. 652-e53. Decided December 16, 1807.
* Ruperto Reslrepo v. Sabana Railway Company, Supreme Court of
Justice of the Republic of Colombia, III Judicial Gaiette, No. 353,
pp. 332-334. Decided July 19, 1892.
* Cancino v. RaUroad of the North, supra, note 1.
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312 OCTOBER TERM, 1919,
Opinion of the Court 25217.8.
The court rested the liability upon Article 2347 of the
Civil Code/ declaring that all doubt as to the existence of
the necessary dependency was removed by Article 5 of
Law 62 of 1887, which "without in any way mentioning
the dependents, employees, or workmen of railway enter-
prises, makes their empresarios responsible for the dam-
ages and injuries which they may cause to persons or to
property by reason of the service of the said roads." The
court continues: "and there is not in the record any proof
whatever that any care or precaution, either on the part
of the empresario or the engineer, had been taken to pre-
vent the fire, the proof that the empresario on his part had
exercised much care in the selection of his employees not
being sufficient in the opinion of the court, because the
diligence and care here treated of, is that which ought to
have been exercised in order to prevent an injury that
could have been easily foreseen." ^ This case seems to
overrule in effect the principal authority to which the
plaintiff in error has referred us * — ^in fact, it is not un-
likely that such was the object of Article 5 of Law 62 of
1887.
^Article 2347. ''Every person is responsible not only for his own
actions, for the purpose of making good the damage, but for the act of
those who may be under his care.
"Thus, the father, and failing him the mother, is responsible for the
act of the minor children who live in the same house.
"Thus, the tutor or guardian is responsible for the conduct of the
pupil who lives under his protection and care.
. "Thus, the husband is responsible for the conduct of his wife.
"Thus, the directors of colleges and schools respond for the acts of
students, while they are under their care, and artisans and empresarios
for the acts of their apprentices and dependents in like cases.
"But this responsibility will cease if with the exercise of the authority
and care which their respective characters prescribe for and confer on
them they could njt prevent the act."
> See also Panama R. R, Co. v. B<wm, 249 U. 8. 41, 49.
* Ramirez v. Panama Railroad Company. Supreme Court of Justice
of Colombia, 1 Gaceta Judicial, No. 22, p. 170 (June 10, 1887).
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THE ATLANTEN. 313
306. l^yOabuflL
Third: The contention that the low^ courts erred in
allowing recovery for physical pain was made and over-
ruled in Panama R. R. Co. v. Basse, supra, p. 47. As the
decision there rested upon Article 2341 of the Civil Code
of Panama it is applicable whether the lex loci or the lex
fori should be held controlling as to such damages. Ex-
ception was also taken to the ruling that ''if the plaintiff
has developed tuberculosis of the spine as a result of the
injuries received" the tuberculosis may be considered as
an element of damages. The instruction was given with
such explanations as to have been clearly imobjectionable.
Affirmed.
THE ATLANTEN.i
CBRTIORAIU TO THE CIRCUIT COURT OF APPEALS FOR
THE SECOND CIRCUIT.
No. 171. Allied March 10, 102O.~I>ecided March 22, 1020.
A charter party provided that, should any dispute arise, it should be
settled by referees, to be appointed by the captain and the charterers
respectively, idiose decision, or that of an umpire, should be final,
and that any party attempting to revoke such submission to arbi-
tration without permiBsion of court should be liable to pay the es-
timated freight as liquidated damages. Held, that this could not
be construed to apply where there was not merely a dispute in carry-
ing out the contract but a substantial repudiation of it, by the ship-
owner's declining to go on with the voyage unless the freight rate
were increased. P. 315.
A dause in a charter party: "Penalty for non-performance of this
agreement to be proved damages, not exceeding estimated amount
of freight,'^ held inapplicable where the shipowner substantially
, . — ^ .._^ — — — ■
>The docket title of this case is Rederiakti^bolagel AUanlen v.
AktieseUkabei Kcm4}g FodenioJ Kompagntet.
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814 OCTOBER TERM, 1019.
Opmion of the Court. 2S2 U. &
-x.
repudiated the oontract by refusing to go on iritfa the vc^yage. P.
316.
Such a clause provides a penalty and leaves the ordinary liability
upon the undertakings of the contract unchanged. Id.
Presumption that in such a matter the rule on the continent of Europe
is the same as in £nghMid and the United States. Id.
250 Fed. Rep. 085, aflbmed.
Thb case is stated in the opinion.
Mr. Clarence Bishop Smith for petitioner.
Mr. Ro9coe H. Huppery with whom Mr. Oeorge H. Terri-
henry was on the brief, for reqtondent.
Mr. Jvlius Henry Cchen^ by leave of court, filed a
brief as amicus curios.
Mr. JusncB Holmes delivered the opinion of the
court.
This is a libel in admiralty by a Danish corporation,
the respondent here, against a Swedish corporation,
owner of the steamship Atlanten, for breach of a charter
party made in Denmark, on September 30, 1914. The
voyage was to be from a southern port in the United
States to Danish ports to be named. On January 8, 1915,
the owner (the petitioner) wrote to the charterers that
owing to the increased war risk and other difficulties ''we
are con4)elled to cancel the Atlanten's charter party
Pensacola to Scandinavia, and are ready to take all the
consequences the Court after Clause No. 24 in the char-
ter party will compel us to pay, not exceeding the esti-
mated amoxmt of freight." It offered to proceed, how-
ever, if the charterers would pay a higher rate. This libd
was brought five months later. The owner in its answer
admitted the breach, but set up the clause 24 of the char*
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THE ATLANTEN. 816
313. Opinioii of the Court
ter "Penalty for noB-perfonnance of this agreement to be
proved damages, not exceeding estimated amount of
fraght " and clause 21 "If any dispute arises the same
to be settled by two referees, one appointed by the Cap-
tain and one by chiarterers or their agents, and if nec-
essary, the arbitrators to appoint an Umpire. The de-
cision • • . shall be final, and any party attempting
to revoke this submission, to arbitration without leave of
a court, shall be liable to pay to the other, or others, as
liquidated damages, the estimated amount of chartered
frdght." It is alleged that by the hlws of both Denmark
and Sweden such a provision is binding and that arbitra-
tion is a condition precedent to the riglj^t to sue by reason
of any dicfpute arising under the charter. The case was
heard on exceptions to the answer. The District Court
made A decree for the liltellant for full damages, 232 Fed.
Rep. 403, and this dcicision was affirmed by the Circuit
Court of Appeals. 250 Fed. Rep. 935. 1)53 C. C. A. 185.
With r^ard to the arbitration clause we shall not
consider the general question whether a greater effect
should not be given to such claxises than formerly was
done, since it is not necessary to do so in order to decide
the case before us. For this case it is enough that we
agree substantially with the views of Judge Learned
Hand in the District Court and Judge Hough in the Cir-
cuit Court of Appeals. Their opinion was that the owner
repudiated the contract and that the arbitration clause
did not apply. It is true that it would be inaccurate to
say that the owner repudiated the contract in toto, for
the letter that we have quoted assumed that the contract
was binding and referred to it as fixing the liability in-
curred. It meant simply that the owner would not pro-
ceed with the voyage. United States v. McMuUeny 222
U.S. 460, 471. But we agree that such a refusal was not a
''dispute " of the kind referred to in the arbitration clause.'
As Judge Hand remarked, the withdrawal was before
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316 OCTOBER TERM, 1919.
Opinion of the Ckiurt 352 U. 8.
the voyage began and it is absurd to suppose that the
captain, who mi^t be anywhere in the world, was to be
looked up and to pick an arbitrator in such a case. The
clause obviously referred to disputes that might arise
while the parties were trying to go on with the execution
of the contract — not to a repudiation of the substance
of the contract, as it is put by Lord Haldane in Jureidini
V. Natiarud British & Irish MiUera Ins. Co., Ltd., [1916]
A. C. 499, 505. The allegation in the answer as to the
law of Denmark and Sweden we do not understand to
mean more than that arbitration agreements will be en-
forced according to their intent. It does not extend the
scope or affect the construction of an agreement which,
as we should construe it apart from that allegation, does
not apply to the present case.
Paragraph 24 of the charter, supposed to limit liability,
may be met in similar and other ways. If it were a limitsr
tion of liability it hardly could be taken to apply to a case
of wilful unexcused refusal to go on with the voyage. It
obviously was not intended to give the owner an option to
go on or stop at that price. But furthermore, as was
fully pointed out below, the clause is a familiar modi-
fication of a very old one, and in the courts of England
that have had frequent occasion to deal with it, is held
to be only a penalty, even in the present foim, and to
leave the ordinary liability upon the undertakings of.
the contract unchanged. WaU v. Rederiaktiebolagel
Luggude, [1915] 3 K. B. 66. Watts, Watts & Co., Ltd., v.
Mitsui & Co., Ltd., [1917] A. C. 227. [1916] 2 K. B. 826,
844. Watts V. Camars, 115 U. S. 353. Presumably this is
also the continental point of view. We are of opinion
that the decree was clearly right.
Decree affirmed.
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MANNERS V. MOROSCO. 817
Aigument for PetitioiMr.
MANNERS V. M0R06CX).
GBRnOBABI TO THB dBCUIT COT7BT OF APFIBAU VOB
THE SECOND dBCUIT.
No. 37a Aigued March 2, ll»20.-~Decided Jiiarch 22, 1020.
Flaintiff, a dramatic author, granted defendant the "sole and ezda-
sive license and liberty to produce, perfonn and represent" hk
cop3rri^ted play in the United States and Canada, defendant agree-
ing to produce it *'not later than January first, 1913, and to 'con-
tinue ... for at least seventy-five perfonnances during the
season of 1913-1914 and for each theatrical season thereafter for a
period of five years; " in default of 75 perfonnances in any one. theat-
rical year, all of defendant's rights were to revert to plaintiff; the
play was to be presented in first-class theaters with competent com-
panies and with a designated actress in the title r61e, a percentage
of the gross receipts going to plaintiff as royalties; if it failed, it was
to be let to stock companies, and the royalties thus accruing were
to be divided equally between the parties; rehearsal and production
were to be under the plaintiff's direction; no changes in the play
were to be made without his approval, and he was to have the ri|^t
to print and publish it, but not within six months of its first produo-
tion without defendant's consent.
i7eU:(l) That the grant was not limited to five yeais* duration. P.326.
(2) It did not ctmrey the ri|^t to represent the play in motion pictures.
Id.
(3) Hiere was an implied covenant by the grantor not to use the re-
served motion picture rii^ts to the destruction of the rii^ts granted.
P.326.
(4) Plaintiff is entitied to an injunction against representation in
motion pictures, but upon condition that he also shall abstain from
representing or authorising representation in that f <nm in Canada or
the United States. Id.
268 Fed. Rep. 557, reversed.
The case is stated in the opinion.
Mr. David Oerber,- with whom Mr. WHUam J. Hughes
was on the briefs for petitioner:
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318 OCTOBER TERM, 1919.
Argument for Petitioner. 252 U. S.
The situation of the parties at the time the contract
was entered into, and their acts in performance there-
under, are at war with the belated claim of respondent
that he had the ri^t to use the drama as the basis for a
photoplay.
The contract is not a grant or assignment — ^but a
license to produce the play in the United States and
Canada, subject to ''the terms, conditions and limitar
tions "therein expressed, and every "term," ''condition"
or "limitation" is applicable only to a production of the
play as a spoken drama, and inappropriate to the use of
petitioner's literary work as the basis for a scenario for
a photoplay or screen performance. Heap v. HarOey,
42 L. R. Ch. Div. 461; London Printing & Publishing
AUiance v. Cox, 7 Times L. R. 738; NeiUon v. Homimdn,
26 Times L. R. 188; Stevens v. Benning, 1 Kay & J. 168;
Tuck V. Canton, 51 L. J. (N. S.) pt. 2, pp. 363-^365; Lucae
V. CooAj6, 13 L. R. Ch. Div. 872; Mcintosh v. Miner, 37
App. Div. 483; Harper Bros. v. Klaw, 232 Fed. Rep. 609,
612; Universal Film Mfg. Co. v. Copperman, 218 Fed.
Rep. 577-678; Photo Drapia Motion Picture Co. v. Social
Uplift FUm Corp., 213 Fed. Rep. 374-377; New Fiction
Publishing Co. v. Star Co., 220 Fed. Rep. 994-«95; Lonr
dan V. Biograph Co., 231 Fed. Rep. 696-697; Klein v.
Beach, 239 Fed. Rep. 108, 110.
The modification of the contract, made July 20, 1914,
somewhat reflects what Vas in the minds of the parties
in January, 1912.
The word "represent " used in the contract, cannot
be construed as referring to a motion picture, as distinct
from the play. BouHedge v. Low, L. R. 3; H. L. 100;
Black v. Imperial Bock Co., 8 Ont. L. R. 9; Smiles v.
Belford, 1 Ont. App. 436; Murray v. EUiston, 5 Bam. &
Aid. 657; Duck v. Bates, 13 L. R. Q. B. 843; ChappeUv.
Boosey, 21 L. ft. Ch. Div. 232.
The provision that the author would not exercise his
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MANNERS V. MOROSCO. 319
817. Aigument for Petitioner.
right to print the play until six months after its produc-
tion in New York City, is not a limitation of the reserved
rights possessed by the author. Its purpose is to delay
the excmse by the author of his undoubted right to
publish the play until six months after the stage represent-
ation in New York City, not otherwise to limit or grant
to respondent his reserved rights.
The fact that petitioner retained the motioit picture
rights is not inconsistent with a license limited to a rq>re-
sentation of the play as a spoken drama.
It would be an act of folly for the author to destroy
the value of his play as a spoken drama by giving motion
picture performances. He might also have published
his play without copyright protection six months after
its first representation in New York City, and thus have
made it common property. With the loss of* his common-
law rights would have fallen the rights . claimed by re-
spondent. SocUU Des Films Mencken v. Vitagraph Co.^
251 Fed. Rep. 258.
By the amendment to § 5 of the Copyright Act of 1912,
37 Stat. 488, motion picture photoplays are classified
apart from dramatic or musical compositions (subdivi-
sions I and m). These rights are dcparable; ''there might
be a copyright for a dramatization of the old sort (acted
on. a stage) and also a copyright for a dramatization of
the new sort (arranged in motion pictures)." Photo Drama
Motion Picture Co. v. Social Uplift FUm Corp., 220 Fed.
Rep. 448, 449.
In Klein v. Beach, 239 Fed. Rep. 108, the exclusive
right to dramatize a book for presentation "on the
stage '^ was held to exclude the presentation by means
of Inotion pictures (see contract set forth at length in
232 Fed. Rep. 242).
In England, a contract covering the "acting rights '^
is held not to include cinema rights, nor do the words
"English performances,'^ embrace them. Oanthony v.
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820 0C5T0BER TERM, Witt.
Afgument for Respondent. 252 U. 8.
O. R. J. Syndicate, Ltd.; and Wyndham v. A. E. Huebsch
& Co., Ltd. (''The Author,'^ Vol. XXVI, No. 1, of
Oct. 1, 1915, pp. 16, 17.) Kalem Co. v. Harper Bros., 222
U. S. 55, diBtinguished.
The license was not the grant of a ri^t in perpetuity.
GrarU v. Maddox, 15 M. & W. 737; Broadway Photoplay
Co. V. World FUm Corp., 225 N. Y. 104.
Mr. Charles H. TutOe, with whom Mr. William Klein
was on the brief, for respondent:
The agreement, as modified, did not terminate by self-
limitation at the end of the six theatrical seasons. It
was not an agreement for personal services or for a naked
license, but a contract of bargain and sale, whereby
property was granted and conveyed. Frohman v. Fiich,
164 App. Div. 231, 233.
It goes without saying that where property is conveyed,
the conveyance is presumed to be absolute and not rev-
ocable at will or for a temporary period, in the absence
of clear words of limitation. Western Union Telegraph
Co. v. Penrusylmnia Co., 129 Fed. Rep. 849, 867, 862.
The provision for at least 75 performances each the-
atrical season for a specified time was not a grant by the
plaintiff but a covenant by the defendant — a statement of
the least he was to do. Furthermore, the contract of
modification constituted a plain recognition by both
parties that the original contract was not limited to the
period mentioned and that the only question which was
to be considered open, was whether that contract carried
the motion picture rights.
The modified contract also shows that the defendant
received not a mere personal privilege, but property rights
which the parties did not intend should expire by self-
linodtation at the end of the period referred to in the
original contract.
Any construction of the contract as modified, whereby
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MANNERS V. MOROBCO. 321
317. Afgume&t for Respondent.
it would be limited to the period of seasons mentioned
in the original agreement, would be harsh and oppressivB
to the defendant.
Quite apart from the special features and circumstanoeSi
the absolute character of this grant as not limited to any
iGxed period of years would follow as a matter of 4aw.
6< Ruling Case Law, §281; Western Union Tel Co. v.
Pennsylvania Co., supra, 861; McKeU v. Chesapeake &
Ohio Ry. Co., 175 Fed. Rep. 321, 329; White v. Hoyt, 73
N. Y. SOS, 511 ; Duryea v. Mayor, 62 N. Y. 592, 597.
Eivcoi if the contract as modified is to be limited to the
period of seasons mentioned in the original contract, the
action must fail because prematiu'e. That period does
not expire until the season of 1918-1919.
The contracts between the parties conferred upon the
defendant as part of the production rights, the right to
produce the play in motion pictmre form. The granting
dause of the original contract conveyed all the production
rights.
The comprehensive force of the word "exclusive'*
when used in a conveyance of dramatic rights,, and its
clear purpose to prevent- competitive production, have
been well stated in Photo Drama Motion Picture Co. v.
Social Uplift FUm Corp., 213 Fed. Rep. 374, 376; afifd. 220
Fed. Rep. 448.
The word ''represent" is peculiarly appropriate to a
motion picture representation of a play.
Section 4952, Rev. Stats., gave the author of a drar
matic composition not only the sole right of printing it but
also the sole right "of publicly performing or represerttr
ing it or causing it to be performed or vspresented by
otiiers."
In Kalem Co. v. Harper Bros., 222 U. S. 55, this court
held that a motion picture representation of "Ben Hur''
was an infringement of the author's copyii^t, since it
was a representation of the story dramatically. See
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322 OCTOBER TERM, 1919.
Alignment for RespoDdent. 252 U. S.
Daly V. Palmer, 6 Blatchf. 256, 6 Fed Cas. 1132, Case
No. 3562.
Furthermore, unquestionably the grant of an exclnsiye
right to produce, perform and represent a play purports
a grant of the exclusive dramatic rights, and the ''dramatic
rights include motion picture rights," unless that mean-
ing is narrowed by the addition of other words. Before
the present contract was made, draipatic rights had ac*
quired that definite and judicially determined meaning
by virtue of Kalem Co. v. Harper Bros., supra. If the
parties to the present contract intended tiiis form of
grant to have any less meaning, language was available
to reveal that intent. Tvily v. Triangle FUm Corp., 229
Fed. Rep. 297.
In addition to the breadth of the granting clause itself,
there are other provisions in the agreement which prove
incontestably the mutual intent to convey the entire
right to place the play before the American public in any
foniL
The expression of cai^dn reservations in favor of the
plaintiff was an exclusion of all others.
The courts will not easily accept a construction which
would pemut the plaintiff to produce motion pictures in
competition with the defendant's production on the stage.
The courts have frequently discerned the destructive
consequences of a motion picture production of the play,
synchronously with its production on the stage. Harper
Bros. V. Klaw, 232 Fed. Rep. 609, 613; Frohman v.
Fitch, 164 App. Div. 231, 233-234; Photo Drama Motion
Picture Co. v. Social Uplift Film Corp., 213 Fed* Rep.
374, 377. V
The supplemental contract illustrates the intent of
the parties to transfer to the defendant the ownership
of the play for aJ^ production purposes.
The unbroken tenpr of judicial decisions interpreting
similar agreements establishes incontestably that the
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MANNERS V. MOROSCO. 323
317. Opinion of the Court.
motion picture rights were included. Frohman v. Fitchj
wpra; Klein v. Beach, 239 Fed. Rep. 108, 109; 232 Fed.
Rep. 240, 246; Harper Bros. v. Klaw, 232 Fed. Rep. 609,
613; lApzin v. Chrdin, 166 N. Y. S. 792; Hart v. Fox, 166
N. Y. S. 793; Photo Drama Motion Picture Co. v. Social
Uplift Film Corp., 220 Fed* Rep. 4^; KaJem Co. v. Harper
Bros., 222 U. S. 55; «. c. 169 Fed. Rep. 61, 63; Klaw v.
General FUm Co., 154 N. Y. S. 988; Universal FUm Mfg.
Co. V. Copperman, 212 Fed. Rep. 301; affd. 218 Fed.
Rep. 577; Liebler v. Bohbs-Merrill Co., 162 App. Div. 900;
Drone, Copyright, p. 588; Brackett's Theatrical Law,
p. 61; Lee v. Simpson, 3 C. B. 871.
Mb. Justice Holmes delivered the opinion of the court.
This is a suit by the author of a play called P^ O' My
Heart to restrain the defendant, Morosco, from represent-
ing the play in motion pictures, in violation of the plain-
tiff's copyright; and also, although this is a subsidiary
question, from producing the play at all. The defendant
justifies under an agreement of January 19, 1912, and a
supplemental agreement of July 20, 1914, both set forth in
the bill. The ground upon which the ri^t to produce the
play in any way was denied was that the agreement gave
rights only for five years. This construction was rejected
by the District Court and the Circuit Court of Appeals.
Both Courts held also that the agreement conveyed the
right to represent the play in moving pictures and on that
ground dismissed the bill. 254 Fed. Rep. 737. 258 Fed.
Rep. 557.
By the first agreement the plaintiff, party of the first
part ''does grant" to Morosco, the party of the second
part, "the sole and exclusive hcense and Uberty to pro-
duce, perform and represent the said play in the United
States of America and the Dominion of Canada," subject
to the terms and conditions of the contract. Morosco
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824 OCTOBER TERM» 1919.
Opiiuon of the Court 262 U, 8.
''to produce the play not later than January first,
1913, and to continue the said play for at least seventy-five
performances during the season of 1913-1914 and for each
theatrical season thereafter for a period of five years/'
He agrees further to pay specified percentages on the gross
weekly receipts as royalties, and that ''if during any one
theatrical year • . . said play has not been produced
or presented for seventy-five performances, then all rights
of the said party of the second part shall cease and deter-
mine and shall immediately revert to the said party of the
first part." Morosco fmrther agrees to preset the play in
first-class theatres with competent companies and with
Miss Laurette Taylor (the stage name of the author's wife),
in the title r61e; the play to have a production in New York
and to be continued on the road for at least one season or
longer if considered advisable by both parties. No alten^
tions, eliminations or additions are to be made without the
approval of the author and the rehearsals and production
of the play are to be under his direction. The author to
have the right to print and publish the play but not
within SIX months after the production of the play in New
York City without consent. Morosco is not to let or
transfer his rights without the author's consent. "Should
the play fail in New York City and on the road . . •
it shall be released for stock;" i. e., let to stock companies,
with an equal division of royalties between plaintiff* and
defendant. By an addendxmi, after Miss Taylor should
have finished her season her successor in the r61e of "P^"
for any subsequent tours shall be mutually agreeable to
both parties. The contract is declared binding upon the
parties, ' ' their heirs, executors, assigns, administrators and
successors."
The second agreement, in order to adjust controversies
and to modify the first, authorized Morosco "as long as
this contract is in force" to "produce, perform and repre-
sent" the play with or Iq as many companies as he saw fit.
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MANNEEIS V. MOROSCO. 326
317. Opinioii of the CkMirt/
without engaging Laurette Taylor and without consulting
the plaintifiF as to the cast, rehearsals or production of the
play. Morosco also was authorized to let or sell any of his
rights under the contracts, but he was not to be released .
from his personal liability to pay the royalties as specified
in the contracts. The play might be released for stock
whenever the net profits r^Jized from all the companies
producing the play should be less than $2,000, and then
the royalties received from the stock theatres were to be
divided equally. For f oiur years from date neither party
without consent of the other was to produce or give leave
to produce the play by moving pictures and after that the
rights of the parties were to be determined by and under
the original agreement as if the supplemental acrreement
had not been made.
As to the duration of the defendant's rights we agree
with the CJourts below. We perceive no ground for con-
verting the defendant's undertaking to continue the play
for seventy-five performances during the season of 1913--
1914, and for each season thereafter for five years, into a
limit of the plaintiff's grant of rights. As was said in the
District Court, it is a statement of the least that defendant
was to do, not of the most that he was to have. The plain-
tiff was secured sufficiently by the forfeiture in case the
play should not have been produced for seventy-five per-
formances. The provisions in both contracts as to the
release for stock are somewhat of an additional indication
that it was expected that the arrangement was to last as
long as the public liked the play well enough to make it
pay, provided the defendant kept his half of the bargain
performed.
On the question principally argued we are of opinion
that the majority below was wrong. The thing granted
was ''the sole and exclusive license and liberty to produce,
perform and represent" the play within the territorial
limits stated, subject to the other terms of the contract.
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326 OCTOBER TERM, 19ia
Opinioii of the Ck>urt. 252 U. 8.
It may be assumed that those words mi|^t cany the right
to represent the play in moving pictures if the other
terms pointed that way, but to our mind they are incon-
sistent with any such intent. We need not discuss the
abstract question whether, in view of the fact that such a
mode of representation was familiar, it was to be expected
that it should be mentioned if it was to be granted or
should be excluded if it was to be daiied. Every detail
shows that a representation by spoken drama alone is
provided for. The play is to be continued for seventy-five
performances for the tiieatrical seasons named. This ap-
plies only to the regular stage. The royalties are adapted
only to that mode of presentation. Harper Bros. v. Klaw,
232 Fed. Rep. 609, 612. The play is to be presented in
first-class theatres with a competent company and with
Miss Laurette Taylor in the title rule, which, of cdiuBe,
does not mean in moving pictures. Hie stipulations
against alterations, eliminations or additions, and that the
rehearsals and production of the play shall be under the
direction of the author, denote the same thing, and clearly
indicate that no other form of production is contemplated.
The residuary clause, so to speak, by which the play is to
drop to stock companies shows the lowest point to which
the author was wiUing to let it go.
The Courts below based their reasoning upon the im-
possibility of supposing that the author reserved the right
to destroy the value of the right granted, however that
right may be characterized, by retaining powsr to set up
the same play in motion pictiures a few doors off with a
much smaller admission fee. We agree with the premise
but not with the conclusion. The implied assumption of
the contract seems to us to be that the play was to be pro-
duced only as a spoken drama, with respect for the
author's natural susceptibility concerning a strict ad-
hesion to the text. We need not amplify the •argument
presented below against the reservation of the right in
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MANNEBS V. MOROSCO. 327
317. Clakkb and PiTzrat, JJ., disBeating.
question. \b was said by Judge Hough in a similar case,
"tfeere is implied a negative covenant on the part of the
[grantor] not to use the ungranted portion of the copy-
right estate to the detriment, if not destruction, of the
licensees' estate. Admittedly if Harper Bros, (or Klaw &
Erlanger, for the matter of that) permitted photo-plays of
Ben Hur to infest the country, the market for the spoken
play would be greatly imi>aired, if not destroyed." Harper
Bros. V. Klaw, 232 Fed. R^. 609, 613. The result is that
the plaintiff is entitled to an injunction against the represen- *
tation of the play in moving pictmres, but upon the terms
that the plaintiff also shall abstain from presenting or
authorizing the presentation of the play in that form in
Canada or the United States.
Decree reversed. Injunction to issus upon the condition
ihcU the plaintiff ahaU neither represent nor authorise the
representation of the play Peg 0' My Heart in moving
pictures while the contract loith the d^endarU remains in
force.
Mr. Justxce Clarke, with whom concurred Mr. Jus-
tice Pftmey, dissenting.
The decision of this case involves the construction of
the written contract of January 19, 1912, as modified by
that of July 20, 1914, and, centering its attention upon
the claim of the defendant to moving picture rights, the
coxut dismisses in a single paragraph provisions in these
contracts which seem to me to so clearly limit the rights
of the defendant to a term expiring possibly in May, 1918,
but certainly not later than May, 1919, that I cannot
concur in the conclusion arrived at by my associates.
. The court says:
"As to the duration of the defendant's rights we agree
with the Courts below. We see no ground for converting
-the defendant's undertaking to continue the play for
seventy-five performances during the season of 1913-1914,
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828 OCTOBER TERM, 1918.
. Clabkb and Pitnst, JJ., diaBeatiiis. 262 U. B.
and for each season thereafter for five years, into a liqtiit
of the'plamtiff's grant of rights. As was said in the Dis-
trict Court, it is a statement of the least that defendant
was to do, not of the most that he was to have,"
This expression that the third paragraph of the ooor
tract of January 19, 1912, ''is a statement of the least
that defendant was to do, not of the most that he was to
have,'' is repeated in the opinion of each of the three
courts as the sufficient reason for concluding, as the Dis-
trict Court said, that the contract gave to the defendant
''all the rigihts mentioned for ofl fime." It is not the first
time that a catchy phrase has diverted attention from
less picturesque realities.
My reasons for concluding that the ri^ts of the de-
fendant were limited, as the court says his obligations
were limited, to a term expiring not later than the close
of the theatrical season of 191S-1919 may be briefly
stated.
The grant which it is concluded gave the defendant
the "exclusive license and liberty to produce, perform
and represent" the play involved ''for all time'' is in
these words:
"First: The party of the first part hereby grants
. ... to the party of the second part 9vbjccl to the
terms, candiiians and limitatUms hereinafter expressed, the
sole and exclusive license and liberty to produce, perform
and represent the said play in the United States" and
Canada.
In terms this is a "license" and in terms also it is
subject to "conditions and limitations" to follow in.
the contract/— which are found in the third apd fifth
paragraphs.
The third paragraph reads:
"The party of the second part (defendant] agrees to
produce the play not later than January first, 1913, and
to continue the said play for at least seventy-five per-
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MANNERS V. MOROSCX). 820
817. CukSKM and Pitnst, JJ., difteting.
farmanoes during the season 191^1914 and for each
theatrical season thereafter for a period of five years*"
The fifth paragraph provides that if the defendant shall
fail to produce the play seventy-five times in any one
theatrical year ''then aU rights of the said party of the
second part [the defendant] shall cease and determine
and shall immediately revert to the said party of the first
part."
This third paragraph expresses the agreement of the
parties as to what the defendant was to do in considerar
tion of the grant by the plaintiff in the first paragraph,
and reading it and the fifth paragraph together, as one,
we have the extreme extent and time limit of the defend-
ant's obligation and the penalty, forfeiture, is provided for
the failure to perform at any time within that limit. The
court says that the third paragraph expresses ''the least
[all] that defendant was to do," so that his obligation under
the contract ended with the five-year period, which pb-
viously would be not later than the close of the theatrical
season of 1918-1919. This being true, when did the re-
ciprocal obligation of the plaintiff expire?
That the obligation of the plaintiff continued "for all
time" is apparently derived wholly from the inference, s&
stated by the District Court, that the parties^ if th^4iad
intended otherwise, "could readily have fixed a time
limit in paragraph 'First' by the addition of words such
as 'for . . . years from' or 'xrntil' a stated date."
It is veiy true that the parties could have written their
contract in a different form, and certainly with much
more precimon of statement, than that in which they did
write it, but it is also true that in making it in their own
way and tenns th^ granted a general license in the first
paragraph, but made it subject to the "terms, conditions
and limitfttions" thereinafter to be esxpreaaeA, and that
they then went forward and e3q>re88ed in the third para-
graph the five-year limitation as we have seen it. The
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330 OCTOBER TERM. 1919.
Clarke and PirtrEt, JJ., dissenting'. 252 U. 8.
court holds that this five-year limitation applies to the
defendant's obhgation to i)erform but that it does not
apply to the plaintiff's license to produce. I think itMp-
plies to both. Plainly the parties were undertaking ti set
down in their contract the mutual obligations which each
.intended to assume — ^thoee of the one in consideration of
those of the other. The author granted the privilege of
producing the play and the defendant agreed to produce
it for at least seventy-five performances during each of five
years. After that, the court concludes, the defendant
w^as no longer bound by the contract to do anything which
could advantage the plaintiff and therefore, clearly, the
plaintiff should not continue thereafter under obligation
to the defendant, unless the intention to be so bound is
unmistakably expressed in his contract. The ''natural
and normal" inference is that whai the obligation of one
party to such a contract as we have here is ended it was
the intention that the obligation of the other party should
end also.
The inference that the license to produce continued
after the obligation to produce expired, in my judgment,
can be sustained only by n^lecting the specific provision
of the first paragraph, that the license granted is subject
to the limitations which should follow, and which did
follow in the third paragraph. It involves imposing, by
judicial construction, heavy and unusual burdens upon
the author of a successful dramatic composition in the
interest of a commercial producer — a result which courts
should not strain themselves to accomplish.
A penalty of forfeiture being provided for failure of
the defendant to perform at any time, I cannot see any
substantial reason for inserting the five-year limttati<m
except to fix a limit for the expiration of all rights of both
parties and this, it seems to me, was its only function.
The provision in the first contract that if tiie play should
fail "in New York City and on, the road," and in the
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OKLAHOMA OPERATING CO. v. LOVE, 331'
317. Syllabus.
second that if the net profits for ''one theatrical season''
should be less than two thousand dollars, the play should
be "released for stock" and the royalties divided equally
between the parties, would have ample scope for ap-
plication within the five-year period and therefore can-
not properly be made the basis for the implied continu-
ance of the license beyond that term.
For the reasons thus briefly stated, I think that the
parties expressed with sufficient clearness their intention
that their mutual relations should all terminate with the
expiration of the five-year period, and therefore I dissent
from the opinion of the court.
Mr. JusncB Pttney concurs in this opinion.
OKLAHOMA OPERATING COMPANY t;. I/)VE
ET AL., COMPOSING THE CORPORATION COM-
MISSION OF THE STATE OF OKLAHOMA.
APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES
FOR THE WESTERN DISTRICT OF OKLAHOIiiA.
No. 129. Argued January 23, 24, 1919; restored to docket for reaigu-
ment April 21, 1919; submitted October 9, 1919; order for oral argu-
ment entered October 20, 1919; reaigued December 17, 1919.— Decided
March 22, 1920.
Under the constitution and laws of Oklahoma, an order of the state
Corporation Commission declaring a laundry to be a monopoly and
its business public, and limiting its rates, was not reviewable di-
rectly^ by appeal, mandamus, prohibition or otherwise, in any court
of tlie State, and the only recourse for securing a judicial test of the
adequacy of the rates fixed was to disobiey the order and to appeal
to the state Supreme Court from further action of the Commission,
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2S2 OCTOBER TERM, 1919.
Opinion of the Court. 252 U. 8.
when taken, imposing a penalty for contempt; a penalty as high as
1500 might be imposed, and, aemble, a new one for eadi violation <^ '
the order ; and each day's refusal was declared to be a separate offense.
Hdd, applying Ex parte Young, 209 U. S. 123, 147, and other cases,
that the provisions relating to the enforcement of the rates by penal-
ties were violative of the Fourteenth Amendment, without regard .to
the question of the insufficiency of the rates. P. 336.
Jurisdiction of the District Court having attadied in a suit to enjoin
the enforcement of sudi a rate-fixing order and infliction of penalr
ties, it is not divested by a change in the state law permitting direct
review of the order in the state court. P. 337.
Enforcement of the penalties should be enjoined until the District
Court can determine whether the rates are confiscatory, and if they
be found so their enforcement, by penalties or otherwise, should be
enjoined permanently; and, if found not confiscatory, there should
be a permanent injunction of peiuiltieE accrued pendenie lUe, if the
plaintiff had reasonable ground for contesting the rates as confisca-
tory. Id.
The State Commission need not be enjoined from investigating plain-
tiff's rates and practices, but its findings and conclusions must be
subjected to the review of the District Court in the injunction case;
and may be made part of the final proofs therein. P. 338.
Reversed.
Ths case is stated in the opinion,
Mr. C B. Ames for appellant.
Afr. S. P. Freeling, Attorney General of the State of
Oklahoma, for appellees.
Mb. Justicb Brakdsis delivered the opinion of the
coiurt.
This suit was brou^t in the District Court of the
United States for the Western District of Oklahoma by
the Oklahoma Operating Company against the Corporation
Cpinmisision of that State to enjoin it from entertaining
complaints against the company for the violation of orders
limiting the rates for laundry work in Oklahoma City
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OKLAHOMA OPERATING CO. v. LOVR 333
331. Opimon of the Court.
theretofore entered by the CommissioD, under § 8235 ^
of the Revised Laws of Oklahoma (1910) ; and from doing
any other acts or things to enforce said orders. The case
comes here under § 266 of the Judicial Code by direct
appeal from an order denying a motion for a preliminary
injunction heard before three judges. The appellant
presents to this court the question whether § 8235 is void
under the Fourteenth Amendment, contending that
under the laws of the State there was no opportunity of
reviewing judicially a l^islative rate fixed pursuant to
that section except by way of defense to proceedings for
contempt which mi^t be instituted for violating the
order, and that the possible penalties for such violation
were so heavy as to prohibit resort to that remedy.
The bill as amended makes the following allegations:
In 1918 the Commission entered an order declaring the
(Xdahoma Operating Company a monopoly and its busi-
ness a public one, and directed it not to increase the rates
then being charged except upon application to and per-
mission of the Commission. Since that time operating
costs have risen greatly and rates for laundry work pre-
^ 8235. PMic Imnneas denied. Whenever any business, by reason
of its nature, extent, or the existence of a virtual monopoly therein,
IB such that the public must use the same, or its services, or the coi^
sidention by it given or taken or offered, or the commodities bought
or sold therein are offered or taken by purchase or sale in such a nianner
as to make it of public consequence or to affect the community at
large as to supply, demand or price or rate thereof, or said busineas is
conducted in violation of the first section of this article, said business
IS a public business, and subject to be controlled by the State, by the
corporation commission or by an. action in any district court of the
State, as to all of its practices, prices, rates and charges. And it is
hereby declared to be the duty of any person, firm or corporation en-
giged in any public business to render its services and offer its com-
modities, or either, upon reasonable terms without discrimination and
adequately to the needs of the public, considering the facilities of said
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334 OCTOBER TERM, 1919.
Opmion of the Court. 262 U. 8.
vailing in 1913 have become noncompensatory. Accord--
ingly in January, 1918, the company moved the Com-
mission to set aside its order of 1913 on the ground that
the laundry business was not within the purview of § 8235,
that the company was not a monopoly within the meaning
of that section, and that the section was void. The Com-
mission denied this motion and thereafter the company
established rates higher than those prevailing in 1913.
On account of this it is now threatened with proceedings
for contempt. Since the establishment of thes^ high^
rates the company has been sununoned before the Com-
mission to give information as to the cost of performing
laundry service in Oklahoma City and information in gen-
eral to determine what may be reasonable rates for laun-
dry service in that city. Upon these allegations a pre-
liminary injimction was sought below to restrain the
Commission from entertaining complaints for violation
of its order fixing rates and to enjoin it from proceeding
with the investigation regarding the cost of the service.
The scope of § 8235 and the prescribed course of proceed-
ings thereunder, as construed by the Supreme Court of the
State {Harriss-Irby CoUon Co. v. StaU, 31 Oklahoma, 603;
Shawnee Gas it Electric Co. v. StaU, 31 Oklahoma, 505;
Oklahoma Gin Co. v. State, 63 Oklahoma, 10) in connec-
tion with other legislation (§§ 1192 to 1207 of the Revised
Laws of 1910) and provisions of the state constitution
(Article IX, §§ 18 to 23), are so far as here material, these:
Whenever any bxisiness by reason of its nature, extent or
the exercise of a virtual monopoly therein is such that the
public must use the same or its services, it is deemed a
public business and as such is subject to the duty to render
its services upon reasonable terms without discrimination.
If any public business violates such duty the Corporation
Commission has power to r^ulate its rates and practices.
Disobedi^ice to an order establishing rates may be pun-
ished as a contempt and the Commission has pow^.
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OKLAHOMA OPERATING CO. v. LOVE. 335
331. Opinion of the Ck)urt.
sitting as a court, to. impose a penalty therefor not ex-
ceeding $500 a day. Each day's continuance of failure
or refusal to obey the order constitutes a separate offencie.
The original order may not be made nor any penalty im-
posed except upon due notice and hearing. No court of
the State, except the Supreme Coiui^ by way of appeal,
may review, correct or annul any action of the Commission
witliin the scope of its authority or suspend the execution
iha'eof ; and the Supreme Coiui^ may not review an order
fixing rates by direct appeal from such order. But in the
proceedings for contempt the validity of the original
order may be assailed; and for that purpose, among others,
new evidence may be introduced. When a penalty for
failure to obey an order has been imposed an appeal lies
to the Supreme Court. On this appeal the validity of the
original order may be reviewed; the appeal is allowed as
of right upon filing a bond with sureties in double the
amount of the fine imposed ; the filing of the bond suspends
the fine; and the period of suspension may not be com-
puted agidnst a concern in fixing the amoimt of liability
for fines.
The order of the Commission prohibiting the company
from charging, without its permission, rates high^ than
those prevailing in 1913, in effect prescribed maximum
rates for the service. It was, therefore, a l^islative order;
and imder the Fourteenth Amendment plaintiff was
entitled to an opportunity for a review in the courts of its
contention that the rates were not compensatory. Chicago ,
Milwaukee & St. Pavl Ry. Co. v. Minnesota, 134 U. S.
418, 456-458; Ex parte Young, 209 U. S. 123, 165,
166. The constitution of the State prohibited any of its
courts from reviewing any action of the Commission
within its authority except by way of appeal to the Su-
preme Court (Article IX, § 20); and the Supreme Court
had construed the constitution and applicable provisions
of the statutes as not permitting a direct appeal firom
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336 OCTOBER TERM, 1919,
Opinion of the Court. 253 IT. S.
orders fixing rates. Harrissr-Irhy Cotton Co. v. State,
supra. On behalf of the Commissioa it was urged at the
oral argument that a judicial review of the order fixing
rates might have been had also by writ of mandamus or
of prohibition issuing out of the Supreme Coiut of the
State. But, in view of the provision of the state constitu-
tion just referred to, it must be assiuned, in the absence
of a decision of a state court to the contrary, that neither
remedy, even if otherwise available, could be used to re-
view an order alleged to be void because confiscatory.
The proviso ''that the writs of mandamus and prohibition
shall lie from the Supreme Court to the Commission in
all cases where such writs, respectively, would lie to any
inferior court or officer/' appears to have no application
here. The challenge of a prescribed rate as being con-
fiscatory raises a question not as to the scope of the Com-
mission's authority but of the correctness of the exercise
of its judgment. Compare Hirah v. Twj/ford, 40 Okla-
homa, 220, 230.
So it appears that the only judicial review of an order
fixing rates possible under the laws of the State was that
arising in proceedings to punish for contempt. The con-
stitution endows the Commission with the powers of a
court to enforce its orders by such proceedings. (Article
IX, §§ 18, 19.) By boldly violating an order a party
against whom it was directed may provoke a complaint;
and if the complaint results in a citation to show cause
why he should not be punished for contempt, he may jus-
tify before the Commission by showing that the order
violated was invalid, imjust or unreasonable. . If he fails
to satisfy the Commission that it erred in this respect, a
judicial review is opened to him by way of appeal on the
whole record to the Supreme Court. But the penalties,
which may possibly be imposed, if he piirsues this course
without success, are such as might well deter even the
boldest and most confid^it. The penalty for refusal to
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OKLAHOMA OPERATING CO. v. LOVE. 337
331. OptDion of the Court
ob^ an Older may be $500; and each day's continuanoe
of the refusal after service of the order it is declared ''shall
be a separate offense." The penalty may appieurently be
imposed for each instance of violation of the order. In
Oklahoma Qin Co. v. Oklahoma^ decided thisday ; poHy 339»
it appears that the full penalty of $500 with the provision
for the like penalty for each subsequent day's violation
of the order was imposed in each of three complaints there
involved^ although they were merely different instances
of charges in exoees of a single prescribed rate. Obviously
a judicial review beset by sudi deterrents does not satisfy
the constitutional requirem^its, even if otherwise ade-
quate, and therefore the provisions of the acts relating to
the enforcement of the rates by penahi^i are unconstitu-
tional without regard to the question of the insufficiency
of those rates. Ex parte Young, 209 XT. S. 123, 147;
Missouri Pacific Ry. Co. v. Tucker, 230 XT. S. 340, 349;
Wadky SauUhem By. Co. v. Georgia, 235 XT. S. 651, 662.
The idaintiff is entitled to a temporary injunction re-
straining the Corporation. Commissicm from enforcing
the penalties. Since this suit was commenced, the legis-
lature has provided by c. 52, § 3, of ihe Laws of 1919
(Sees. Laws Oklahoma 1919, p. 87) that in actions arising
before the C!ommission under § S235 there shall be the
same ri{^t of direct appeal to the Supreme Court of the
State as had theretofore existed in the case of transporter
tion and transmission companies under Art. IX, § 20, of
the constitution. But as plaintiff was obliged to resort
to a federal court of equity for relief it ou|^t to retain
jurisdiction of the cause in order to make that rdief as
full and complete as the circumstances of the case and
the nature of the proofs may require. The suit should,
therefore, proceed for the purpose of determining whether
the maximum rates fixed by the Commission are, under
present conditions, confiscatory. If they are found to be
so, a pemument injunction should issue to restrain their
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338 OCTOBER TERM, 1919.
Opinion of the Court 262 IT. 8.
enforcement either by means of penalties or otherwise,
as through an assertion by customers of alieged ri^ts
arising out of the Commission's orders. Missouri y.
Chicago, Burlington & Quincy R. R. Co., 241 IT. S. 533, 638.
If upon final hearing the maximum rates fixed shoidd be
foimd not to be confiscatory, a permanent injunction
should, nevertheless, issue to restrain enforcement of
penalties accrued pendefiie lite, provided that it also be
found that the plaintiff had reasonable ground to contest
them as beii^ confiscatory.
It does not follow that the Commission need be r^
strained from proceeding with an investigation of- plain*
tiff's rates and practices, so long as its findings and con-
clusions are subjected to the review of the District Court
herein. Indeed, such investigation and the results of it
might with appropriateness be made a part of the final
proofs in the cause.^
These conclusions require that the decree of the District
Court be reversed and that the case be remanded for
further proceedings in conformity with this opinion.
Reverwd.
1 In Ex parte Young, 209 U. 8. 123, 133, the District Court appears
to have considered whether the rates were reasonable although the
penal features of the act were declared void. Miswwri Pacific Ry,
Co, V. Tucker, 230 IT. S. 340, was an action for the penalty; and the
question here raised was not involved. That it ii the penalty provision
and not the rate provisbn which is void appears from the cases in
which the validity of statutes was sustained because the objectionable
penalty provisions were severable and there was no attempt to enforce .
the penalties. WxOcox v. Consolidated Oas Co., 212 17. S. 19, 53; United
States V. Delaware & Hudson Co., 213 U. S. 366, 417; Grenada Lumber
Co. V. Mississippi, 217 U. S. 433, 443; Atchison, Topeka dt Santa Fe
Ry. Co. V. O'Connor, 223 U. 8. 280, 286; Waiky Southern Ry. Co. v.
Georgia, 285 U. B. 651, 662.
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OKLAHOMA OIN CO. v. OKLAHOMA. 339
Opinion of the Court
OKLAHOMA GIN COMPANY v. STATE OF
OKLAHOMA.
SBBOB TO THB BUPBlOflE COUBT OF THB BTATB OF OKLAHOMA*
No. 82. Aigued January 23, 24, 1919; restored to docket for reargo-
ment April 21, 1919; mibmitted October 9, 1919; order for oral argu-
ment entered October 20^ 1919; reargued December 17, 1919.— Decided
March 22, 1920.
The provision of the Oklahoma law eonceming penalties for disobedi-
enoe of an order of the Corporation Commission fixing rates, hdd
void, following Oklahoma Operating Co. v. Lave, amU, 331, as de-
priving a cotton ginning company dL opportunity for judicial review.
P. 340,
ft3 Oklahoma, 10, revened.
Thb case is stated in the opinion.
Mr. C. B. Ames for plaintiff in error.
Mr. S. P. Freding, Attorney General of the State of
Oklahoma^ vdth whom Mr. Paul A. Walker was on the
brief, for defendant in error.
Mb. JtTBTicB BaA2a)Ei8 delivered the opinion of the
court.
The Corporation Commission of Oklahoma having
foimd under § 8235 of the Revised Laws of 1910 that the
Oklahoma Gin Company and four other concerns in the
tovm of Chandler had combined and raised the charges for
{pamiog cotton, on October 17/ 1913, fixed a schedule of
rates lower than those then in force. The company there-
after charged rates in excess of those so fixed; and three
separate complaints against it alle^ng violation of the
order were filed with the Commission. Being summoned
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340 OCTOBER TERM, 1919.
Opinion of the Court. 262 XT. S.
to show cause why it should not be punished for contempt
the company admitted violation of the order, but alleged
that it was void, among other reasons, because § 8236 was
in conflict with the Foiul^eenth Amendment. After a full
hearing at which new evidence was introduced, the Com-
mission afiirmed, on October 10, 1914, the rates fixed;
made a finding that the violation of the order was wilful;
imposed on the company a fine of $500 and costs under
each of the three separate complaints; directed refund of
all amounts collected in excess of prescribed rates; and
declared also: ''A fine will be imposed for each day the
order has been violated, and the matter as to the nimiber
of days and the amounts of fines to be imposed upon the
defendant, other than those mentioned in the inf onnation,
will be left open for adjustment upon taking o£ evidence as
to the nimiber of day^ violated." An appeal was taken by
the company to the Suprane Court of the State, whidi
affirmed the order and, thereafter, denied two petitions
for rehearing. The case comes here on writ of error under
§ 237 of the Judicial Code as amended.
This case was argued and submitted with Oldahoma
Operating Co. v. Love, decided this day, ante, 331. For the
reasons set forth in the opinion in that case the provision
concerning penalties for disobedience to an order of the
Commission was void because it deprived the company of
the opportunity of a judicial review. The judgment must,
therefore, be reversed. It is unnecessary to consider other
contentions of plaintiff in error.
Reversed.
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HIAWASSEE POWER CO. t^. CAROUNA-TENN. CO. 341
Coonad f or Ffetftifla.
HUWASSEE RIVER POWER COMPANY v. CARO-
LINA-TENNESSEE POWER COMPANY.
SBBOB TO THE SUPBSBCB COURT OF THE STATE OF NORTH
CAROUNA.
No. 208. Argued January 30, 1020.— Decided March 22, 1920.
Hie question whether ft special act of a state legislature chartering a
power company contravenes the equal protection and privileges and
immuniiies clauses of the Fourteenth Amendment because it grants
powers of eminent domain not oonf ened on a rival company orgai^
iied under a general law, is not necessarily decided by a ruling of a
state trial court, in a suit by the former company against the latter
to quiet title, admitting the special charter in evidence over de-
fendant's objection that it is void under the state bill of rights and
constitution and violates the Fourteenth Amendment; nor is such
question raised in the state Supreme Court by an assignment alleging
merely that the trial court ened in admitting such evidence, and not
mentioning the Amendment. P. 342.
A constitutional question not presented by assignment of errors or
otherwise, or passed upon, in the state Supreme Court, does not
afford jurisdiction under Jud. Code, { 237; an attempt to raise it by
the petition for a writ of error from this court and the assignment
filed here, is too late, and allowance of the writ l^ the ehief justiee
of the state court does not cure the omission. P. 343.
Writ of error to review 175 N. Car. 668, dismissed.
The case is stated in the opimon.
Mr. Evgene R. Blade, with whom Mr, Sanders McDanid,
Mr. J. N. Moody, Mr. Fdix AUey and Mr. ZdmUm Weaver
were on the briefs, for plaintiff in error.
Mr.Jvliua C. Martin, with whom Mr. Thoa. S. Rollins
and Mr. Oeo. H. Wright were on the brief , for defendant in
errof.
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342 OCTOBER TERM, 1919.
Opmion (4 the Court 252 U. 8.
Mr. JusncB Brandeis delivered the opinion of the
court.
The Carolina-Tennessee Power Company, a public
utility, was incorporated by a private law of North Caro-
lina with broad powers, including that of taking by emi-
nent domain riparian lands of and water rights in any
non-navigable stream of the State. It filed locations for
two hydro-electric plants on the Hiawassee River and
proceeded to acquire by purchase and by condemnation
the lands and water rights necessary for that development.
Thereafter the Hiawassee River Power Company was
organized under the general laws of the State and threat-
ened to locate and develop on that river hydro^ectric
plants which would necessajily interfere with the develop-
ment undertaken by the CarolinarTennessee Company.
The latter brought in the Superior Court of Cherokee
County a suit in the nature of a bill to quiet title. l*he
case was tried in that court with the aid of a jury. Many
issues of fact were raised and many questions of state law
presented. A decree entered for the plaintiff below was
reversed by the Supreme Coiui^ of the State and a new
trial was ordered (171 N. Car. 248). The second trial
resulted also in a decree for plaintiff below which was
affirmed by the state Supreme Court (176 N. Car. 668).
The case comes here on writ of error.
The federal question relied upon as giving jurisdiction
to this court is denial of the claim that the private law in-
corporating the Carolina-Tennessee Company is invalid,
because it conferred upon that company broad powers of
eminent domain, whereas the general law, under which the
Hiawassee Company was later organized, conferred no
such right; the contention being that thereby the guaranty
of the Foxuteenth Amendment of privileges and immuni-
ties jGuid equal protection of the laws had been violated;
But fliis claim was not presented to nor passed upon l^ the
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HIAWASSEE POWER CX). v. CAROLINA-TENN. C50. 343
341. Opinion of the Court
Supreme Court of the State. The only basis for the con-
tention that it was so presented is the fact, that, when the
Carolina-Tennessee Company offered in evidence at the
trial in the Superior Court the private law as'its charter,
objection was made to its admission ''on the groimd that
the same was in terms and effect a monopoly and a void
exercise of power by the State Legislature which under-
took to provide it, it being opposed and obnoxious to the
bill of rights and the Constitution and in violation of the
Fourteenth Amendment;" and that the admission of this
evidence is among the many errors assigned in the Supreme
Court of the State. The law, whether valid or invalid, was
clearly admissible in evidence, as it was the foundation of
the equity asserted in the bill. No right under the Federal
Constitution was necessarily involved in that ruling. The
reference to the ''bill of rights and the Constitution"
made when objecting to the admissibility of the evidence
was to the state constitution and the point was not again
called to the attention of that court. Compare Hvlbert v.
Chicago, 202 U. S. 275, 279, 280. The claam of invalidity
under the state constitution was specifically .urged in that
court as a reason why the CarolinarTennessee Company
should be denied relief and the claim was passed upon
adversely to the plaintiff in error; but no reference was
made in that connection to the Fourteenth Amendment.
If a general statement that the ruling of the state court
was against the Fourteenth Amendment were a sujficient
specification of the claim of a right under the Constitution
to give this court jurisdiction (see Clarke v. McDade, 165
U. S. 168, 172; Capital City Dairy Co. v. Ohio, 183 U. S.
238, 248; Martrin v. Trout, 199 U. S. 212, 217, 224), stUl
the basis for a review by this court is wholly lacking here.
For the Fourteenth ^^endment was mentioned only in
the trial court. In the Supreme Court of the State no men-
tion was made of it in the assignment of errors; nor was it,
80 far as appears by the record, otherwise presented to or
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844 OCTOBER TERM, 1019.
Interlocutory Decree. 2S2 IT. 8.
passed upon by that court. The denial of the claim was
specifically set forth in the petition for the writ of earror to
this court and in the assignment of errors filed here. But
obviously that was too late. Chicago^ Indianapolis A
Louimtte Ry. Co. v. McGuire, 196 U. S. 128, 132. The
omission to set it up properly in the Supreme Court of the
State was not cured by the allowance of the writ of error
by its Chief Justice. ApflOyy v. Buffalo, 221 U. S. 624,
529; HuBberl v. Chicago, TKQ U. S. 276, 280; Marvin v.
Trout, 199 U. S. 212, 223.
We have no occasion, therefore, to consider whether the
claim of denial of rights under the Foiuiieenth Amendxnent
was of the substantial character which is required to sup-
port a writ of error. Equitable Life Asstaranoe Society v.
Brown, 187 U. S. 308, 311. Compare Henderson Light A
PawerCo.v.BlueRidgeInterurbanRy.Co.,24ZV.a.66a.
Dismieeed for want cf jurieSdiML
STATE OF ARKANSAS t;. STATE OF MISSISSIPPL
INTEBLOCTJTOBY DBGBBE. IN BQUITT.
No. 7, Oiigina]. Entered Maroh 22, 1020, upon motioo submitted
BiwchS^lOaO.
Decree appointing, empowering and instructing oommiasionerB to
locate, etc., part of the boundary between the two States.
THIS CAUSE came on to be heard by this court on
the motions and suggestions of coimsel for the respective
parties for the appointment of a conmiission to run, locate,
and designate the boimdary line between the States of
Arkansas and Mississippi as indicated in the opinion of
this court delivered on the 19th day of May, 1919, and
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ARKANSAS v. MISSISSIPPI. 846
844. Interioeutory Decree.
thereupon and on consideration thereof, It is ordei»d,
adjudged and decreed as follows, viz: .
1. The true boundaiy line between the States of Ark-*
ansas and Mississippi, at the places in controversy in this
cause, aside £rom the question of the avulsion of 1848,
hereinafter mentioned, is the middle of the main channel
of navigation of the Mississippi River as it existed at
the Treaty of Peace concluded between the United States
and Great Britain in 1783, subject to such changes as
have occurred since that time through natural and gradual
processes.
2. By the avulfflon which occurred about 1848, and
which resulted in the formation of a new main channel
of navigation, the boundary line between said States was
unaffected, and remained in the middle of the former
main channel of navigation as above defined.
3. The boundary line between the said States should
now be located along that portion of said river, or the
bed of said river, which ceased to be the main channel of
navigation as the result of said avulsion, according to
the middle of the main navigable channel as it existed
immediately prior to the time qf said aviilsion.
4. A commission consisting of Samuel S. Gannett,
Washington, D. C., Charles H. Miller, Little Rock,
Arkansas, and Stevenson Archer, Jr., Gre^iville, Mis-
sissippi, competent persons, is here and now appointed
by the court, to run, locate and designate the boundaiy
line between said States along that portion of said river
which ceased to be a part of the main navigable channel
of said river as the result of said avulsion, in accordance
with the above principles: Commencing at a point in
said Mississippi River about one mile southwest from
Friars Point, Coahoma County, Mississippi, where the
main navigable channel of said river, prior to said avul-
sion, turned and flowed in a southerly direction, and
thence following along the middle of the former main
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346 OCTOBER TERM, 1019.
Interlocutory Decree. 262 U. 8.
channel of navigation by its several coureeB and windings
to the end of said portion of said Mississippi River which
ceased to be a part of the nxain channel of navigation of
said river as the result of said avulsion of 1848.
5. In the event the said Commission cannot now locate
with reasonable certainty the line of the riv^ as it ran
immediately before the avulsion of 1848, it shall report
the nature and extent of the erosions, accretions and
changes that occurred in the old channel of navigation
as the result of said avulsion, and in said report, if nec-
essary to be made in obedience to this pari^raph of the
decree, said Commission shall ^ive its findings of tkct and
the evidence on which same are based.
' 6. Before entering upon the discharge of their duties,
each of said Commissioners shall be duly sworn to per-
form faithfuUy, impartially and without prejudice or
bias the duties hereinafter imposed; said oaths to be taken
before the Clerk of this court, or before the clerk of any
District Court of the United States, or before an officer
authorized by law to^administer an oath in the State of
Arkansas or Mississippi, and returned with their report.
Said Commission is authorized and empowered to make
examination of the territory in question, and to adopt
all ordinary and legitimate methods in the ascertainment
of the true location of the paid boundary line; to examine
and consider carefully tho printed record in this cause
and the opinion of this court delivered on May 19, 1919,
and to take such additional evidence under oath as may
be necessary and authorized to enable said Conunission
to determine said boundary line, but such evidence shall
be taken only upon notice to the parties with permission
to attend by counsel and cross-examine the witnesses;
to compel the attendance of witnesses and require them
to testify; and all evidence taken and all exceptions
thereto and rulings thereon shall be preserved, certified
and returned with the report of said Conmiissioners; and
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ARKANSAS v. MISSISSIPPI. 347
344. Interlocutoty Decree.
said Commission shall do all other matters necessary to
enable it to discharge its duties and to obtain the end to
be accomplished conformably to this decree.
7. It is further ordered that should any vacancy or
vacancies occur in said Board of Commissioners by reason
of death) refusal to act, or inability to perform the duties
required by this decree, the Chief Justice of this court is
hereby authorized and empowered to appoint another
commissioner or commissioners to supply such vacancy
or vacancies, the Chief Justice acting upon such informa-
tion in the premises as may be satisfactory to him*
8. It is further ordered that said Commissioners do
proceed with all convenient dispatch to discharge their
duties conformably to this decree, and they are authorized,
if they deem it necessary, to request the co-operation and
assistance of the state authorities of Arkansas and Mis-
sissippi, or either of those States, in the performance of
the duties hereby imposed.
9. It is further ordered that the Clerk of this court
shall forward at once to the Governor of each of said
States of Arkansas and Mississippi and to each of the
Commissioners hereby appointed a copy of this decree
and of the opinion of this court delivered herein May 19,
1919, duly authenticated.
10. Said Conunissioners shall make a report of thdr
proceeding$ under this decree as soon as practicable on
or before the first day of October, 1920, and shall return
with thdr report an itemised statement of services per-
formed and expenses incurred by them in the performance
of their duties.
11. All other matters are reserved until the coming
in of said report, or until such time as matters pertaining
to this cause shall be properly presented to this court for
its consideration.
Per Mb. Chief Justicb Whiiiq.
March 22, 1920.
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d48 OCTOBER TERM, 1918.
Syllabus. 282U.a.
STRATHEARN STEAMSfflP COMPANY, LIM-
ITED, V. DILLON.
gbbhorabi to thb citouir court of appeals for ths
FIFTH CIRCUIT.
No. 373. Argued December 9, 1919.— Decided BdLaieh 29, 1920.
Section 4 of the Seamen's Act of March 4, 1915, c. 153, 38 Stat. 1164,
amending Rev. Stats., $4530, provides that every seaman on a
vessel of the United States shall be entitled to receive on demand
from the master one-half of the wages which he shall then have
earned, at every port where such vessel, after the voyage has been
commenced, shall load or deliver cargo before the voyaige is ended;
that all stipulations in the contract to the contrary shall be void;
that such demand shall not be made before the expiration of or of tener
than 5 days; that the master's failure to comply shall release the
seaman from hb contract and entitle him to full payment of wages
earned, and (by a proviso) that the section shall afply to seamen on
foreign vessels while in harbors of the United States, and that the
courts of the United States shall be open to such seamen for its en-
forcement.
HM: (1) The proviso makes it clear that the benefits of the section
are for foreign seamen on foreign vessels as well as American seamen
on such vessels, since, otherwise, the grant of access to federal courts
—a ric^t already enjojred by American seamen— would have been
superfluous. P. 353. Sandberg v. McDanM, 248 U. S. 185, dis-
tinguished.
(2) The title of the act does not justify a different construction. P. 354.
(3) The section is constitutional as applied to the case of a foreign
seaman who shipped abroad on a foreign vessel under a contract
withholding payment of wages until the end of the voyage, and
where demand was made before that time, it being within the au-
thority of Congress thus to condition the right of foreign vessels to
enter and use the ports of the United States. P. 355. Patterson y.
Bark Etidara, 190 U. S. 169.
(4) The wages in respect of which demand may be made are not limited
to those earned in a port of the United States, nor does the section
intend that demand made in such a port shall be defened five days
from the airival of the vessel there. P. 356.
256 Fed. Rep. 631, afSrmed.
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8TRATHEARN 8. 8. CX). v. DILLON. 849
348. Aigument for FMHuiwr.
Thi caae is stated in the opinioiL
Mr. Ralph James M. BvUowa, for petitioner, submitted:
The statute was not intended to apply to a foreign
seaman entering into a valid contract in a foreign port for
service on a foreign vessel.
If the Boope of the act is so broadened/ it is necessary
to impute to Congress an intention to enact legislation
having force beyond the territory of the United States;
to interfere witii friendly foreigners by destroying the
contracts which they have made between themselves at
home merely because thdr ships visit our ports; and to
interfere with and attoipt to control the relations be-
tween the subjects of a foreign friendly power aboard their
own ships while they are toiporarily in American waters.
The language of the proviso does not require such a con-
struction. It may readily be so construed as to avoid
such results by excluding from its operation foreign sea-
men under agreements made in foreign countries, thus
making it conform to the purpose of tiie act as ex^nressed
in its titie.
The libellant contends that the object was to make the
seaman a ''faee man'' — ^in sfanple words, to encourage
desertion from foreign vessels, not to promote the welfare
of American seamen. This is much too shortHsd^ted to
be accepted as American. Under British law the breach
of a seaman's contract is desertion, and the punishment
for desertion is imprisonment. Of what avail is it for a
Biitiflh seaman to desert and to ship on an American
vessel with higher wages and, when he arrives in a British
port, to be imprisoned? The argument further implies
that it was the will of Congress to impose ita standards
not only on behalf of American seamen but of all seamen
American or foreign. Fundamentally and radically the
aigument is at variance w)th the first principles erf our
Bepublic and is an attempt to violate the sovereignty of
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860 OCTOBER TERM, 1919.
Atgument for Petitioner. 252 U. &
each nation and the comity of nations. Moore, Inter-
national Law Dig., vol. II, p. 335; Wildenhus^s Case, 120
U. S. 1; Sandberg v. McDonald^ 248 U. S. 185.
If construed as libeliant contends, this statute violates
the due process of law clause of the Constitution. It
would give him wages to which he is not entitled under
his contract; these same wages it would take from the
ship; it would deprive the ship of libellant's services to
which, under their contract, it is entitled; and it would
take from the ship a right to defend an action broucht by
the seaman for wages which under his contract he has not
yet earned. The argument that the effect of the statute
is ^'merely remedial," in opening the courts of this country
to foreign seamen, is contrary to the statements by which
it has be^ explained, and to the statute itself. Properly,
Congress has refused our fora to the enforcement of
remedies which are contrary to its public policy (such as
imprisonment for desertion), and has made it illegal to
enter into a contract contrary to its law within its juris-
diction {PaUersm v. Bark Eudara, 190 U. S. 169); but it
is radically different to open our fora, not for the en-
forcement of its law, but for the avowed purpose of inter-
fering with and rendering void the contracts, laws and
regulations of a friendly power.
It cannot be held that the law of the place of perf onn-
ance is the law of the United States, for the place of per-
formance was a British ship; and although she was not
immune from process while in the ports of the United
States, still she did not cease to be British. While amen-
able to the police power of the United States, and of its
several States, ''her discipline and all things done on
board which affected only the vessel or those belonging
to her" must be dealt with according to British law. The
agreement to pay the seamen's wages was not to be per-
formed in the United States — the wages were to be paid
only upon the return of the vessel to a port in the United
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STRATHEARN 8. S. CO. v. DiLLON. 351
848. Opiiiion of the Court.
Emgdomi except as the master might voluntarfly make
prior pajrmeiits.
The temporary stay in a port of the United States can-
not be held to take away the right of the owner to the
security, which he held for the performance of the sea-
man's contract.
Even if the act applies to foreign seamen upon fordgn
vessels who ship at a foreign port, the libellant's demand
for half wages was premature, five days not having elapsed
from the time of the arrival of the vessel at an American
port. The Itdlier, 257 Fed. Rep. 712.
Mr. George StUherJand and Mr. W. J. Wagueepackj
with whom Mr. SUas B. Axtdl was on the bri^, for re-
spondent.
Mr. Frederic R. Coudert and Mr. Howard Thayer
KingAvry for the British Embassy, by special leave of
court.
The Solicitor Oeneral, with whom Mr. A. P. MyerSf
was on the brief, for the United States, by efpedal leave of
court.
Mb. Jubticb Day delivered the opinion of the court.
This case presents questions arisLog under the Seamen's
Act of March 4, 1915, c. 153, 38 Stat. 1164. It appears
that Dillon, the respondent, was a British subject, and
shipped at Liverpool on the eighth of May, 1916, on a
Britiish vessel. The shipping articles provided for a voy-
age of not exceeding three years, commencing at Liverpool
and ending at such port in the United Smgdom as might
be required by the master, the voyage including ports of
the United States. The wages which were fixed by the
articles were made payable at the end of the.v<^yage. At
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362 OCTOBER TERM, 1019.
Opmion of the Court. 362 TT. 8.
the time of the demand for one-half wages, and at the
time of the beginning of the action, the period of the
voyage bad not been reached. The articles provided that
no cash should be advanced abroad or liberty granted
other than at the pleasure of the master. This, it is ad-
mitted, was a valid contract for the payment of wages
under the laws of Great Britun. The ship arrived at the
Port of Pensacola, Florida, on July 31, 1916, and while
she was in that port, Dillon, still in the employ of the
ship, demanded from her master one-half part of the wages
theretofore earned, and payment was refused. Dillon
had received nothing for about two months, and after
the refusal of the master to comply with his demand for
one-half wages, he filed in the District Court of the United
States a libel against the ship, claiming S12S.00, the
amount of wages earned at the time of demand and refusal.
The District Court found against Dillon upon the
ground that his demand was premature. The Circuit
Court of Appeals reversed this decision, and held that
Dillon was entitled to recover. 256 Fed. R^. 631. A
writ of certiorari brings before us for review the decree of
the Circuit Court of Appeals.
In Sandberg v. McDonald, 248 U. S. 186, and NeOson
V. Rhine Shipping Co,, 248 U. S. 205, we had occasion to
deal with § 11 of the Seamen's Act, and held that it did
not invalidate advancement of seamen's wages in foreign
countries when legal where made. The instant case re-
quires us to consider now §4 of the same act. That section
amends § 4530, Rev. Stats., and so far as pertinent pro-
vides: ''Sec. 4530. Every seaman on a vessel of the
United States shall be entitled to receive on demand from
the master of the vessel to which he belongs one-half part
of the wages which he shall have then earned at every
port where such vessel, after the voyage has been com-
menced, shall load or deliver cargo before the vqyage is
ended and all stipulations in the contract to the contrary
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STRATHEARN S. S. CO. v. DILLON. 363
848. Opinion of the Court.
shall be void: Provided, Such a demand shall not be made
before the expiration of, nor oftener than once in five
days.- Any failure on the part of the master to comply
with this demand shall release the seaman from his con-
tract and he shall be entitled to full payment of wages
earned. . . . And provided further, That this section
shall apply to seamen on foreign vessels while in harbors
of the United States, and the courts of the United States
shall be open to such seamen for its enforcement.''
This section has to do with the recovery of wages by
seamen, and by its terms gives to every seaman on a
vessel of the United States the ri^t to demand one-half
the wages which he shall have then earned at every port
where such vessel, after the voyage has been commenced,
shall load or deliver cargo before the end of the voyage,
and stipulations in the contract to the contrary are de-
clared to be void. A failure of the master to comply with
the demand releases the seaman from his contract and
entitles him to recover full payment of the wages, and the
section is made applicable to seamen on foreign vessels
while in harbors of the United States, anH the courts of
the United States are open to such seamen for enforce-
ment of the act.
This section is an amendment of § 4530 of the Revised
Statutes. It was intended to supplant that section, as
amended by the Act of December 21, 1808, c. 28, 30 Stat.
756, which provided, ''Every seaman on a vessel of the
United States shall be entitled to receive from the master
of the vessel to which he belongs one-half part of the
wages which shall be due him at every port where such
vessel, after the voyage has been conmienced, shall load
or deliver cargo before the voyage is ended unless the
contraiy be expressly stipulated in the contract," etc.
The section, of which the statute now under considera-
tion is an amendment, expressly excepted from the ri^^t to
recover one-half of the wages those cases in which the
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364 OCTOBER TERM, 1919.
Opinion of the Court 252 U. S.
contract otherwise provided. In the amended section ail
such contract provisions are expressly rendered void, and
the right to recover is given the seamen notwithstanding
contractual obligations to the contrary. The language
lilies to all seamen on vessels of the United States, and
the second proviso of the section as it now reads makes it
applicable to seamen on foreign vessels while in harbors of
the United States. The proviso does not stop there, for it
contains the express provision that the courts of the United
States shall be open to seamen on foreign vessels for its
enforcement. The latter provision is of the utmost im-
portance in. determining the proper construction of this
section of the act. It manifests the puipose of Congress
to give the benefit of tiie a^ to seamen on foreign vessels,
and to open the doors of the federal courts to foreign sear
men. No such provision was necessary as to American
seamen, for they had the right independently of "^this
statute to seek redress in the courts of the United States,
and, if it were the intention of Congress to limit the pro-
vision of the act to American seamen, this feature would
have been wholly superfluous.
It is seid that it is the purpose to limit the benefit of the
act to American seamen, notwithstanding this provision
giving access to seamen on foreign vessels to the courts of
the United States, because of the title of the act in which
its purpose is exprersed ''to promote the welfare of Ameri-
can seamen in the merchant marine of the United States."
But the title is more than this, and not only declares the
purposes to promote the welfare of American seameu but
furUier to abolish arrest and imprisonment as a penalty for
desertion and to secure the abrogation of treaty provisions
in relation thereto; and to promote safety at sea. But the
title of an act cannot limit the plain meaning of its text,
although it may be looked to to aid in construction in cases
of doubt. CameU v. Coffne, 192 U. S. 418, 530, and cases
cited. Apart from the text, which we think plain, it is by
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STRATHEARN S. S. CX). v. DILLON. 355
MS. Opinioii of the Cknirt
no means clear that, if the act were given a construction to
limit its ai^lication to American seamen only, the pur-
poses of Congress would be subserved, for such limited
constructicm would have a tendency to prevent the em-
ployment of American seamen, and to promote the en-
gagement of those who were not entitled to sue for one-
half wages under the provisions of the law. But, taking
the provisions of the act as the same are written, we think
it plain that it manifests the purpose of Congress to place
American and f ordgn seamen on an equality of ri^t in so
far as the privil^^ of this section are concerned, with
equal opportunity to resort to the courts of the United
States for the enforcement of the act. Before the amend-
ment, as we have already pointed out, the ri^^t to recover
one-half the wages could not be enforced in face of a con-
tractual obligation to the contrary. Congress, for reasons
which it deemed sufficient, amended the act so as to per-
mit the recovery upon the conditions named in the statute.
In the case of Sandberg v. McDonald, 248 U. S. mpraf we
found no purpose manifested by Congress in § 11 to in-
terfere with wages advanced in foreign ports under con-
tracts legal where made. That section dealt with ad-
vancements, and contained no provision such as we find in
§4. Under §4 all contracts are avoided which run counter
to the purposes of the statute. Whether consideration for
contractual rij^ts under engagements legally made in
foreign countries would suggest a different course is not
our province to inquire! It is sufficient to say that Con-
gress has otherwise declared by the positive tenns of this
enactment, and if it had authority to do so, the law is en-
forcible in the courts. I
We come then to consider the cont^tion that this con-
struction renders the statute unconstitutional as being
destructive of contract rights. But we think this conten-
tion must be decided adversely to the petitioner upon the
authority of previous cases in this court. The matter was
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356 OCTOBER TERM, 1910.
Opinion of the Court. 252 U. S.
fully considered in PaUerson v. Bark Eudora, 190 U. S. 169,
in which the previous decisions of this court were reviewed,
and the conclusion reached that the jurisdiction of tiiis
Gova:iunent over foreign merchant vesi^els in our ports
was such as to give authority to Ckmgress to make pro-
visions.of the character now under consideration; that it
was for this Government to determine upon what terms
and conditions vessels of other countries might be per-
mitted to enter our harbors, and to impose ccmditions
upon the shipm^it of sailors in our own ports, and make
them applicable to foreign as well as domestic vessels.
Upon the authority of that case, and others cited in the
opinion therein, we have no doubt as to the authority of
• Congress to pass a statute of this sort, applicable to foreign
vessels in our ports and controlling the employment and
payment of seamen as a condition of the ri^t of such
foreign vessels to enter and use the ports of the United
States.
But, it is insisted, that Dillon's action was premature as
he made a demand upon the master within less than five
days after the vessel arrived in aa American port. This
contention was sustained in the District Court, but it was
ruled otherwise in the Court of Appeals. Turning to the
language of the act, it enacts in substance' that the de-
mand shall not be made before the e3q>iration of five days,
nor of tener than once in five days. Subject to such limita-
tion, such demand may be made in the port where the
vessel stops to load or deliver cargo. It is true that the
act is made to apply to seamen on foreign vessels while in
United States ports, but this is far from requiring that the
wages shall be earned in such ports, or that the vesseb
shall be in such ports five days before demand for one*
half the wages earned is made. It is the wages of the
voyage for which provision is made, with the limitation
of the right to demand one-half of the amount earned not
often^ than once in five days. The section permits no
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STRATHEARN S. S. CO. v. DILLON. 367
S48. Opinion of the Court.
demand until five days after the voyage haa begun, and
then provides that it may be made at every port where the
vessel stops to load or deliver cargo, subject to the five-day
limitation. If the vessel must be five days in port before
demand can be made, it would defeat the purpose of the
law as to vessels not remaining that long in port, and
would run counts to the manifest purpose of Congress to
prevent a seaman from being without means while in a
port of the United States.
We agree with the Circuit Court of Appeals of the Fifth
Circuit, whose judgment we are now reviewing, that the
demand was not premature. It is true that the Circuit
Court of Appeals for the Second Circuit held in the case of
The Italier, 257 Fed. Rep. 712, that demand, made before
the vessel had been in port for five days, was premature;
this was upon the theory that the law was not ia force
until the vessel had arrived in a port of the United States.
But, the limitation upon demand has no reference to the
length of stay in the domestic port. The right to recover
wages is controlled by the provisions of the statute and
includes wages earned from the bcgnning of the voyage.
It is the right to demand and recover such wages, with the
limitation of the intervals of demand as laid down in the
statute, which is given to the seaman while the ship is in a
harbor of the United States.
We find no error in the decree of the Circuit Court of
Appeals and the same is
Afirmed.
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368 OCTOBER TERM, 1919.
Argument for Petitionfir. 262 U. S.
THOMPSON, MASTER AND CLAIMANT OF THE
STEAMSHIP "WESTMEATH," Ac, v. LUCAS
ET AL.
CEBTIORABI TO THE CIRCUIT COURT OF APFBAL8 FOR THB
SECOND CIRCUIT.
No. 391. Argued December 9, I919.~-Dedcled Mardi 29, 1920.
Decided on the authority of Stratheam S. 8. Co. v. DiUon, ante, 348.
P. 363.
268 Fed. Rep. 446, affirmed.
The case is stated in the opinion.
Mr. L. deOrave Potter , with whom Mr. John M. Woclaey
was on the brief, for petitioner:
This section is ambiguous and is not expressly appli-
cable to foreign seamen on a foreign vessel. Considering
&e purpose as disclosed by the act and its title, it is
quite evident it was not tiie intention of Congress to
legislate for the welfare of foreign seamen, but for the
welfare of American seamen alone.
As the meaning is doubtful and as adherence to the
^strict letter would lead to injustice or contracttction, it
is the duty of the court to give the statute a reasonable
construction consistent with the general principles of law
and comity, and, so far as practicable, to reconcile the
different provisions to make them consistent and har-
monious.
As this statute is penal, and in derogation of the common
law, it should be construed strictly. Sandberg v. Mo-
DonM, 248 TJ. S. 185; NeiUon v. Rhine Shipping Co.,
id. 205:
If Congress had intended that this section should apply
to foreign seamen on foreign vessels, t6mi>orarily within a
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THOMPSON V. LUCAS. 369
358, Argument for Petitioner.
harbor of this country, in derogation of contracts made
on foreign soil, and in contravention of the long estab-
lished rules of comity and the law of nations it would
expressly have provided in the act that it should be so
applicable.
This section, and all the sections of the act, deal with
American seamen and make provisions for their benefit
and safety. Sandberg v. McDonald, 248 U. S. 195.
It is a general rule of law, well recognized in this country
as well as in most other civilized countries, that a con-,
tract valid where made is valid everywhere, and should
be enforced unless against public policy, natural justice
or morality. Story, Conflict of Laws, 8th ed., § 242.
Vjfhea once the ri^ts and obligations of a particular
transaction are fixed, in accordance with the principles
of law and policy of the place where they become fixed,
it cannot be admitted that these ri^ts and obligations
are subject to being varied according to the place or
coimtry or time of their enforcement. This fundamental
principle is attributed to Cicero by Mr. Justice Swayne
in the opinion of this court in the case of Wilson v. Mo-
Namee, 102 U. S. 572, 574. The enforcement by one
sovereign of rights accrued und^ a valid contract made
in the jurisdiction of another sovereign is part of the
comity and law of nations.
The law of nations is a part of the law of the land and
should be followed by the courts of the United States.
The Amelia^ 1 Cranch, 1; The Charming Betsy, 2 Cranch,
64, 118; Holmes v. Jennison, 14 Pet. 540, 569.
The contract involved herdui, whereby it was provided
that no wages were due the libellants until the completion
of the voyage, is not contrary to public policy, good
morals, or natural justice. Such a contract is valid
under the laws of this country as well as those of Great
Britain.
This contract is not contrary to public policy simply
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360 (XrrOBER TERM, 19ia
Argument for Petitioner. 2&i U. b.
because it is in conflict with the provisions of § 4530 of
the Revised Statutes. Northern Pacific R. B. Co. v. Bofc-
codb, 154 U. S. 190. See Sandberg v. McDonald, 2i8TJ. 8.
185, 196.
That class ci cases r^resented by The Kensington^
183 U. S. 263, and Union Trust Co. v. Growian, 245 TJ. S.
412, on which the decision of the Circuit Court of Appeals
in The Straiheam, 239 Fed. Rep. 583, was based, are not
applicable here. Th^ simply affism the well recognized
principle that the comts of this country will not enforce
a foreign contract against public policy. See Cvba R. R.
Co. V. Croshg, 222 U. S. 473, 478. The Seamen's Act,
in so far as it is sought to be invoked in this case, does
not place any limitation on the enforcement of an obli-
gation but creates a pecuniary ri^^t and obligation in
contravention of the terms of a valid foreign contract.
It has always been recc^oized by the courts as well
as the executive branch of the government of this country
that the laws and statutes of any State should not be
given extrar-territorial force and effect.
The Kngliflh rule is laid down in Lloyd v. QuSbertj L. R.
1 Q. B. 115, 127; the French rule can be found in The Dio
Adelphi, Nov., 1879, 91 Jour, du Palais, 1880, pp. 603,
609. In The ApoUon, 9 Wheat. 362, Mr. Justice Story
said, p. 370: .''The laws of no nation can justly extend
beyond its own territories, except so far as regards its
own citizens.'' American Banana Co. v. United Fruit Co.,
213 U. S, 347, 357; United States v. Palmer, 3 Wheat.
610, 631.
This court in. the cases that have come before it has
construed the act under consideration as not having any
extra-territorial force. Sandberg v. McDonald, and NcHeon
V. Rhine Shipping Co., supra. To the same effect are:
The Italier, 257 Fed. Rep. 712; The Nigretia, 255 Fed.
Rep. 56; The BOgier, 246 Fed. Rep. 966; The State of
Jlfmne, 22Fed.R4-734;30Op8.Atty.Gen.441. Patter-
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THOMPSON V. LUCAS. 861
358. Aigument for Petitioiier.
9on V. Bark EudorGf 190 U. S. 169^ is not an authority to
the contrary.
The provisions would have ample operation if confined
to contracts of seamen on a foreign vessel when made
while the vessel is in a harbor of the United States, and
then only to contracts of American seamen. See The
Ixian, 237 Fed. Rep. 142; The Itdlier, 257 Fed. Rep. 712.
Where a controversy concerns the rights and duties of
the crew to the ship or among themselves and not involv-
ing a breach of the peace, on a foreign vessel on the hi|^
seas, or in the port of another country, the law of the
flag of the vessel governs the ri^ts and liabilities of the
parties just as conclusively as though the controversy
had arisen on land within the territorial jurisdiction of
the couhtiy whose flag the vessel flies, for a ship has
long been regarded by the courts and by writers on inter-
national law as a floating island of the country to which
she belong?. Dicey, Conflict of Laws, 2d ed., § 663 ; Whar-
ton, Conflict of Laws, § 473; Minor, Conflict of Laws, § 195;
Bluntschli, § 317; 1 Calvo Droit International, 4th ed., 552;
Book VI, § 3; Rutherford, II, c. 9. Wildenkua's Ca9e,
120 U. S. 1, 12; WiUon v. McNamee, 102 U. S. 572, 574;
The HamUUm, 207 U. S. 398; Moore, International Law
Dig., vol. II, §§ 204, 207; Secretary Bayard to White,
Charge d'Affauis at London, March 1, 1889, For. Rel.
1889, 447.
Where an act of Congress is passed over opposition of a
minority, as in this case, it is to be considered that the
words of the act represent all the majority deemed it safe
to ask. Lincoln v. United SUUea, 202 U. S. 484.
If the provisions of this section which do not specifically
apply to foreign seamen of foreign vessels are construed by
this court to apply to the case at bar, the effect of such a
construction would be tantamount to holding th&t Con-
gress may legislate as to contracts made on f ordgn soil and
affecting only foreigners. Part of the section provides*
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362 OCTOBER TERM, 1919.
Argument for Petitioner. 252 U. S.
''And all stipidations in the contract to the contrary shall
be void." The contract was made at a i>ort of Australia,
and, if the words quoted are held to apply to the contract,
this court will be sanctioning interference by Congress
with the law of a foreign friendly power. That Congress
possesses any such power has been denied by this court.
The ApoOm, 9 Wheat. 362.
The Fedenl Government possesses only those powers
which are expressly or knpliedly conferred on it by the
Constitution. South Carolina v. United States, 199 TJ. S.
437. By no possible stretch of the power to regulate com-
merce can it be said that Congress possesses the i>ower
to regulate contracts of foreign shipowners and foreign
seamen made in Australia. Brown v. Ducheene, 19 How.
183, 198.
Interference with the liberty to contract on such terms
as may be advisable to the parties to the contract is a dep-
rivation of liberty, without due process of law. AUgeyer
V. LouUianay 165 U. S. 578.
It is true that consistently with the Fifth Amendment
Congress may legislate in such a manner as to deprive
persons of the liberty of entering into certain contracts,
but the justification for such le^slation has always been
motives of policy based on the exercise of police power.
Patterson v. Bark Eudara, 190 U. S. 169.
In order to justify any legislation under the i>olice
pawesr it must appear plainly that it has a tendency to
rectify the conditions which the legislative body sou£^t to
remedy. The courts will look through the form to the
substance. Booth v. IlUnois, 184 IT. S. 425, 429. The
section does not even attempt to legislate to the benefit of
the seaman. It goes directly contrary to the policy of the
early Act of 1898, which was held constitutional in Patterr
son V. Bark Etukra, supra.
The only effect that the act has produced up to the
present is that seamen on incoming vessels habitually
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THOMPSON V. LUCAS. 368
868. Opinion of tbeCouii.
demand one^balf wages under it immediately upon arrival,
and leave the ship at once. Crews are constantly chaog-
ing, discipline is impaired, and unnecessary expenses are
incurred.
Althou^ Congress is not prohibited from pasdng laws
impairing the obligation of contracts, it cannot deprive a
person of property without due process of law. Hepbwm
V. Grimvold, 8 Wall 603, 623; McCracken v. Hayward, 2
How. 606, 612; Sinking-Fund Cases, 99 U. S. 700, 718;
Cool^, Const. Um., 7th ed., 507. If this act be appUcable
to the case at bar. Congress did not merely pass a law
impairing the oblie^tion of a contract, by taldng away the
remedy for the enforcement of a contract, but created a
liability on the shipowner in direct contravention of the
terms of a legal, binding contract; and therefore violated
the Constitution by taking property without due prooess
of law.
Mr. W. J. Waguespack, with whom Mr. SUas B. AxUU
was on the brief, for respondents.
Mb. Justiob Day delivered the opinion of the court
This case was argued at the same time as Number 373,
just decided, ante, 348. In this case the libellants shipped
as part of the crew of the British Steamer Westmeatfa
for a voyage not to exceed one year, before the expiration
of which time the vessel arrived in the harbor of New
Yoric, where she loaded and discharged cargo. A demand
was made for one-half wages under § 4 of the Seamen's ,
Act of 1915. The demand was refused, and an action was
begun for full wages. A d^cknse was set up that the libel-
lants were deserters, and, therefore, not entitled to recover.
The District Court and the Circuit Court of Appeals held
that the libellants' case was made out under the statute.
258 Fed. Rep. 446.
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364 OCTOBER TERM, 1918.
QyDabus. 2fi2n.8.
The case is controlled by principleB which govemed the
disposition of No. 373. The difference being that it i^
pears in this case that demand was made more than five
days after the vessel had arrived in the United States port.
In all other respects as to the constitutionality and con-
struction of the statute our judgment in the former case
is controlling. It follows that the decree of the Circuit
Court of Appeals must be affirmed.
COLLINS V. MILLER, UNITED STATES MARSHAL
FOR THE EASTERN DISTRICT OF LOUISIANA.
CARLISLE, BRITISH CONSUL GENERAL v.
COLLINS.
APPEALS FROM THE DISTRICT COURT OF THE UNITED STATES
FOR THE EASTERN DISTRICT OF LOUISIANA.
Nos. 360, 861. Argued December 0, lOlO.—Dedded Mar«h 29, 1020.
A judgment of the District Courti in a kohen corptu proceeding
wherein the construction of a treaty is drawn in question, is not ap-
pealable directly to this court (Jud. Code, { 238) unless it is final.
•P. 366.
It is the duty of this 4x>urt in every case in which its juiisdiction de-
pends on the finality of the judgment under review, to examine
and determine that question whether raised by the parties or not.
W.
A judgment in hdbecu carpus dealing with the detention of the relator
for foreign extradition on three charges, and denying relief as to one
but assuming to order a further hearing by the commissioner as to
the others has not the finality and completeness requisite for an ap-
peal to this court. Pp. 368, 370.
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COLLINS V. MILLER. 366
961 Opinioii of the Ck>urt.
The proper puty to appeel fionva judgment in' hobetu oorpua directing
the Tnamhal to rdease a person held for foreign ejctradition is the
marshal, not the foreign consul upon whose complaint the extradi-
tion proceedings were begun. P. 371.
Appeals dismissed.
Thb case is stated in the opinion.
Mr. J. Zach. Spearing and Mr. Ouion Miller , with whom
Mr. J, Kemp BarUett was on the briefs, for appellant in
No. 360 and appellee in No. 351.
Mr. Charles FoXy with whom Mr. Robert H. Marr and
Mr. Donaldson Caffery were on the briefs, for appellee
in No. 360 and appellant in No. 351.
Mr. Jxtbucb Bbandsis delivo^ the opinion of the
comrt.
These are appeals from a single judgment entered by
the District Court of the United States for the Eastern
District of Louisiana on a petition for writs of habeas
corpus and certiorari. The relator had been anested on
extaradition proceedings. Each party asks to have re-
viewed the construction given below to provisions of
our treaty with Great Britain, proclaimed August 9, 1842
(8 Stat. 572, 576), and of the supplementary treaty pro-
claimed April 22, 1901 (32 Stat. 1864). The questions
presented are, therefore, of a character which may be
reviewed upon direct appeal under § 238 of the Judicial
Code. CAafttonv.KaUy, 229 U.S. 447. But this court has
jurisdiction on writ of error and appeal under that sec-
tion, as under others, only from final judgments. McLish
V. TJoJf, 141 U. S. 661; Heike v. United States, 217 U. S.
423. And the rule applies to habeas corpus proceedings.
Harkrader v. Wadley, 172 U. S. 148, 162. The funda-
mental question whether the judgment appealed from
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366 OCTOBER TERM, 1919.
Opinion of the Court. 262 U. 8.
is a final one within the meaning of the rule has suggested
itself to the court; and it must be answered although it
was not raised by either party. Defiance Water Co. v.
Defiance, 191 IT. S. 184, 194. In order to answer the
question it is necessary to describe the proceedings before
the committing magistrate as well as those in the District
Court on the petition for a writ of habeas corpus.
In October and November, 1918, the British Consul
General at New Orleans filed with the Honorable Ruf us
E. Foster, District Judge of the United States for the
Eastern District of Louisiana, three separate affidavits
each charging that Charles Glen Collins, who was then
within the jurisdiction of that court, had committed at
Bombay, India, the crime therein described as obtaining
property under false pretences, and that he stood charged
therewith in the Chief Presidency Magistrate's Court at
Bombay; and asking that he be committed as a fugitive
from justice for the purpose of having him returned to
India for trial. Warrants of arrest issued and Collins
moved, as to each affidavit, to dismiss for want of jurisdic-
tion, contending that the transactions in question were
commercial dealings in which he had merely failed to
pay debts incurred. Hearings, entitled ''In the Matter
of Extradition Proceedings of Charles Glen Collins,'' were
had before Judge Foster, at which the Consul General
and Collins appeared by counsel. Evidence in support
of each of the three affidavits was introduced by the
Consul General. Then Collins, who was sworn at his
request, admitted his identity and that he had been
present in India at the times the alleged crimes were
committed. As to one of the charges, that of obtaining
a pearl button from Mphamed Alii Zamiel ali Raza, he
was allowed to testify further. But he was not per-
mitted to testify as to matters concerning the other two
which had been consolidated. And he was not permitted
to introduce other witnesses in defense of any of the three
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COLLINS V. MILLER. 387
364. Opinion of the Court.
affidavits. After the hearings were concluded Judge
Foster made two orders or judgments signed by him as
Judge of said United* States District Court and entitled
in said court. In these orders he found, as to each of
the affidavits, that he deemed the evidence sufficient to
sustain the charge under the law and the treaty; and as
to each he ordered Collins reconunitted to the House of
Detention in the custody of the United States marshal
for that district to await the order of the President of
the United States. The two proceedings (which included
the three affidavits) were then consolidate. Under date
of November 27, 1918, a certificate setting forth his find-
ings together with a copy of the record in all the proceed-
ings was transmitted to the Secretary of State.
This petition for writs of habeas carpus and certiorari
was ffied by Collins, in said District Court, on January 8,
1919. It set forth the proceedings before Judge Foster
on the three affidavits, and alleged that his detention was
illegal and in violation of rights secured to him by the
treaty; among other reasons because he was refused per-
mission to introduce evidence as above mentioned. Dis-
trict Judge Grubb ordered that the writs issue; and the
marshal made return setting forth in substance the facts
above recited. The case was heard before Judge Grubb
on February 21, 1919, the record before Judge Foster
bang introduced. On the same day Judge Grubb, with-
out delivering an opinion, ento^ an order which declared
that "relator's application for habeas carpus is denied "
so far as concerned the charge of obtaining the pearl
button from Mohamed AUi Zaimel ali Raza, and that
"the writs of habeas carpus are granted " so far as the
detention was based on the other two charges, but that
the relator be remanded to the House of Detention to
await further proceedings in said last two named affidavits.
"And it is further ordo^ that, as to the*said two affi-
davits last mentioned, this cause be and is hereby r^
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868 OCTOBER TERM, 1919.
Opinion of the Court 262 U. 8.
manded to the Honorable Rufus E. Foster, Judge, to
the end that relator be given the opportunity of mtroduc-
ing such evidence as he might offer at a preliminary
examination under the law of Louisiana/'
Neither party took any action in respect to such further
proceedings before Judge Foster. On March 3, 1919,
Collins petitioned for leave to appeal, contending that
he should have been discharged on all three affidavits
and his appeal was allowed. This is case No. 350 on the
docket of this court. Later, the British Consul General
petitioned for leave to appeal on the ground that Collins'
application should have been definitely denied also as
to the commitment on the other two affidavits. His ap-
peal, being No. 351 on the docket of this court, was
allowed March 28, 1919.
First: Was the judgment appealed from a final one?
A single petition for a writ of habeas carpus thus sets
forth detention of the relator on three separate affidavits.
As to the commitment on one of these the judgment en-
tered by Judge Grubb directed that the writ be ''denied.''
Such denial, or more appropriately dismissal, of the
writ would obviously have been a final judgment, if it had
stood alone. McNamara v. Henkel, 226 U. S. 520, 523.
But the judgment appealed from dealt also with the de-
tention on the other two affidavits. It declared that
''the writs of habeas corpus are granted " as to the com-
mitments on the other two affidavits and ordered that
the case be remanded for fiuiiier hearing before Judge
Foster.
What was thus called granting the writ was not a dis-
charge of the prisoner, deferred as in In re Medley^ 134
U. S. 160, and in In re Bonner, 151 U. S. 242; or made
conditional as in United States v. Petkos, 214 Fed. Rep.
978; BiUings v. Sitner, 228 Fed. Rep. 315, and Ex parte
Romano, 251 Fed. Rep. 762; or coupled with othcy dii^-
position of him as in In re Gut Lun, 84 Fed. Rep. 323, and
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00LLIN3 V. MILLER. 360
864. Opmion of the Court.
Ex parte QyU, 210 Fed. Rep. 918, 924. It more nearly
resembleB llie kind of an order which an appellate tri-
bunal enters on reversing and remanding the judgment
of a lower court upon finding error in its proceedings.
But the proceeding before a committing magistrate in
international extradition is not subject to correction by
appeal. See Fang YjAe Ting v. Uniied States, 149 U. S.
698, 714; Stemaman v. Peck, 80 Fed. Rep. 883. CJompare
United States v. Ferreira, 13 How. 40, 48; United States,
Petitioner, 194 IT. S. 194. And it is ordinarily beyond
the scope of the review a£Forded by a writ of habeas carpus
to correct error in the proceedings. In re Kaine, 14 How.
103, 122; Ex parte Harding, 120 U. S. 782, 784; Charlton
V. KeUy, 229 IT. S. 447, 457; Henry v. Henkel, 235 IT. S.
219, 22S. The order resembles, also, that which might
be entered by a district judge after having reviewed the
proceedings taking place before a United States com-
missioner, imder the court's authority to assume control
in the preliminary stages of matters of which it has the
final decision under the law. United States v. Berry, 4
Fed. Rep. 779, 781; In re Chin K. Skue, 199 Fed. Rep.
282, 284; The Mary, 233 Fed. Rep. 121, 124; compare
Todd V. United States, 158 U. S. 278, 282; United States
v. AUred, 155 U. S. 591, 594; In re Perkins, 100 Fed. Rep.
950, 954. For an extradition commissioner is an officer
of the court which appoints him. See Grin v. Shine, 187
IT. S. 181, 187; In re Gnn, 112 Fed. Rep. 790, 794. But
here the extradition commissioner had certified his find-
ings to the Secretary of State before the petition for writ
of habeas corpus was filed. Whether, for this reason, the
time had not passed when the court could correct the
action of its commissioner, except upon reopening of the
proceeding before him with the consent of the Executive
(see 6 Ops'. Atty; Gen. 91), — or, in other words, whether
in such a case the power of the court is not limited to
ordering the discharge of the prisoner either absolutely
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370 OCTOBER TERM, 1919.
Opinioii of the Court. 252 U. 8.
or conditionally except upon a rehqiaring before the com-
missioner with the consent of the President — ^this ques-
tion, we are not required to consider at this time. For
the proceeding ordered by Judge Grubb had not been
taken; nor had the power sought to be exercised by him
been challenged. Nor need we consider whether Judge
Grubb, having found that a proper hearing had been
denied by the committing magistrate on the two affi-
davits, might have heard the case de now, and have
determined thereon whether the prisoner should be dis-
charged; compare Chin Yow v. United States, 208 U. S. 8,
13; Whitfield v. Ranges, 222 Fed. Rep. 745, 746; United
States V. WiUiams, 193 Fed. Rep. 228; for Judge Grubb
did not undertake to do so. The prisoner remained
under the authority of the District Court (see Mr. Justice
Nelson in In re Kaine, 14 How. 103, 133^) ; and as the
writ of habeas corpus had not been disposed of there so
far as concerned the detention on two of the three affi-
davits, the decision below on that branch of the case was
not final.
Second: A case may not be brought hesre by appeal
or writ of error in fragments. To be appealable the judg-
ment must be not only final, but complete. United
States V. GiravJi, 11 How. 22, 32; Holcombe v. McKusick,
20 How. 552, 554; Bostwick v. Brinkerhoff, 106 U. S. 3, 4;
Grant v. Phcmix Ins. Co., 106 IT. 8. 429, 431; Dainese v.
KendaU, 119 U. S. 53; Cotrington v. Covington First Na-
tional Bank, 185 U. B. 270, 277; Heike v. United States,
217 U. S. 423, 429; Rexford v. Brun^wick-Balk^oUender
Co., 228 U. S. 339, 346. And the rule requires that the
judgment to be appealable should be final not only as to
all the parties, but as to the whole subject-matter and
as to all the causes of action involved. Louisiana Navi-
gation Co. v. Oyster Commission, 226 U. S. 99, 101 ; Sheppy
V. Stevens, 200 Fed. Rep. 946. The seeming exception to
this rule by which an adjudication final in its nature of
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COLLINS i;. MILLER. 871
364. Opinion of the C!ourt.
matters distinct from the general subject of the litigation,
like a claim to property presented by intervening petition
in a receivership proceeding, has been treated as final so
as to authorize an appeal without awaiting the termina-
tion of the general litigation below, Central Trust Co. v.
Orant Locomotive Works, 135 TJ. S. 207, 224; WiUiams v.
Morgan, 111 IT. S. 684, 699; Trustees v. Greenough, 106
U. S. 527, has no application here. Nor have cases like
Forgay v. Conrad, 6 How. 201, 204, and Thomson v. Dean,
7 Wall. 342, 345, where decrees finally disposing of prop-
erty which the successful party was entitled to have car-
ried into execution immediately, were hdd appealable,
although certain accounts pursuant to the decree remained
to be settled. Here a single judgment deals with the
detention on three aflSdavits. Only one branch of the
case has been finally disposed of below, therefore none
of it is ripe for review by this court.
Third: In what has been said we must not be imder-
stood as recognizing the British Consul G^ieral as the
party entitled to appeal from a decision in Collins' favor.
For the writ of habeas corpus was directed to the United
States marshal who held Collins in custody and the mar-
shal was the party in whom rested the right to appeal,
if Collins prevailed on final judgment. See Charlton v.
Ketty, supra.
Both appeals are
Dismissed for ward cf jurisdiction.
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372 OCTOBER TERM, 1919.
Order. 25211.8.
STATE OF OKLAHOMxY v. STATE OF TEXAS,
UNITED STATES, INTERVENER.
IN EQXJITT.
No. 27, Origuml. Motion for leave to intervene and to rabmit motion
for injunction and receiver submitted March 29, 1020. Order entered .
April 1, 1020.
Order granting injunction and appointing receiver.
This cause coming on to be heard on the motion of the
United States for leave to intervene herdn for an injunc-
tion and for the appointment of a receiver, and on the re-
sponses made to such motion by the State of OJdahoma
and the State of Texas, respectivdy, and the court being
fully advised in the premises,
It is now considered, ord^ed and decreed as follows,
until the fxurther order of the court:
1. That said motion for leave to intervene herein be,
and the same is hereby, granted.
2. The defendant, the State of Texas, her officers and
agents, are hereby enjoined from selling any purported
rights or making or issuing any grants, licenses or permits
to any person, corporation or association covaing or affeclr
ing any lands, or any part of the bed of Red River, lying
north of the line of the south bank of such river as said
south bank existed at the date of the ratification of the
Treaty of 1819 between the United States and Spain, that
is to say, on the twentynsecond day of February, 1821,
and between the One Himdredth degree of West Longi-
tude and the southeastern comer of the State of Okla-
homa.
3. Jacob M. Dickinson, Esquire, of Chicago, lUinois,
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OKLAHOMA v. TEXAS. 878
372. Older
is hereby appointed receiver of all the lands described in
paragraph two of the said intervener's motion, to wit:
Bounded on the north by the mid channel of the Red
River, as tiie mid .channel is hereinafter defined; on the
east by extension south of the west boundary line of
Range 10 West between Township 4 South, Range 10
West, and Township 4 South, Range 11 West, in Cotton
County, Oklahoma, crossing tiie remaining portion of
said Red River and to the foot of the Texas-bluffs as the
South bank, — ^Thence up said River along the foot of
the Texas bluffs as the South bank, through Ranges 11,
12, 13, and through Range 14 as follows: Commencing
at a point on the east boundary line of Riemge 14 extended
which point is 116.50 chains from the original meander
comer of fractional Section 31, Township 4 South, Range
13 West and Section 36, Township 4 South, Range 14
West; thence
N. 79^ 00' W. 26.76 chs.
N. 71M5' W. 33.00 "
N. 75M5' W. 28.26 "
N. 85^ 30' W. 22.60 "
S. 85^ 15' W. 52.20 "
S. 85°30'W. 8.90 "
N. 82^ 00' W. 21.40 "
S. 82^ 15' W. 11.50 "
S. 71*^ 30' W. 66.70 "
S. 69^ 00' W. 59.25 "
to a point on the present south bank of the Red River
which is at the foot of the Texas bluff; thence along the
line of the south bank and the foot of the Texas bluff
S. 64^ 30' W. 36.00 chs.
S. 64^ 00' W. 20.40
S. 51° 30' W. 44.60
S. 65° 45' W. 24.20
S. 71° 15' W. 54.70
It
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874 OCTOBER TERM, 1919.
Older. 252 U. S.
to a point on the present south bank of Red River at the
foot of the Teicas bluff at the intersection of a direct south
extension of the west boundary of Range 14 West between
fractional Section 7, Township 5 South, Range 14 West,
and Section 12, Township 5 South, Range 15, which point
is 57.43 chains from the original meander comer of said
fractional sections. —
Thence continuing up said River along the foot of the
Texas bluffs as the south bank, throu^ Ranges 15 and 16
to the intersection of the west boimdary line of Range 16
extended to the foot of the Texas bluffs. —
Thence north along said boundary line of Range 16
to mid channel of said River as the same meanders throu|^
the broad stretch of sand which in some places extends
to and is boimded by the bluffs on either side and in other
places by the mai^gin of the alluvial flood plain on either
side, and which is covered with water at times of freshets
and entirely devoid of flowing water during the annual
dry seasons, — and of all machinery, fixtures, tools and
other property of Whatever kind or character now on
said lands and used in connection with the extraction,
storage, transportation, refining or disposal of the oil or gas
products of said lands. And the said receiver is hereby
authorized and empowered to take possession of said
lands and property forthwith, to take all appropriate
measures to conserve the oil and gas within such lands
and to control all operations thereon for the production
and disposal of such oil and gas.
4. Within thirty days after taking possession the
receiver shall formulate and report to this court full and
complete plans for prospecting such lands and devdoping
and producing the oil and gas within the same; and until
such report is made and acted upon by the court the
receiver shall operate the existing oil and gas wells on
said lands, or permit them to be operated by their respeJ^
tive claimants under his direction and supervision, or
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OKLAHOMA t^, TEXAS. 376
372. Order.
close down said wells if he shall deem it advisable to do
so; and he shall sell at market prices the oil and gas so
produced and pay out of the proceeds the necessary ex-
penses of operation and supervision. Full and accurate
accounts shall be kept by the receiver of all oil and gas
so produced and of the proceeds derived from their sale
and the expenses paid therefrom; and these accounts
shall be kept in such way that they will show sepa-
rately the produclion, proceeds and expenses pertaining
to each well so that the net proceeds may be ultimately
awarded to the rightful claimant.
5. Before entering upon his duties the recover shall
execute a bond to be approved by the court in the sum
of One Himdred Thousand Dollars for the faithful per-*
formance of his duties including the disbursement and
payment according to the court's direction of all monejrs
which may come into his. hands in the course of the re-^
ceivership.
6. The receiver shall receive such compensation for
his services as may be fixed hereafter by the court.
7. The defendant; the State of Texas, and the com-
plainant, the State of Oklahoma, and their respective
officers, agents and employees, and all persons now in
possession of any of the said lands or claiming any. right,
title or interest therein, are directed to dehver possession
thereof to the said receiver and are enjoined imtil the
further order of this court from removing any of the
property hereinbefore described from said lands and from
conducting any oil or gas mining operations thereon save
under the direction and supervision of the receiver and
firom interfering with the possession, control or operations
of the receiver.
8. As to such of the land before described as is not
claimed by the defendant, the State of Texas, in its pro-
prietary capacity said State shall have fifteen days within
which to file a response to the intervener's motion for an
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876 OCTOBER TERM, 1919.
Syllabus. 262 n.&
injunction and recover; and on the filing of such response
the State of Texas or any claimant claiming under a patent
lease or permit from that State shall be at liberty to re-
quest any modification of this order deemed essential or
appropriate for the right or full protection of the interest
of such State or claimant.
9. Either the plaintiff, the State of Oklahoma, or the
intervener, the United States, may by an amendment
of its pleading make any claimant claiming imder the
State of Texas or any other claimant a party to the cause
and have the requisite process issued and served, so that
all parties claiming an interest in the subject-matter may
be before the court. And the like permission is granted to
the State of Texas in respect of parties claiming under
the State of Oklahoma or the United States.
CALDWELL v. PACKER, SHERIFF OF CALHOUN
COXJNTY, ALABAMA.
EBBOB TO THB DISTBICT COUBT OF THB* XTNTTBD STATES FOB
THB NOBTHEBN DISTBICT OF ALABAMA.
No. 636. Argued March 4, 5, 1020.— Decide April 19, 1020.
The jurisdiction to try and punish for the crime of murder, committed
by a person in the federal military service upon a civilian while the
nation is at war, but in a place within the jurisdiction of a State
where hostilities are not present and where martial law has not been
proclaimed, is not vested exclusively in a military court-martial by
the Articles of War of 1916; and oonidction and sentence of a soldier,
in such circumstances, in the state court, are not void. So hdd, where
no demand for the culprit had been made upon the State by the mili-
tary authorities. P. 385.
Affirmed.
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CALDWELL v. PARKER. 377
876. Aigament for Ajipellaiit.
The case is stated in the opinion.
Mr. Henry E. Dam and Mr. Charles D. Kline, with
whom Mr. James A. Cobb was on the brief, for appellant:
Comparing former Article 58, Rev. Stats., § 1342, with
present Article 92, it is first particularly to be noted that,
whereas the former used the expression that the offenses
therein mentioned ''shall be pmiishable" (of which*
language as used in the Enrolment Act of March 3, 1863,
this court in Coleman v. Tenneeeee, 97 XT. S. 609, remarked:
''It simply declares that the offences shall be 'punish-
able,' not that they shall be punished by the military
courts; and this is merely saying that they may be thus
punished'') the present Artide 92 distinctly provides
that "any person subject to miHtary law who commits"
either crime in the Article mentioned, of which murder
is one, '* shall suffer death or imprisonment for life, as a
courtr^martUd may direcV^ The difference in language
between the two sections, old and new, caimot be regarded
as accidental and must be regarded as industrious. As
Congress is to be presumed to have had in mind the lan-
guage of this court in the Coleman Case, this conclusion is
inevitable. Congress, instead of providing that the of-
fenses mentioned should be "punishable," intended that
the offender should suffer the prescribed penalty, to be
inflicted by the designated tribimal, namely, a court^
martial.
By existing Article 74 it is required of the commanding
officer, and of him only, upon application of the civil au-
thorities, and upon such application only, to deliver to
the latter, or to aid in apprehending or securing for the
latter, for trial, a soldier accused of crime, except one who
is at the time held by the military authorities as pre-
scribed, and also, ^^ except in time of war; " and the penalty
incurrable by the commanding officer who upon such ap-
plication refuses or wilfully neglects to do as required is
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378 OCTOBER TERM, 191&
Aigument for Appellant 252 U. S.
to be visited upon him only in time of peace. Again,
whereas present Article 92 provides that a soldier com-
mitting murder shall suffer the prescribed penalty by
sentence of a court-martial, it further provides that no
soldier accused of such offense shall be tried by that
tribunal if the offense be committed "m time of peace'''
If, therefore, these Articles are so to be read as to give
. effect to each and all of their provisions, they mean this:
that in time of peace a soldier charged with murder must
be tried by the civil authorities and cannot be tried by
the militaiy , but that in time of war the military authority
over the soldier is primary, paramount and exclusive.
From another viewpoint this conclusion seems equally
unavoidable. The citizen— by which is meant every citi-
wsk — is imder obligation to national nulitary service, and
the right of the nation to require such service is para-
mount; the army of which the citizen becomes a member
is a body of men whose business is war, and what is more,
the body which the nation has formed and is using as its
instrumentality to cany on war; and so impossible is it
to say that the services of every citizen capable of bearing
arms may not become indicfpensable for the defense of the
country, that it follows as a corollary that every citizen
must be kept in a situation and condition to render those
services at any and every moment of his time.
• When, therefore, the citizen becomes a member of the
army in time of war, he is, for the time bdng and for the
puii>oses of the services due by and required of him, with-
drawn from civil life and transferred to a separate and
distinct realm, namely, the realm of nulitaiy life. He
ceases for the time being to be of the civil citizenry and
becomes a member of the military citizenry, and is sub-
ject accordingly to the laws and regulations governing
the latter and not to those governing the former: all this,
of course, diuring a state of war. And if this be so, no
dvil authority may for the time being lay hand upon him
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CALDWELL v. PARKER. 379
878. Aigament f or AppeOaiit
because of any act for which, except for his temporary
condition, he would have been amenable to the civil law
and its authorities.
The language of this court in the Coleman Case r^
specting the exclusiveness, or the contrary, of the juris-
diction of the military tribunal under the section of the
Enrollment Act under consideration is plainly obiter
didwm^ and should therefore not be, and is not, con-
The cases of Ex parte Maeon, 106 U. 3. 606; GhrtrfUm v.
United Staies, 206 U. a 333, and Franklin v. United
States, 216 U. S. 560, arose in time of peace, and under the
former, and not the present. Articles of War; and the
language of the court in each of those cases is to be re-
stricted in application accordingly. [Counsel also cited
Tennessee v. Hibdom, 23 Fed. R^. 705; Ex parte King,
246 Fed. Rep. 868; and Kepner v. United States, 106
U. 8. 100, 128.1
In the judgment now under review it is recited that
there is no averment in the petition that the military
authorities at any time demanded the surrender of the
petitioner. Of tUs it ou{^t to suffice to say that the failure
of those authorities to put thdr jiurisdictipn in play can-
not be said to cancel or abrogate it.
Nor would the case be affected if the fact were that any
one in military authority had delivered the petitioner to
the civil authorities for trial: as respects this, it suffices to
say that no one in military authority has any rigiht so
to do; that no one but the commanding officer is charged
with the duty of delivering an accused soldier to the civil
authorities, and that in time of war that obligation is not
even on him.
Mr. J. Q. Srrdth, Attorney Generaliof the State of Ala-
bama, and Mr. Nid P. Sterne, with whom Mr. Benjamin
Micou was on the brief, for appellee.
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380 OCTOBER TERM, 1919.
Opinion of the Court 252 TJ. 8.
The SoKcUor Oeneral and Mr. H. S. Ridgdy^ by leave
of court, filed a brief as amid curicB, in behalf of the United
States.
Mb. Chief Jubtigb Whitb ddivered the opinion of the
court.
Pending the existence of a state of war with Germany
the appellant, a soldier in the Army of the United States
serving in a camp in Alabama, was tried and convicted for
the murder of a civilian at a place within the jurisdiction
of the State and not within the confines of any camp or
place subject to the control of the civil or militaiy authori-
ties of the United States. The conviction was reviewed
and afiSnned by the Supreme Court of Alabama and was
reexamined and reaflSrmed on rehearing.
The case is here to reverse the action of the court below
in refusing on writ of habeas corpus a discharge which was
prayed on the ground that, under the circumstances
stated, the sentence was void because the state court had
no jurisdiction whatever over the subject of; the commis-
sion of the crime, since under the Constitution and laws
of the United States that power was exclusively vested in a
coiut-martial.
As there was no demand by the' military authorities for
the surrender of the accused, what would have be^ the
efifect of such a demand, if made, is not before us. The
contention of a total absence of jurisdiction in the state
court is supported in argument, not only by the appellant,
but also by the United Stetes in a bridf which it has filed
as amicus curice. These arguments, while differing in
forins of expression, rest upon the broad assumption that
Congress in reenacting the Articles of War in 1916, by an
exercise ofconstitutfonal authority, vested in the military
courtr during a state of war exclusive jurisdiction to try
and punish persons in the military service for offenses
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CALDWELL v. PARKER. 881
876. . OpinJoQ of the Ckmrt.
oommitted by them which were violative of the law of the
several States. In other words, the propositioii is that
under the Aet of 1916, by mere operation of a declaration
of war, the States were completely stripped of authority
to try and punish for virtually all oflfeuses against their
laws committed by persons in the military service. As in
both arguments differences between the provisions of the
Act of 1916 and the previous Articles are relied upon to
sustain the accomplishment of the result contended for, we
must briefly consider the prior Articles before we come to
test tiiie correctness of the conclusion sou^t to be drawn
from the Articles of 1916.
The first Articles of War were adopted in 1775. By
them the generic power of courts-martial was established
as fdlows:
''L. All crimes, not capital, and all disorders and neg-
lects, which officers and soldiers may be guilty of, to the
prejudice of good order and military discipline, though not
mentioned in the articles of war, are to be taken cognizance
of by general or regimental court-martial, according to the
nature and d^pree of the offence, and be punished at their
discretion. "
It cannot be disputed that the effect of this grant was to
confer upon courts-martial as to offenses inherently mili-
tary an exclusive authority to try and punish. In so far,
however, as acts which were cnminal under the state law
but which became subject to military authority because
they could also appropriately be treated as prejudical to
good order and military discipline, a concurrent power
necessarily arose, althouj^ no provision was made in the
Articles regulating its exercise. But this omission was
provided for in Article 1 of § X of the revised Articles
adopted in 1776, as follows:
"Whenever any officer or soldier shall be accused of a
capital crime, or of having used violence, or committed any
offence against the persons or property of the good people
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882 OCTOBER TERM, 191&
Opinion of the Court. 353 U. 8.
of any of the Umted American Statea, such as is punisAi^
by the known laws of the land/the cammandmg officer and
officers of every regbnent, troop, or party^ to which the
peroon or persons so accused shall belong, are hereby re-
quhed, upon application duly made by cnr in behalf <k the
party or parties iujured, to use his utmost endeaycMB to
deliver over such accused person or persons to the civil
magpstrate; and likewise to be aiding and assisting to the
officers of justice in apprehending and securing the person
or peraons so accused, in order to bring them to a triaL If
any commanding officer or officers shall wilfully neglect or
shall refuse, upon the application aforesaid, to deliver over
such accusjdd person or persons to the civil magpstrates, or
to be aiding and assisting to the officers of justice in appre-
hending such i)erson dr persons, the officer or officers so
offending shall be cashiered.''
In view of the terms of this Article and the fact that it
was drawn from the British Articles, where the supremacy
of the civil law had long prevailed, it results that its pro-
visions gave the civil courts, if not a supremacy of juris-
diction, at least a primary power to proceed against
military offenders violating the civil law, although the
same acts were concurrently within the jurisdiction of the
military courts because of their tendency to be prejudidai
to good order aind military discipline.
And in hannony with this view, the Articles in question
were applied up to 1806, in which year they were refinacted
without change as Articles 99 and 33 of that revisipn, and
were in force in 1863, in the Enrollment Act of which year,
it was provided (Act of Marc& 3, 1863, c. 75, § 30, 12 Stat. -
736):
''That in time of war, insurrection, or rebellion, mur-
der, assault and battery with an intent to kill, man-
daughter, mayhem, wounding by shooting or stabbing
with an intent to commit murder, robbery, arson, bur-
g^aiyj rape, assault and battery witii an intent to commit
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CALDWE V. PARKER. 888
876. Opinion of the Court.
rape, and larceny, shall be punishable by the sentence of a
gjsnersl oouilrmartial or military commission, when
committed by persons who are in the military service of
the .United States, and subject to the articles of war; and
the punishments for such offences shaU never be less than
those inflicted by the laws of the state, territory, or dis-
trict in which they may have been committed. ''
It is to be observed that by this section there was given
to courts-martial, imder the conditions mentioned, power
to pmush for capital crimes, from which their authority
had been from 1775 expressly excluded; and power was
also given to deal, under the conditions stated and in the
manner specified, with other enumerated offenses over
which they had not prior to the passage of the act had
jiuisdiction, presumably f>ecause such acts had not in
practice been treated as within the grant of authority to
deal with them as prejudicial to good order and military
discipline.
In 1874, when the Articles of War were revised and re-
enacted (Rev. Stats., § 1342), the generic grant of power
to pmush acts prejudicial to good order and military
discipline was reSxpressed in Article 82, substantially as it
existed from 1775. The provisions of § 30 of the Act of
1863, supra, were in so many words made to constitute
Article 58; and the duty put upon military ofiBcials, to
surrender to state officers on demand persons in the
military service charged with offenses against the State,
was reenacted in Article 59, qualified, however, with the
words, ''except in time of war. " Thus the Articles stood
until tHey were regnacted in the Revision of 1916, as
follows:
The general grant of authority as to acts prejudicial to
good order and military discipline was regnacted in Article
96, substantially as it had obtained from the beginning.
The capital offenses of mimier and rape, as enumerated in
§ 30 of the Act of 1863, were placed in a distinct Artide
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884 OCTOBER TERM, 1919.
Opinion of the Court 282n.B.
find power was given to military courts |«o prosecute and
punish them, as. follows:
''Art. 92. Murder — ^Rape. — Any person subject to
military law who commits murder or rape shall suffer
death or imprisonment for life, as a court-martial may
(be) direct; but no person shall be tried by court-martial
for murder or rape committed within the geographical
limits of the States of the Union and the District of Colum-
bia in time of peace." (39 Stat. 664.)
The remaining offenses enumerated in the Act of 1863
were placed in a separate Article, as follows:
'^Art. 93.. Various Crimes. — ^Any person subject to
military law who commits manslaughter, mayhem, arson,
burglary, robb^, larcooy, embezzlement, pequry, assault
with intent to commit any felony, or assault with intent
to do bodily hann, shall be punidied as a court-martial
may direct. " (39 Stat. 664.)
And finally, the duty to reqx>nd to the demand of the
state authorities for the surrender of military offenders
against the state criminal laws was refinacted as it had
prevailed from the beginning, subject however to express
r^ulations to govern in case of conflict between state and
federal authority, and again subject to the qualification,
'^ except in time of war, " as first expressed in the Revision
of 1874, the. Article being as follows:
"Art. 74. Delivery of Offenders to Civil Authorities. —
When any person subject to miUtaiy law, except one who
is held by the military authorities to answer, or who is
awaiting trial or result of trial, or who is undergoing
sentence for a crime or offense punishable under these
articles, is accused of a crime or offense committed within
the geographical limits of the States of the Union and the
District of Columbia, and punishable by the laws of the
land, the commanding officer is required, except in time of
war, upon application duly made, to use his utmost en-
cleayor to deliver over sudi accwed person to the civil
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CALDWELL v. PARKER. 386
376. Opixdon of the Court.
auihoritiesi or to aid the officers of justice in apprehending
or securing him, in order that he may be brought to trial.
Any commanding officer who upon such application re-
fuses or willful^ n^ects, except in time of war, to deliver
over such accused person to the civil authorities or to aid
the officers of justice in apprehending and securing him
shall be dismissed from the service or suffer such other
punishment as a court-martial may direct. '^ (39 Stat.
662-)
Comprehensively conridering these provisions, it is
apparent that they contain no direct and clear expression
of a purpose on tiie part of Congress, conceding for the
sake of the argument that authority existed undar the
Constitution to do so, to bring about, as the mere result of
a declaration of war, the complete destruction of state au-
thority and the extraordinary extension of military power
iQ)on which the argument rests. Hiis alone might be suf-
ficient to dispose of the subject for, as said in Coleman v.
Tennessee, 97 U. S. 509, 514, ''With the known hostility
of the American people to any interference by the military
with the regular administration of justice in the civil
court3, no such intention should be ascribed to Congress in
Hie absence of clear and direct language to that effect.''
Certainly, it cannot be assumed that the mere existence
of a sta;te of war b^ot of necessity the military powar as-
serted, since the Articles of War, originally adopted in
1775, were, as we have seen, in the very midst of the War
for Independence, modified in 1776 to make certain the
preservation of the civil power.
But the contention relied upon is directly based upon
the words, ''except in time of war, " as qualifying the duty
of the military officers to respond to the demand by state
a^ority for the surrender of military offenders against
the state criminal laws, imposed by Article 74, and the
grant in Article 92, expressed in the form of a negative
pregnant, of authority to courtsrmartial to try capital
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386 OCTOBER TERM, 1919.
Opinkm of the Court. 2S2 U. 8.
crimefi when committed by an officer or soldier within the
geographical limits of the United States and the District
of Columbia in time of war. Both these provisions took
their origin in the Act of 1863 and were drawn from the
terms of that act as re&cpressed in the Revision of 1874;
By its very terms, however, the Act of 1863 was wholly
foreign to the destruction of state and the enlargement of
military power here relied upon. It is true, indeed, that
by that act authority was for the first time given, as
pointed out in the Coleman Case, 97 U. S. 509, 514, to
courts-martial or military commissions to deal witli capital
and other serious crimes punishable under the state law.
But the act did not purport to increase the general powers
of courts-martial by defining new crimes, or by bringing
enumerated offenses within the category of military crimes
as de^ed from the beginning, as we have already pointed
out, but, simply cdntemplated endowing the militaiy
authorities with power, not to supplant, but to enforce,
the state law. As observed by Winthrop, in his work on
Military Law, 2d ed., p. 1033, it was intended to provide,
through the military authorities, means of enforcing and
punishing crimes against the state law committed by
persons in the military service where, as the result of the
eadistence of martial law or of military operations, the
courts of the State were not open and military power was
therefore needed to enforce the state law. And it was
doubtless this purpose indicated by the text, to which we
have ahnady called attention, which caused the court in
Hie Qoieman Case to say that that statute had no applica-
tion to territory where ''the civil co\ui» were open and in
the undisturbed exercise of their jurisdiction." (P. 515.)
As in 1^6 it was settled in Ex parte MiUigan, 4 Wall. 2,
that a state of war, in the a^bsence of some occasion for the
declaration of martial law or conditions consequent on
military operations, gave no power to the military author-
ities where the civil courts were open and capable of peiv
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CALDWELL i^. PARKER, 387
376. Opmion of the Court
forming their duties, to disregard their authority or
frustrate the -exercise by them of their normal and legiti-
mate jurisdiction, it is indeed open to grave doubt whether
it was the purpose of Congress, by the words ^'except in
time of war,'' or the cognate words which were used with
reference to the jiuisdiction conferred in capital cases, to
do more than to recognize the right of the military authori-
ties, in time of war, within the areas affected by military
operations or wbete martial law was controlling, or where
civil authority was either totally suspended or obstructed,
to deal with tiie crimes specified, — a doubt which if solved
against the assumption of general military power, would
demonstrate, not only the jimsdiction of the state courts
in this case, but the entire absence of jurisdiction in the
military tribunals. And this doubt becomes additionally
serious when the Revision of 1874 is considered, since in
that revision the Act of 1863 was in terms reSnacted and
the words ^'except in time of war," appearing for the first
time in Article 59 of that revision, could have been alone
intended to qualify the time of war with which the act
dealt, that is, a condition resulting from- a state of war
which prevented or interfered with the discharge of their
duties by the civil cp\ui».
Into the investigation of the subject of whether it was
intended by the provision ''except in time of ^ar,'' con-
tiuned in the Articles of 1916, to do more than me^t the
conditions exacted by the actual exigencies of war like
those contemplated by the Act of 1863, and which were
within the purview of military authority, a» pointed out
in Sx parte MiUigan, we do not feel called upon to enter.
We say this because even though it be conceded tiiat the
purpose of Congress by the Article of 1916, departing from
everything which had gone before, was to give to military
courts, as the mere result of a state of war, the power to
punish as military offenses the crimes specified when com-
mitted by those in the military service, such admission is
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388 OCTOBER TERM, 1919.
Syllabus. 262 U. 8.
here negligible because^ in that view, the regulations relied
upon would do no more than extend the military authority,
because of a state of war, to the punishment, as military
crimes, of acts criminal under the state law, without the
slightest indication of purpose to exclude the jurisdiction
of state courts to deal with such acts as offenses against
the state law.
And this conclusion harmonizes with the principles of
interpretation applied to the Articles of War previous to
1916; Drury v. Lewis, 200 U. S. 1; Grafton v. United States,
206 U. S. 333; Franklin v. United States, 216 V. S. 559;
6 Ops. Atty. Gen. 413; and is, moreover, in accord with the
decided cases which have considered the contention of
exclusive power in the military courts as resulting from the
Articles of 1916 which we have here considered. People v.
Denman, 179 Califomia, 497; Funk v. StaU, 208 S. W. Rep.
509; United States v. Hirsch, 254 Fed. Rep. 109.
It follows, therefore, that the contention as to the en-
largement of military power, as the mere result of a state of
war, and the consequent complete destruction of state
authority,, are without merit and that the court was right
in so deciding and hence its judgment must be and it is
Affirmed.
CXJYAHOGA RIVER POWER COMPANY v. NORTH-
ERN OHIO TRACTION & LIGHT COMPANY
ETAL.
APPEAL FROM THE DISTRICT COURT OP THE UNITED STATES
FOR THE NORTHERN DISTRICT OF OHIO.
No. 102. Argued March 17, 1920.— Decided Aprfl 19, 1920.
Plaintiff, a hydro-electric company organixed under a gjBoml law of
Otdo, averred in its bill to quiet title, that its incorporation con-
stituted a contract whereby tiie State granted it a right of way for
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CUYAHOGA CO. v. NORTHERN OHIO CO. 389
388. Statement of the Case.
its plant, along a certain river, between the termini designated in
its articles, witii the power of eminent domain to acquire title from
private owners; that these rights were crystaUized by a resolution oiF
its board of directors adopting a detaitod plan of power develop-
ment and definitely and irrevocably fixing the location of its proposed
works on specific lands, surveyed by its engineers and essential to
the enterprise; that all this, supplemented by condemnation pro-
ceedings initiated but not as yet consummated, gave exclusive rights
to acquire the lands for plainti£f's corporate objects, throu^ its
power of eminent domain; and that the purchase of such lands from
their owner by one of two defendant public service corporations,
also organised under general laws of Ohio, their transfer to the other
with the consent of the state Public Utilities Commission, and their
.occupation and use by the other for generating electric power, with
assertion of immunity from plaintiff's power of condemnation,
worked an impairment of plaintiffs contract, and a taking of its
jtDperty, by state action or agency. Rdd^ that the asserted federal
qi^Htions were too plainly without merit to afford jurisdiction to the
iHstrict Court. P. 395. Seora v. Ci^o/iiibran, 246 U.S. 242.
Affirmed.
The appeal is direct to this court, the laws and Constitu-
tion of tiie United States being asserted to be involved.
Upon motion of defendants (appellees) the bill was dis-
missed for want of jurisdiction and equity. Its allegations,
therefore, become necessary to consider.
Plaintiff (appellant) was incorporated as a hydro-electric
power company on May 29, 1908, for the purposes speci-
fied in the act of the legislature of Ohio, passed in 1904, and
contained in §§ 10,128 and 10,134 of the Ohio General
Code of 1910.
The Articles of Incorporation filed May 29, 1908, with
the Secretary of State specified the streams across which
the dams were to be built and maintained, that is, the
streams in controversy, the Big Cuyahoga River and cer-
tain of its tributaries.
By said incorporation a contract was duly made and
entered into between the State and plaintiff whereby the
State granted to plaintiff a right of way over and along jthe
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890 OCTOBER TERM, 1919.
Statement of the Case. 362 U. 8.
Cuyahoga River between the designated termini and a
vested rij^t and franchise to construct, Tnaint>ain and
operafd, within the limits of the right of way, a hydro-
electric plant for the development of electric current and
• energy from the waters of the river, together with a right
or franchise to exercise the State's power of eminent do-
main in order to appropriate and acquire property nece&-
sfuy to carry out and perform the grant and make it
effective. The grant has not been repealed.
The grants were accepted and are of great vahie and
upon the faith of that, th^ capital stock of plaintiff was
subscribed for, and large expenditures and investments
made and obligations incurred, including bonds of the par
value of $150,000, and stock to the value of $210,000, all
in a large part prior to December, 1910.
On June 4, 1908, plaintiff by its board of directors
adopted a specific and detailed plan for the development
of Uie power and sale of the same to the public, and defi-
nitely located its proposiSl improvements for that purpose
upon specifically descnbed lands, which had previously
been entered upon and surveyed by its engineers, and
then and there declared and resolved that the parcels
of land were necessary to carry out the purpose of the
plaintiff']^ organization and that it thereby appropriated
and demanded them for its corporate purposes. The
'parcels of land described in the resolution include all that
were necessary for the puipose of the corporation, and the
location of the improvement so fixed by the resolution was
permanent and irrevocable and conclusive upon plaintiff
and all other persons except as the same might be altered
by further act of the State. ^
June 5, 1908, the plaintiff instituted a suit in the court
of proper jurisAjtioh, to .condemn, or appropriate in
accordance with the statutes of Ohio, the parcels of land
mentioned in the resolution, and the persons owning the
same were made parties. The suit was continuously pend-
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CUYAHOGA CO. i^. NORTHERN OHIO CO. 391
388. Statement of the Case.
ing until a date subsequent to July 18, 1911, but at the
instance and request of one of the owners of the parcels,
and of the Northern Ohio Traction and Light Company,
called the Traction Company, the suit was not pressed for
trial agunst them until January, 1911, up to which date
certain negotiations in regard to the improvement of the
Company were proposed, but finally terminated in the
refusal of the owner of the land and the Traction Company
to sell the land to plaintiff.
December 20, 1910, pending the suit and negotiations,
the landowner executed a deed of the lands to The North-
em Realty Company, conveying to it a fee simple title.
January 20, 1911, after unsuccessful negotiations with
the Realty Company, plaintiff instituted another suit for
the condemnation of the land, which suit was prosecuted in
the Probate Court (the court of jurisdiction) and is now
pending in the Supreme Court of the United States, irnde-
termined, to which court it was carried by a writ* of error
from the Court of Appeals of Ohio.
January 31, 1911, and while the suit above mentioned
was pending, the Realty Company conveyed 'the land
that had been conveyed to it, to the Northern Ohio Power
Company, and the latter company conveyed that and
other land which it had acquired, and all of its properties,
rights and franchises to the Traction Company and the
latter company entered upon the lands and now holds
possession of them and of the improvements erected
thereon.
Prior to January 20, 1911, no location or improvement
upon the lands above designated was made for the purpose
of utilizing them in the development of power and they
were actually employed for no use whatsoever, except a
small wooden structure intended and occasionally used
for dances and roller skating, a small portion of which
structure was within all of the parcels.
Between January 31, 1911, and February 24, 1914, there
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8B2 OCTOBER TERM, 1919.
Statement of the Caae. 262D.&
was'erected upon the lands designated, a power-house and
other i^plianeep for the generation of electric current and
energy by means of steam power, also a dam, a power-
house and other appliances for the generation of electric
current and energy by the flow and fall of the waters of
the river.-
(There is an allegation of the capacity of the plants
which may be omitted. Other allegations in regard to the
various companies and the powers th^ possess and do not
possess also may be omitted. It is only necessary to say
that it is alleged that the Power Company had not, and
the Traction Company has not, power to use the desig-
nated lands or the waters of the river to operate the dteam
power plant and the hydro-electric plant, or for the
development of such powers and, therefore, neither com-
pany had power to exercise eminent domain for such
purposes, though asserting its right and intention to do so,
and if it should do so, it woidd invade and injure rigihts of
plaintiff, inflicting "upon the plaintiff and the persons
interested therein a continuing, permanent and irreparable
injury, for which there is no adequate remedy at law.")
From and after the time of the adoption of the resolu-
tion of Jime 4, 1908, the designated parcels of land were
subjected to plaintiff's public use and its rights and fran-
chises, exclusive of all other persons and corporations; that
such rights and franchises were granted to plaintiff by the
State of Ohio under and by authority of plaintiff's contract
with the State, and for the protection of which plaintiff is
entitled to and claims the protection of the Constitution
of the United States and of the Amendments thereof, as
wiell as § 5 of Article XIII of the constitution of the State
of Ohio.
The effect and result of the Traction Company's use of
the designated parcels of land and of the waters of the
river is an appn^riation.by it of the rights and franchises
of plaintiff and tiie deprivation of its property for private
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CUYAHOGA 00. v. NORTHERN OHIO 00. 893
888. Counsel for PBrties.
use without compensation and without due process of law,
contiaiy to the Fourteenth Amendment of the Constitu-
tion of the United States, and an hnpainnent of the con-
tract of plaintiff with the State of Ohio within the mean-
ing of Article I of the Constitution of the United States.
Plaintiff has at all times and since its incorporation,
actively and diligently and in good faith proceeded to
cany out and accomplish its corporate purpose.
In April, 1909, the plaintiff amended its resolution of
June 4, 1908, and enlarged its proposed plant and the out-
put and product thereof and obtained a grant from the
State over the additional portion or section of the Cuya-
hoga River so as to carry out the amended plan, and it
provides for the utilization of the designated parcels of
land necessary to the plaintiiST's rights and franchises.
(The additional capacity is allied.)
The prayer is that plaintiff's rights and franchises be
establidied and adjudged; that the proceedings com-
plained of be decreed a violation of the plaintiff's rights,
and of the constitution of Ohio and tbe Constitution of the
United States, and a taking its property without due proc-
ess of law. And that an injunction be granted against
their further exercise; that defendants be required to re-
move the structures and devices already erected upon the
lands, or to convey them to the plaintiff, and that a
receiver be appointed to take possession of the lands and
structures. An accounting is also prayed, and general
relief.
Mr. CarrcU 0. WdUer, with whom Mr. WiUiam Z.
Davis and Mr. John L. Wells were on the briefs, for ap-
pellant.
Mr. John E. Morley and Mr. J. 8. Cfxxfk, with whoioi
Mr. S. H. ToUes and Mr. T.H. Hogsetl were on the briefs,
for appellees.
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394 OCTOBER TEBM, 1919.
Opinioii of the Court 362U.8..
Mb. Justice McEonna, after stating the caae as abbve^
delivered the opinion of the court.
Ab we have said, a motion was made to dismiss the bill.
The gromids of the motion were that there was no juris-
diction in the court, the controversy not arising under the
Constitution and laws of the United States, and that the
bill did not state facts sufficient to constitute a cause of
action against defendants or either of th^n«
There is an assertion,in words, of rights under the Cour
stitution of the United States, and the only question now
presented is whether the assertion is justified by the
all^^tions of the bill. Putting the question concretely,
or rather the contention which constitutes its foundation,
the District Court said, ''The contention of the plaintiff
is that by virtue of its charter, it has appropriated the
potentialities of the river and its tributaries within the
boundaries by it designated in its resolution of unproye-
ment, and that it is entitled, because of its incorporation
under the general laws of the State, to exclude any use of
the water power of these streams of the nature of the use
which it anticipates enjoying in the future while it pro-
ceeds, however dilatorily, to make its improvements in
detail and to complete its ambitious scheme. In brief, its
proposition is that its charter is equivalent to a contract
with the State of Ohio giving it the exclusive rig^t to the
employment of the benefits which nature has conferred
upon the public through the forces of these streams to the
end that, until it finds itself able to completely occupy all
the territory which it has privately designated to be
necessary for its use, the public shall not have the advan-
tage of any portion not immediately occupied by it
through the employment of the resources thereof by
another public utility company."
The court rejected the contention holding that it was
not tenable under the law and constitution of Ohio. To
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CUYAHOGA CO. v. NORTHERN OHIO CO. 806
888. Opinidii of the Court.
sustain this view the court cited prior Ohio cases, and oeiv
tain cases on the docket of the courti and, as an inference
dbm them, declared that it was ''not true m Ohio that the
character of complainant gave to it 'a vested rig^t seem-
ingly unlimited in time to exclude the rest of the worid
from the water sheds it chose' simply by declaring by
resolution just what territoiy it hoped in the future to
occupy to carry out its purposes" and further, ''the terms
of Section 19, Art. I of the Ohio constitution militate
against plaint^'s claim. Until appropriation is completed
as provided by the condemnation laws of the State, the
Traction Company's right to dominion over its holdings
is inviolate. Wagner v. Raihoay Co., 38 O. S. 82/' The
court also cited Sears v. City of Akron, 246 U. S. 242 (then
just delivered) expressing the view that if the case had
been brought to the court's attention sooner, a less ex-
tended discussion of the motion to dismiss could have
been made.
We concur with the District Court both in its reasoning
and its deductions from the dted cases. The contention of
plaintiff is certainly a bold one and seemingly erects into'a
l^al principle, that unexecuted intention, or partly exe-
cuted intention, has the same effect as executed intention,
and that the declaration of an enterprise gives the same
right as its consummation. Of coimse, there must be a first
step in eveiy project as well as a last step, and in enterprises
like those we are considering there may be attainment
under the local law of a right invulnerable to opi>osing as-
sertion. And this plaintiff contends. To be explicit it con-
tends that as against the Power Company and tiie Traction
Company, they being its competitors in the same field of
enterprise, its resolution of Jime 4, 1908, constituted an
appropriation of the waters of the river, and a definite lo-
cation of "its proposed improvement for that purpose
upon specifically described parcels, of land previously en-
tered upon and surveyed by its engineers. " Whether the
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396 OCTOBER TERM, 191ft
Opjnkm of tha Court 262X7.8.
resolution had that effect under the Ohio laws we are not
called upon to say. Indeed, we are not so much co^bcemed
with the contention as the ground of it. Plaintiff allies
as a ground of it, a contract with the State of Ohio, by its
incorporation, '^ wherein and whereby said State duly
granted to the plaintiff a right of way over and along said
Cuyahoga River" between the designated tenmni, with
the rights and franchises which we have mentioned, to-
gether ''with the right or franchise of exercising the
State's power of eminent domain in order to appropriate
and acquire all property necessary to carry out and per-
fonn said grant and make the same effective" and that
the acts of defendants, having l^islative sanction of the
State, impair plaintiff's contract.
It is manifest, therefore, that the determining and effec-
tive element of the contention is the charter of the State,
and plaintiff has proceeded in confidence in it against
adverse adjudications. One of the adjudications is Sears
v. City of Akron, mpra. The elemental principle urged
here was urged there, that is, there was urged there as here,
that the charter of the company constituted a contract
with the State, and that the contract was to a conclusive
effect executed by the resolution of the board of directors
of plaintiff on June 4, 1908, such resolution constituting an
appropriation of the lands described therein, they being
necessary to be acquired in order to construct and main-
tain the improvement specified in the plaintiff^s charter
and resolution. The principle was rejected and it was
decided that the incorporation of plaintiff was not a con-
tract by the State with r^erence to the riparian rights,
and that if plaintiff acquired riparian rights or sp&yJia
rights in the use and flow of the water, that ''would be
property acquired under the charter, not contract ri^JA(:s
expressed or implied in the grant of the charter. "
The case is determinative of the plaintiff's contention
here, and it is manifest if plaintiff has any rights, they
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CUYAHOGA 00. v. NORTHERN OHIO CX). 897
888. Opmioid of tha Ccmrt
are against defendants as rival companies or against them
as land owners, ri^ts imder the charter, not by the
charter, considered as a contract express or implied. The
District Court recognised the distinction and confined its
decree accordingly. The court refused to speculate as to
what plaintiff mi^t be able to do hereafter in the asser-
tion of rights against the Traction Company, but declared
that it was against public poller to accede to the conten-
tion of plaintiff that, in the absence of specific acquirement,
plaintiff could prevent an owner of properly within its
territory from occupying or using the same, without
condemnation proceedings being had and compensation
paid or secured for such property.
The court, therefore, was considerate of the elements of
the case and of plaintiff's ri^ts both against defendants
as rival companies or as land owners, and necessarily, as
we have said, if either or both of them b^ regarded as
involved in the case, its or their assertion cannot be made
in a federal court unless there be involved a federal
question. And a federal question not in mere form but in
substance, and not in m»re assertion, but in essence and
effect. Tlie federal questions urged in this case do not
satisfy the requirement. The charter as a contract is the
plaintiff's reliance primarily and ultimately. Independ^it
of that it has no rights or property to be taken, that is,
independently of the resolution of Jime 4, 1908, there was
no appropriation or condeomation of the land. WojgfMr
V. Railway Co., 38 Ohio St. 32.
Having nothing independently of its charter and the
resolution of June 4, 1908, it coidd be divested of nothing
and it noust rely upon the assertion of a contract and the
impairment of it by the State or some agency of the State
exercising the State's legislative power. That there is such
agency is the contention, but what it is exactly it is not
easy to say. We, however, pick out of the confusion of the
bill, with the assistance of plaintiff's brief, that the rights
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SgS OCTTOBER TERM, IfilO.
Opimon of tha Court. 262 U. 8.
it acquired, and by what they are impaired, are as foUows:
By the resolution of June 4, 1908, the lands described in
the bill (Exhibit A) became, and ever since have been,
subjected to plaintiff's public use and subject to its rights
of way and franchises exclusive of all other persons or cor-
porations, that the Traction Company asserts and claims
that by reason of purchases of the rights and franchises of
The Northern Ohio Power Company sanctioned by the
orders of the Public Utilities Commission as set forth in
the bill, and th,e construction by the Traction Company
of power plants upon the designated tracts of land, they,
the tracts of land, have become subject to a public use and
cannot be appropriated by plaintiff. And it is said (in the
brief) that the Traction Company bases its claim upon the
state laws, that is, the incorporation of the d^endant
Power Company and the Public Utilities Commission's
orders.
" It is manifest that thete was no state l^islative or other
action against any charter ri^ts which plaintiff possessed.
What the Traction Company may, or does claim, cannot
be attributed to the State (its incorporation antedated
that of plaintiff), and it would be a waste of words to do
more than say that the incorporation of plaintiff imder the
general laws of the State did not preclude the incorpora-
tion of the Power Company under the same general laws.
What ri^ts, if any, the Power Company thereby acquired
against plaintiff is another question.' Iliere remains then,
only the order of the Public Utilities Commission, authcM>
izing the conveyance by the Power Company of the latter's
rights and franchises to the Traction Company, to com-
plain of as an impaument of plaintiff's asserted contract.
But here again we are not disposed to engage in much dis-
cussion. The Commission's order may or may not have
been the necessary condition to a conveyance by the
Power Company of whatever rights it had to the Traction
Company. (§ 614-60, Page and Adams Ohio General
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SOUTH CJOVmOTON Ac. RY. (X). v. KENTUCKY. 389
«18& SjilabuB.
Code.) The order conferred no new rights upon the
Power Company which that company could or did convey
to the Traction Company, nor give them a sanction that
they did not have, nor did it affect any rights of the
plaintiff.
From eveiy federal constitutional standpoint, therefore,
the contentions of plaintiff are so obviously witiiout merit
as to be colorless and whatever controversies or causes of
action it had were against the defendant companies as
rivals in ^ninent domain, or as owners of the lands, and,
diversity of citizenship not existing, the District Court of
. the United States had no jurisdiction.
Decree affirmed,
Mb. Jijbticb Day and Mr. Justice Clabxb took no
part in the consideration or decision of this case.
-SOUTH COVINGTON & CINCINNATI STREET
RAILWAY COMPANY v. COMMONWEALTH OF
KENTUCKY.
SBBOB TO THB COURT OF APPEALS OF THE STATE OF
KBNTCJCKT.
No. 252. Argued March 18, 19, l«20.^I>eckkd April 19, 1920.
A tfeate law raqaiiing intemifaaa nilroad oompaoiaB to mipgiy sepan «tB
can or oompartmentB for white aiid<oolored passengers, and punitl^
ing failure to do so, is not an unconstitutional burden on interstate
oonunerce as applied to such a raiboad, owned by a local corporation
and lying wholly within such State, while in control of an allied
street car company and in practice operated as part of a street-
ear ssrstem over which the cars are run to and from a city in another
State (where such separation of races is illegal) and passengers are
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400 OCTOBER TERM, 1910.
Opinion of the CkMirt 962n.&
oarried through to destination without change for a ein^^e fare,
thoee traveling interstate greatly exceeding in number thoee travel-
ing wholly within the State making the requirement. P. 403.
181 Kentucky, 449, affirmed.
The case is stated in the opinion.
Mr. Alfred C. CassaU, with whom Mr, J. C. W. Beckham,
Mr, Richard P. Emk and Mr. Frank W, CatUe were xm
the briefs^ for plamtiff in error.
Mr. Stephens L. Blakdy, with whom Mr. Chas. /.
Dawean, Attorney General of the Commonwealth of
Kentucky, was on the brief, for defendant in error.
Mr. JxTsncB McKenna delivered the opinion of the
court.
The Railway Company was indicted for a violation of
a statute of Kentucky which required companies or jper-
sons running or operating railroads in the State, to fmv
nish separate coaches or cars for white and colored
passengers.
The statute, as far as we are concerned with it, is as
follows: all corporations, companies or persons ''engagsed
in running or operating any of the railroads of this State,
dther in part or whole, either in their own name or that of
others, are hereby required to furnish separate coaches or
cars for the travel or transportation of the white and
colored passengers on their respective lines of railroad.
Each compartment of a coach divided by a good and sub-
stantial wood^ partition, with a door therein, shall be
deemed a separate coach within the meaning of this act,
and each separate coach or compartment shall bear in
some conspicuous place appropriate words in plain letters
indicating the race for which it is set apart." [Ky. Stats.,
§ 795.]
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SOUTH COVINGTON Ac. RY. (X). v. KENTUCKY. 401
309. OpimoQ of the Conrt
It is also provided that there shall be no difference or
discrimination in the quality of the coaches or cars. A
violation of the act is made a misdemeanor.
Interurban electric railroads are subject to the above
provisions. We may say in passing that the railway com-
pany denies that it is int^urban, but admits that tlie fact
has been decided against it and accepts the ruling. It will
be considered, therefore, as interurban and being so it was
within the law and the charge of the indictment. The
charge is that ihe company at the time designated ''then
and there had authority and was authorised to operate
a line of railroad ten miles in length between Covington
and Erlanger, and beyond, through and by means of its
control, ownership and lease of and from the Cincinnati,
Covirfiton and Erlanger Railway Company, a corporation
organized under the laws of the Commonwealth of Ken-
tucky, an interurban railroad company authorized to
construct and operate an electric railroad ten miles in
length in this County between Covington and Erlanger
and beyond, and incori>orated under the general railroad
laws of this Commonwealth, said defendant then and there
operating said Une of railroad, the construction of which
by the Cincinnati, Covington and Erlanger Railway Com-
pany had theretofore been authorised. '^ And having such
authority , and control of the line of railroad, the company
violated the law of the State by not observing its require-
meiat as to separate coaches.
. The defense to the action was, and the contention here
is, not that the facts charged are not true, but that the
statute so far as it is attempted to be made applicable to
ihe company is an interference with interstate commerce,
and that the defense, was made in the trial court in a
motion to dismiss and for a new trial and also in the Court
of Appeals.
In support of the contention it is stated that the com-
pany's princqMd business was interstate commerce — ^the
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402 OCTOBER TERM, 1919.
Opinion of the Court 362 TT. 8.
carriage of passengers between Cincinnati and the Ken-
tucky cities across the Ohio River, — ^that the car in ques-
tion was an ordinary single truck street car solely engaged
in interstate trips from Cincinnati, Ohio, throu^ Coving-
ton, Kentucky, and a suburb about five miles distant, and
that eighty per cent, of the passengers carried were inter-
state.
The reply made by the State, and expressed by the
Court of Appeals, to the contention is that the railway
company is a Kentucky corporation and by its charter was
given authority ''to construct, operate and manage street
railways in the City of Covington and vicinity"; "and
along such streets and public highways in the city as the
council shall grant the right of way to"; ''and along such
roads or streets out of the city as the companies or cor-
porations owning the same may cede the right to the use
of." And further "it may at any time, by agreement,
purchase, lease, consolidate with, acquire, hold or operate
any other street railway, or intersect therein, in Coving-
ton, Cincinnati, Newport or vicinity," etc.
The Court of Appeals further declared that the railway
company became in some way the owner of all of the
stocks of the Cincinnati, Covington and Erlanger Railway
Company, and that the corporations are operated under
the same general management, and "that the elder cor-
poration operating in the name of the junior, actually con-
structed its road, and has been operating it from the
beginning, being the owner of the cars, which are operated
upon the road. The motive power is electricity and is the
property oi
the road a
roads, and
street raili
charged f o
Cincinnati
point on ti
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SOUTH COVINGTON Ac. BY. 00. p. KENTUCKY. 403
399. Opinkm of the Court
nati Street Railway Company and from one point to
another upon the entire syskesm of the latter company, and
transfers are given for all connecting lines. Manypersons,
who take passage upon the line of the Cincinnati, Coving-
ton and Erlanger Railway Company, at its terminus,
near Erlanger and at other places along its line, are trans^
ported without change of cars, into Cincinnati, in the
State of Ohio, as it connects with the lines of the South
Covington and Cincinnati Street Railway Company, at its
terminus, in the City of Covington." Sqiarate coaches
were not provided as required by the law.
These being the facts the Court of Appeals decided that
there was no interference with or r^^ulation of interstate
commerce. ''Each of the termini," the court said, ''as
well as all the stations of the Cincinnati, Covington alid
Erlanger Railway Company's road is within the State of
Kentucky." And it was concluded t|utt "the offense
charged and fo> which the" railway was "convicted was
the operation of the railroad, in an unlawful manner,
within the State, and in vioUition of one of the measures
enacted under the police powers of the State. "
In answer and in resistance to the conclusion of the
court, the railway company contends that it operates a
railway between designated termini, one being in Ken-
tucky and the other in Ohio, that the price of a fare may
be the sin^e one of five cents for the complete trip in the
g^sMne coach taken at or terminating at the respective
^^^rmini, and that therefore the car and passoiger are
^^i^ceBsarily interstate. Thus viewed they undoubtedly
g^x^f ^^^ thiere are other considerations. There was a
^jKjj^tinct operation in Kentucky, — an operati(»i authorized
oMxd re^ivdred by the charters of the companies, and it is
tb^t ap^^*^^^^ ^e ^^ ui question r^ulates, and does no
^^^ A2id therefore is not a regulation of interstate com-
yY?^- This is the effect of the ruling in iScmtt CotriTij^ton
cfi- ^ y^^r^^^^"^^^ 'Sfrecf Ry. Co. v. CovingUm, 235 U. S. 537. The
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404 OCJTOBER TERM, 19^
Dat, Yah Deyamtsb and Pitnxt, JJ./diasentiiig. 252 U.S.
regulation of the act affects interstate busiiiess inciden-
tally and does not subject it to unreasonable demands.
The cited case points out the equal necessity, under our
system of government, to preserve the power of the States
within their sovereignties as to prevent the power from
intrusive exercise within the National sovereignty, and
an interurban railroad company deriving its powers from
the State, and subject to obligations imder the laws of the
State, should not be permitted to exercise the powers
given by the State, and escape its obligations to the State
under the circiunstances presented by this record, by run-
ning its coaches beyond the state lines. But we need not
extend the discussion. The cited case expresses the prin-
ciple of decision and marks the limitation upon the power
of a State and when its legislation is (Ar 13 not an Interfer-
ence with interstate commerce. And regarding its prin-
ciple, we think, as we have said, the act in controversy does
not transcend that limitation.
Judgment affirmed.
Mr. Justice Day, dissenting.
If the statute of the State of Kentucky, here involved,
as enforced by the decision under review imposes an un-
reasonable burden upon interstate commerce, the convic-
tion should be reversed. To determine this question it is
necessary to have in mind precisely what the charge was,
and the natiu'e of the traffic to which it was applied. The
South Co\7ngton & Cincinnati Street Railway Company
was charged with the offense of unlawfully ruiming and
operating a coach or car by electricity on a railroad track
within the State of Kentucky, without causing or having
a separate coach for the transportation of white and
colored passengers on its said line of railroad to bear in
some conspicuous place appropriate words in plain letters
indicating the race for which it was set apart, and without
having its coach or car divided by a good and substantial
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SOUTH COVINGTON 4c. RY. CO. v. KENTUCKY. 406
309. Dat, Van Dbvantbb and Pxtnvt, JJ., dissenting.
wooden partition, or other partition, dividing the same
into compartments with a door therein, and each separate
compartment bearing in some conspicuous place appro-
priate words in plain letters indicating the race for which
it was set apart.
There is no conflict of testimony, and the record shows
that the Company was engaged in the operation of a street
railway system whose principal business was interstate
commerce, carrying passengers between Cincinnati and
Kentucky cities across the Ohio River; that the car in
question, described in the indictment, was an ordinary
sin^e truck street car seating thirty-two passengers,
about twenty-one feet in length, inside measurement,
solely engaged in interstate trips from Cincinnati, Ohio,
through Covington, Kentucky, and well-populated terri-
tory adjacent thereto, to a point near Fort Mitchell, a
subiu*b, about five miles distant. Eighty per cent, of the
passengers carried were interstate. Not to exceed 6 per
cent, of the passengers carried at any time were colored
and on a large proportion of the trips no colored passengers
were carried.
The question for determination is: Whether under such
circumstances the requirement of the statute of the State
of Kentucky that railroad companies doing business in
that State shall be required to furnish separate coaches
and cars for the travel or transportation of white and
colored persons or cars with compartments, as described
in the indictment, is constitutional? The nature of the
traffic of the South Covington & Cincinnati Street Rail-
way Company was considered by this court in South
Covington & Cincinnati Street Ry. Co/v. Covington, 235 U.
S. 537, and we held that the traffic between Kentucky
and Ohio on the same cars, under the same management,
and for a single fare constituted interstate commerce.
(See 235 U. S. 545, and cases cited.) In that case we held
that an ordinance of the City of Covington, which under-
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406 OCTOBER TERM, 1919.
Dat, Van Devanteb and Pitnbt, JJ., dissentiiig. 252 IT. 8.
took to determine the number of cars and passengers to be
carried in interstate transportation was invalid as a bur-
den upon interstate commerce; and that, as to certain
regulations affecting the safety and welfare of passengers^
the ordinance was valid until Congress saw fit to r^^te
the interstate transportation involved.
It is true that a portion of the transportation involved in
the present case is over the track of a raibroad company
organized imder the laws of Kentucky. But that road had
no carsi conducted no railroad operations, and its stock
was owned and it Was operated by the South Covington &
Cincinnati Street Railway Company. The car, for which
the indictment was returned, and the conviction had, was
operated only in interstate traffic, and, whether over one
road or the other, such operation was interstate commerce,
and plainly within the authority of Congress. In the
absence of congressional r^ulation the State had power
to make reasonable rules, not burdening interstate com-
merce, which should be enforced until Congress otherwise
enacted. .
The question in this case then is: Was the application of
this statute a reasonable regulation? The traffic consists
in running a angle car, of the character ab-eady described,
from fountain Square, Cincinnati, a distance of about six
miles, to Fort Mitchell, a suburb of South Covington, Ken-
tucky. How could this separate car or compartment stat^
ute be complied with? It is first suggested a separate car
could be put on for the acconmiodation of colored passen-
gers for the distance of the intrastate run on the Kentucky
side of the river. In view of the nature of the transporta-
tion and the meagre pittronage compared with the expense
of such an undertaking,^this method would be unpraqticahle
without iiitemiptuig travel and entailing a great loss upon
the Company. Secondly, it is suggested, and this seems to
be the wei^t of the argument, that cars could be con-
structed with a separate compartment for the few colored
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SOUTH COVmaTON Ac, RY. 00. v. KENTUCKY. 407
399. Dat, Van Dbvaktu and PmaBT, JJ., dissentoig.
persons who ride in the car after it reaches or before it
leaves Kentucky. It is admitted that this regulation would
not apply to interstate passengers, and colored passengers
going from Kentuclgr to Cincinnati, or going from Cincin-
nati to Kentucky on a through trip, would not be subject
to the r^^tion. The few colored passengers traveling
exclusively in the State of Kentucky in this car would thus
be discriminated against by reason of the different privilege
accorded to other colored passengers on the same car, a
condition not likely to promote the peace or public welfare.
As this transportation is also subject to r^ulation in the
State of Ohio (see § 12940, Ohio Gen. Code) and as by the
laws of that State no such separation of passengers is per^
mitted, it follows that upon the same trip the traffic
would be the subject of conflicting r^^tions, calculated
to be destructive of the public policy which it is supposed
to be the design of this statute to promote; a condition
which we said in Sovih Covington Street Railway Case,
supra, would breed confusion greatly to the detriment of
interstate traffic.
This case is quite different from Chesapeake & Ohio Ry.
Co. V. Kentucky, 179 U. S. 388, in which the statute now
under consideration was before the court, and wherein it
was held that the law was valid when applied to a carrier
operating an interstate road. The act was held to be
separable, and capable of being complied with within the
State by attaching a car for passengers traveling only
within the State. That case presented quite a different
situation from the operation of the single street car here
involved.
The present indictment is for running an ordinary street
car upon an interstate journey of only about six miles, with
80 per cent, of its travel interstate, and not bver'6 per cent,
of the passengers colored, and*&n. many trips no colored
passengers at all. As we^faave indicated, the attadmient
of the additional car upon the KentuolQr side on so^short a
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40S 0C3TOBER TERM, 1919.
t>)UDScl for Plaintiff in Error. 252 IT. 8.
journey would burden interstate commerce as to cost and
in the practical operation of the traffic. The provision
for a separate compartment for the use of only intrastate
colored passengers would lead to confusion and discrimi-
nation. The same interstate transportation would be sub-
ject to conflicting r^^ulation in the two States in which it
is conducted.
It seems to me that the statute in question as applied to
the traffic here involved is an imreasonable r^olation and
burdensome to interstate commerce, and, therefore, be-
yond the power of the State. I think the judgment should
be reversed.
Mr. JusticbTan Dbvantbb and Mb. Justicb PrrNBT
concur in this dissent.
CINCINNATI, COVINGTON & ERLANGER RAIL-
WAY COMPANY t;. COMMONWEALTH OP KEN-
TUCKY.
EBBOB TO THB COUBT OF APPBALB OF THB 8TATB OF
KENTUCKY.
No. 253. Aigned M[areh 18, 19, 1920.— Decided April 19, 1920.
Decided on the authority of South Camngian dt Cincinnati Strrni B^.
Co. y, Kentuidey, imie, dl99.
181 Kentucky, 449, affirmed.
The caae is ^stated in the opinion.
Mr. Alfred C. Casaatt, with whom Afr. /. C. W. Beckham,
Mr. Ri^uxrd P. Ernst and Mr. Frank W. CotUe were on
the briefs, for plaintiff in enror.
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CINCINNATI Ac. RY. 00. v. KENTUCKY. 409
40& Opinidii of the Court.
Mr. StepheM L. Blakdy, with whom Mr. Chaa. I. Dauh
9(m, AttoTD^ General of the Commonwealth of Kentucky,
was on the brief, for defendant in error.
Mb. Jxtbtegb McKibnna delivered the opinion of the
court.
This case was argued with No. 252, South CmringUm A
(Xneinnaii Street Ry. Co. v. Kentucky, ante, 399. It was
d]q>oeed of by the Court of Appeals with that case in (me
opinion. The company was indicted as the other company
was for a violation of the Separate Coach Law of the State
and found guilty. The facts are in essence the same as m
the other case, thou^ the mdietment is more daborate.
The defenses and contentions are the same. We have
stated them, and upon what they are based, and the
character and relation of the companies, in our opinion in
the other case.
The company is an interurban road and the Separate
Coach Law is applicable to it. It was incorporated imder
the general laws of the State and authority conferred
upon it to construct and operate an electric railway from
the City of Covington to the town of Erlanger, and to
such further point beyond Erlanger as might be deter-
mined. It was constructed from Covington to a point
just beyond the suburban town called Fort Mitchell, a
town of. a few hundred inhabitants.
The South Covington and Cincinnati Street Railway
Company furnished the means to build the road and at
the time covered by the indictment was operating the
road as part of its railway intern as described in the
other case.
The intimate relations of the roads as stated by the
Court of Appeals, we have set forth in the other case, and
it is only necefeary to add that the indictment in the
present case charges that the company in this case was
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410 OCTOBER TERM, 1919.
Dat, Van Divamtbb and Pitnst, J J., diaMnting. 262 U. 8.
the lessor of the other company and thereby ''permitted
and brought about the acquisition of its ric^ts and privi-
l^es knowing that" the other company, ''would not
operate and run separate coaches for its white and colored
passengers.'' And, it is charged that the other com-
pany operating the lease violftted the law and that the
defendant company knowing of the intended method
of operation, also violated the law. These facts and
other facts the Court of Appeals decided made the comr
pany an offender agaiost the statute, and decided fui^
ther that the statute was not an interference with inter-
state oonimerce. The conviction of the company was
sustained.
Our reviewing power, we think, is limited to the last
point, that is, the effect of the law as an interference with
interstate commerce, and that we disposed of in the other
case. The distinction counsel make between street rail-
ways and other railways, and between urban and inter-
urban roads, we are not concerned with.
Judgment affirmed.
Mr. JusncB Day, dissenting.
This case is controlled by the disposition made of No.
252. While it is true that the Erlanger Company was
incorporated under the laws of the State of Kentucky,
the proof shows that its road was built and operated by
the South Covington & Cincinnati Street Railway Com-
pany as part of the latter 's system. This is not a proceed-
ing to test the right to operate the road. The conviction
is justified because the local company permitted the
principal compaxiy to operate without separate coaches
or compartments for its colored passengers. The traffic
conducted is of an interstate nature, and the same reasons
which impel a dissent in No. 252 require a like dissent in
the present case.
In my opinion the single traffic over both railroads being
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EENNEY t^. SUPREME LODGE. 411
408. OjUDsd for PeUtioner and Plaihtiff in EmK.
interstate, the regulation unbodied in the statate and for
which the conviction was had, as to both roads, is an im-
reasonable and burdensome interference with int^*8tate
commerce.
Mr. Justice Van Dbyamtbb and Mb. Justicb Ptinbt
concur in this dissent.
KENNEY, ADMINISTRATOR OF KENNEY, v.
SUPREME LODGE OF THE WORLD, LOYAL
ORDER OF MOOSE.
CEBnOBABI AND EBBOB TO-THB SUFRBICB COUBT OF TBK
STFATB OF ILLINOI8.
Not. 260, SOS. Argued Maroh 23, 1920.— Decidod April 10, 1023.
A statute dei^ing juriadictiQn to the*€i)urt8 of niiiioia in actiooB for
damages occasioned by death occuning in another State in con-
sequence of wrongful conduct was construed 6y the Supreme* Court
of the State as applying equally to an action on aeiste^state judg-
ment founded on such a cause of action. SM, that, so appli^, it
contravened the full faith aha credit clause of the Constitution.
P.414.
The law of Alabama, which gives a right of action in that State for
death by wrongful act, cannot, by its declaration that such actions
may not be maintained elsewhere, affect the right to enforce by
action in another State a judgment recovered on such a cause of
action in Alabama. P. 415.-
A judgment of a state supreme court giving a meaning and effect to
a statute of the State which brings it in conflict with the Federal
Constitution is reviewable by writ of error. P. 416.
285 Illinois, 188, reversed; writ of oertiohtfi dismissed.
Thb case is stated in the opinion.
Mr. G. R. Harsh for petitioner and plaintiff in error.
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412 OCTOBER TERM, 1910.
AxganMnt for Heqwiideiit and Defendant in E^ 2fi2n.8L
Mr. E. J. HenmnQy with whom Mr. Ralph C. Putnam
was on the briefs, for respondeat and defendant in error:
The matter sought to be reviewed in this comrt can only
be considered upon writ of certiorari, and not by writ of
enor/ Philadelphia A Beading C. & I. Co. v. OUbert^
246 U. a 162; Bruce v. Totnn, 245 U. S. 18; Ireland v.
Woods, 246 XJ. S. 327; Northern Pacific By. Co. v. Solum,
247 U. 8. 477. The writ of certiorari should be dismissed
because the application was not timely submitted under
the rules of this court and the statutes of the United
States.
A state court is free to determine its own jurisdiction,
without reference to the full faith and credit clause of the
Federal Ckinstitution. Anglo-American Provision Co. v.
Davis Prorieian Co., 191 U- S. 373.
Where an action is brought upon a judgment of a sister
State, the court may always examine the nature of the
cause of action upon which the judgment is founded for
the purpose of determining if it would have jurisdiction
of the real subjectrmatter of the action, and, if it appears
that the court would not have jurisdiction of the ori^nal
action, it will not have jurisdiction of an action on the
judgment. Wisconsin v. Pelican Insurance Co., 127 U. 8.
265. In the Pelican Case, the binding force of the judg-
ment was not questioned ; it was given full faith and credit
as a judgment, but the court said, ''we have no jurisdic-
tion of an action of that nature.'' FaurvELeroy y. Lum,
210 U. S. 230, follows the rule laid down in the Pelican
Case and the Anglo-American Provision Co. Case. It
clearly distinguishes between an attack upon the judg-
ment or an inquiry into the merits of the judgment and
the determining of a question of jurisdiction. Christmas
V. BusseU, 5 Wall. 290, establishes no contrary doctrine,
as is clearly shown by the discussion in the Angh-Amerir
can Proidsion Co. Case.
That the Illinois statute is jurisdictional is held by
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KENNEY V. SUPREME LODGE. 413
411. Opinion of the Court.
Dougherty v, American McKenna Co,, 255 lUmois, 369;
and WaUon v. Pryor, 276 Illinois; 563. It makes no dis-
tinction as .to citizenship; and as here applied it does not
violate the full faith and credit or privileges and immuni-
ties provisions of the Constitution. See Dougherty v.
American McKenna Co., supra, relying on Chambers v.
Baltimore & Ohio R. R. Co,, 207 U. S. 142.
The provision of the Alabama statute that an action for
death by wrongful act shall be brought in a court of com-
petent jurisdiction within the State of Alabama and not
elsewhere is jurisdictional; and no court outside of the
State of Alabama has jurisdiction of the subject-matter
of such an action.
It has the effect of making the action local and unen-
forceable in other jurisdictions. 40 Cyc. 46; 22 Ency.
PL & Pr. 786; Eachm v. Trustees, 17 Illinois, 534; EUen-
wood V. Marietta Chair Co., 158 U. S. 195; Coyne v. Souths
em Pacific Co., 155 Fed. Rep. 683; 12 Corpus Juris, 441;
Southern Pacific Co. v. Dusohlon, 48 Te3L Civ. App. 203;
PoUardv. Bailey, 20 Wall. 520.
We observe that both Alabama and niinois, through
their legblatureS; have declared that the Illinois courts
shall not have jurisdiction of an action for a death oc-
casioned in Alabama. The principle is plain and imiversal
that the form of the action cannot change its substance
and vest jurisdiction where it is in fact lacking. Nor did
the Constitution change this rule of law. The full faith
and credit clause does not purport to vest courts with
jurisdiction contrary to the lavvs of the States, and this
principle is fully recognized in Anglo-American Provision
Co. V. Davis Provision Co., 191 U. S. 373.
Mb. Justice Holbies delivered the opinion of the court.
This is an action of debt brought in Illinois upon a
judgment recovered in Alabama. The defendant pleaded
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414 OCTOBER TERM, 1019.
Opiiuim of the Court 262U.8.
to the jurifldiotion that the judgment was for n^^ligeiitly
qfiusing the. death of the plamtiff's intestate in Alabama.
The plMntiff demurred to the plea, setting up Article IV,
§§ 1 and 2 of the Constitution of the United States. A
statute of Illinois provided that no action should be
brou^t or prosecuted in that State for damages occa-
sioned by death occurring in another State in conse-
quence of wrongful conduct. The Supreme Court of
Illinois held that as by the terms of the statute the original
action <K>uld not have been brou^t there, the Illinois
Courts had no jurisdiction of a suit upon the judgment.
The Circuit Court of Kane County having ordered that
the demurrer be quashed its judgment was affirmed.
285 Hlmois, 188.
In the court below and in the argument before us re-
liance was placed upon AngUhAmerioan Pramum Co. v.
Davis Prwmon Co., No. 1, 191 U. S. 373, and language
in Wisconsin v. Pelican Insurance Co., 127 U. S. 265, the
former as showing that the clause requiring full faith and
credit to be given to judgments of other States does not
require a State to furnish a court, and the latter as sanc-
tioning an inquiry into the nature of the original cause of
action in order to determine the jurisdiction of a court to
enforce a forogn judgment foimded upon it. But we are
of opinion that Ihe conclusion sou^t to be built upon
these premises in the present case cannot be sustained.
Anglo-'Amerioan Provision Co. v. Davis Provision Co.
was a suit by a forogn corporation on a foreign judgment
against a forogn corporation. The decision is sufficiently
explained without more by the views about foreign cor«*
porations that had prevailed unquestioned since Bank oj
Augusta v. Earle, 13 Pet. 519, 589-591, cited 191 U. S. 375.
Moreover no doubt there is truth in the proposition that
the Constitution does not require the State to furnish a
court. But it also is true that there are limits to the power
of exclusion and to the power to consider the nature of
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KBNNEY V. SUPREME LODGE. 415
41L Opixiioa of the Court.
the cause of action before the foreign judgment based
upon it is given effect.
In Faunderoy v. Lum, 210 U. S. 230; it was held that
the courts of Mississippi were boimd to enforce a judg-
ment rendered in Missouri upon a cause of action arising
in Mississippi and illegal and void there. The policy of
Mississippi was more actively contravened in that. case
than the policy of Illinois is in this. Therefore the fact
that here the origmal cause of action could not have been
maintained in Illinois is not an answer to a suit upon the
judgment. See Christmas v. RusseU, 5 Wall. 290; Con-
verse v. HamiUon, 224 IT. S. 243. But this being true, it
is plain that a State cannot escape its constitutional
obligations by the simple device of denying jurisdiction
in such cases to courts otherwise competent. The as-
sumption that it could not do so was the basis of the de-
cision in Intematianal Textbook Co. v. Pigg, 217 U. S. 91,
111; 112; and the same principle was foreshadowed in
Oeneral Oil Co. v. Crain, 209 U. S. 211, 216, 220, 228, and
in FaunOeroy v. Lum, 210 U. S. 230, 235, 236. See Keyser
V. Lowell, 117 Fed. Rep. 400; Chambers v. Baltimore &
Ohio R. R. Co., 207 U. S. 142, 148, and cases cited.
Whether the Illinois statute should be construed as the
Mississippi act was construed in FaunUeroy v. Lum was
for the Supreme Ck>urt of the State to decide, but read as
that court read it; it attempted to achieve a result that
the Constitution of the United States forbad.
Some argument was based upon the fact that the statute
of Alabama allowed an action to be maintained in a court
of competent jurisdiction within the State ''and not
elsewhere.^' But when the cause of action is created the
invalidity of attempts to limit the jurisdiction of other^
States to enforce it has been established by the decisions
of this court; Tennessee Coal, Iron & R. R. Co. v. Oeorge,
233 U. S. 354; Atchison, Topeka & Santa Fe Ry. Co. v.
Sowers, 213 U. S. 65; and had these decisions be^ other-
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416 OCTOBER TERM,. i91ft
SyDabuB. 252 U.S.
wise they would not have unported that a judgment
rendered exactly as required by the Alabama statute was
not to have the respect due to other judgments of a sister
State.
As the judgment below upheld a statute that was in-
valid as construed the writ of error was the proper pro-
ceeding and the writ of certiorari must be dismissed.
Judgment reversed.
STATE or MISSOURI v. HOLLAND, UNITED
STATES GAME WARDEN.
APPEAL FBOlil THE DISTRICT COURT OF THE UNITED STATES
FOR THE WESTERN DISTRICT OF MISSOURI.
No. 609. Argued March 2, 1820.— Decided April 10, 1920.
Protection of its quasi sovereign right to regulate the taking of game
18 a sufficient jurisdictional basis, apart from any pecuniary interest,
for a bill by a State to enjoin enforcement of federal regulations
over the 8ubje<?t alleged to be unconstitutional. P. 431.
llie Treaty of August 16, 1916, 39 Stat. 1702, with Great Britain,
providing for the protection, by close seasons and in pther ways, of
migratory birds in the Unit^ States and Canada, and binding each,
power to take and propose to their law-making bodies the necessary
measupes f6r carr3ring it out, is within the treaty<4naking power
conferred by Art. II, § 2, of the Constitution; the Act of July 3,
1918, c. 128, 40 Stat. 755, which prohibits the killing, capturing or
selling any of the migratory birds included in the terms of the treaty,
except as permitted by r^ulations compatible with thosis terms to
be made by the Secretary of Agriculture, is valid under Art. 1, § 8,
of the Constitution, as a necessary and proper means of efifectnating
the treaty; and the treaty and statute, by bringing such birds within
the paramount protection and regulation <^ the Government dc ajui
infringe property rights or sovereign powers, respecting such birds,
reserved to the States by the Tenth Amendment. P. 432.
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MISSOURI t'. HOLLAND. 417
410. ArgumeiLt f or AppeUant.
With raspeet to rights reserved to the States, the treatyHuaking power
is not limited to wbsi may be done by an unaided act of Congress.
R432.
258 Fed. Rep. 479, affinned.
Thb case is stated in the opinion.
Mr. J. 0. L. Harvey and Mr. John T. OosCy Assistant
Attorney General of the State of Missouri, with whom
Mr. frank W. McAUiater, Attorney General of the State
of Missouri, was on the brief, for appellant:
If the act of Congress now in question would have
been^ unconstitutional when the Constitution and the
first amendments were framed and ratified, it is uncon-
stitutional now. The Constitution itself does not change.
Smih Carolina v. United States, 199 U. S. 447, 448.
Under the ancient law, the feudal law, and the common
law in England, the absolute control of wild game was a
necessary incident of sovereignty. When, therefore, the
United Colonies became ''Free and Independent States''
with full power to do all ''acts and things which Inde-
pendent States may of right do," the power to control
the taking of wild game passed to the^ States. Oeer v.
Connecticut, 161 U. S. 519, 523-530; Ward v. Race Horse,
163 U. S, 504.
If it had even been suggested that, althoti^ Congress
had no power to control the taking of wild game within
the borders of any State, yet indirectly by means of a
treaty with some foreign power it could acquire the power
and by this means its long arm could reach into the States
and take food from the tables of their people, who can for
one moment believe that such a constitution would have
been ratified? Wild game and the right of the people
thereto have always been a "touchy" subject with all
EngUah speaking people. It was of sufficient importance
to be a part of the Magna Charta and the "Charter of the
Forests." See Parker v. People, 111 Illinois, 681, 647.
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il8 OCTOBER TERM, 1919.
AiginnfiQt for Appellant. 252 U. S.
This power of the State over wild game within its
borders, which "cannot be questioned" and "will not
be gainsaid/' is derived from the peculiar nature of such
property and its common ownership by all the citizens
of the State in their collective sovereign capacity. The
State in its sovereign capacity is the representative of the
people in their common ownership, and holds it in trust
for the benefit of all its people. Qeer v. Connecticut, mpm,
529, 530; McCready v. Virffinia, 94 U. S. 391; Martin v.
Waddell, 16 Pet. 410; United States v. Sfuximr, 214 Fed.
Rep. 154; United States v. McCuUagh, 221 Fed. Rep.
288, 294; Rupert v. United States, 181 Fed. Rep. 87, 90;
Magner v. People, 97 Illinois, 320, 333; QenOle v. State,
29 Indiana, 409, 417; Ex parte Maier, 103 California, 476,
483; Chambers v. Church, 14 R. I. 398, 400; Manchester v.
Massachusetts, 139 XJ. S. 240; Patsone v. Pennsylvania,
232 U. S. 138; Abby Dodge v. United States, 223 U. 8.
166; Smith v. Maryland, 18 How. 71; Carey v. South
Dakota, 250 U. S. 118; Sils v. Hesterberg, 211 U. 8. 31;
In re Deininger, 108 Fed. Rep. 623; Heim v. McCaU, 239
U. S. 175.
But the power of the State is not dependait upon the
authority which the State derives from common owner-
ship and the trust for the benefit of the people; it is a
necessary incident of the power of police — an attribute
of sovereignty. State v. Heger, 194 Missouri, 707.
If a somrce of food supply is not within the exclusive
control of a State imder its power of iK>lice, is there any-
thing which is? If Congress by means of a treaty can tdl
the people of a State when and imder what conditions
they may take wild game which they own in their collective
sovereign capacity, and in and over which, while within
the borders of the State, neither Congress nor any foreign
nation can have, either under national or international
law (see Behring Sea Arbitration, 32 Amer. Law Reg*
901), any property rights or any power of control, then
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MISSOURI V. HOLLAND. 419
416. Aigument for AppeDant.
the Tenth Amendment with its powers ''reser/ed'' to
the States respectively or to the people, is a delusion, and
thqr are States in name only, and our govemmwt a very
different government from tibat preBui^)06ed and intended
by the people who ratified the Constitution. Passenger
Cases, 7 How. 474.
Upoii the authority and principles of the cases above
cited it has been held that the Act of Congress, approved
March 4, 1913, was unconstitutional. The fact that the
present act purports to give effect to a treaty cannot
validate it. Every treaty must be presumed to be
made subject to the ri^tful powers of the governments
concerned, and ndther the treaty-making power aldne,
nor the treaty-making power in conjunction with any or
aU other departm^its of the Government, can bind the
Government to do that which the CJonstitution forbids.
Oeofroy v. Biggs, 133 U. S. 258, 267; People v. Oerke, 6
California, 381, 382 et seq.; George v. Pierce, 148 N. Y. S.
230, 237; Compagnie v. Board, 51 La. Ann. 645, 662;
affd. 186 U. S. 380; CanHtd v. TiUman, 54 Fed. Rep.
969; Loan Association v. Topeka, 20 WaU. 6S5, 662, 663;
Cherokee Tobacco Case, 11 WaU. 616; Siemessen v. Bofer, 6
Cal. Rep. 250; People v. Naglee, 1 Califomia, 246, 247;
Kansas v. Colorado, 206 U. S. 80; Murphy v. Ramsay,
114 U. S. 15, 44; Head Money Cases, 112 U. S. 580; Jones
V. Meehan, 175 U. S. 132; Fong Yue Ting v. United States,
149 U. S. 698; Seneca NaHon v. Christie, 126 N. Y. 122;
Fort Leavenworth v. Lowe, 114 U. 8. 525; Pierce v. State,
13 N. H. 576; Martin v. Hunter's Lessee, 1 Wheat. 304,
326; Mormon Church v. United States, 136 U. S. 1; The
Federalist, Nos. 33, 46; Works of Calhoun, vol. I,
203, 204, 249, 250, 252, 253; Tucker, Const., vol. 11, 725,
726; ButlCT, Treaty Making Power, vol. I, 64; vol. II,
350, 352; Story, Const., § 1508; Duer, Lectures on Con-
stitutional Jurisprudence of the United States, 2d ed.,
228; Cooley, Const. Law, 117; Van Hoist, Const. Law,
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420 0C3T0BER TERM, WW,
Aigument for Appellant. 252 XT. 8.
202; Thayer, Cases on Const. Law, vol. I, 373; Senator
Rayner, 59th Cong., 41 Cong. Rec., pt. 1, 299; Cocke's
Constitutional History, 235; Jefferson, Manual of Par-
liamentary Practice, 110, note 3; Elliot's Debates, voL
III, 604, 507; Coolqr, Const. lim., 7th ed., 11; Hamilton's
Works, vol. IV, 324.
In the consideration of the questions involving the
powers of the federal and sta;^ governments there exists
the temptation to lodge all sovereign or governmental
power in either the United States or the States. This dis-
position is evidenced by the erroneous statement that
there exist in this coimtry dual sovereignties. Cf . 8 Ops.
Atty. Gen. 411-415. The power reserved to the people
is overlooked. Kansas v. Colorado, 206 XJ. S. 90. The
Federal Grovemment is a government not only of enum-
erated powers, but it is also a government to which cei^
tain powers are denied. Powers denied are not to be
implied: th^ are to be obtained, if at all, from, and in the
noanner provided by, those who originally granted the
enumerated powers, but who at the same time denied
other powers — ^the people. Barron v. BaMmore, 7 Pet.
243, 247; Kansas v. Colorado, supra; United States v.
Shauver, 214 Fed. Rep. 154, 156; HoMen v. Joy, 17 Wall.
243; United States v. Rhodes, 1 Abb. U. S. Rep. 43; Fed.
Cases, 16151; Fairbank v. United States, 181 U. S. 283,
288; Tucker, Const., vol. I, 371-373.
Ambng the powers so denied are those over purely
internal affairs which ^'concern the lives, liberties and
properties of the people and the internal order, improve-
ment and prosperity of the State," including, as held with-
out exception, the control over wild game. When the
power of the States over their purely internal affairs is
destroyed,\the system of government devised by the Con-
stitution is destroyed.
If these leserved powers could be taken over through the
device of titety making, the President and Senate could
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MISSOURI t^. HOLLAND. 421
416. Argument for Appellant.
control the laws of a State relating to inspection, quaran-
tine, health and internal trade; prescribe the times and
modes of elections; force the introduction and sale of
opium, intoxicating liquors or other substances, however
injurious to the health and well-being of a State; cede to a
foreign power a State or any part o^ its territory, and de-
stroy the securities of liberty and property as effectually
as the most despotic government ever formed.
But this is not all. li the treaty-making power is not
within the constitutional limitations relating to the pow-
ers reserved to the States, it is not limited by any restric-
tion of the Constitution. The Federal Government itself,
as well as the several States, would be at the m^cy of the
President and the Senate. /They could regulate foreign
commerce in spite of the ikct that Ck>ngress is expressly
authorized to control it. / They could provide for duty
rates upon articles imported from foreign nations, or
admit them free of duty, although Congress has express
authority to lay and collect taxes and duties. They
could appropriate directly from the pubUc treasury the
public moneys in the face of the express power of Congress
to originate all such appropriations. They could diJSh
pose of any part of the territory of the United States,
or any of their property, without the consent of Congress,
which alone has power to dispose of and make rules and
regulations for the property of the United States. In
short, the Federal Government would be a government
of men, and not of laws. The question is not whether or
not they will do these things but whether or not, under omr
form of government, they have the power.
If a treaty be *'the supreme law of the land," it has
become so by construction, for the Constitution as rati*
fied by the people made the supreme law of the land to
consist of three things: (1) The Constitution; (2) the laws
of the United States which shall be made in pursuance
thereof; (3) all treaties made or which shall be made
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422 OCTOBER TERM, 1919.
Aigament for Appdlant. 252 U, S.
under the authority of the United States. The powers
reserved to the States respectively or to the people are,
under this Constitution, as sacred as the power to make
treaties. Are th^ not even more so smce th^ are the
object of specific reservation and necessarily limit or
restrict the general grant of power made to the treaty-
makmg department of the government? Hamilton's
Works, vol, IV, 342; Cooler, The Forum, June, 1893,
p. 397; Von Hoist, Const. Law of United States, 202;
Duer, Lectures on Constitutional Jurisprudence of the
United States, 2d ed., 228; Tucker, lim. Treaty-Making
Power, 128, 129, 136-136, 139, 93-94, 86^7; Judge
Shackleford Miller, quoted in Tucker, Lim. Treaty-
Making Pow^, 21, 22.
The United States existed under the Articles of
Confederation and the purpose was to include treaties
made under that authority as well as those which should
be made under the Constitution. The '^authority of the
United States'' .under the Articles of Confederation and
under the Constitution was an authority derived from
enumerated powers accompanied by specific reservations,
and under both the Articles of Confederation and the
Constitution . certain rights of the States respectively
and the people were jealously guarded by express excep-
tions. There was and could be no '^authority of the
United States" outside of and beyond that given by the
Articles of Confederation and the Constitution.
That a treaty stands upon an equal f ootiog with a law
of the United States is settled. Cherokee Tobacco Ca9e,
11 Wall. 616'rWard v. Riu:e Horse, 163 U. S. 504.
The term ^'treaty" must undoubtedly be given a
broad meaning, and generally speaking, it may be said
that by this clause there is conferred the power to make
treaties on those matters ordinarily the subject of treaties
between sovereign powers. But, in the very natiu^ of
things, there must be a limit, else that power would de--
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MISSOURI V. HOLLAND. 423
41S. Axgument for Anpellaat.
8troy many of the other provisions of the Constitution.
Such meaning must be given each part of the Constitution
as will not intetfsre with the meaning of the other parts,
in order that effect may be given to the whole.
The cases usually cited by those who advocate the su-
premacy of a treaty do not in any instance hold that the
reserved powers of a State or a trust which the State holds
for the benefit of all its people are subject to and may be
annulled by a treaty having for its subject tiie regulation
of a matter which is reserved to the States respectively or
to the people by the Tenth Amendment. Ware v. HylUm,
8 Dall. 199; Chirac v. Chirac^ 2 Wheat. 259; Oeofroy y.
Riggsy 133 XJ. S. 266 (cf. Fox\. United States, 94 U. S.
320); Orr v. Hodgson, 4 Wheat. 453; Fairfax v. Hunter,
7 Cranch, 603; People v. Oerke, 5 California, 381, 384 (cf.
Tucker, Address before Georgia Bar Association, June 2,
1917, p. 23; lim. on Treaty-Making Power, c. 6, pp. 143
el eeq.); Hauenstein v. Lynham, 100 XT. S. 483; 22 Ops.
Atty. Gen. 215.
In the making of the Constitution a negative, in any
form, upon laws passed by the States in the exercise of
their reserved powers was defeated, though persistently
urged, in some form, by some of the ablest men in the Con-
stitutional Convention. It . was universally admitted
that under the Constitution as it stood the Federal Gov-
ernment had no such power, and by the first ten amend-
ments the people undertook to forestall any attempt on the
part of the Federal Government to obtain such power by
construction. Works of Calhoun, 246, 247, 249, 250.
Treaties are not to be given a sanctity which shields
them from inspection and rejection, if, by their terms they
do that which the Constitution forbids, and destroy es-
sential ri^ts of the States or the people. Downes v.
BidtpeU, 182 U. S. 244, 344; Compagnie v. Board, 186 XJ. 8.
380, 395; Heim v. McCall, 239 U. S. 175, 194.
The High Contracting Powers n«ist be held to have
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4M OCTOBER TERM, 1910.
Axgument for Appellee. 262 U. 8.
known that the power of the Federal Government did not
extend to the taking over of a trust exercised by the State
in relation of the oonunon property of its citizens, or the
enactment of mere police r^ulations wiUiin the limits of a
State; and the language of Article VIII seems to indicate
that th^ both had acted upon this knowledge. Such
construction leaves both the treaty and the laws of Mis-
souri intact. It results in holding unconstitutional only
an act of Congress which was not necessarily required by
the treaty, and which, under the Constitution, Congress
had no power to pass.
The SoUcUor Oeneral and Mr. Assisbmt Attorney Oeneral
Frier son for appellee:
A migratory bird law of this kind is sustained, apart
from treaty; by the power to dispose of and make all need-
ful rules an(i regulations respecting the property belonging
to the United States (Art. IV, § 3), and by the power to
r^ulate conimerce between the States.
The Constitution expressly grants to Congress the power
to enact such laws as may be necessary to gife effect to
treaties. Art. I, § 8; Baldwin v. Franks, 120 V. S. 678;
United States v. Jin Fuey May, 241 U. S. 394; Chinese
Exclusion Case, 130 U. S. 581.
Whenever a treaty operates of itself, it is to be roguded
in the courts as equivalent to an act of Congress. But if
it is only promissory, it is then clearly within the proviam
of Congress to enact legislation necessary to put it ialo.
effect. Foster v. Neiison, 2 Pet. 253, 314; United States v.
4S Gallons of Whiskey, 93 U. S. 188, 196.
The power of Congress to legislate to make treaties
effective is not limited to the subjects with respect to
which it is empowered to legislate in purely domestic
affairs.
There are many national questions affecting alone this
Government or the people of the United States with which
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MISSOURI V. HOLLAND. 425
416. Argument for Appellee.
it deals; With respect to this class the line of demarcation
between the powers of the state governments and those
of the Federal CJovemment is clearly marked by the Con-
stitution. But when we come to deal with national ques-
tions affecting the interests of other coimtries as well as
our own, we confront a different situation. At home, we
are citizens of dual sovereignties, ieach supreme within
its own sphere. But, in oxir intercourse with foreign na-
tions, we are one people and one nation. In our relations
to foreign countries and their subjects or citizens, our
Federal Government is one CJovemment and is invested
with the powers which belong to independent nations and
which the several States would possess, if separate na-
tions, and the exercise of these powers can be invoked
for the maintenance of independence and seciuity through-
out the entire country. Cohens v. Virginia^ 6 Wheat.
264, 413; Knox v. Lee, 12 Wall. 457, 556; Chinese Exdvr
8ion Case, 130 U. S. 581, 604.
In exercising the treaty-making power, the Federal
Government acts for the entire American people, whether
we r^ard them as citizens of the United States or as
citizens of the several States, and likewise for every State.
As said by this court in Hauenstein v. Lynham, 100 U. S.
483, 490: "If the National Government has not the power
to do what is done by such treaties, it cannot be done at
all, (or the States are expressly forbidden to 'enter into
any treaty, alliance, or confederation.'"
Since tiie power was expressly granted to Congress to
enact legislation necessary and proper to put into execu-
tion a treaty, the validity of such legislation cannot de-
pend upon whether its subjectr-matter is included within
the general legislative powers of Congress. Rather, it
depends upon whether the treaty which is being enforced
is within the treaty-making power of the United States.
In re Ross, 140 U. S. 453, 463.
By the Constitution the complete and imrestrict^
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426 OCTOBER TEBM, 1919.
Aigument for AppeDee. 252 IJ. 8.
treaty-makixig power pcNssessed by the States is expressly
granted to'the United States to be exercised by the Presi-
dent and Senate. The exercise of such power is expressly
prohibited to the States. Therefore, except as restrained
by prohibitions contained in other clauses of the Constitu-
tion, the entire treaty-making pow^ of the States was
vested in the United States when that instrument was
adopted m 1788.
Amendment X (thereafter adopted) reserves to the
States or the people all powers not granted to the United
States nor prohibited to the States. As the treaty powers
had been both granted to the United States and pro-
hibited to the States, they were expressly excepted from
the reservations of the Tenth Amendment, and it is wholly
irrelevant. A treaty made by th3 treaty-making power
does not derogate from the power of any State. It is an
exercise of the treaty-making power of such State in con-
junction with the like powers of all of the States by their
common government — ^the agency they appointed in
adopting the Constitution.
It is undoubtedly true that, generally, matters of a
purely local nature are reserved for the l^islative power
of the States. But just what these reserved powers are
depends upon the extent to which powers, either eacpressly
or by necessary implication, are conferred upon the Federal
(iovemment. The police powers are those most gener-
ally regarded as having been reserved to the States.
But, if the full exertion of any power conferred upon the
Federal Government requires the exercise of police powers
within the States, such powers may be exercised to the
extent necessary, although they may involve an inter-
ference with what would otherwise lie exclusively within
the province of the State. United States v. Thompson^
258 Fed. Rep. 257, 264. That the police or other powers
of the States cannot be interposed as an obstacle to the
exertion of these federal powers to make and enforce
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MISSOURI V. HOLLAND. 427
410. Aignmeot far Appellee.
treatieB has been too often decided to now admit of doubt.
WHdenkua's Case, 120 U. S. 1, 17; Wcare v. HyUan,
8 DalL 109; Chirac v. Chirac, 2 Wheat. 259, 276; Oeqfray
V. Biogs, 183 U. S. 258, 266; Hapkirk v. BeU, 3 Granoh,
454; UnUed Siateev. 4S GaUons of WhiOGey, 98 U. S. 188;
UnOed States y.WinaM,19&V. 8. S71.
It is inconceivable that, since the States were to be
denied the treaty-making power, the frainers of the Con-
stitution intended that the treaty-making power conferred
upon the new Gfovemment should be less than that i>ob-
sessed by any other independent government and less than
that possessed by the State conferring it. The very
general language used in conferring the power negatives
such an intention. What was conferred was obviously
that power to negotiate treaties which is essential tf
there is to ty intercourse between nations.
Again, those representing the States in the Constitur
tional Convention understood too well the necessity for
the exercise of such a power to have been willing U> de-
prive the States of the ample power that they had unless,
at least, as full power was to be vested in some other
agency.
It must be remembered that every power which was
conferred upon the Federal Government was taken from
those powers which the State had the right to exercise,
and it would seem impossible to construe the two pro-
Aisions of the Constitution, above referred to, as accom-
plishing anything short of the transfer of all the treaty-
making power which the several States had to the new
Federal Government. Baldwin v. Franks, 120 U. S. 678,
682,683.
Bdore the adoption of the Constitution it cannot be
doubted that each State could not only enact such laws
as it deerned necessary for the protection of game within
its borders, but could, likewise, ^iter into a treaty with
any other State or foreign country for the protection of
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428 OCTOBER TERM, 1919.
Aigument for Appellee. 262 U. EL
migratory game which remained within its borders only a
portion of the year. After the adoption of the Constitu-
tion, however, as said in Oeer v. Connecticut, 161 U. S.
519, 528, this power remained in the States only "in so
far as its exercise may be not incompatible with, or re-
strained by, the rights conveyed to the Federal Govern-
ment by the Constitution." But if the protection of
migratory game is a proper subject-matter for treaties
between independent nations, the power to secure this
protection was expressly conferred upon the Federal Gov-
ernment as a part of the treaty-making power.
The peculiar nature of its property in migratory game,
which is in one country during a part of the year and in
another during the remainder of the year, makes it im-
possible for the laws of one State )r one country to give
ample protection. This can be accomplished only by con-
cert of action on the part of two or more States or coun-
tries. This, in the very nature of things, cannot be se-
cured except through the medium of treaties.
The treaty-making power applies to all matters which
may properly be the subject of negotiations between the
two governments. Calhoun, 4 EUiot's Debates, 464;
Story, Const., 5th ed., § 1508; Ware v. HyUon, 3 Dall.
199, 235; Geofroy v. Riggs, 133 U. S. 268, 266; In re Ross,
140 U. S. 453, 463.
The protection of migratory game is a proper subject
of n^otiations and treaties between the governments
of the countries interested in such game. Van Yalken-
burgh, J., in the court below, 258 Fed. Rep. 479, 484;
United States v. Rockefeller, 260 Fed. Rep, 346-348.
It may be that, while migratory birds are within a
State, that State, as trustee for its people, has the same
title to them that it has to birds which remain peirjnar
nently within its borders. But, when the birds return to
Canada, that government has exactly the same title that
the State has when they ate in the United States. More-
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MISSOURI V. HOLLAND. 429
416. Argament of amid curise.
over, while the birds are in Canada, the State to which
they customarily migrate is still interested in them, be^
cause, when they return, its title again attaches. Man-
ifestly, then, the States of the United States are as much
interested in the preservation of these birds while id
Canada as while in the United States. But for the pro-
tection of these migratory birds while they are in a for-
eign country, each State is powerless. While in the
one case, therefore, it resorts to its own l^islative
power, in the other it must have resort to an exercise of
power by the agent which it has agreed shall act for
it in negotiating and making treaties with foreign gov-
ernments.
Mr. Richard J. Hopkins, Attorney General of the State
of Kansas, and Mr. Samuel W. Moore, by leave of court,
filed a brief as amid curice, in behalf of the State of Kansas:
Every State possesses the absolute right to deal as it
may see fit with property held by it either as proprietor or
m its sovereign capacity as a representative of the people,
and this right is paramoimt to the federal l^islative or
treaty-making power.
The constitutional limitation prohibiting a State with-
out the consent of Congress from entering into any agrees
ment or compact with any State or with a foreign power
prohibits "the formation of any combination tending ty
the increase of political power in the States which may
encroach upon or interfere with the just supremacy cf
the United States." It has no application to agreements
or compacts which a State may make in the control and
r^ulation of its own property or property rights.
Congress' lack of l^slative power to divest a State
of its property right and control over the wild game withii
its borders cannot be supplied by making a treaty wiii
Great Britain.
The ti^eaty-making power of the National Government
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4S0 CXTTOBER TERM, ma.
Opinion of the Court. 362U.8.
is so limited by other provisions of the Constitution, in-
cluding the Tenth Amendment^ that it cannot divest a
State of its police power or of its ownership or control of
its wild game.
The courts have never upheld a treaty whose subject-
matter extended beyond the constitutional domain of
congressional legislation.
The treaty in this case does not, by its terms, purport
to create a closed season between December 31st and
March 10th. Its executory agreement to pass future
legislation covering this period is not the supreme law
of the land and cannot have the effect (rf giving validity
to an imconstitutional act.
Mr. Louis MarshaU, by leave of court, filed a brief as
amicua curice, in behalf of the Association for the Protec-
tion of the Adirondacks:
Irrespective of whether nugratory birds may be con-
sidered property belonging to the United States and re-
gardless of the sanction of the treaty-making power, the
Migratory Bird Treaty Act, as was its preciu'sor the Act
of March 4, 1913, c. 145, 37 Stat. 847, is valid as an enact-
ment of "needful rules and regulations" respecting the
national forests and other parts of the public domain,
which constitute "property belonging to the United
States," within the meaning of paragraph 2, § 3 of Article
IV of the Constitution.
The fact that the States are trustees of animals ferm
naturtB within their boundaries, does not prevent the
United States from preserving such animals for the pur-
pose of protecting its property.
Mb. Jubticb Holmes delivered the opinion of the court.
This is a bill in equity brought by the State of Missouri
to prevent a game warden of the United States from
attempting to enforce the Migratory Bird Trealy Act of
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MISSOURI V. HOLLAND. 431
416. Opmion of the Court.
July 3| 1018, c. 128^ 40 Stat. 755, and the regulations made
by the Secretary of Agriculture in pursuance of the same.'
Tlie ground of the bill is that the statute is an imconstitu-
tional interference with the rights reserved to the States
by the Tenth Amendment, and that the acts of the
defendant done and threatened under that authority in-
vade the sovereign right of the State and contravene its
will manifested in statutes. The State also alleges a
pecuniary interest, as owner of the wild birds within its
borders and otherwise, admitted by the Government to be
sufficient, but it is enough that the bill is a reasonable and
proper means to, assert the alleged quasi sovereign rights
of a State. Kansas v. Colorado, 185 U. S. 125, 142.
Georgia v. Tennessee Copper Co., 206 U. S. 230, 237.
Marshall Dental Manvfacturing Co. v. Iowa, 226 U. S.
460, 462. A motion to dismiss was sustained by the Dis-
trict Court on the ground that the act of Congress is
constitutional. 258 Fed. Rep. 479. Ace. United States y.
Thompson, 258 Fed. Rep. 257; United Slates v. BockefeOer,
260 Fed. Rep. 346. The State appeals.
On December 8, 1916, a treaty between the United
States and Great Britain was proclaimed by the President.
It recited that many species of birds in their annual migrsr
tions traveirsed certain parts of the United States and of
Canada, that they were of great value as a source of food
and in destroying insects injurious to vegetation, but were
in danger of extermination through lack of adequate pro-
tection. It therefore provided for specified close seasons
and protection in other forms, and agreed that the two
pow0*s would take or propose to their law-making bodies the
necessary measures for canying the treaty out. 39 Stat.
1702. The above mentioned Act of July 3, 1918, entitled
an act to give effect to the. convention, prohibited the
killing; capturing or selling any of the migratory birds
included in the terms of the treaty except as permitted by
regulations compatible with those terms, to be made by
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432 OCTOBER TERM, 1919.
Opinion of the Ck>urt 2S2 U. 8.
the Secretary of Agriculture. Regulations were pro-
claimed on July 31, and October 25, 1918. 40 Stat. 1812;
1863. It is unnecessary to go into any details, because, as
we have said, the question raised is the general one whether
the treaty and statute are void as an interference with the
rights reserved to the States.
To answer this question it is not enouj^ to refer to the
Tenth Amendment, reserving, the powers not del^ated to
the United States, because by Article II, § 2, the power to
make treaties is delegated expressly, and by Article VI
treaties made under the authority of the United States,
along with the Constitution and laws of the United States
made in pursuance thereof, are declared the supreme law
of the land. If the treaty is valid there can be nb dispute
about the validity of the statute imder Article I, § 8,
as a necessary and proper-means to execute the powers of
the Government. The language of the Constitution as to
the supremacy of treaties being general, the question be-
fore us is narrowed to an inquiry into the groimd upon
which the present supposed exception is placed.
It is said that a treaty cannot be valid if it infringes the
Constitution, that there are limits, therefore, to the treaty-
making power, and that one such limit is that what an act
of Congress could not do imaided, in d»x)jga{ion of the
powers reserved to the States, a treaty cannot do. An
earlier act of Coi^ress that attempted by itself and not in
pursuance of a treaty to regulate the killing of migratory
birds within the States had been held bad in the District
Court. United Stales v. Shauver, 214 Fed. Rep. 154.
United States v. McCvUagh, 221 Fed. Rep. 288. Those,
decisions were supported by arguments that migratory
birds were owned by the States in their sovereign capacity
for the benefit df tlxdr people, and that under cases like
Geer v. Connecticut, 161 U. S. 519, this control was one
that Congress had no power to displace. The same argu-
ment is isupposed to apply now with equal force.
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MISSOURI t;. HOLLAND. 433
416. Opinion of the Court.
^ Whether the two cases cited were decided rightly or not
they cannot be accepted as a test of the treaty power.
Acts of Congress are the supreme law of the land only
whep made la pmmiance of the Constitution, while treaties
are declared to be so when made under the authority of
the United States. It is open to question whether the
authority of the United States means more than the
fonnal acts prescribed to make the convention. We do not
mean to imply that there are no qualifications to the
treaty-making power; but th^y must be ascertained in a
different way. It is obvious that there may be matters of
the sharpest exigency for the national well being that an
act of Congress coidd not deal with but that a treaty
followed by such an act could, and it is not lightly to be
assumed that, in matters requiring national action, ''a
power which must belong to and somewhere reside in
every civilized government'' is not to be foimd. Andrews
V. ATidrewSf 188 U. S. 14, 33. What was said in that case
with regard to the powers of the States applies with equal
force to the powers of the nation in cases where the States
individually are incompetent to act. We are not yet dis-
cussing the particular case before us but only are con-
. sidering the validity of the test proposed. With r^ard to
that we may add that when we are dealing with words that
also are a constituent act, like the Constitution of the
United States, we must realize that they have called into
life a being the development of which could not have been
foreseen completely by the most gifted of its begetters.
It was enough for them to realize or to hope that they had
created an organism; it has taken a century and has cost
tiieir successors much sweat and blood to prove that they
created a nation. The case before us must be considered
in the ligiht of our whole experience and not merely in that
of what was said a hundred years ago. The treaty in
question does not contravene any prohibitory words to be
found in the Constitution. The only question is whether
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434 OCTOBER TERM, 191&
Opinion of the Ckmrt. 252 IT. S.
it is forbidden by some invisible radiation from the general
terms of the Tenth Amendment. We must consider what
this country has become in deciding what that Amend-
ment has reserved.
The State as we have intimated founds its claim of
exclusive authority upon an assertion of title to migratory
birds, an assertion that is embodied in statute. No doubt
it is true that as between a State and its inhabitants the
State may regulate the killing and sale of such birds, but
it does not follow that its authority is exclusive of parar
mount powers. To put the claim of the State upon title is
to lean upon a slender reed. Wild birds are not in the
possession of anyone; and possession is the banning of
ownership. The whole foundation of the State's rights is
the presence within their jurisdiction of birds that yester-
day had not arrived, tomorrow may be in another State
and in a week a thousand miles away. If we are to be
accurate we cannot put the case of the State upon higher
groimd than that the treaty deals with creatures that for
the moment are within the state borders, that it must be
carried out by officers of the United States within the same
territory, and that but for the treaty the State would be
free to regulate this subject itself.
As most of the laws of the United States are carried out
within the States and as many of them deal with matters
which in the silence of such laws the State might regulate,
such general groimds are not enough to support Mis-
souri's claim. Valid treaties of course ''are as binding
within the territorial limits of the States as they are dse-
where thi-oughout the dominion of the United States."
Baldmn v. Franks, 120 U. S. 678, 683. No doubt the
great body of private relations usually fall within the con-
trol of the State, but a treaty may override its power. We
do not have to invoke the later developments of constitu-
tional law for this proposition; it was recognized as early
as Hapkirk v. Bell, 3 Cranch, 454, with regard to statutes
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MISSOURI V. HOLLAND. 436
41C. Difleent.
of limitation, aod even earlier, as to confiscation, in Ware
V. HyUan, 3 Dall. 199. It was assumed by Chief Justice
Mardiall with regard to the escheat of land to the State
in Chirac v. Chirac, 2 Wheat. 259, 275, Hanenstein v.
Lynham, 100 U. S. 483. Oeofroy v. Rigga, 133 U. S. 258.
Blythe v. Hinckley, 180 U. S. 333, 340. So as to a limited
jurisdiction of foreign consuls within a State. Wildenhua^s
Case, 120 U. S. 1. See Roes v. Mdntyre, 140 U. S. 453.
Further illustration seems unnecessary, and it only re-
mains to consider the application of established rules to
the present case.
Here a national interest of very nearly the first magni-
tude is involved. It can be protected only by national
action in concert with that of another power. The subject-
matter is only transitorily within the State and has no
permanent habitat therein. But for the treaty and the
statute there soon might be no birds for any powers to
deal with. We see nothing in the Constitution that com-
pels the Gk)venmient to sit by while a food supply is cut
off and the protectors of our forests and our crops are
destroyed. It is not sufficient to rely upon tiie States:
The rcdiance is vain, and were it otherwise, the question is
whether the United States is forbidden to act. We are of
opinion that the treaty and statute must be upheld.
Carey v. South Dakota, 250 U. S. 118.
Decree affirmed.
Me. JusncB Van Dbvantdr and Mb. JtnsncB Pfcnbt
dissent. .
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436 OCTOBER TERM, 1Q1&
Counsel for ItetieB. 252 U. S.
BLUMENSTOCK BROTHERS ADVERTISING
AGENCY V. CURTIS PUBLISHING COMPANY.
EBROR TO THE DISTRICT COURT OF THE UNITED STATES
FOR THE NORTHERN DISTRICT OF ILLINOia
No.197. Submitted January 26, ig2a--Deotded ^xrfl 19, 1020.
Jurisdiction based on diverse dtisenship cannot be maintained in the
District Court, over defendant's objection, in a district where neither
party resides. P. 440.
To confer jiurisdiction on the District Court over an action for triple
damages xmder { 7 of the Sherman Anti-Trust Act, a claim under
the statute, plainly real and substantial, must be set up by the aver-
ments. Id.
A business conducted by an advertising agency of {facing, l^ contracts
with pubUshers, advertisements for manufacturers and merchants,
in magasines which are published and distributed throughout the
United StateS| is not interstate commerce, although the circulation
and distribution of (he publications themselves be such; and a dec-
laration claiming triple damages for injury alleged to have resulted
from refusal of a publisher to accept such advertisements from such
an agency pursuant to an attonpt of the publisher to monopolise
the business of publishing such advertising matter, fails to state
a claim or cause of action of the substantial character requisite
to confer jurisdiction on the District Court under the Sherman
Anti-Trust Act. P. 441. ItUematumal Textbook Co. v. Pigg, 217
U. S. 91, distmguished.
Affirmed.
The case is stated in the opinion.
Mr. Colin C. H. Fyffe for plaintiff in error. Mr. Pavl
N. Dale and Mr. David R. Clarke were on the brief.
Mr. Amos C. Miller for defendant in aror. Mr. Sid-
ney S. Gorham, Mr. Henry W. Watea and Mr. Gilbert
Noxon were on the brirf.
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BLUMENSTOCK BROS. v. CURTIS PUB. CO. 437
436. Opimoii of the Court
Mr. Jubticx Day delivered the opinion of the court.
ThiB suit was brought by the Blumenstock Brothers
Advertising Agency against the Curtis Publishing Com-
pany in the District Court of the United States for the
Ncnthem District of Illinois to recover treble damages
under § 7 of the Sherman Anti-Trust Act. 26 Stat. 209.
The case here concerns the question of the jurisdiction of
the District Court. Judicial Code, § 238. The plaintiff
is a corporation of the State of Missouri, the defendant a
corporation of the State of Pennsylvania. The defendant
appeared specially in the District Court and moved to
dismiss the complaint for want of jurisdiction, the groimds
stated being:
1. ''That in each of the counts of plaintiff's original
declaration, and in the additional couAt thereof, it ap-
pears that the plaintiff is a citizen and resident of the State
of Missouri, and that this defendant is a citizen and resi*
dent of the State of Pennsylvania.'^
2. ''That in none of said coimts is a cause of action
stated by plaintiff within the provisions of the Act of
Congress approved July 2nd, 1890, entitled, 'An Act to
protect trade and commerce against unlawful restraints
and monopolies. '"
The court entered judgment dismissing the suit for
want of jurisdiction over the defendant or the action.
The record contains a certificate stating that the court
found that it had no jurisdiction of the defendant and
no jurisdiction to entertain the action. The certificate
further states, that the question involved is whether the
transaction set forth in the several counts of the declara-
tion involves a question of interstate commerce, and
whether the averments in said several coimts of the
declaration state a cause of action within the provisions
of the Act of July 2, 1890.
The declaration is voluminous, containing five counts
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438 OCTOBER TERM, 1919.
Opinion of the Court. 262 IT. 8.
and an additional count. So far as it is neoessary for our
purpose the cause of action of the plaintiff may be said
to rest upon the allegations: That the plaintiff is engaged
at Chicago in conducting an advertising agency. That
when customers or princ^)als desire to place advertiser
ments in the magazines and periodicals of the trade they
make plaintiff tiieir agent, and plaintiff contracts witii
the defendant and other publishers and distributors of
magazines; that plaintiff had many customers for whom
it placed advertisements in the periodicals published and
distributed by the defendant and in other periodicals of
otiier publishers, all of which were distributed throue^out
the United States and the several States thereof; that the
defendant was the owner and publisher of three period*
icals sold and distributed throughout the United States
known as ''The Saturday Evening Post/' "The Ladies
Home Journal/' and "The Country Gcaitieman;" that
the business of the defendant in publishing, sdling and
distributing said periodicals was interstate commerce.
The character of each of the several publications is de-
scribed, and a large circulation is attributed to each of
them; and it is stated that in publishing and distributing
said i)eriodicals defendant hdd itself out as desirous of
taking, receiving, printing, publishing, and distributing
throu^out the United States its publications and ad-
vertisements to persons, firms and corporations concerning
their business and occupation; that in the course of the
business the defendant dealt with the plaintiff and other
advertising agencies; that the defendant in the regular
course of its business dealt with not only advertisers, but
with advertising agencies such as the plaintiff, and it is
alleged that such dealings were transactions of interstate
commerce, and that the business of editing, publishing
and distributing throughout the United States the ad-
vertising matter contained in said publications, pursuant
to contracts made with its customers and advertising
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BLUMENSTOCK BROS. v. CURTIS PUB. CO. 439
I
430. Opinion of the Court.
agencies, was interstate commerce; that such commerce
is dependent for its operation and growth upon advertis-
mg facilities offered by magazines and periodicals such
as those of the defendant, and that such publications
constitute the chief method of presenting to the buying
public the articles held out for sale; that the advertising
facilities were necessary to dealers, merchants, and manu-
factinrers in order to bring their products to the notice
and attention of purchasers; that the defendant's pmod-
icals, particularly "The Satiurday Evening .Post,'' have
an important position among such publications, and
are largely read throughout the United States; that "The
Saturday Evening Post" is the most necessary of such
advertising mediiuns to the customers of the plaintiff;
that the defendant's periodicals, together with certain
other magazines, periodicals and publications owned by
persons other than the defendant, had, to a certain ex-
tent, exclusive control of a certain field of advertising;
that the ntiagazines and other publications which control
and do all the advertising business of the field in question
are few in nmnber; that for the advertising of goods and
merchandise offered for sale in commerce there were no
adequate facilities except those offered by the defendant
and other publishers of similar magazines; that the de-
fendant was desirous of using its preponderant position
in this special field of advertising as a means of acquiring
for itself and its publications, especially for " The Saturday
Evening Post," a monopoly of the publication and dis-
tribution of ^advertising matter in this restricted field of
advertising throughout the United States in violation of
the Anti-Trust Act; that the defendant refused without
any reasonable cause to accept proper and ordijoaiy ad-
vertising matter or copy offered in the usual way to the
defendant by the plaintiff and other advertising agencies
imless the plaintiff, and other advertising agencies, would
agree to allow the defendant to increase its preponder-
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440 OCTOBER TERM, 1919.
Opinioix of the Court. 252 U. 8.
anoe in said advertisiiig field by permittiiig it to control
and limit and reduce^ at the will of the defendant, the
amount of advertising given by the plaintifif and other
advertising agencies to the owners and publishers of other
magazines, journals^ periodicals and other publications
aforesaid, which were competing with the defendant in
the field of adverti^ng mentioned and described; that by
reason of the illegal and wrongful acts, done by the de-
fendant in pursuance of its attempt and scheme to create
a monopoly for its own benefit in, and to monopolize the
advertising business, plaintiff lost the business of its cus-
tomers for whom it had been acting as agent in placing of
advertisements with defendant's and other publications,
and was prevented from making further contracts for the
placiQg of advertising matter in publications of the de-
fendant, and ia consequence thereof, in any other pub-
lication of a like or similar character, to the damage of
the plaintiff in the sum of $25,000.
The declaration contaios an alleged cause of action at
common law, but as Ujeither the plaintiff nor the defendant
reside in the district in which the suit was brouglit, it is
conceded that such cause of action could not be main*
tained in that court against the defendant's objection.
Section 51, Judicial Code.
The Sherman Anti-Trust Act (§ 7) created a cause of
action in favor of anyj)erson to recover by suit ia any
District Court of the United States, in the district in
which the defendant resides or is found, three-fold dam-
ages for injury to his business ^r property by reason of
anythiQg forbidden and declared unlawful ia the act. In
order to maintain a suit under this act the complaint
must state a substantial case arising thereimder. The
action is wholly statutory, and can only be brought in a
District Court of the United States, and it is essential to
the jurisdiction of the court ia such cases that a substantial
cause of action within the statute be set up.
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BLUMENSTOCK BROS. v. CURTIS PUB. CO. 441
436. Opinioa of the Court.
In some cases it is difficult to detennine whether a
ruling dismiHsing the complaint involves the merits of the
cause of action attempted to be pleaded or only a question
of the jurisdiction of the court. In any case alleged to
come within the federal jurisdiction it is not enough to
allege that questions of a federal character arise in the
case; it must plainly appear that the averments attempt-
ing to bring the case within federal jmisdiction are real
and substantial. Newbwryport Water Co. v. Neneburypart^
193 U. S. 561, 576.
In cases where, as here, the controvert concerns a
subject-matter limited by federal law, for which recovery
can be had only in the federal courts, the jmisdiction
attaches only when the suit presents a substantial claim
under an act of Congress. This rule has been applied in
bankruptcy cases {Grant Shoe Co. v. Laird Co., 212 U. S.
445;) in copyright cases (Gflobe Newspaper Co. v. Walker ^
210 IT. S. 356;) m patent cases (fTeoIi^v.^SeaOWZiSpeaatty
Co., 237 U. S. 479;) in admiraUy cases {The Jeffereon,
215U. S. 130).
We come then to inquire whether the cause of action
stated was a substantial one within § 7 of the Sherman
Anti-Trust Act. It is not contended that any combinar
tion, conspiracy, or contract in restraint of trade is alleged
such as would bring the case within the first section of
the act. The second section is relied upon which in tenns
punishes persons who mqnopolize or attempt to itxonopo-
lize, or combine with others to monopolize, taxy part of
trade or commerce' among the several States or with
foreign nations.
The Anti-Trust Act, it is hardly necessary to say, de-
rives its authonty from the power of Congress to r^ulate
commerce among the States. It declares unlawful com-
binations, conspiracies, aiid contracts and attempts to
monopolijBe which concern such trade or ccamnerce. It
follows that if the dealings with the defendant, which
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442 OCTOBER TERM, 1010.
Oimiioii of the Court 2B2 U. 8.
form the subject-matter of compkdnt; were not transac-
tions of interstate commerce, the declaration states no
case within the terms of the act.
Commerce, as defined in the often quoted definition of
Chief Justice Marshall, in Oibbons v. Ogden, 9 Wheat. 1,
189, is not traffic alone, it is intercourse, ''It describes
the commercial intercourse between nations, and parts of
nations, in all its branches, and is r^ulated by prescrib-
ing rules for carrying on that intercourse.''
In the present case, treating the all^ations of the com-
plaint as true, the subject-matter dealt with was the
making of contracts for the insertion of advertising matt^
in certam periodicals belonging to the defendant. It
may be conceded that the circulation and distribution of
such publications throughout the country would amount
to interstate commerce, but the circulation of these peri-
odicals did not depend upon or have any direct relation
to the advertising contracts which the plaintiff offered
and the defendant refused to receive except upon the
terms stated in the ^declaration. The advertising con-
tracts did not involve any movement of goods or mer^
chandise in interstate commerce, or any transmission <rf
intelligence in such commerce.
This case is wholly unlike InterruUional Tex&ook Co.
«. Pigg, 217 U. S. 91, wherein there was a continuous
interstate traffic in textbooks and apparatus for a course
of study pursued by means of correspondence, and the
movements in interstate commerce were held to bring the
subject-matter within the domain of federal control, and
to exempt it from the biirden imposed by state l^isla-
tion. This case is more nearly analogous to such cases as
Ficklen v. Shelby County Taxing District, 145 U. S. 1,
wherein this court held that a broker engaged in negotiat-
ing sales between residents of Tennessee and non-resident
merchants of goods situated in another State, was not
engaged in interstate commerce; and within that line of
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BLUMENSTOCK BROS. i;. CURTIS PUB. CJO. 443
i86. Opinion of the Court.
cases in which we have held that policies of insurance are
not articles of commerce, and that the making of such
contracts is a mere incident of commercial intercourse.
Paul V. Virginia, 8 WalL 168; Hooper v. Califomia, 155
U. S. 648; New York Life Ins. Co. v. Deer Lodge County,
231 U. S. 405. We held in Hopkins v. United States, 171
U. S. 579, that the buying and selling of livestock in the
stodQraids <rf a city by members of the stock exchange
was not interstate commerce, although most of the live-
stock was sent from other States. In WilUams v. Fears,
179 U. S. 270, we held that labor agents engaged within
the State of Georgia in hiring persons to be employed
outside the State were not engaged in interstate commerce.
In Ware dt Leland v. Mobile County 209 U. S. 405, we held
that brokers taking orders and transmitting them to
other States for the purchase and sale of grain or cotton
upon speculation were not engaged in interstate commerce;
that such contracts for sale or purchase did not neces-
sarily result in any movement of commodities in inter-
state traffic, and the contracts were not, therefore, the
subjects of interstate commerce. In the recent case of
United States Fidelity & Guaranty Co. v. Kentucky, 231
U. S. 394, we held that a tax upon a corporation engaged
in the business of inquiring into and reporting upon the
credit and standing of persons in the State, was not un-
constitutional as a burdea upon interstate commerce as
applied to a non-resident engaged in selecting and dis-
tributing a list of guaranteed attorneys in the United
States, and having a representative in the State. The
contention in^that pase, which this court denied, was that
the service rendered through the representatives in Ken-
tuclQr, and other representatives, of the same kind acting
as agents of merchants engaged in interstate commerce,
to furnish them with information through the ^mails, or
by telegraph, or telephone, as a result of which mer-
chandise mig^t be transported in interstate commerce.
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444 OCTOBER TERM, 1010.
Syllabufl. 252 U.S.
or withhdd from such transportation; according to the
character of the information reported, was so connected
with interstate commerce as to preclude the State of
Kentucky from imposing a privilege tax upon such busi-
ness.
Applying the principles <rf these cases, it is abundantly
establidied that there is no ground for claiming that the
transactions which are the basis of the present suit, con-
cerning advertising in journals to be subsequently dis-
tributed in interstate conmierce, are contracts* which
directly affect such commerce. Their incidental relation
thereto cannot lay the groundwork for such contentions
as are undertaken to be here maintained under § 7 of the
Shennan Anti-Trust Act. The court was right in dich
missing the suit.
Affirmed.
ASKREN, ATTORNEY GENERAL OF THE STATE
OF NEW MEXICO, ET AL. v. CONTINENTAL
OIL COMPANY.
SAME V. SINCLAIR REFINING COMPANY.
SAME t^. THE TEXAS COMPANY.
APPEALS FROM THB DIBTBIGT COURT OF THE UNITED STATES
FOR THB DISTRICT OF NEW MEXICO.
Nob. 521-«23. Argued January 6, 6, 1920.— Decided April 19, 1920.
A law of New Mexico defining "distributors'' of gasoline as those who
sell it from tank cars, receiving tanks or stations, or in or from tanks,
barrels or packages not purchased from a licensed distributor, and
"retail dealers" as those other than distributors who sell it in
quantities of 50 gallons or less, lays an annual license tax of S50.00
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ASKREN V. CONTINENTAL OIL CJO. 445
444. Ojnnion of the Court.
on each diBtributor for eadi distributing station, place of bnnness or
agency, and of S5.00 on each retailer for every place of business or
agenqy,— besides imposing an exdse of 2c per gallon on all gaaob'ne
sold or used, to be paid and made return of by distributors and
dealers; it provides inspectors to see to its enforcement, and devotes
the resulting revenue first to pay their salaries and expenses, and
thentoahic^wayfund. FeU, that it is not an inspection act merely,
but a privilege tax; and, as applied to parties who bring gasoline
from without and sell it within the State, the act is void — a burden
on interstate oonmieroe — ^in so far as it relates to their business of
selling in tank car lots and in barrels and packages, as originally
imported from other States, but, if separable, it is valid in its appli-
cation to sales made from such original packages in retail quantities
to suit purchasers. P. 447.
An excise on purely local dealing in a commodity cannot be treated
as a discrimination against other States merely because the couh
modity is not produced in the State imposing the tax but comes
wholly from other States. P. 449.
llie question whether an act assuming to tax a business in its interstate
and intrastate aspects is separable as to the latter, resened for final
hearing where the relative importance of the two classes of business
as conducted I^ plaintiffs could not be ascertained from the case
as made on application for temporary injunction. P. 450.
Affirmed.,
The case is stated in the opinion.
Mr. A. B. Renehan, with whom Mr. 0. 0. Askren,
Attorney General of the State of New Mexico, and Mr^
Harry S. Bovman, Assistant Attorney Genend of the
State of New Mexico, were on the brief, for appellants.
Mr. Charles R. Brock and Mr. E. R. Wright^ with whom
Mr. Milian Smith, Mr. W. H. Ferguson, Mr. S. B. Davis,
Jr., and Mr. Elmer L. Brock were on the briefs, for ap-
pellees.
Mb. Jttsticb Day delivered the opinion of the court.
^ These suits were brought by the three companies,
'appellees, in the District Court of the United Staties for the
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446 OCTOBER TERM, 19ia
Opiiuon of the Court. 252 U. 8.
District of New MezioO; to ^oin the enforoemeDt of an
act of the legtslature of the State entitled: ''An Act pro-
viding for an excise tax upon the sale or use of gasoline
and for a license tax to be paid by distributors and retail
dealers therein; providing for collection and application of
such taxes; providing for the inefpection of gasoline and
making it unlawful to sell gasoline below a certain grade
without notifying purchaser thereof; providing penalties
for violations of this act and for other purposes.'* The
law is found in Session Laws of New Mexico, 1919, c. 93,
p. 182.
The cause came before three judges upon an ^[>plication
for temporary injunctidn and a counter-motion to dismiss
the bills of complaint. The temporary injunction was
granted, and a direct appeal taken to this court..
The provisions of the act so far as necessary to be con-
sidered define a diBtributor of gasoline as meaning ''every
person, corporation, firm, co-partnership and association
who sells gasoline jfrointank cars, receiving tanks or sta-
tions, or in'or from tanks, barrels or packages not pur-
chased from a licensed distributor of gasoline in this
State. '' A retail dealer is defined as meaning: "A person,
other than 4 distributor of gasoline, who sells gasoline
in quantities of filty gallons or less. " Every distributor is
required to pay an annual license tax of $50.00 for each
distributing station, or place of business, and agency.
Every retail dealer is required to pay an annual license tax
of 15.00 for every place of business or agency. An excise
tax is imposed upon the sale or use of gasoline sold or used
in the State after July 1, 1919; such tax to be 2c per gallon
on all gasoline so sold or used. Any distributor, or dealer,
who shall fail to make return or statement as required in
the act, or shall refuse, neglect or fail to pay the tax upon
all sales or use of gasoline, or who shall make any false re-
turn or statement, or shall knowingly sell, distribute or use
any gasoline without the tax upon the sale or use thereof
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ASKREN t^. CONTINENTAL OIL 00. 447
444. Opiiuon of the Court
hayiog been paid as provided in the act shall be deemed
guilty of a misdemeanor, and punished by a fine and for*
feiture of his license. It is made unlawful for any person
(exc^t tourists or travelers to the extent provided in the
act) to use any gasoline not purchased from a licensed dis-
tributor or retail dealer without paying the tax of 2c per
gallon. Inspectors are provided for, for each of the eight
Judicial Districts of the State, who are required to see
that the provisions of the act are enforced, and privileged
to examine books and accounts of distributors and retail
dealers, or warehousemen or others receiving and storing
gasoline and of railroad and transportation companies,
relating to purchases, receipts, shipments, or sales of
gasoline; their salaries are provided, and sidaries and ex*
pease bills are to be paid out of the State Road Fund.
Any person who shall engage or continue in the business of
selling gasoline without a license or after such license has
been forfeited, or shall fail to render. any statement, or
make any false statement therein, or who shall violate any
provision of the act the punishment for which has not been
theretofore provided, shall be deemed guilty of a misde-
meanor and upon conviction shall be punished by a fine or
imprisonment, or both. The State Treasurer is required to
set aside from the license fees and taxes collected imder the
provisions of the act a sufficient sum to pay the salaries and
traveling expenses of the insfpectors out of the money re-
ceived frotQ such collections, and to place the balance
to the credit of the State Road Fund to be used for the
construction, improvement and maintenance of public
highways.
It is evident from the provisions of the act thus stated
that it is not an inspection act merely; indeed, the inefpec-
tors do not seem to be required to make any inspection,
beyond seeing that the provisions of the act are enforced,
and the excess of the salaries and fees of the inspectors is
to be used in making roads within the State. ConsiderinK
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448 OCTOBER TERM, 1919.
Oinnion of the Court 252 U. 8.
its provisions and the effect of the act, it is a tax upon
the privilege of dealing in gasoline in the State of New
Mexico.
The bills in the three cases are id^tical except as to the
number of distributing stations alleged to belong to the
companies respectively. As there was no answer, and the
bills were considered upon application for injunction, and
motion to dismiss, their allegations must be taken to be
true.
Plaintiffs are engaged in the business of buying and sell-
ing gasoline and other petroleum products. The bills state
that they purchase gasoline in the States of Colorado,
California, Oklahoma, Texas and Kansas, and ship it into
the State of New Mexico, there to be sold and delivered.
The bills describe two classes of business — ^first, that they
purchase in the States mentioned, or in some one of said
States, gasoline, and ship it in tank cars from the State
in which purchased iato the State of New Mexico, and
there, according to their custom and the ordinary method
in the conduct of their business, sell in tank cars the whole
of the contents thereof to a single customer, before the
package or packages, in which the gasoline was shipped
have been broken. In the usual and regular coiurse of their
business they purchase gasoline in one of the States, other
than the State of New Mexico, and ship it, so purchased
from that State, in barrels and packages containing not less
than two 5-gallon cans, into the State of New Mexico, and
there, in the usual and ordinary coiurse of their business,
without breaking the barrels and packages, containing the
cans, it is their custom to sell the gasoUne in the original
packages and barrels. The gasoline is sold and delivered to
the customers in precisely the same form and condition as
when received in the State of New Mexico; that this man*
ner of sale makes the plaintiffs distributors of gasoliae as
the term is defined in ike statute, and they are required to
pay the sum of $50.00 per annum for each of theur stations
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ASEREN V. CJONTINENTAL OIL CJO. 449
444. Ophuon of the Court
as an annual license tax for purchasing, shipping and
selling gasoline as aforesaid.
A second method of dealing in gasoline is described in
the bills: That the gasoline shipped to the plaintiffs from
the other States^ as aforesaid, is in tank cars, and plaintiff,
or plaintiffs, sell such gasoline from such tajik cars, barrels
and packages in such quantitii^s as the purchaser requires.
As to the gasoline brought into the State in the tank
cars, or in the original packages, and so sold, we are unable
to discover any difference in plan of importation and sale
between the instant case and that before usin Standard
Oa Co. V. Graves, 249 U. S. 389, in which we held that a
tax, which was in effect a privilege tax, as is the one under
consideration, providing for a levy of fees in excess of the
cost of inspection, amounted to a direct biuden on inter-
state commerce. In that case we reaflSrmed, what had
often been adjudicated heretofore in this court, that the
direct and necessary effect of such legislation was to im-
pose a burden upon interstate commerce; that under the
Federal Constitution the importer of such products from
another State into his own State for sale in the original
packages, had a right to sell the same in such packages
without being taxed for the privilege by taxation of the
sort here involved. Upon this branch of the case we deem
it only necessary to refer to that case, and the cases therein
dted, as establishing the proposition that the license tax
upon the sale of gasoline brought into the State in tank
cars, or original packages, and thus sold, is beyond the
taxing power of the State.
The plaintiffs state in the bills that their business in part
consists in selling gasoline in retail m quantities to suit
purchasers. A business of this sort, although the gasoline
was brdU^^t into the State in interstate conmierce, is
properly taxable by the laws of the State.
Much is made of the fact that New Mexico does not
produce gasoline, and all of it that is dealt in within that
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460 OCTOBER TERM, 1010.
Qyllabufl. 262 U. &
State must be brought in from other States. But, so long
as there is no discrimination against the products of
another State, and none is shown from the mere fact that
the gasoline is produced in another State, the gasoline
thus stored and dealt in, is not beyond the taxing power of
theState. Wagner v. City of Cimnfftm, 251V. 8.95; md
the cases from this court cited therein.
Sales of the class last mentioned would be a subject of
taxation within the legitimate power of the State. But
from the averments of the bills it is impossible to deter-
mine 0ie relative importance of this part of the business as
compared with that which is non-taxable, and at this
preliminary stage of the cases we will not go into the
question whether the act is separable, and capable of being
sustained so far as it imposes a tax upon business legiti-
mately tajuible. That question may be reserved for the
final hearing. The District Court did not err in granting
the temporary injunctions, and its orders are
CAMERON ET AL. t^. UNITED STATES.
APPBAL VROM THE CIBCinT COUBT OF APPEALS FOR THB
NINTH CIRCTJIT.
No. 206. Argued January 29, 30, 1020.— Decided April 19, 1920.
The inclusion of part of a national forest within a monument reserve'
under the Act of June 8, 1906, c. 3060, M Stat. 225, by a proclama-
tion of the President providing that both reservations shall stand
as to the common area but that the monument reserve shall be
dominant, and saving valid claims theretofore acquired, ^dthdiaWB
such area, except as to such claims, from the operation (sf-Qie mineral
land law. P. 454.
The Grand Canyon of the Colorado, in Ariiona, is an ''object <^ soleo-
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CAMERON 9. TTNITED 8TATEB. 461
460. AigmiMQt for AppeDante.
tifie intenBt/' within the meaaiBig of the Ae^ of June 8, 1906, m^mo,
empowering the Piresident to rom've each objects as "National
Monuments/' P. 455.
Bifineral character and an adequate discovery of mineral within the
location are essential'to the validity of a mining daim, and without
these the locator has not the ri^t of possession. P. 456.
To bring a mining claim within an exception of ''valid claims" in a
proclamation establishing a monument reserve, the claim must be
founded upon an adequate discovery of mineral made before the
reservation; a discovery made later can confer no rights upon the
claimant. Id.
To support a mining location the discovery must be sadi as to justify
a person of ordinary prudence in the further expenditure of hk time
and means in an effort to develop a paying mine. P. 459.
A decision of the Secretary of the Interior, made upon an iqyplication
to patent a mining dahn within a monument reserve, finding the
land claimed not mineral in character and the location not sup- .
ported by any discovery antedating the reservation, and therefore
rejecting the application and adjudging the location invalid, is
conclusive as to the inviklidity of the claim in a suit subsequently
broui^t by the Government to enjoin the claimant from occupying
and using the land for his private purposes and thus obstructing its
use by the public as a part of the reserve. Pp. 450, 464.
A mining location which has not gone to patent is of no higher quality,
and no more immune from attack and investigation, than unpat-
ented claims under the homestead and kindred laws; and, so long
as the legal titie remains in the United States, the Land Department,
in virtue of its general statutory duty and function, is empowered,
after proper notice and upon adequate hearing, to determine whether
such a location is valid, and, if found invalid, to declare it null and
void. P. 460.
250 Fed. Rep. 943, affirmed.
The case is stated in the opinion.
Mr. WiUiam C. Preniiss, with whom Mr. Robert E.
Morrison and Mr. Joseph E. Morrieon were on the brief,
for appellants:
Possessory title to a mining claim is acquired imder
the mining laws wholly independently of the Land De-
partment. Such title has the quality of a grant and is
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4fl2 OCrrOBER TERM, 1919.
Axgument for AppeDante. 2S2 U. 8.
prop^iy in the highest sense of the term. While, upon
application for patent, the Land Department ex neeesn-
tote must pass upon the validity of the location, it does so
administratively and not judicially. In case it refuses
patent, its action is not conclusive, final, or binding, even
as to itself. 42 L. D« 584; 43 L. D. 79.
Where the department, rightly or wrongly, denies
patent to an applicant, without issuing patent to an ad-
versary applicant, the effect is merely to wipe the appli-
cation from the Istnd records pro tempore. The depart-
ment may afterward review its ruhng, reinstate the
apphcation or entry, and grant patent.
Where, as here, the Land Department undertakes to
go fiirlher and declare void the location upon which an
application for mineral patent is predicated, such action
is not conclusive, final, or binding, even as to itself.
vThe department is without power to enter a judgment of
ejectment or in any manner to execute such an attempted
declaration of illegality of a possessory mining claim.
Congress has not empowered the Land Department to
pass upon the validity of a possessory mining claim other-
wise than as involved in the actual issuance of patent to
the claimant or an adversary claimant, and, then subject
to limitations. Nor has Congress given the courts power,
or imposed upon them the duty, of enforcing a mere
declaration by the department of the invalidity of a pos-
sessory mining claim (not merged into disposition of the
title to the land by issuance of patent to another), even
assuming, for the sake of the argument, that Congress
would have the power so to l^islate.
It is only by the issuance of patent that action of the
Land Department becomes effective, and then within
limitations recognized by the courts.
The rule that decisions of the Land Department upon
questions of fact are binding upon the courts is raised as
an incident of, and in support of the integrity of patents,
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CAMERON V. UNITED STATES. 468
450. Aigument for Appellants.
recognizes that action by the Land Department upon ap-
plications for patent is not judicial but administrative^
and is based upon the assumption that Congress, in vest-
ing the department with administration of the laws
governing the digfposition o| the title to public lands, con-
ferred upon it the power and duty of deciding questions
of fact involved in the granting of patents.
And the rule that decision by the Land Department of
questions of law involved in the issuance of patent is not
binding upon the courts, is recognition that the depart-
ment acts administratively and not judicially.
The statement in the opinion in Clipper Mining Co. v.
Eli Mining Co., 194 U. S. 220, to the effect that the depart-
ment, in rejecting an application to patent a mining claim,
may go farther and set aside the location, is an cbiter
dictum, as clearly appears from a consideration of that
case as it stood in the department. 7 Copp's L. O. 36;
11 L. D. 441, 442; 22 L. D. 527, 528; 33 L. D. 660, 665;
34 L. D. 401, 409.
Jiuisdiction to cancel mining claims was disclaimed in
34 L. D. 276, and in the Instructions of February 6, and
May 16, 1907, 35 L. D. 666; id. 666. The practice of in-
vestigating and passing upon mining locations in forest
reserves, administratively (H. H. Yard el cd., 38 L. D.
59), was rejected in the unreported case of Nichols and
Smith, October 24, 1913.
Lane v. Cameron, 45 App. D. C. 404, went upon the
aroneous assumption that the power to determine the
character of land as between the United States and a
mining locator was vested exclusively in the Land De-
partment, and that the courts alone would be powerless,
which is contrary to Oauthier v. Morrison, 232 U. S. 452
(1 Lindley on Mines, 3d ed., § 108, pp. 188 et seq.), and
contrary to the practice of the Government in bringmg
many suits attacking the possessory titles of oil land
claimants.
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464 OCTOBER TERM, 19ia
Opinkm of the Court V2V.B.
The lopcal and proper tribunals to try the issue of dis-
covery, upon which the miner's title depwds, are the
courts of the vicinage— not an administratiye body
two or three thousand nules away acting both as prose-
cutor or plainti£F and judgeor jury. Overman SUoer Mitir
ing Co. v. Corcoran, 16 Nevada, 147; Ethardtv. Boaro, 113
U.S. 627./
We submit that the decision of the departmenti in
fina^ analysis, resolves into a ruling, not that Cameron
had not made discovery sufficient to validate the location^
but that he had not developed a paying mine, and that,
in aiQT view, it was not entitled to judicial recognition.
The attempted setting apart of the land as the Grand
Canyon National Monument was unauthorised, violative
of the Forest Reserve Laws, and void
Mr. ABriskmi AUomey Oeneral Nd)eker, with whom
Mr. H. L. Underwood, Special Assistant to the Attorney
General, was on the brief, for the United States.
Mb. Jusnca Van Dxvantbb delivered the opinion of
the courts
This is a suit by the United States to enjoin Ralph H.
Cameron and others from occupying, using for business
purposes, asserting any right to, or interfering with the
public use of, a tract of land in Arizona, approximately
1600 feet long and 600 feet wide, which Cameron is claim-
ing as a lode mining claim, and to require the defendants
to remove there&om certain buildings, filth and refuse
placed therepn in the course of its use by them as a livery
stable site and otherwise. In the District Court there
was a deciw for the United States, and this was affinnyl
by the Circuit Court of Appeals. 260 Fed. Rep. 043.
The ix^ct is* on the southern rim of the Grand Canyon
of the Colprado, is immediately adjacent to the railroad
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CAMERON V. UNITED STATES. 456
460. Opinion of the Court.
terminal and hotel buildings used by visitors to the can-
yon and embraces the head of the trail ^ over.which visitors
descend to and ascend from the bottom of the canyon.
Formerly it was public land and open to acquisition under
the public land laws. But smce February 20, 1893, it has
been within a public forest reserve * established and con-
^^mued by proclamations of the President under the Acts
of Mar6h 3; 1891, c.^561, § 24, 26 Stat. 1095, 1103, and
June 4, 1897, c. 2, 30 Stat. 34-36; and since January 11,
1908, all but a minor part of it has been within a monu-
ment reserve * established by a proclamation of the Presi-
dent under the Act of June % 1906, c. 3060, 34 Stat. 225.
The forest reserve r^nained effective after the creation of
the monument reserve, but in so far as both embraced the
same land the monimient reserve became the dominant
one. 35 Stat. 2175. The inclusion of the tract in the .
forest reserve withdrew it from the operation of the pub-
lic land laws, other than the mineral land law; and the
inclusion of the major part of it in the monument reserve
withdrew that part from the operation of the mineral
land law, but there was a saving clause in respect of any
"valid" mining claim theretofore acquired. The United
States still has the paramoimt legal title to the tract, and
also has the full beneficial ownership if Cameron's as-
serted Itining claim is not vklid.
The defendants insist that the monument reserve
should be disregarded on the ground that there was no
authority for its creation. To this we cannot assent.
The act under which the President proceeded empowered
him to establish reserves embracing "objects of historic
or scientific interest.^' The Grand Canyon, as stated in
his proclamation, "is an object of unusual scientific in-
^ The Bri^t Angel Trail.
^ OriginaUj the Grand Canyon Foreet Reserve and now the Tuaayan
National Forest.
' Called the Grand Canyon National Monument.
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466 OCTOBER TERM, 1919.
Opinion of the Court 252 U. EL
terest/^ It is the greatest eroded canyon in the United
States, if not in the world, is over a mile in depth, has
attracted wide attention among explorers and scientists,
affords an miexampled field for geologic study, is regarded
as one of the great natural wonders, and annually draws
to its borders thousands of visitors.
The defendants also insist that in holding the United
States entitled to the relief sought the courts below gave
undue effect and weight to decisions of the Secretary of
the Interior dealing with Cameron's asserted claim and
pronouncing it invalid. Rightly to appreciate and dis-
pose of this contention requires a further statement.
The claim in question is known as the Cape Horn lode
claim and was located by Cameron in 1902 after the crea-
tion of the forest reserve and before the creation of the
monument reserve. To make the claim valid, or to invest
the locator with a right to the possession, it was essential
that the land be mineral in character and that there be
Bfi adequate mineral discovery within the limits of the
claim as located, Rev. Stats., §2320; Cole v. Ralphs
ante, 286; and to bring the claim within the saving clause
in the withdrawal for the monument reserve the discov-
eiy must have preceded the creation of that reserve.
Cameron applied to the land department for the issue
to him of a patent for the claim and dmilarly sought pat-
ents for other claims embracing other portions of the
trail into the canyon. A protest was interposed charging
that the land was not mineral, that there had been no
supporting mineral discoveries and that the claims were
located and used for purposes not contemplated by the
mineral land law; and the Secretary of the Interior di-
rected that a hearing be had in the local land office to
enable the parties concerned, — ^the protestant, Cameron
and the Government, — ^to produce evidence bearing on
the questions thus presented. 35 L. D. 495; 36 L. D. 66.
After due notice the hearing was had, Cameron fully
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CAMERON V. UNITED STATES. 467
48a Opnikm of the Oooii.
participating in it. This was shortly after the creation
of the monument reserve. In due course tbe evidence
was laid before the Cknumissioner of the General Land
Office and he concluded therefrom that the claims were
not valuable for mimng purposes, and therefore were
invalid. The matter was then taken before the Secretary
of the Interior and that officer rendered a decision hi
which, after reviewing the evidence, he said:
"It is not pretended that the applicant has as yet ac-
tually disclosed any body of workable ore of commercial
value; nor does the evidence reveal such indications and
conditions as would warrant the belief or lead to the con-
clusion that valuable deposits are to be found, save, ap-
parently, in the case of the Magician lode claim. With
that possible exception, the probabilities of such deposits
occurring are no stronger or more evident at the present
time than upon the day the claims were located. The
evidence wholly fails to show that there are veins or lodes
carrying valuable and workable deposits of gold, silver,
or copper, or any other minerals within the limits of the
locations. Sufficient time has elapsed since these claims
were located for a fair demonstration' of their mineral
possibilities."
And further :
"It follows frcnn the f or^^ing that each of Cameron's
applications for patent . • • must be rejected and
canceled, and it is so ordered.
"It is the further result of the evidence, and the De-
partment holds, that the several mining locations, with
the apparent exception of the Mi^cian lode claim, do not
stand upon such disclosures or indications of valuable
mineral in rock ia place therein, prior to the establish-
ment of the National Monument and the withdrawal of
the lands therein embraced, as to bring them' within the
saving clause of the Executive Order. The right of Cam-
eron to continue possession or exploration of those claims
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458 OCTOBER TERM, 1919.
OpiDion of the Court. 262 U. 8.
is hereby denied, and the land covered thereby is declared
to be and remain part of the Griand Canyon National
Monument as if such locations had not been attempted."
Directions were given for a further hearing respecting
the Magician claim, but this is of no moment here.
That decision was adhered to on a motion for review,
and in a later decision denying a renewed application by
Cameron for a patent for the claim here in question the
Secretary said:
''As the result of a hearing had after the creation of the
national monument, the Department expressly found
that no discovery of mineral had been made within the
limits of the Cape Horn location, and that there was no
evidence before the Department showing the existence
of any valuable deposits or any minerals within the limits
of the location. ... So far as the portion of the
claim included within the exterior limits of the national
monument is concerned, no discovery which would defeat
the said monument can have been made since the date
of the previous hearing in this case, nor do I find that one
is claimed to have been made since the former decision in
any part of the alleged location."
After and notwithstanding these decisions Cameron
asserted an exclusive right to the possession and enjoy-
ment of the tract, as if the lode claim were valid; and he
and his co-<fefendant8, who were acting for or under him,
continued to occupy and use the ground for livery and
other business purposes, and in that and other ways ob-
structed its Mae by the public as a part of the reserves.
In this situation, and to put an end to what the Govern-
ment deemed a continuing trespass, purpresture and
public nuisance, the present suit was brou^t.
The courts below ruled that the decisions of the Secre-
tary of the Interior should be taken as conclusively de-
termining the non-mineral character of the land and the
absence of an adequate mineral discovery, and also as
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CAMERON 9. UNITED STATES. 460
45a Opinion of the CkMirt.
showing that the matter before the Secretary waa not
merely the application for a patent but also the status of
the claim, — ^whether it was valid or was wanting in esseki-
tial elements of validity, and whether it entittoH Camera
to the use of the land as against the public and ^ (jwmi^
ment. As before stated, the defendants complain dP t^l^
ruling. The obfections urged agaidst it are; first, that I2ie
Secretary's decisions show that he proceeded upon^'^a'
misconception of what under the law constitutes an $de-
quate mineral discovery, and, second, that although the
Secretary had ample authority to determine whether
Cameron was entitled to a patent, he was without au-
thority to determine the character of the land or the ques^
tion of discovery, or to pronounce the claim invalid.
As to the first objection little need be said. A reading
of each decision in its entirety, and not merdy the excerpts
to which the defendants invite attention, makes it plain
that the Secretary proceeded upon the theory that to sup-
port a mining Ideation the discovery should be such as
would justify a person of ordinary prudence in the further
expenditure of his time and means in an effort to develop
a paying mine. l%at is not a novel pr mistaken test, but
is one which the land department long has applied and
this court has approved. Chrisman v. MiUer, 197 U. S.
313, 322.
The second objection rests on the naked proposition
that the Secretary was without power to determine
whether the asserted lode claim, under which Cameron
was occupyiog and using a part of the reserves to the ex-
clusion of the public and the. reserve officers, was a valid
claim. We say ''naked proposition*' because it is not
objected, that Camexon d^d not have a full and fair heai^
ing, or that any^udinras jiractised against him, but only
that the Secretary was without any power of decision in
Hie matter. In our opmion the proposition is not tensile.
By general statutory provisions the execution of the
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460 OCTOBER TERM, 1919.
Opinion of the Court. 282 U. 8.
laws regulatiiig the acquisition of rights in the public
lands and the general care of these lands, is confided to
the land department^ as a special tribunal; and the Seere-
raty of the Interior, as the head of the department, is
charged with seeing that this authority is rightly exer-
cised to the end that valid claims may be recognized, in-
valid ones eliminated, and the rights of the public pre-
served. Rev. Stats., §§ 441, 453, 2478; United States v.
Schurz, 102 U. S- 378, 395; Lee v. joknean, 116 U. S. 48,
52; Knight v. United States Land Association, 142 U. S.
161, 177, 181; Riverside OU Co. v. Hitchcock, 190 U. S. 316.
A mining location which has not gone to patent is of
no higher quality and no more immune from attack and
investigation than are unpatented claims under the home-
stead and kindred laws. If valid, .t gives to the claimant
certain exclusive possessory rights, and so do homestead
and desert claims. But no right arises from an invalid
claim of any kind. All must conform to the law under
which they are initiated; otherwise they work an unlawful
private appropriation in derogation of the rights of the
public.
Of course, the land department has no power to strike
down any claim arbitrarily, but so long as the legal title
remains in the Govenunent it does have power, after
proper notice and upon adequate hearing, to detmnine
whether the claim is valid and, if it be found invalid, to
declare it null and void. This is well illustrated in
Orchard v. Alexander, 157 U. S. 372, 383, where in giving
effect to a decision of the Secretary of the Interior can-
celing a preemption claim theretofore passed to cash.
entry, but still impatented, this court said: ''The party
who makes proofs, which are accepted by the local land
officers, and pays his money for the land, has acquired an
interest of which he cannot be arbitrarily dispossessed.
His interest is si\bject to state taxation. Carroll v. Safford,
li How. 441; Witherspoon v. Duncan, 4 Wall. 210. The
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CAMERON V. UNITED STATES. 461
ASO, Opinion of the Court.
government holds the legal title in trust for him, and he
may not be dispossessed of his equitable rights without
due process of law. Due process in such case ^nplies no-
tice and a hearing. But tliis does not require that the
hearing must be in the courts, or forbid an inquiry and
determination in the Land Department." And to the
same effect is Michigan Land & lumber Co. v. /Jwt, 168
U. S. 589, 593, where in giving effect to a decision of the
Secretary canceling a swamp land selection by the State
of Michigan theretofore approved, but as yet unpatented,
it was said: ''It is, of course, not pretended that when an
equitable title has passed the land department has power
\o arbitrarily destroy that equitable title. It has juris-
diction, however, after proper notice to the party claiming
sucli equitable title, and upon a hearing, to determine the
question whether or not such title has pass^. Cornelius
V. Kessd, 128 XJ. S. 456; Orchard v. Alexander, 157 U. S.
372, 383; Parsons v. Vemke, 164 U. S. 89. In other words,
tiie power of tiie department to inquire into the extent
and validity of the rights claimed against the Govemr
ment does not cease until the l^al title has passed."
True, the mineral land law does not in itself confer such
authority on the land department. Neither does it place
the authority elsewhere. But this does not mean that the
authority does not exist anywhere, for, in the absence of
some direction to the contrary, the general statutory
provifflons before mentioned vest it in the land depart-
ment. This is a necessary conclurion from this court's
decisions. By an Act of 1848 the title to public land in
Oregon then occupied as missionary stations, not exceed-
ing six hundred and forty acres in any instance, was coor
firmed to the several religious associations maintaining
those stations, but the act made no provision for deter-
mining where the stations were, by whom th^ were
maintained or the area occupied. Tlie land dq[>artment
proceeded to a determination of these questions in the
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462 OCTOBER TERM, 101ft
Opinion of the Court. 282n.8.
exercise of its general authority, and in CaihMc Bitihop
qf NesquaUy v. OMxm, 168 U. S. 185, 166, 167, where that
detanunation was challenged as to a particular tract, it
was said: ^' While there may be no specific reference in the
act of 1848 of questions arisLiig under this grant to the
land department, yet its administration comes within
the scope of the general powers vested in that depart-
ment. . • . It may be laid down as a general .rule
that, in the absence of some specific provicdon to the con-
trary in respect to any particular grant of public land, its
administration falls wholly and absolutely within the
jurisdiction of the Commissioner of the General Land
Office, under the supervision of the Secretary of the Id^
terior. It is not necessary that with each grant there
shall go a direction that its administration shall be under
the authority of the land department. It falls there un-
less there is express direction to the contrary.'' And in
Coamos Exploration Co. v. Oray Eagle Oil Co., 190 XT. S.
301, 308, where a claimant asserting a full equitable title
under the lieu land provision of the Forest Reserve Act
of 1897 questioned the authority of the land department
to inquire into and pass on the validity of his claim and
sought to have it recognised and enforced by a suit in
equity, it was said: '^There can be, as we think, no doubt
that the general administration of the forest reserve act,
and also the det^mination of the various questions which
may arise thereunder before the issuing of any patent for
the selected lands, are vested in the Land Department.
The statute of 1897 does not in terms refer any question
that might arise under it to that department, but the
subject-matter of that act relates to the reUnquishment
of land in the various forest reservations to the United
States, and to the selection of lands, in lieu thereof, from
the public lands of the United States, and the adminis-
tration of the act is to be governed by the general sjrstem
adopted by the United States for the administration of
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CAMERON V. UNITED STATES. 468
460. Opmioii of the Gouit.
the laws regarding its public lands. Unless taken away
by some aflSnnative provision of law, the Land Depart-
ment has jurisdiction over the subject.'' There is in the
mineral land law a provision referring to the courts con-
troversies between rival mineral claimants arising out of
conflicting mining locations (Rev. Stats., §§ 2325; 2326),
but it does not reach or affect other controversies and so
is without present bearing. Creede A Cripple Cretk Minr
ing Co. v. Uinta Turmd Mining Co., 196 U. S. 337, 356,
et seq.
It is rightly conceded that in the case of a conflict be-
tween a mining location and a homestead claim the de-
partment has authority to inquire into and detennine the
validity of both and, if the mining location be found in-
valid and the homestead claim valid, to declare the f onner
null and void and to give full effect to the latter; and yet
it is insisted that the department is without authority, on
a complaint preferred in the public int^'est, to inquire
into and determine the validity of a mining location, and,
if it be found invalid, to decline it of no effect and recog-
nise the rights of the public. We think the attempted
distinction is not sound. It has no support in the tenns
of the mineral land law, is not consistent with the general
statutory provisions before mentioned, and if upheld
would encourage the use of m«:^y colorable mining loca-
tions in the wrongful private appropriation of lands be-
longing to the public.
Instances in which this power his been exercised, in
respect of mining locations are shown in the Yard Com,
38 L. D. 59, and the NichohSmUh Ca9e (on reheari}ig),
46 L. D. 20; instances in which its exercise has received
judicial sanction are found in Lane v. Cameron, 45 App.
D. C. 404, and Cameron v. Bass, 19 Arisona, 246; and an
instance in which its existence received substantial, if
not decisive, recognition by this court is found in Clipper
Mining Co. v. EH Mining Co., 194 U. S. 220, 223, 234.
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464 OCTOBER TERM, IMft
OpmioDortheCoaii. 2B2n.a
The argument is advanced that the dqtartment neo-
essarily is without authority to pronounce a mining loca-
tion invalid; because it has within itself no means of exe-
cuting its decisiony such as dispossessing the locator. But
this is not a proper test of the existence of the authorityi
for the department is without the means of executing
most of its decisions in the sense suggested. When it
issues a patent it has no means of putting the grantee in
possession, and yet its authority to issue patents is be-
yond question. When it awards a tract to one of two
rival homestead claimants it has no means of putting the
successful one in possession or the other one out , and yet
its authority to determine which has the better claim is
settled by repeated deciaons of this court. And a similar
situation exists in respect of most of the claims or con*
troversies on which the department must pass in regular
course. Its province is that of determining questions of
fact and right under the public land laws, of recognising
or disapproving claims according to their merits and of
granting or refusing patents as the law may give sanction
for the (me or the other. When there is occasion to en-
force its decisions in the sense suggested, this is done
through suits institute by the successful claimants or
by the Government, as the one or the other may have the
requisite interest.
Whether the tract covered by Cameron's location was
mineral and whether there had been the requisite dis-
covery were questions of fact, the decision of which by
the Secretary of the Interior was conclusive in the ab-
sence of fraud or imposition, and none was claimed.
Catholic Bishop of NesquaXLy v. Gibbon^ supra; Burfenr
ning v. Chicago, St. Pavl, etc., Ry. Co., 163 U. S. 321, 323.
Acc^ting the Secretary's findingg that the tract was not
mineral and that there had been no discovery, it is plain
that the location was invalid, as was declared by the
Secretary and held by the courts below.
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UNITED STATES v. SIMPSON. 465
450. Aigumeat for the United States.
Of other complaints made by the defendants, it suffices
to say that, in our opinion, the record shows that the
GoyerDment was entitled to -flie relief sought and awarded.
Decree affirmed.
* UNITED STATES v. SIMPSON.
BBBOB TO THE DISTRICT OOX7BT OF THE UNITED STATES
FOB THE DISTRICT OF COLOBADO.
No. 444. Submitted Maroh 6, 1920.— Dedded April 10, IfiM.
The transportation by their owner of five quarts of whiakoy for hfa
persofial use, in his own automobile, into a State whose laws pro-
hibit the manufacture or sale of intoxicating liquors for beverage
purposes, is transportation in interstate commerce and violates the
Reed Amendment if the liquor is not intended for any of the purposes
therem excepted. P. 466.
257 Fed. Rep. 860, reversed.
The case is stated in the opinion^
Mr. Aesistani Attorney Oeneral Friersan {(X the United
States:
This case is ruled by United States v . Hill, 248 U. S. 420.
The judgment in the present case rests solely upon the
idea that, in order to be transportation in interstate com-
merce, tranq>ortation must be by common carrier. But
transportation, in order to constitute interstate com-
merce, need not be by common carrier, and may be
transportation by the owner of the goods. RaUroad Com-
pany V. Hueen, 95 U. S. 465, 469-70; Kirmeyer v. Kansas,
236 U. S. 568, 572; Kelley y.^Rhoads, 188 U. S. 1; Pipe
Line Cases, 234 U. 8. 548, 560; Bearick y. Pennsylvania,
203 U. a. 507, 512.
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466 OCTOBER TERM, 1919.
Opiiiion of the Court. 262U.a
No appearance for defendant in error.
Mb. Jubticb Van Dbyantbr delivered the opinion of
the court.
This is an indictment under § 5 of the Act of March 3,
1917; known as the Reed Amendment, c. 162, 39 Stat.
1069, which declares that "whoever shall . • . cause
intoxicating liquors to be transported in interstate com-
merce, except for scientific, sacramental, medicinal, and
mechanical purposes, into any State . . . the laws of
which . . ;. prohibit the manufacture or sale therein of
intoxicating liquors for beverage purposes shall be pun-
ished, " etc.; and the question for decision is whether the
statute was applicable where the liquor — five quarts of
whiskey — was transported by its owner in his own auto-
mobile and was for his personal use, and not for an ex-
cepted purpose. The Dbtrict Court answered the ques^
tion in the negative and on that ground sustained a
demurrer to the third count, which is all that is here in
question, and discharged the accused. 257 Fed. Rep. 860.
We think the question should have been answered the
otiier way. The evil agaiost which the statute was di-
rected was the introduction of intoxicating liquor into a
prohibition State from another State for purposes other
than those specially excepted, — a matter which Congress
could and the States could not control. Danciger v.
Cooley, 248 U. S. 319, 323. The introduction could be
^ected only through transportation, and whether this
took one form or another it was transportation in inter-
state commerce. KeOey v. Rhoadij 188 U. S. 1; United
States V. Chavez, 228 U. S. 525, 532^533; United States v.
Mesa, 228 U. S. 533; Pipe Line Cases, 234 U. S. 548, 560;
UnitedTStatesy.Hia,24AJJ.8.^20. The statute makes no
distinction between different modes of transfportation and
we think it was intended to include ihem all, that being
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UNITED STATES 9. SIMPSON. 467
465* Clabkb, J., disBentiiig.
the natural import of its words. Had Congress intended
to confine it to transportation by railroads and other
common carriers it weU may be assumed that other words
appropriate to the expression of that intention would have
been used. And it also may be assumed that Congress
foresaw that if the statute were thus confined it could
be so readily and extensively evaded by the use of auto-
mobiles, auto-trucks and other private vehicles that it
would not be of much practical benefit. See Kirmeyer v.
Kansas, 236 U. S. 568. At all events, we perceive no
reason for rejecting the natural import of its words and
holding that it was confined to transportation for hire or
by public carriers.
The published decisions show that a number of the
federal courts have regarded the statute as embracing
transportation by automobile, and have applied it in
cases where tiie transportation was personal and private,
as here. Ex park WesOrook, 2S0 Fed. Rep. 636; Malcolm
y. United ataiesy 256 Fed. R^. 363; Janesv. UnUed States,
259 Fed. Rep. 104; Berryman v. United Stales, 259 Fed.
Rep. 208.
That the liquor was intended for the personal use of the
person transporting it is not material, so long as it was not
for any of the purposes specially excepted. This was
settled in United States v. HtU, supra.
We conclude that the District Court erred in construing
the statute and sustaining the demurrer.
Judgment reversed.
Mb. Justicb Clabke, dissenting.
The indictment in this case charges that the defendant,
bemg in the City of Cheyenne, Wyoming, ''boufj^t, paid
for and owned'' five quarts of whiskey and thereafter, in
his own automobile, driven by himself, transported it into
the City of Denver, Colorado, intending to there devote it
to his own personal use. Colorado prohibited the manu-
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468 OCTOBER TERM, 1918.
Glabkb, J.i dissenting. 2S2 U. 8.
facture and sale therein of intoxicating liquor for beverage
purposes. The court decides that this liquor was unlaw-
fully ''transported in interstate commerce, " from Wyom-
ing into Colorado within the meaning of the Act of Con-
gress of March 3, 1917 (39 Stat. 1069).
With this Conclusion I cannot agree.
By early (Gibbons v. Ogden, 9 Wheat. 1, 193) and by
recent decisions (Second Employers' Liability Cases, 223
U. S. 1, 46) of this court and by the latest authoritative
dictionaries, interstate commerce, in the constitutional
sense, is defined to mean commercial, business, inter-
course— ^including the transportation of passengers and
property — carried on between the inhabitants of two or
more of the United States, — especially (we are dealing here
with property) the exchange, buying or selling of com-
modities, of merchandise, on a large scale between the
inhabitants of different States. The liquor involved in this
case, after it was purchased and while it was being held for
the personal use of the defendant, was, certainly, with-
drawn from trade or commerce as thus defined — ^it was no
longer in the channels of commerce, of trade or of business
of any kind — and when it was carried by its owner, for his
personal use, across a state line, in my judgment it was
not moved or transported in interstate commerce, within
the scope of the act of Congress relied upon or of any
legislation which Congress had the constitutional power
to enact with respect to it at the time the Reed Amend-
ment was approved. The grant of power to Congress is
over commerce, — ^not over isolated movements of small
amoimts of private property, by private persons for tiieir
personal use.
I think the HiU Case, 248 U. S. 420, was wrongly de-
cided and that the judgment of the District Court in this
case should be affiitaed.
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HOUSTON V. ORMES. 460
Axgament for AppeDants*
HOUSTON, SECRETARY OF THE TREASURY,
ET AL. V. ORMES, ADMINISTRATOR OF LOCK-
WOOD,
APPBAL FROM THE COURT OF APPEALS OF THE DISTRICT OF
C0LX7MBIA.
No. 8(k Argued January 23, 1020.— Decided April 10, 1020.
Where a fund has been appropriated by Congress for payment to a
specified person in satisfaction of a finding of the Court of Clainis,
the duty of the Treasuiy officials to pay it over is mini^rial; and a
suit by one who has an equitable right in the fund, for attorney's
. fees, to establish such right as against the owner, and to require the
Treasury officials to pay the fund to a receiver, is not a suit against
the United States, and may be maintained in the courts of the Dis-
trict of Columbia if the owner, as well as the officials, is made a party
and bound by the decree so that it may afford due acquittance to
the Government. P. 472.
The situs of the debt in such cases is not material, if its owner volun-
tarily appears and answers .without objecting to the jurisdiction.
P. 474.
Section 3477 of the Revised Statutes does not prevent assignment
by operation of law after a daim has been allowed. P. 473.
47 App. D. C. 364, affirmed.
The case is stated in the opinion.
The Solicitor Oeneralf with whom Mr. Morgan Beach
and Mr. A. F. Myers were on the brief, for appdlants:
The test whether or not a suit is one against the United
States or against an officer as an individual depends upon
the nature of the. decree to be entered. If the decree
would control the action of the officer outside the scope
of his authority, the interest of the Government would
not be involved and the suit would be one against the
individual. PhUadelvhia Company v. Stimson, 223 U. S.
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470 OCTOBER TERM, 191ft
Aiguniflot for AppellaatB. 262 XJ. CL
605, 620. But if the decree would control the action of
the officer within the scope of his authority, or interfere
with the United States in the use of its property or per-
formance of its functions, the suit would be one against
the United States. TF^Ib v. i2oper, 246 U. S. 335, 337.
In the case at bar it is sougjit to enjoin these govern-
ment officers from dischar^bg an official duty devolved
upon them by statute. The payment of the fund in ques-
tion to the defendant Sanders is a mioisterial duty, the
performance of which could be compelled by mandamus.
Pariah v. MacVeagh, 214 U. S. 124. This conclusively
establishes the character of the suit as one to control the
official action of the appellants.
Moreover, the suit is an attempt to control the property
qf the United States in the hands of these officials. That
this cannot be done is made clear by Belknap v. SchUd^
161 U. S. 10. See also Goldberg v. DanieU, 221 U. S. 218.
If hie^ officials of the Government, acting wholly
within the scope of their authority, may be sued in pro-
ceedings of this kind, officials of the Treasury Depart-
ment will be subject to be sued by creditors of the suc-
cessful claimant whenever an appropriation is made in
satisfaction of a claim against the United States, and will
b^ greatly hampered in the disdiarge of their official
duties. This would be contrary to public policy. Afor-
gan v. RiMt, 100 Georgia, 346, and cases cited.
Debts due from the United States have no situs at the
seat of Government. This has been many times decided.
The appropriation, which is made payable ''out of
any money in the Treasury not otherwise appropriated,"
segregate no special f imd from the general f imds of the
Government. The situation simply is that there is a debt
due from the Government to a resident of Vinita, Okla.,
and this debt, it is contended, has no situs in the District
of Columbia which would warrant a proceeding by publi-
cation. Vaughan v. Northup^ 15 Pet. 1; Wyman v. Hair
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H0X7BT0N V. ORMES. 471
«». Qpinioa of the CSourt
dead, 109 U. S. 654; Mackey v. Caxe, 18 How. 100; Barcher-
ling V. United States, 35 Ct. Glms. 311/ affd. 185 U. S.
223.
Miv Mary O^Tock for appdiee.
Mr. Chapman W. Maupin, by leave of oourti filed a
brief as amicus cutub.
Mjel Jxtbtigb Petnbt delivered the opinion of the court.
This was a suit in equity, brougjit by the late Belva A.
Lockwood in her lifetime in the Supreme Court of the
District of Columbia, to establish an equitable hen for at-
torney's fees upon a fimd of $1,200 in the Treasuiy of the
United States, appropriated by Congress (Act of March 4,
1015, c. 140, 38 Stat. 962, 081) to pay a claim found by the
Court of Claims to be due to one Susan Sanders, who was
made defendant together with the Secretary of ike Treas-
ury and the Treasurer of the United Stateb. There were
appropriate prayers for relief by injunction and the ap-
pointment of a receiver. Defendant Sanders voluntarily
appeared and answered denying h^ indebtedness to plain-
tiff; the other defendants answered admitting the existence
of the fund and declaring that as a matter of comily and
out of deference to the court it would be retained under
their control to await the final disposition of the case; but
objecting to the jurisdiction of the court over the cause
upon the ground that debts due from the United States
have no situs in the District of Columbia, that there was
nothing to show that either the United States or the
defendant Sanders had elected to make the sum alleged to
be due from the United States payable to her in the Dis-
trict, and that in jthe absence of personal service upon her
the court could inake no decree that would protect the
United States. There was a final decree adjudging that
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472 0C3T0BER TERM, 1919.
Opinion of the Court. 252 U. S.
the sum of $90 was due from the defendant Sanders to Mrs.
Lockwood, with costs, and appointing a receiver to collect
and receive from the Secretary of the Treasury the $1,200
appropriated in favor of Sanders, directing the Secretary to
pay the latter sum to the receiver, and decreeing that his
receipt should be a full acquittance to the United States
for any and all claims and demands of the parties arising
out of or connected with said claim. The Secretary of the
Treasury and the Treasurer appealed to the Court of
Appeals of the District of Columbia, the defendant
Sanders not appealing. That court aflSnned the decree,
47 App. D. C. 364; and a further appeal taken by the
officials of the Treasury under § 250, Judicial Code, brings
the case here.
The principal contention is that because the object
of the suit and the effect of the decree were to control the
action of the appellants in the performance of their official
duties the suit was in effect one against the United States.
But since the fund in question has been appropriated by
act of Congr^ for ^payment to a specified person in
satisfaction of a finding of the Court of Claims, it is clear
that the officials of the Treasury are charged with the
ministerial duty to make payment on demand to the
person designated. It is settled that in such a case a suit
brought by the person entitled to the performance of the
duty against the official charged with its performance is
not a suit against the Government. So it has been de^
clared by this court in many cases relating to state officers.
Board of lAquidatum v. McCamb, 92 U. S. 631, 541;
Louisiana v. Jumd, 107 U. S. 711, 727; In reAyera, 123
U. S. 443, 506. In Minnesota v. Hitchcock, 185 U. S. 373,
386, while holding that a suit against officers of the
United States might be in effect a suit against the United
States, the court said (p. 386) : "Of course, this statement
has no reference to and does not include those cases in
which officers of the United States are sued, in appropriate
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HOUSTON V. OBMES. 473
409. Opinion of the Court
form, to QompA them to perform somie ministerial duty
imposed upon them by law, and which they wrongfully
neglect or refuse to perform. Such suits would not be
deemed suits against the United States within the rule
that the Government cannot be sued except by its consent,
nor within the rule established in the ilyera case." And in
Parish v. MaeVeagh, 214 U. S. 124, the court upheld the
ri^t of a claimant, in whose favor an appropriation had
been made by Congress, to have a mandamus agamst the
Secretary of the Treasury requiring him to pay the claim.
To the same effect, fioberte v. United States, 176 U. S. 221,
231.
In the present case it is conceded, and properly con^
ceded, that payment of the fund in question to the defend-
ant Sanders is a ministerial duty, the performance of
which could be compelled by mandamus. But from this
it is a necessary consequence that one who has an equitable
right in the fund as agamst Sanders may have relief
against the officials of the Treasury throu^ a mandatory
writ of injunction, or a receivership which is its equivalent,
making Sanders a party so as to bind her and so that the
decree may afford a proper acquittance to the Govern-
ment. The practice of bringing suits in equity for this
purpose is well established in the courts of the District
{Sanborn v. MaxtoeU^ 18 App. JD. C. 245; Roberts v. Conn
savl, 24 App. D. C. 651, 562; Jones v. Rutherford, 26 App.
D. C. 114; Parish v. McGowan, 39 App. D. C. 184; s. c. on
appeal, McGowan v. Parish, 237 U. S. 285, 295), Con-
fined, as it necessarily must be, to cases where the officials
of the Government have only a ministerial duty to per- *
form, and one in which the party complainant has a
particular interest, the practice is a convenient one, well
supported by both principle and precedent.
Section 3477, Rev. Stats., regulating the assignment of
claims against the United States, is not an obstacle. As has
been held maxiy times, the object of Congress in this legis-
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474 OCTOBER TERM^ 191&
OpimoQartheCoart 252n.8.
lation was to protect the Government, not the claimant;
^nd it does not stand in the way of giving effect to an as-
sigmnent by operation of law after the claioi has been
allowed. Erwin v. United States, 97 JJ.S. 392, 397; Good-
man V. NMack, 102 U. S. 556, 560; Price v. Forrest, 173
TI. S. 410, 423-425.
In support of the contention that a court of equity may
not control the action of an officer of the United States
within the scope of his ^thority, WeUs v. Roper, 246 U. S.
335, is cited; but it is not in point; the official duty sougjit
to be subjected to control in that case was not ministerial
but required an exercise of official discretion, as the opin-
ion shows (p. 338).
It is further objected that debts due from the United
States have no situs at the seat of Government, and
Vaughan v. Nortkup, 15 Pet. 1, 6; Machey v. Coxe, 18 How.
100, 105; Wyman v. Balstead, 109 U. S. 654, 657, are cited.
But in the present case the question of situs is not material.
If the jurisdiction as to the defeiidant Sanders had de-
pended upon publication of process against her as a non-
resident under § 105 of the District Ckxle (Act of March
3, 1901, c. 854, 31 Stat. 1189, 1206), upon the theory that
her claim against the Government was ^'property within
the District, " the point would require consideration. But
the jiurisdiction over her rests upon her having voluntarily
appeared and answered the bill without objection. Hence
th^ is no question that the decree binds her, and so
constitutes a good acquittance to the United States as
against her.
The decree will be
Affirmed.
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HULL V. PHILA. A READING RY. 00. 476
Aigiimmt for PetitioiMr.
HULL, ADMINISTRATRDC OF HULL, Ac. v. PHTT.A-
DELPHU A READING RAILWAY CX)MPANY.
CSBnOBABI TD THB OOtTBfF OF APPBAIA Of THB STATB OF
liABTLAND.
No. 161. Aigued Januuy 16, 1020.— Dedded ApiSi 19, 1920.
The terms "empfeyee" and "employed'' in the Empkyyen' liabOity
Act are used in their natural Benee, importing the ooiiventional re-
lation of employer and employee. P. 479.
Under an agreement for through f rej^t service between two railmads,
each retained control of its own train crews while on the other's
line, subJQpt to regulations, orders and discq>line imposed by the
other for the pinrpose of coordinating their movements to its own
operations and for insuring safety and furthering the general object
of the agreement; and ihe acts of each company's employees ^fhile
on the line of the other were performed as pejrt (rf their duty to their
general employer. Edd^ that an onployee of one company did not
become an employee of the other, within the meaning of the Em,-
plpyers' Liability Act, while so operating on the other's line. Id,
North Carolina R. B. Co. ▼. Zachary, 232 U. 8. 2i8, distinguished.
132 Maryland; 540, affirmed.
Thx case is stated in the opinion.
Aff>. Charles D. Wagaman, with whom Mr. Omer 7*.
Kaylar and Mr. Frank 0. Wagaman were on the brief,
for petitioner:
Where one in the general service of another performs
work in which that other and a third person are both
interested, he remains the servant of that other or be-
comes the servant of ^e ihird p^Bon according ab the
work in its doing is the work of that other, or is, in its
doing, the work of the third person? . And this principle
is true no matter who hires, pays or has the power to dis-
charge the servant. 8tandari,0il Co. v. Anderson, 212
U. S. 216; Murray v. Currie, L. R, 6 C-R 24; Raurke v.
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476 OCTOBER TERM, 1910.
Afgument for Raqxmdint 262 U. S.
White Moss CoOiery Co., L. R. 2 C. P. Div. 205 (1877)
Byrne v. Kansas City At. Ry. Co., 61 Fed. Rep. 605
Donovan v. Construction Syndicate, [1893] 1 Q. B. 629
PoweU y. Construction Company, 88 Teimefiseei 692
MiUer v. Baibroad Company, 76 Iowa, 665.
The law unpoees upon a railroad corporation the non-
delegable duty of the operation of its road. Central
TransportalionCo.y.PuUman'sPalaceCarCo., 139 U.S. 24.
One who performB the non-delegable duty of another
with the knowledge and assent of that other becomes the
employee of him for whom he is performing the work.
Adantie Coast Line R. R. Co. v. Treadway's Administrar
fcw, 120 Virginia, 739.
Responsibility of one for the manner of the performance
of the work of another always creates the relation of em-
ployee and employer. North Carolina R. R. Co. v. Zachary,
232 U. S. 248.
Jiff. Henry H. Keedy, Jr., for respondent, relied on the
following:
Robinson v. Baltimore & Ohio R. R. Co., 237 U. S. 84;
Chicago & AUon R. R. Co. v. Wagner, 239 U. S. 452;
Fowler v. Pennsylvania R. R. Co., 2l2ld Fed. Rep. 375;
Missouri, Kansas A Texas Ry. Co. y. West, 38 Oklahoma,
581; LitOe v. HackeU, 116 U. S. 366; BenOey, Shriver A
Co. V. Edwards, 100 Maryland, 652; Q^arman v. Burnett,
6 M. A W. 499; ZeigJer v. Danbury Ac. R. R. Co., 52 Con-
necticut, 543; Tiemey v. Syracuse Ac. R. R. Co., 85 Hun,
146; SuUivan v. Tioga R. R. Co., 112 N. Y. 643; Bosworth
V. Rogers, 82 Fed. Rep. 975; Hambls v. Atchison, Topeka
A Santa Fe Ry. Co., 164 Fed. Rep. 410; PhUlips v. Chicago,
Milwaukee A St. Paul Ry. Co., 64 Wisconan, 475; M(h
Adow y.JCansas City Western Ry. Co., 164 S. W. Rep.
188; KasU v. WabfashR.R. Co., Il4 Michigan, 53; Labatt,
Master & Servant, 2d ed., 83, note c;P.W.AB. Ry. Co.
V. Bitter, 58 Maryland, 372; Ddaware, Lackawanna A
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HULL V. PHILA. & READING RY. CO. 477
475. Opinion of the Court.
Western R. R. Co. v. Hardy, 59 N. J. L. 36; Morgan v.
Smith, 159 Massachusetts, 570; Berry v. New York Cenr
tral R. R. Co., 202 Massachusetts, 197.
Mr. JtJBTiCB Ptpney delivered the opuuon of the court.
This was an action brought in a state court of Maryland
under the Federal Employers' Liability Act of April 22,
1908, c. 149, 35 Stat. 65, as amended April 5, 1910, c. 143,
36 Stat. 291, by petitioner as administratrix of John M.
Hull, deceased, to recover damages because of his death
occurring, as alleged, while he was employed by defendant
in interstate commerce. The trial court directed a verdict
in favor of defendant, the Court of Appeals of Maryland
affirmed the resulting judgment upon the groimd that
the deceased at the time he was killed was not in the em-
ploy of defendant within the meaning of the act of Con-
gress, 132 Maryland, 540; and upon this federal question
the case is brought here by certiorari.
The pertinent facts are not in dispute. John M. Hull,
at the time he was killed and for a long time before, was in
the general employ of the Western Maryland Railway
Company, an interstate carrier operating, among other
lines, a railwfty from Hagerstown, Maryland, to Lurgan,
Pennsylvania, at which point it connected. with a railway
owned and oi)erated by defendant, the Philadelphia and
Reading Railway Company, which extended from Lurgan
to Rutherford, in the same State. Through freight trains
were operated from Hagerstown to Rutherford over these
two lines, and Hull was employed as a brakeman on such a
train at the time he received the fatal injuries. On the
previous day a crew employed by the Western Maryland
Railway Company, and of which he was a member, had
taken a train hauled by a Western Maryland engine from
Hagerstown to Rutherford, and at the time in question
the same crew was returning with a train from Rutherford
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478 0C3T0BER TERM, 19ia
Opinion of the Goort. 262 U.S.
to Hagerstown. Before starting th^ received instructions
from the yardmaster at Rutherford (an employee of de-
fendant company) as to the operation of the train, in-
cluding directions to pick up seven cars at Hairisburg.
They proceeded from Rutherford to Harrisburg, stopped
there for the purpose of picking up the seven cars, and
while this was being done Hull was run over and killed by
one of defendant's locomotives.
The through freight service was conducted under a
written agreement between the two. railway companies,
which was introduced in evidence and constitutes the
chief rdiance of petitioner. Its provisions, so far as they
need to be quoted, are as follows:
^'2. Frei(^t trains to run through between Hagerstown
and Rutherford in both directions and each Company
agrees to supply motive power in the above proportions
[based upon mileage] so as to equalize the service per-
formed.
''4. Crews of each road to run througji with their
engines over the line of the othor Company.
'^5. Eadi Company to compensate the other for the use
of the other's engines and crews on their line at the follow-
ing rates per hour: • . . Time to begin at Rutherford
and Hagerstown when crew is called for. . • • Time
to cease when the engines arrive on the fire track at
Rutherford and Hagerstown. ...
''6. The division of earnings of the traffic not to be
disturbed or in any way affected by this arrangement.
' ' 7. Each Company to furnish fuel and other supplies to
its own engines and crews; any furnished 1^ one to the
other to be upon agreed uniform rates.
« « * * *.♦ * *
''9. Neither Company to be expected to do the engine
cleaning and wiping for the other; where done, a charge of
seventy-five (75) cents per engine to be made-
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HULL V. PHILA. ft READING RY. 00. 479
475. Opinion of the Court
'40. Each CJompany to be respoiudble and bear all
damage and expenses to persons and property caused by
all accidents upon its road.
'46. Each Ck>mi>any to relieve and return as promptly
as practicable the engines and crews of the other at ends
of runs.
" 17. Each Company to have the right to object and to
enforce objection to any unsatisfactory employee of the
other runnii^ upon its lines.
'' 18. All cases of violation of rules or other derelictions
by the employees of one Company while upon the road of
the other shall be promptly investigated by the owning
Company, and the result reported to the employing Com^-
pany, with or without suggestions for disciplining, the
employing Company to report to the other the action
taken.
"19. Accident reports on prescribed forms to be
promptly made of all such occurrences, wA. where a crew
of one Company is operating upon the road of the other, a
copy must be sent to the proper officer of each Company.
"20. Employees of each Company to be required to
report promptly, on notice, to the proper officer of the
other, for investigations of accid^ts, etc., the fullest
cooperation to be given by the one Company to the other
in all such matters.
"21. The employees of each Company while upon the
tracks of the other shall be subject to and conform to the
rules, regulations, discipline and orders of the owning
Company."
We haa*dly need repeat the statement made in Robinson
V. Baltimore & OhioR. R. Co., 237 U. S. 84, 94, that in the
Employers' Liability Act Congress used the words "em-
ployee" and "employed" in their natural sense, and
intended to-describe the conventional relation of employer
and employee.' The simple question is whether, imder the
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480 OCTOBER TERM, 1919.
Clabkb, J., diBflftnting. 252 U. 8.
facts as recited and according to the general principles
applicable to the relation, Hull had been transferred from
the employ of the Western Maryland Railway Company
to that of defendant for the pmpoees of the train move-
ment in which he was engaged when killed. He was not a
party to the agreement between the railway companies,
and is not shown to have had knowledge of it; but, passing
this, and assuming the provisions of the agreement can
be availed of by petitioner, it still is plain, we think, from
the whole case, that deceased remained for all purposes —
certainly for the purposes of the act — an employee of the
Western Maryland Company only. It is clear that each
company retained control of its own train crews ; that
what the latter did upon the line of the other road was
done as a part of their duty to the general employer;
and that, so far as they were subject while upon the tracks
of the other company to its rules, regulations, discipline,
and orders, this was for the purpose of coordinating their
movements to the other operations of the owning com-
pany, securing the safety of all concerned, and furthering
the general object of the agreement between the com-
panies. ^See Standard Oil Co. v. Anderson, 212 U. S. 215,
226.
North Carolina R. R. Co. v. Zachary, 232 U. S. 248, is
cited, but is not in point, since in that case the relation of
the parties was controlled by a dominant rule of local law,
to which the agreement here operative has no analogy.
The Court of Appeals of Maryland did not err in its
disposition of the federal question, and hence its judg-
ment is
Affirmed.
Mil Justice Clarke, dissenting.
The Western Maryland Railroad Company owned a line
of railroad, extending from Hagerstown, Maryland, to
Lurgan, where it connected with the line of the Reading
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HULL V. PfflLA, & READINQ RY. CX). 481
475. Clabkb, 3., diflBenting.
Company^ ejctending to Rutherford, in Pennsylvania.
The two companies entered into a contract by which
through freight trains, made up and manned by crews
primarily employed by either, should run through over
the rails of the other company to Rutherford or Hagersh
town, as the case might be. A crew from either line,
arriving at the terminus of the other should return with a
train made up by the company operating the latter — to-
gether with any cars which might be ^'picked up" on the
way.
Thus, for the purposes of operation, the line over which
train crews worked was 81 miles in length, 34 miles of
Western Maryland track and 47 miles of Reading track,
and the relation of the men to the company, other than the
one which originally employed them, while on its line, was
defined by the contract quoted from in the opinion of the
court.
Five of the paragraphs of this contract seem to me de-
cisive of what that rdation was, and of this case, viz:
5. Each company to pay the other an agreed compensi^
tion for the service of its engines and crews while on its
line.
'40. Each Company to be responsible and bear all
damage and expenses to persons and property caused by all
accidents upon its road. "
'47. Each Company to have the right to object to and
to enforce objection to any unsatisfactory employee of the
other runoing upon its lines.
'48. All cases of violation of rules or other derelictions
by the employees of one Company while upon the road of
the other shall be promptly investigated by the owning
Company, and the result reported to the employing Com-
pany, with or vdfhoiU suggestions for disciplining, the
employing Company to report to the other the action
taken."
"21. The employees of each Company while upon the •
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482 OCTOBER TERM, 1019.
Clabkb, J., diBBeating. 26217.8.
tracks of (he other shall he Buhjed to and conform to the rules,
regulations J discipline and orders of the awning Company. ^^
The deceased brakeman, Hull, was killed on the Read-
ing tracks at Harrisburg, thirty miles away from any
Western Maryland track, by the alleged nei^igence of a
Reading engineer, when engaged, imder the direction of a
local Reading yardmaster, in ^'picldng up'' cars to' be
added to a train which was made up by the Reading
C!ompany at Rutherford and dispatched by Reading
officials from that terminal.
Thus, when he was killed, Hull was working on the
Reading Railroad, subject to the '^ rules, r^pilations,
discipline and ord^ns" of the Reading C!ompany and at the
moment was acting imder q)ecific direction of a Reading
yardmaster. The Reading Company was payii^ iot the
service which he was rendering when he was killed, it had
authority to cause his discharge if his service was not
satisfactory to it (paragraphs 17 and 18 of the contract,
supr(i)y and it had specificaJly contracted to be responsible
for all damage to persons and property caused by accidents
on its line growing out of the jmnt operation.
It is admitted that the service he was rendering was in
the movement of interstate commerce, but upon the facts
thus stated it is concluded in the opinion, that he was not
within the scope of the act providing that "Every common
carrier by railroad while engaging in commerce between
any of the several States . . . shall be liable in damages
to any person suffering injury while he is employed by such
-carrier in such conunerce, or, in ease of the death," etc.,
(35 Stat. 65, c. 149, § 1).
I cannot concur in this decision of the court for the
reason that the case seems to me to be ruled by a conclu-
sion as to the applicable law, stated in a strongly reasoned
opinion in Standard OH Co. v. Anderson, 212 U. S. 215, in
this paragraph:
"One may be in the general service of another, and,
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HULL V. PHILA. A READING RY. CO. 483
475. Clabke, J., dlsBentiiig.
nevertheless, with respect to particular work, may be
transferred, with his own consent or acquiescence, to the
service of a third person, so that he becomes the servant
of that person with all the legal consequences of the new
relation."
By the contract of hiring Hull was in the general service
of tile Maryland Company, but ^^ by his consent and
acquiescence, '' he was transferred to the service of the
Reading Company whenever his train passed on to its
tracks. From that moment until his return to the Mary-
land Company's tracks again he was engaged exdusivdy
in the work of the Reading Company, that company paid
for his services, he was under its ''rules, r^pilations, disci-
pline and orders, " and it had authority to cause his dis-
charge if his service was not satisfactory. He was imder
the control of that company as to what he was to do and as
to the details of the manner of doing it as completely as if
he had no other employer. He ceased for the time being
to be the servant of the Maryland Company and became .
the servant of the Reading Company (212 U. S. 215, 224).
The Federal Employers' Liability Act does not require
that a person diall be in the exclusive employ of a railroad
common carrier in order to come within its scope. It
provides that such carrier ehsJl be "liable in dailnages to
any person suffering injury while he is employed [engaged\ hy
such carrier in such cammercey^' and it is impossible for me
to accept the conclusion that Hull, when in the pay of the
Reading Company, assisting in operating Reading inter-
state trains on Reading tracks, under the direction solely
of Reading officials, general and local, was not "employed"
by it in interstate commerce, within the meaning of this
provision.
We are not dealing here with mere words or with merely
"conventional relations," but with very serious realities.
Enacted as the Federal Employers' Liability Act was to
bring the United States law up to the hmnanitarian level
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4U OCTOBER TERM, 1919.
Clarkb, J., diaBeQting. 262 U. 8.
of the laws of piany of the States, by abolishing the unjust
and irritating fellow servant rule, by modifying the often
Harsh contributory n^gence rule, and by otherwise
changing the common-law liability of interstate rail
carriers to then* employees, it should receive a liberal
construction to promote its important purpose. Its terms
invite the appUcation of the rule, widely appUed by other
courts and clearly approved by this court, in the case cited,
that a man may be in the general service of one, and also,
with respect to a part of his service — ^to particular work —
be in the service of another employer, so that he becomes
for the time being the servant of the latter ''with all the
l^al consequences of the new relation." The line of
demarcation could not be more clearly drawn than it was
in this case, and the rule seems to me to be sharply and
decisively applicable.
In the opinion of the court it is said: ''It is clear that
each company retained control of its own train crews."
Upon the contrary, it seems to me, it is clear that neither
company retained any control whatever over the crews
primarily employed by it while they were on the Une of the
other company. — "21. The employees of each Company
while upon the tracks of the other shall be subject to and
conform to the rules, regulations, discipline and orders of
the owning Company, " was the contract between the two
companies imder which they were operating wh^i Hull was
negligently killed.
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UNITED STATES v. CHASE NATIONAL BANK. 436
Argument for the United States.
UNITED STATES v. CHASE NATIONAL BANK.
SRBOB TO THE CIBCUIT COURT OF APPEALS FOR THE SECOND
CIRCUIT.
No. 134. Argued January 14, 15, 1920.— Decided April 10, 1920.
A drawee who pays a draft drawn to the drawer's order, upon widch
the drawer's signature, as well as his endorsement, is forged, cannot
recover the money from a bona fide holder for value, guilty o: no
bad faith or negligence contributing to the suooess of the forgery.
P. 493.
In order to recover money as paid under mistake of fact, the plaintiff
must show that the defendant cannot in good conscience retain it.
Id.
260 Fed. Rep. 105, affirmed.
T^ case is stated in the opimon.
Mr. Awisbmt Attorney General SpeUacyy with whom
Mr. Leonard B. Zeisler and Mr. Charles H. Weston wero
on the briefs, for the United States:
The plaintiff may recover, since the defendant, did not
change, its position to its prejudice in reliance on the fact
of payment and since its indoirser was guilty of acts of
n^iigaice contributing to the success of the forgery.
The law recognizes no such thing as a holder in due course
of a negotiable instrument void in its inception because
of the forgery of the drawer's signatiu^. If plaintiff is
permitted to assert as against the Howard National Bank
that the drawer's signature was forged, it may also do so
against the defendant. As between plaintiff and the How-
aid National Bank this case is not within the rule that
one who has paid a check drawn upon him cannot deny
the genuineness of the drawer's signature, but within the
exceptions to it-
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486 OCTOBER TERM, 1919.
Argument for the United States. 252 U. S.
The Howard National Bank must have known that
for aknost two months prior to the presentation of this
check Simmer had not been acting as quartermaster.
This circumstance alone should have aroused its suspicion
as to the authority of Howard to cash the check. It is
true that Howard's endorsement on the check was not
necessary for n^otiation; but the universal custom of
bankers, of which this court will take judicial notice,
requires a person receiving payment of a check or draft
to endorse his name on it as a form of receipt and as a
means of identification. Morse, Banks and Banking,
5th ed., § 391. This is especially true where the check is.
being cashed by a bank on whom it is not drawn.
The check when presented to the Treasurer showed no
endorsements intervening between that of Sumner and
the bank, and the Treasurer was justified in believing
that the money had been paid to Simmer in person. The
bank's guaranty of Sumner's endorsement amounted to a
representation* that it knew it to be genuine. Since his
signatures as drawer and endorser were indistinguishable,
such a guaranty oould not but allay any suspicion plaintiff
might have as to the genuineness of his signature as drawer.
It certainly amounted to a statement that the bank did
not intend to call on the Treasurer to verify the signature.
Had plaintiff been doubtful of the signature it mi^t well
rely upon that guaranty as evidence that the drawer's
signature was genuine. Further, had Howard's endorse-
ment appeared on the check, the plaintiff would have had
notice that the mon^ had not been paid -to Sumner
directly and the case might have called ui)on it to scrutin-
ize the drawer's signature with more care. This is su£5r
dent to defeat -defendant's claim. Danvers Bank v.
Salem Bank, 151 Massachusetts, 280, 283; Ford & Co. v.
Bank, 74 S. Car. 180; People^s Bank v. Franklin Bank, 88
Tennessee, 2d9; Greenwald v. Ford, 21 S. Dak. 28; McCaU
V. Coming^ 3 La. Ann. 409; Fdrmera' National Bank v.
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UNITED STATES v, CHASE NATIONAL BANK, to?
485. Aigument for file United States.
Farmers^\A^ Traders^ Bank, 159 Kentucky, 141; Canor
dian fiank of Commerce v. Bingham^ 30 Washington,
484; NatUmal Bank v. Bangs, 106 Massachusetts, 441)
Wmiamslnirgh Trust Co. v. Turn Suden, 120 App. Div.
518; Ronvant V. San AnUmio National Bank, 63 Texas,
610.
The general rule that mon^ paid under a mistake of -
fact may be recovered, however negligent the party
paying may have been in making the mistake, unless the
payment has caused siich a change in the position of the
other party that it would be unjust to require him to re-
fund, has been modified in the class of cases under con-
dderation only to the extent that where the mistake
is that (rf a drawee in failing to discover the forgery of
his drawer's signature, he cannot recover where the per-
son receiving the mon^ has been free from negligence,
or affirmative action, contributing to the success of the
deception. The drawee is bound to know the signature of
one who draws upon him, and his failure to detect a
forgery is negligence as a matter of law. The rule applies
only where the holder is himself entirely free from fault
and slight circumstances have been laid hold of to show
n^ligwce on his part so as to take the case out of the
operation of the exceptional rule. See cases cited supra,
and mis v. Trust Company, 4 Oh. St. 628; First National
Bank v. State Bank, 22 Nebraska, 769; Woods v. Colony
Bank, 114 Georgia, 683; Newberry Bank v. Bank of Co-
lumbia, 91 8. Cbx. 294:.
The doctrine that a check payable to a fictitious per-
son is payable to bearer is inapplicable^ The plaintiff is
not barred from recovery in this case by negligence in
failing sooner to discover and notify the bank of the for-
gery. Even if it was negligent in this respect, that
would not avail the defendant, for the latter was itself
urgent in cashing the draft under suspicious circum-
stances without inquiring into the right to recdve the
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488 OCTOBER TERM, 1919.
Aigument for Defendant in Error. 262 U. 8.
money. LeaOier Manufacturers* Bank v. Morgan^ 117
U. S. 96, distinguished.
All the authorities which lay down the rule that it is
the duty of a depositor to exercise reasonable diligence to
discover forgeries of his checks and that if the bank
suffers a loss because of his negligence in failing to promptly
discover and notify the bank of forgeries, the depositor
cannot recover money paid out, recognize that where the
bank has itself been guilty of negligence in paying a forged
check it cannot receive a credit for the amoimt. New
York Produce Exchange Bank v. HausUm, 169 Fed. Rep.
785, 788; Merchants National Bank v. Nichols dt Co., 223
Illinois, 41, 52; National Dredging Co. v. Farmers Bank,
6 Penn. (Del.), 580, 590; Brixen v. National Bank, 5 Utah,
504; United States v. National Bank of Commerce, 205
Fed. Rep. 433, 436; Danvers Bank v. Salem Bank, 151
Massachusetts, 280.
Mr. Henry Root Stem for defendant in error:
The drawee of a check or draft is bound, at his peril,
to know the drawer's signatvu^ and cannot, after paym^it
to an innocent holder for value, recover back the amount
from the latter. Price v. Neal, 3 Burr. 1354; United
States Bank v. Bank of Georgia, 10 Wheat. 333; United
States V. Bank of New York, 219 Fed. Rep. 6^: National
Park Bank v. Ninth National Bank, 46 N. Y. 77^ Bank of
St. Albans v. Farmers' & Mechanics' Bank, 10 Vermont,
141; First National Bank of Belmont v. First National
Bank of BamesviUe, 58 Ohio St. 207; State National Bank
V. Bank of.Magdalena, 21 N. Mex. 653; Bergstrom v. Ritz-
Carlton Restaurant & Hotel Co., 171 App. Div. 776; Ger-
mania Bank v. BouteJl, 60 Minnesota, 189^ Ames, 4 Har-
vard Law Review, 275.
This is equally true, even though the endorsement of
the purported payee also is forged. Postal Telegraphr
Cable Co. v. Citizens' National Bank, 228 Fed. Rep. 601;
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UNITED STATES v. CHASE NATIONAL BANK. 489
485. Argument for Defendant in Error.
State Bank v. Cumberland Savings Bank, 168 N. Car. 605;
Deposit Bank of Georgetown v. Fayette National Bank,
90 Kentucky, 10; First National Bank v. MarshaJUown
State Bank, 107 Iowa, 327; Howard & Preston v. Missis-
sippi VaUey Bank of Vickshurg, 28 La. Ann. 727; Bank
of England v. Vagliano Bros., L. R. (1891) A. C. 107;
National Park Bank v. Ninth National Bank, 46 N. Y.
77; National Bank of Commerce v. United States, 224 Fed.
Rep. 679; s. c., 206 Fed. Rep. 433; 2 Parsons on Notes
and Bills, 691; Robinson v. Yarrow, 7 Taunt. 455; Cooper
V. Meyer, 10 B. & C. 468; Beeman v. Dude, 11 M. & W.
251; Williams v. Drexel, 14 Maryland, 566.
Inasmuch as the mdividual drawmg this instrument did
not intend that the person named as payee therein should
have any interest in it or even possession, such payee was,
within the negotiable instruments law, a '' fictitious"
payee, and hence the instrument was payable to bearer,
and the endorsement surplusage.
The record fails to disclose any facts sufficient to justify
a finding that the Howard National Bank was negligent.
Dedham National Bank v. Everett National Bank, 177
Massachusetts, 392.
Both parties having moved for the direction of a verdict,
the exception to the finding of the trial judge in favor of
the defendant does not permit the plaintiff to raise the
question of the negligence of the Howard National Bank
for review by this court upon writ of error.
Even assuming that the Howard National Bank was
negligent in cashing the check, such negligence could not
be charged to the defendant bank, which was a bona fide
purchaser for value. Merchants Naiional Bank v. Santa
Maria Sugar Co., 162 App. Div. 248; National Park
Bank v. Seaboard Bank, 114 N. Y. 28; Rickerson Roller-
Mill Co. V. FarreU Foundry & Machine Co., 75 Fed. Rep.
554; Naiional Park Bank v. Ninth National Bank, 46
N. Y. 77; Jones v. Miners, etc., Bank, 144 Mo. App. 428;
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490 OCTOBER TERIif, 1910.
Opinkm of ttie Cooii. - 252 U.S.
Pennington County Bank v. Moorehead First State Bank, 110
Minnesota, 263; Raphael v. Bank qf England,. 17 G. B. 161;
United States v. Bank of New York, 219 Fed. Rep. 648.
The stipulated facts establish such negligence on the
part of the plaintiff as will, iirespective of any other ques-
tion in the case, preclude its right to recovery. Thegeneral
verdict directed in favor of the defendant necessarily
constituted a finding, of such negligence which this court
will not disturb upon writ of error. Leather Mamrfacturers^
Bank v. Morgan, 117 U. S. 96, 115; Marks v. Anchor
Savings Bank, 252 Pa. St. 304, 310; Gloucester Bank y.
Salem Bank, 17 Massachusetts, 32; United States v. Cenr
iral National Bank, 6 Fed* Retp. 134; Solas v. United
States, 234 Fed. Rep. 842; United States v. Bank ef New
York, 219 Fed. Rep. 648, 640.
Mb. Jxjsticb McRsTNOiiDS delivered the opinion of
the court.
Plaintiff in error sued the defendant bank, at law, to
recover mon^ paid out under inistalre of fact. The comr
plaint alleged:
''First. That at all the times hereinafter mentioned, the
plaintiff was and is a corporation sovereign, and the
defendant was and is an association organised for and
transacting the business of banking in the dty, State, and
Southern District of New York, under and pursuant to the
provisions of the acts of Congress in such case made and
provided;
''Second. That on or about the 18th day of December,
1914, the defendant presented to the Treasurer of the
United States at Washington, D. C, for payment, a draft
in the sum of S3,571.47, drawn on the Treasurer of the
United States, payable to the order of E. V. Sumner, 2d
Lt., 2d Gav., A. Q. M.^ and purporting to be drawn by
E. v. Sumner, Acting Quartermaster, U. S. A., and to be
endorsed by E. V. Sunmer, 2d Lt., 2d Gav., A. Q. M., the
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UNITED STATES v. CHASE NATIONAL BANK. 491
485. Opmion of the Court.
Howard National Bank, and the defendant; a copy of said
draft and the indorsements on the back thereof is hereto
attached and marked Exhibit A,^ and made a part hereof;
' (Ex. A.) UfBce.]
QmCD OF THB QlTABTBBilABTKB.
Fort Ethan Allen,. Vermont.
War December
Quartermaster 15, 1914.
Thesaur Amer 444
(Shield) Treasura- of the United States 15-^1
Septent Sigfl.
Pky to the Older of E.V.Sumner,2dLt., 2d Cav., A. Q.M.. . .$3571.47
Thiriy-five hundred seventy-one & 47/100 dollars.
Object for which drawn: Vo. No. Cash transfers.
E. V. Sumner,
Acting Quartemmter, U. 8. A. nt7S9.
[Back.]
Form Approved by the
ComptroOer of the
Treasury
Januaiy 27, 1913.
This check must be indorsed on the line bdow tyy the person in
^ose favor it is drawn, and the name must be spelled exactly the same
as it is on the face of the check.
If indorsement is made by mark (X) it must be witnessed By ti7o
persons who can write, giving their place of residence in full
E. V. Sumner,
(Sign on this line)
idU.,2dCw.,AQM.
Vhj C!hase National Bank
New York, or Order,
Restrictive endorsements guaranteed.
Howard Nat'l Bank,
58^ Buriiiigton, Vt. 58-3,
M. T. Ruttes, Cashier.
Received payment from
The Treasurer of the United Stated
Dec. 16, 1914.
1-74 Tlie Chase National Bank 1-74
Of the City of New York.
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492 CX7IOBER TERM, 1919.
QimuGn of tiie Court. 2S2 U. S.
''Third. That at the date of the presentation of said
draft by the defendant to the Treasurer of the United
States, the defendant was a depository of the funds of
the United States of America, and payment of said draft
to the defendant was thereupon made by the plaintiff, by
passing a credit for the amount of said draft to the defend-
ant upon the accounts of* the def aidant, as depository for
the funds of the plaintiff ;
''Fourth. That the name of said E. V. Sumner, 2d Lt.,
2d Cav., A. Q. M., endorsed upon the back of said draft,
was forged and had been wrongfully and fraudulently
written upon the same by a person other than the said E.
V. Sumner, without his knowledge or consent, and no part
of the proceeds of said draft were ever received by him;
"Fifth. That the payment of said draft made by the
plaintiff to the defendant, as described in paragraph three
of this complaint, was made under a mistake of fact and
without knowledge that the signature of the said E. V.
Sumner, 2d Lt., 2d Cav., A. Q. M., payee thereof, had been
forged upon the back of said draft;
"Sixth. That the plaintiff has duly requested the
defendant to repay to it the amoimt of said draft, to wit,
$3,571.47, but the defendant has failed and refused to pay
the same or any part thereof to the plaintiff.
"Wherefore, the plaintiff demands judgment against
the defendant in the sum of $3,571.47, with interest
thereon from the 18th day of December, 1914, together
with the costs and disbursements of this action."
The bank denied liability and among other thingi^
claimed that the same person wrote the name E.. V. Smn-
ner upon the draft both as drawer and indorser. The facts
were stipulated.
It appears: Lieutenant Sumner, Quartermaster and
Disbursing Officer at Fort Ethan Allen, near Burlington,
Vermont, had authority to draw on the United States
Treasiurer. Sergeant Howard was his finance clerk and so
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UNITED STATES v. CHASE NATIONAL BANK. 493
485. OpimoQ of the Court
known at the Howard National Bank of Burlington.
Utilizing the official blank form, Howard manufactured
in Mo the draft in question— Esdiibit A. Having forged
Lieutenant Sumner's name both as drawer and indorser
he cashed the instrument over the counter at the Howard
National Bank without adding his own name. That bank
immediately indorsed and forwarded it for collection and
credit to tiie defendant at New York City; the latter
promptly presented it to the drawee (The Treasurer),
received payment and credited the proceeds as directed.
Two weeks thereafter the Treasurer discovered the forgery
and at once demanded repayment which was refused. Be-
fore discovery of the forgery the Howard National Bank
withdrew from the Qiase National Bank sums aggregating
more than its total balance immediately after such pro-
ceeds were credited; but additional subsequent credit
items had maintained its balance continuously above the
amount of the draft.
Both sides asked for an instructed verdict without more.
The trial court directed one for the defendant (241 Fed.
Rep. 535) and judgment thereon was affirmed by the
Circuit Court of Appeals. 250 Fed. Rep. 105. If impoiv
tant, the recOTd discloses substantial evidence to support
the finding necessarily involved that no actual negligence
or bad faith, attributable to defendant, contributed to
success of the forgery. WiUiams v. Vreeland, 250 U. S.
205, 298.
The complaint placed the demand for recovery solely
upon the forged indorsement — ^neither negUgwce nor bad
faith is set up. If the draft had been a valid instrument
with a good title thereto in some other than the collecting
bank, nothing else appearing, the drawee might recover as
for money paid under mistake. Hortvman v. Jienthaw^ 1 1
How. 177, 183. But here the whole instrumefit was forged,
never valid, and nobody had better right to it ttian the
collecting bank.
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491 OCTOBER TERM, 19ia
Olrinioo of the Court. 25217.8.
Price V. Nedl (1762) , 3 Burrow's, 1354, 1367, held that it
is incumbent on the drawee to know the drawer's hand and
that if the former pay a draft upon the latter's forged name
to an innocent holder not chai^eable with fault there can
be no recovery. * ' The plaintiff can not recover the money,
unless it be against conscience in the defendant to retain
it, " '^ But it can never be thought unconscientious in the
defendant, to retain this money, when he has once re-
ceived it upon a bill of exchange indorsed to him for a fair
and valuable consideration, which he had bona fide paid,
without the least privity or suspicion of any foi^ery."
And the doctrine so announced has been approved and
adopted by this court. Bank of United States v. Bank of
Georgia] 10 Wheat. 333, 348. Hoffman & Co. v. Bank of
Milwaukee, 12 Wall. 181, 192. Leather Manufacturere'
Bank v. Morgan, 117 U. S. 96, 109. United States v. Non
tianal Exchange Bank, 214 U. S. 302, 311.
In Bank of United States v. Bank of Georgia, through
Mr. Justice Story, this court said concerning Price v. Neal:
''There were two bills of exchange, which had been paid
by the drawee, the drawer's handwriting being a forgery;
one of these bills had been paid, when it became due, willi-
out acceptance; the other was duly accepted, and paid at
maturity. Upon discovery of the fraud, the drawee
brought an action against the holder, to recover back the
money so paid,^both parties being admitted to be equally
innocent. Lord Mansfield, after adverting to the nature
of the action, which was for money had and received, in
which no recovery could be had, unless it be against con-
science for the defendant to retain it, and that it could not
be aflSrmed, that it was unconscientious for the defendant
to retain it, he having paid a fair and valuable considera-
tion for the bills, said, ' Here was no fraud, no wrong; it was
incumbent upon the plaintiff to be satisfied, that the bill
drawn ui)on him was the drawer's hand, before he accepted
' or paid it; but [it] was not incumbent upon the defendant
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UNITED STATES v. CHASE NATIONAL BANK. 496
485. Opinion of the Court. '
to inquire into it. There was a n6;tice giveHiby the defend-
ant to the plainti£F, of k bill drawn upon him, and he sends
his servant to pay it, and take it up; the, other bill he
actually accepts, after which/ the d^endant, ^ocently
and bona fide, discounts it; the plaintiff lies by for a con-
siderable time after he has paid these bills, and then found
out that they were forged. Hemadenoobjectioiito'them/
at the time of paying them; whatever neglect there Was,
was on his side. The defendant had actual enco^iragement
from the plaintiff for n^otiating the second bill, from the
plaintiff's having, without any scruple or hesitation, paid
the first; and he paid the whole value &(ma)l(2e. Itisamis*
fortune which has happened without the defendant's
fault or neglect. If there was no neglect in the plaintiff,
yet there is no reason to throw off the loss from one inno-
cent man, upon another iimocent man. But, in this case,
if there was any fault or n^ligwce in any one, it certainly
was in the plaintiff, and not in the defendant.' The whole
reasoning of this case applies with full force to that now
before the court. In r^ard to the first bill, there was no
new credit giv^i by any acceptance, and the holder was in
possession of it, before the time it was paid or acknowl-
edged. So that there is no pretence to allege, that there
is any l^al distinction between the case of a holder before
or after the acceptance. Both were trcM^ted in this judg-
ment as being in the same predicament, and entitled to
the same equities. The case of Price v. Neal has never
since been departed from; and in all the subsequent
decisions in which it has heea cited, it has had the imiform
support of the court, and has been deemed a satisfactory
authority."
Does the mere fact that the name of Lieutenant Sum-
ner was forged as indorser as well as drawer prevent appUr
cation here of the established rule? We think not. In
order to recover plaintiff must show that the defendant
cannot retain the mon^ with good conscience. Both are
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496 OCTOBER TERM, 19ia
^Uabus. 2S2U.&
innocent of intentional fault. The drawee failed to detect
the forged signature of the drawer. The forged indorse-
ment puts him in no worse position than he would occupy
if that were genuine. He cannot be called upon to pay
again and the collecting bank has not received the proceeds
of an instrument to which another held a better title. The
equities of the drawee who has paid are not superior to
those of the innocent collecting bank who had full right to
act upon the assumption that the former knew the draw-
er's signatiu^ or at least took the risk of a mistake con-
cerning it. Bank of England v. Vagliano Bros., L. R. App.
Cas. [1891] 107; Dedham Bank v. Everett Banky 177
Massachusetts, 392, 395 ;Depa8it Bank v. Fayette Bank, 90
Kentucky, 10 ; National Park Bank v. Ninth National Bank,
46 N. Y. 77, 80; Howard v. Mississippi Valley Bank, 28 La.
Ann. 727; First National Bank v. MarahaUtown State Bank,
107 Iowa, 327; Stale Bank v. Cumberland Savings & Trust
Co., 168 N. Car- 606; 4 Harvard Law Review, 297, Article
by Ptof . Ames. And see, Cooke v. United States, 91 U. S.
389, 396.
The judgment of the court below is
Affirmed.
Mr. Jxjsncs Glabke diss^its.
BOEHMER t;. PENNSYLVANLl RAILROAD
COMPANY.
CSRTIORABI TO THE CIRCUrr COURT OF APPICALS FOR THB
SECOND CIRCUIT.
No. 191. Argued March 10, 11, 1020.— Decided April 19, 1920.
Section 4 of the Safety Appliance Act of 1893, in requiring grab irons
or handholds "in the ends and sides of each car," should be inter-
preted and applied in view of practical railroad operations, and does
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BOEHMER V. PENNSYLVANIA R. R. CX). 497
496. Opinion of the Court.
not mean that the handholds on the sides shall be supplied at all
four comers, but is satisfied if they are placed at comers diagonally
opposite. P. 498.
Whether a railroad company was n^^ligent in not notifying a brake-
man that a car was not supplied with handholds on its sides at all
four comers, held a matter dependent on appreciation of peculiar
facts concerning which this court will accept the concurrent judg-
ment of the two courts below without entering upon a minute analy**
sis of evidence. Id.
252 Fed. Rep. 553, affirmed.
The case is stated in the opinion.
Mr. Edwin C. Bmndehburg and Mr. Thomas A. SuUwan
for petitioner.
Mr. Frederic D. McKenney, with whom Mr. John
Spending Flannery was on the brief, for respondent.
Mr. Justice McReynoldb delivered the opinion of
the court.
Relying upcm the Federal Employers' Liability Act,
petitioner sought damages for personal injuries sustained
by him November 8, 1915, while employed by respondent
as brakesman. He claimed that the railroad was negligent
in using a freight car not equipped with handholds or grab
irons on all four outside comers; and also in failing to in«
struct hini that he would be required to work about cars
not so equipped. The car in question had secure and
adequate handholds on the diagonally opposite comers.
B^ng of opinion that this equipment sufficed to meet the
commands of the statute and that, under the circumstances
disclosed, failure to instmct the petitioner concemiog
possible use of such car did not constitute negligence, the
trial court directed verdict for respondent.
The Circuit Court of Appeals affirmed the consequent
judgment. 252 Fed. R^. 553.
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498 OCTOBER l^BM, ISUL
UpinknoftiieCoipl SBU.IB.
Section 4 of tiie Safety Appluuiice Act of 1883 (27 Stat
iS31)V ^provides:
''That from'iand after the first day of July, eighteen
hundred and iunety-five, until otherWise ordered by the
Interstate Commerce Commission, it diall be imlawf ul for
any raihxMuf compitoy <o use any car in interatate com-
merce that is not provided with secure grab irons or hand-
holds in the ends and sides of each car for greater security
to men in coupling and uncoupling cars/'
Petitioner insists that the Act of 1893 was designed for
the safety of employees and specified grab irons or hand-
holds in tibie end and sides of each car as one of the essential
requirem^its. That while it did not specifically command
that these should be placed at all four comers, this was the
obvious intent. But the courts bdow concurred in reject-
ing that construction, and we cannot say th^ erred in so
doing. Section 4 must be interpreted and applied in view
of practical railroad operations; and having considered
these the courts below ruled against petitioner's theory.
Likewise we accept the concurrent judgm^it of the
lower courts that the carrier was not negligent in failing to
give warning concerning the use of cars with handholds
only at two diagonal comers. Whether this constituted
negligence depended upon an appreciation of the peculiar
facts presented, and the rule is well settled that in such
circumstances where two courts have agreed we will not
enter upon a minute analysis of the evidence. Chicago
JuncHon Ry. Co. v. King, 222 U. S. 222.
The judgment is
Affirmed.
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MUNDAY V. WISCONSIN TRUST 00. 499
Aigument for Fbuntiffs in Bmv.
MUNDAY, TRUSTEE, ET AJ.. v. WISCONSIN TRUST
COMPANY ET AL.
BBBOB..T0' THB ST7PBEME COURT OF THB QTATE OF
WISCOI^SIN.
No. 288. Argued Mareh 25, ig20.--Decided Aprfl 19, 1920.
Whether a state statute is infended to validate a contract previously
unenforceable under the state law is for the state courts finally to
decide and involves no federal question. P. 502.
As applied to transactions subsequent to its enactment, a state law
providing that conveyances of local realty takei\ by sister^tate
corporations before they have filed their articles with the local
secretary of state shall be wholly vo?d on behalf of them or their
assigns, violates neither tihe contract clause nor the due process
clause of the Fourteenth Amendment. P. 503.
The power of the State to exact such coniditions dt outside corpora-
tions precedent to acquisition of land within the State, and th^ rule
that conveyances are governed by the lex lod rei siUe, are not af*
fected by delivery of the deeds, etc., in another State; the
transaction does not thus become a matter of interstate com-
merce. Id,
168 Wisconsin, 31, affirmed.
The case is stated in the opinion.
Mr. Walter Backrach, Mr. HamiUon Moses and
Mr. Thomas M. Kearney ^ for plaintiffs in error, sub-
mitted:
Under § 1770b, and more particularly subHsection 10
thereof, both as written, and as construed by the Supreme
Court of Wisconsin prior to the making of the contract
and the execution and delivery of the deeds in controversy,
such deeds were merely voidable and not void. Such
statute as now administered and enforced against plain-
tiffs in error by the Supreme Court of Wisconsin, so as to
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600 OCTOBER TERM, 1919.
Azgument for Plaintiffs in Enor. 2S2 U. CL
render such deeds absolutely void, impairB the obligation
of such contract and deeds and deprives plaintiffs in
error of their property without due process of law. Myles
Salt Co. v. Iberia Drainage District, 239 U. S. 478; Mackay
Telegraph Co. v. LitOe Rock, 250 U. S, 94, 98; Kaukauna
Co. v. Green Bay, etc., Canal Co., 142 U. S. 269; MuhJker v.
New York & Harlem R. R. Co., 197 U. S. 544, 570; Sauer
v. New York, 206 U. S. 536, 549; Ohio Life Ins. Co. v.
DeboU, 16 How. 432; Gelpck^ v. Dubuque, 1 Wall. 206;
Douglass v. Pike County, 101 U.S. 687.
Section 1770b, and more particularly subnaection 10 as
administered and enforced in the case at bar, so as to
render void the contract and deeds made and delivered
in Illinois, violates the due process clause of the Four-
teenth Amendment.
The judgment of the Supr^ne Court of Wisconsin in
declaring the deeds void and in refusing to give them
efficacy, notwithstandii^ the validating statute of 1917,
deprived plaintiffs in error of their property, without due
process of law in violation of the Foiurteent^ Amendment.
Chicago, Burlington A Quincy R. R. Co. v. Chicago, 166
U. S. 233, 234; St. Patd Gas Light Co. v. St. Paul, 181 U. S.
142, 147; Jefferson Branch Bank v. SkeUy, 1 Black, 436;
Louisiana Ry. & Nav. Co. v. New Orleans, 235 U. S. 164;
Mobile & Ohio Railroad v. Tennessee, 153 XT. S. 486;
Houston Ac. R. R. Co. v. Texas, 177 U. S- 77; McCtdUmgh
V. Virginia, 172 U. S. 109.
The legislature of Wisconsin, by the passage of the
amendatory Act of May 11, 1917, confirmed the title of
the Realty Ck>mpany, its grantee and successors in title,
and absolutely and unconditionaliy validated the title
theretofore attempted to be granted by the Trust Com-
pany and Robinson.
Mr. WiUiam E. Black, with whom Mr. John B. Sim^
mons was on the brief, for defendants in error.
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MUNDAY V. WISCONSIN TRUST 00. 601
499. Opinion of the Ccniit.
Mr. Justice MgRetnolds delivered the opinion of
the court.
The court below declared null and void two separate
deeds whereby defendants in error undertook to convey
to the Realty Realization Company, a Maine corporation,
certain land in Wisconsin upon the ground that the grantee
had failed to comply with the statute of the State prescrib-
ing conditions under which foreign corporations mig^t
acquire title to property therein. The deeds were dated
and delivered in Illinois February 28, 1913. A subsequent
deed from the Realty Company and a mortgage by its
grantee were also decla^ inefifective, but they need not be
separately considered here. 168 Wisconsin, 31.
At the time of the transactions in question the applicable
statutory provisions concerning foreign corporations were
subHsections 2 and 10 of § 1770b, Wisconsin Statutes, 1911,
which follow:
Sec. 1770b. '^2. No corporation, incorporated or organ-
ized otherwise than under the laws of this state, except
railroad corporations, corporations or associations created
solely for religious or charitable purposes, insurance
companies and fraternal or beneficiary corporations,
societies, orders and associations furnishing life or cas-
ualty insurance or indemnity upon the mutual or assess-
ment plan, shall transact business or acquire, hold, or
dispose of property in this state until such corporation
shall have caused to be filed in the ofiice of the secretary of
state a copy of its charter, articles of association or incor-
poration and all amendments thereto duly certified by the
secretaiy of state of the state wherein the corporation was
organized. . . .''
Sec. 1770b. *'10. . . . Every contract made by or
on behalf of any such foreign corporation, affecting the
personal liability thereof or relating to property within
this state, before it shall have complied with the provisions
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502 OCTOBER TERM, 1919.
Opinion oi the Court 262 U. S.
of this section, shall be wholly V9id on its behalf and on
behalf of its assigns, but shall be enforceable against it or
them."
The original proceeding Was instituted March 30, 1913.
While it was pending in the Circuit Court the Realty
Company complied with § 1770b and obtained a license to
do business and hold property in Wisconsin — October,
1915. On May 11, 1917, the legislature enacted c. 211,
Laws of 1917, which amended sub-section 1 of § 1770j of
the statute to read: .
''Any corporation organized otherwise than under the
laws of this state, having acquired, or attempted to ac^
quire, legal title by deed, or lease to any real property in
this state, before complying with the terms of section
1770b of the statutes, and which is now not required to
comply vriih aaid eection or which has thereafter, and be-
fore the passage of this section, complied with said section,
shall be and is hereby relieved from any disability pro-
vided in said statute or prohibition therein contained, so
far as said section relates to the acquisition and holding of
the property so acquired, or attempted to be acquired, and
the title so acquired, or attempted to be acquired, is
hereby confirmed."
Plaintiffs in error unsuccessfully challenged the validity
of § 1770b upon the ground of conflict with the contract
clause, § 10, Article I of the- Federal Constitution and the
due process clause of the Fourteenth Amendment. They
further insisted that if § 1770j as amended by c. 211, Laws
' o[^ 1917,. was apt so apiflied as to validate the deeds in
question, rights, privileg^es and immunities guaranteed
toi them by the Fourteenth Amendment would be in-
fringed/
Obviously, no impairment of any federal right resulted
from the construction placed upon § 1770j as amended in
1917. Whether that section did or did not validate a con-
tract theretofore unenforceable was a question for the
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MUNDAY V. WISCONSIN TRUST CO. 603
499. Opinion <tf the Court
state court finally to decide — ^it involved no right under
the Constitution or laws of the United States.
Section 1770b was enacted prior to the transactions here
in question and the settled doctrine is that the contract
clause applies only to legislation subsequent in time to the
contract alleged to have been impaired. Cross Lake
ShoaHng & Fishing Clvh v. Louisiana, 224 U. S. 632, 639.
In support of the claim that sub-section 10, § 1770b as
construed by the coiui; below conflicts with the due process
clause it is said: ''The contract between the defendants in
error and the Realty Company, and the deeds delivered in
compliance therewith were aU made in Illinois They
have been declared void in the State of Wisconsin. So
applied the statute deprives plaintiffs in error of their
property without due process of law. "
AUgeyer v. Louisiana, 165 U. S. 578, 591, is relied upon
as adequate authority to support the point presented; but
we think it is wholly irrelevant.
Where interstate commerce is not directly affected, a
State may forbid foreign corporations from doing business
or acquiring property within her borders except upon such
terms as those prescribed by the Wisconsin statute.
Fritts V. Palmer, 132 U. S. 282, 288; Chattanooga National
Building & Loan Association v. Denson, 189 XT. S. 408;
Interstate Amusement Co. v. Albert, 239 U. S. 560, 568.
No interstate commerce was directly involved in the
transactions here questioned. Moreover, this court long
ago. declared — ''The title to land can be acquired and lost
only in the manner prescribed by the law of the place where
such land is situated. " United States v. Crosby, 7 Cranch,
115, 116.
The judgment of the court below is
Afflrmed.
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604 OCTOBER TERM, 1919.
Aigumeat for Appellee. 8S2 U. EL
FIRST NATIONAL BANK OF CANTON, PENN-
SYLVANIA, V. WILLIAMS, COMPTROLLER OF
THE CURRENCY.
APPBAL FBOM THE DISTRICT COURT OF THE UNITED STATES
FOB THE BODDLE DISTRICT OF PENNSYLVANIA.
No. 618. Argued March 3, 1020.— Decided April 10, 1920.
A cause of action arises '^ under" the laws of the United States when
an appropriate statement by the plaintiff, unaided by any antici-
pation or avoidance of defenses, discloses that it really and substanr
tially involves a dispute or controversy respecting the validity, ooor
struction or effect of an act of Congress. P. 512.
A suit by a national bank to restrain the Ck>mptroller of the Currency
from alleged unlawful and malicious practices, wherein plaintiff's
right turns on construction and application of the National Banking
Law, is a suit to enjoin him under that law, within the intend-
ment of Jud. Code, §§ 24, 40, must be brought in the district where
the bank is established and may be maintained upon service made
elsewhere— in this case in the District of Columbia. P, 500.
260 Fed. Rep. 674, reversed.
The case is stated in the opinion.
Mr. John B. Stanchfieldf with whom Mr. M. J. Martin,
Mr. John P. Kelly, Mr. Charles A. Collin and Mr. Henry
P. Wolff were on the brief, for appeUant.
The Solicitor General and Mr. La Rue Brown, Special
Assistant to the Attorney General, with whom Mr. A. F.
Myers was on the brief, for appellee:
The District Court did not have jurisdiction of the
person of the defendant. He was not personally ser\^ed
in the Middle District of Pennsylvania. Service of process
outside the district in which suit is brought cannot be
had without express statutory authority. Winter v.
Koon, Schwarz & Co., 132 Fed. Rep. 273; Cely v. Oriffin,
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FIRST NATL. BANK v. WILLIAMS. 505
501. Aigument for Appellee.
113 Fed. Rep. 981; Toland v. Sprague, 12 Pet. 300; Green
V. Railway Co., 205 U. S. 530; Hughes, Federal Procedure,
264, 265. As the bill was origmally drawn against the de-
fendant individually, the servioe was insufficient, and no
amendment at the hearing oould cure the defect of the
original service.
There is no statute expressly authorizing the service
of process outside the district. Because a statute may
provide for the bringing of suit in a district other than
that in which the defendant resides, it does not follow
that the defendant may be served outside the district
in which suit is brought. Thus, § 51 of the Judicial Code,
providing that suits based alone on diversity of citizen-
ship may be brought in the place of residence of either the
plaintiff or the defendant, does not dispense with the
necessity for personal service in the district in which
suit is brought. Rose, The Federal Courts, § 239; see also
note to § 1033, Comp. Stats. 1916, vol. I, pp. 1154-1156. •
Any implication of authority to serve process outside the
district, in order to override the rule requiring express
statutory authority, would have to be so plain as to nega-
tive any contrary inference. United States v. Congress
Construction Co., 232 U. S. 199, is not inconsistent with
this view.
Sections 24 (16) and 49, Judicial Code, relate to in-
jimction proceedings brought under the national banking
laws. The only proceedings of that nature are those
provided by Rev. Stats., § 5237, — ^to enjoin proceedings
by the Comptroller on accoimt of an alleged refusal by a
bank to redeem its circulating notes. Tlie present suit
is not of that class. Section 380, Rev. Stats., merely pro-
vides for the conduct of cases specifically authorized by
the national banking act.
The District Court '^ did not have jiuisdiction of the
subject-matt^ of the suit. Jurisdiction was not conferred
by §5198, Rev. Stats. The proviso to that section
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6M^ OCTTOBER TERM, 1919.
Ai^SiAneiit for AjipeDee. 262 U* S,
(added by the Act of February 17, 1875) is m no
a reSnactment of § 57 of the Act of 1864; it is not general
in scope/ but only confers jurisdiction in the cases against
nationaUbanks in cases arising under the national bank-
ing act. The interpretation placed on § 57 of the Act
of 1864 in Kennedy v. Gibson, 8 Wall. 498, has no applica-
tion to §5198. QeePirstNaa. Bank cfChoarlotter. Mar-
^an, 132X1.8.141,143.
Nor was jiuisdictibn of the subject-matter conferred
by § 24 (16X o^ the Judicial Code, derived from § 57
of the Act of 1364; Rev. Stats., § 629 (10), (11). The
contention thai; as the. words ''or any receiver acting
under his dkiection, as provided by said title," first ap-
peared in Rev. Stats., § 629, the closing words ''as pro-
vided by said title" must be construed as applicable only
to the preceding portion of the new clause, and that there-
fore the District Court, under said section, has juorisdic-
tion of aU suits to ^oin the Comptroller, and not merely
suits "as provided by said title," is imtenable. The
section is expressly^limited to suits brought by national
banks "under the provisions of title 'National Banks,'
Revised Statutes." Furthermore, Rev. Stats., § 629,
was expressly repealed by the Judicial Code, § 297. If
provision for receivers acting under the direction of the
Comptroller had first been made in the Revised Statutes,
it might with some force be argued that the words "as
provided by said title" referred only to the preceding
words. But such is not the case. See §§ 26-29, Act of
1863, and §§ 47-^, Act of 1864. As above pointed out,
the only provision of "said title" for suits against the
Comptroller is contained in § 5237.
The contentions here made by complainant were for
the most part adversdy decided in Van Antwerp v. Hvl-
burd, 7 Blatchf . 426, which has never been overruled or
questioned. That case shows conclusively that §§24
(16) and 49, Jud. Code, and § 380, Rev. Stats., (all of
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PIBST NATL. BANK v. WILLIAMS. 607
£04. AigomeEit for AppeOee.
which were derived from the Act of 1864) cannot be relied
upon to.give the court below jurisdiction over the subject-
matter of this suit or to authorize it to serve process out-
side of the Middle District of Pennsylvania.
This suit is one between citizens of different States
and involves federal questions.^ It cannot, therefore, be
maintained in the Middle District of P^uisylv&nia. It is
not a suit for a statutory injunction under § 5237^ Rev.
Stats., and jurisdiction, cannot therefore be maintained
under §§ 24^(16) and 49 of the Judicial Code. If juris-
diction is to be maintained at all, it must be under §§>^24
(1) and 51 of the Judicial Code. Except in suits for statu-
tory injunctions, national banks have no greater rights
than otiier citizens in the matter of suii^ in the federal
courts, and, where federal jiuisdiction is" based upon di-
versity of citizenship only, the defendatit must be foimd
and served within the district where m&h. suit is brought.
But § 51 cannot be. invoked as authority for the court's
jurisdiction; the jurisdiction is not founded only on di^
verse citizenship but federal questions also are involved,
— ^the court is called upon to determine the Comptroller's
powers under Rev. Stats., §§ 5211, 5213, 5240.
Where a suit involves federal questions in addition to
diversity of citizenship, it can only be brought in the dis-
trict of the residence of the defendant. This suit could not,
therefore, be maintained in the Middle District of Penn-
sylvania, even though personal service had been effected
upon the defendant. See Macon Grocery Co. v. Atlantic
Coast Lin£, 215 U. S. 501; Male v.. Atchieon Ac. Ry. Co.,
240 U. S. 97, 102i Cound v. Atchison, Topeka & Santa
Fe Ry. Co., 173 Fed. Rep. 527; Memphis v. Board 7>f
Directors, 228 Fed. "Rep. 802; Whittaker v. lUinois Cen^
tral R. R. Co., 176' Fed. Rep. ISO^^underland'y.Cfiicago
ike. Ry. Co., 158 Fed. Rep. 877; SmUh v. Detr(rU &c.
R. R. Co., 175 Fed. /Rep. 606; NeweU v. Baltimore &c.
R. R. Co., 181 Fed. Rep. 698.
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508 OCTOBER TERM, 1910.
Opinion of the Goait. 2S2 U. S.
The defendant did not waive objection to the defective
service by interposmg a second motion to dismiss after the
preliminary motions made on the special appearance had
been denied.
Mb. JxjsncB McItirrNOu>B delivered the opinion of
the court.
Appellant, whose place of business is within the Middle
District of Pennsylvania, brought this suit in the United
States District Court for that District, seeidng an injunc-
tion to prevent John Skdton Williams, Comptroller of the
Currency, from doing certain things under color of his
office declared to be threatened, unlawful, arbitrary and
oppressive.
The bill alleges that, in order to injure complainant's
president, towards whom be entertained personal ill will,
the Comptroller determined to destroy its business and to
that end he had maliciously persecuted and oppressed it
for three years, in thi3 following ways among others: By
often demanding special reports and information beyond
the powers conferred upon him by law; by disclosing
confidential and official information concerning it to banks.
Members of Congress, representatives of thcipress, and the
public generally; by inciting litigation against it and its
officers; by publishing and disseminating false statements
charging it with xmlawful acts and improper conduct and
reflecting upon its solvency; and by distributing to deposi-
tors, stockholders and others alarming statements in-
tended to aflfect its credit, etc., etc. And further that,
unless restrained, he would continue these and similar
malicious and oppressive practices. ^
Williams is a citizen of Virginia, officially stationed at
Washington. He was not smnmoned while in the Middle
District of Pennsylvania, but a subpoena was served upon
him in Washington by the United States marshal. Having
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FIRST NATL. BANK v. WILLIAMS. 509
8M. Opinion of the Court.
speciaDy appeared he successfully challenged the jurisdic-
tion of the court; and the cause is here upon certificate to
that effect.
Generally, a District Court cannot acquire jurisdiction
over an individual without service of process upon him
while in the district for which it is held. But here a na*
tional bank seeks to enjoin the Comptroller, and the claim
is that by statutory direction the proceeding must be had
in the district where the association is located and not
elsewhere. The court below took the contrary view. 260
Fed. Rep. 674.
Determination of the matter requires consideration of
three sections of the Judicial Code.
"Sec. 24. The district courts shall have original jmis-
diction as follows: . • •
"Sixteenth. Of all cases commenced by the United
States, or by direction of any officer thereof, against any
national banking association, and cases for winding up the
affairs of any such bank; and of all suits brought by any
banking association established in the district for which
the court is held, under the provisions of title 'National
Banks,' Revised Statutes, to enjoin the Comptroller of the
Currency, or any receiver acting under his direction, as
provided by said title. And all national banking associa-
tions established under the laws of the United States shall,
for the purposes of all other actions by or against them,
real, personal, or mixed, and all suits in equity, be deemed
citizens of the States in which they are respectively lo-
cated."
"Sec. 49. All proceedings by any national banking
association to enjoin the Comptroller of the Currency,
under the provisions of any law relating to national bank-
ing associations, shall be had in the district where such
association . is located.''
• VSec. 51. Except as provided m the five succeeding
sections, no person shall be arrested in one district for trial
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610 OCTOBER TERM, 1010.
Opiiiion of the Ccniit. VOTJ.8.
in another, in any civil action before a district court; and,
eKcq>t as provided in the six succeeding sections, no civil
suit shall be brought in any district court against any per-
son by any original process or proceeding in any other
district than that whereof he is an inhabitant; but where
the jurisdiction is founded only on the fact that the action
is between citisens of different states, suit shall be broue^t
only in the district of the residence of either the plaintiff or
the defendant/'
If {§ 24 and 40 properly construed restrict this proceed-
ing to the district where the bank is located, they dispbce
{ 61 pro tanto and authorise service of process upon defend-
ant wherever found. United States v. Cangreae Conebruc-
turn Co., 222 V. S. 100, 203.
It is said for appellee that both §§ 24 and 40 relate to in-
junction proceedings brouji^t under the National Banking
Law— such proceedings as are thereby expressly author-
ised and no others. And further that such law only
authorizes suit by a bank to enjoin the Comptroller when
he undertakes to act because of its alleged refusal to re-
deem circulating notes. Rev. Stats., § 5237.
The Act of February 25, 1863, establishing National
Banks, c. 58, 12 Stat. 665, 681—
''Sec. 60. And be it further enacted^ That suits, actions,
and proceedings by and against any association under this
act may be had in any circuit, distoict, or territorial court
of the United States held witiiin the district in which
such association may be established. "
An Act to provide a National Currency, secured by a
Pledge of United States bonds, approved June 3, 1864, c.
106, 13 Stat. 00, llfrT-
''Sec. 57. And he it further enacted^ That suits, actions,
and proceec^ngB, against any association under this ak^t,
Biay be had in any circuit, district, or territorial court oif
the Ujuted States held within the district in which such
ai^jBociation may be established; or in any state, county, or
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FIRST NATL. BANK v. WILLIAMS. 611
501. Qixiiiioii of the Court.
municipal court in the oounly or dly in which said associa-
tion is located, having jurisdiction in similar cases: Pro-
vided, however, That all proceedings to enjoin the comp-
troller under this act shall be had in a circuit, district, or
territorial court of the United States, held in the district
in which the association is located. '^
InKennedyy. Gibson (1869)^ 8 Wall. 498, 606, this court
ruled that § 67 should be construed as if it read, **And be it
further enacted, That suits, actions, and proceedings, by
and against,'' etc., the words '^by and" having been
accidentally omitted. ''It is not to be supposed that
Congress intended to exclude associations ham suing in
the courts where they can be sued." ''Such suits may still
be brought by the associations in the courts of the United
States." And it further held, "that receivers also may
sue in the courts of the United States by virtue of the act,
without reference to the locality of their personal citizen-
ship."
The Revised Statutes—
"Sec. 629. The circuit courts shall have original juris-
diotion as follows: . . .
"Tenth. Of all suits by or against any banking associa-
tion established.in the district for which the court is heiu,
under any law providing for national banking associations.
"Eleventh. Of all suits brought by [or against] any
banking association established in the district for which
the court is held, under the provisions of Title 'The
National Banks,' to enjoin the Comptroller of the Cur-
rency, or any receiver acting under his direction, as pro-
vided t)y said title."
"Sec. 736. All proceedings by any national banking
association to enjoin the Comptroller of the Currency,
under the provisions of any law relating to national bank-
ing associations, shall be had in the district where such an
association is located."
Parts of the foregoing sub-sections 10 and 11 were
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512 OCTTOBER TERM, 1919.
Syllabus. 252 D. S.
joined in sub-section 16, § 24, and § 736 became § 49,
Judicial Code.
What constitutes a cause arising ''under" the laws of
the United States has been often pointed out by this court.
One does so arise where an appropriate statement by the
plaintiff, imaided by any anticipation or avoidance of
defeases, discloses that it really and substantially involves
a dispute or controversy respecting the validity, construc-
tion or effect of an act of Congress. If the plaintiff thus
asserts a ri^t which will be sustained by one construction
of the law, or defeated by another, the case is one arising
tinder that law. Tennessee v. Union & Planters' Bank, 152
XT. S. 454; Boston A Montana Mining Co. v. Montana Ore
Purchasing Co., 188 U. S. 632; Deirine v. Los Angeles, 2Q2
U. S. 313; Taylor v. Anderson, 234 U. S. 74; Hopkins v.
Waiker, 244 U. S. 486, 489. Clearly the plaintiff's biU
discloses a case wherein its right to recover turns on the
construction and application of the National Banking
Law; and we think the proceeding is one to enjoin the
Comptroller under provisions of that law within the true
intendment of the Judicial Code.
The decree below must be
Reversed.
BURNAP V. UNITED STATES.
APPSAL FROM THE COURT OF CLAIMS.
No. 228. Argued Mardi 12, 1020.— Decided April 19, 1920.
The power to remove from public office or employment is, in the
absence of any statutory provision to the contrary, an incident of the
power to appoint, and the power to suspend is an incident of the
power of removal. P. 515. ^
In § 169, Rev. Stats., which authoiizes each "head of a D^Mutment"
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BURNAP V. UNITED STATES. 618
512. Counsel for Appellant.
to employ clerkB, messengers, laborers, etc., and other onployees,
"head of a Department" means the Secretaiy in charge of a great
division of the executive branch, who is a member of the Cabinet,
and does not include heads of bureaus or lesser divisions. P. 515.
The term "employ" as thus used is the equivalent of appoint. Id,
The terms "clerks" and "other employees," as used in Rev. Stats.,
S 169, include persons filling positions which require technical skill,
teaming and professional training. Id.
Whether the incumbent is an officer or an employee is determined by
the manner in which Congress has specifically provided for the crea-
tion of the several positions, their duties and appointment thereto.
P. 516.
Althou^ the Office of Public BuikUngB and Grounds is part of the
bureau of the Chief of Engineers, in the War Department, appoiut-
ment of a landscape architect (whose employment is authorized by
general appropriation acts) is not to be made by the Secretary of
War under the general authority of Rev. Stats., § 169, but by the
Chief of Engineers, under the specific authority given him by § 1799,
to employ in such office and in and about the public buildings and
grounds under his control such persons as may be appropriated for
from year to year. Id.
The power to remove such landscape architect is with the Chief of
Engineers as an incident of the power of appointment, and is not
affected by the fact that the appointment, acquiesced in by the Chief
of Engineers, was made without authority by the Secretary. P. 518.
. In the absence of regulations prescribed by the President through the
War Departm^t under Rev. Stats., § 1797, and assuming the reg-*
ulations governing the classified Civil Service as applied to the En-
gineer Department at large do not affect the Office of Public Build-
ings and Grounds, the power of the Chief of Engineers to remove
the landscape architect is to be exercised in the manner prescribed
by the Act of August 24, 1912, c. 389, § 6, 37 Stat. 555, and Civil
Service Rule XII. P. 519.
The landscape architect in the Office of Public Buildings and Grounds
is not an officer but an employee. Id.
53 Ct. Chns. 605, affirmed.
The case is stated in the opinion.
Mr. George A. King, with whom Mr. WiUiam B. King
and Mr. WiUiam E. Harvey were on the brief; for appel-
lant.
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614 OCTOBER TERM, 1919.
Opinkm of the Court 2S2 U. 8.
Mr. Amdavi Attorney, General Davis, with whom Mx,
Harvey D. Jacob was on the brief, for the United States.
]Vf R. JusncB BRAin>Ei8 delivered the opinion of the
court
On July 1, 1910, Bumap entered upon duty in the Office
of Public Buildings and Grounds as landscape architect at
the salary of $2400 a year, having been appointed to that
position by the Secretary of War. On September 14, 1915,
he was suspended, upon charges, from duty and pay; and
on August 3, 1916, he was discharged ''in order to promote
the efficiency of the service." His successor was not
appointed imtil July 20, 1917. Bumap contends that his
suspension and discharge were illegal and hence inopersr
tive; that he retained his position until his successor was
appointed; and that until such appointment he was en-
titled to his full salary. United States v. Wickeraham, 201*
U. S. 390. His claun for such salary was rejected by the
Auditor of the War Department (of which the Office of
Public Buildings and Groimds is a part), and, upon appeal,
also by the Ck>mptroller of the Treasury. Then this suit
was brought in the Court of Clauns. There his petition
was dismissed and the case comes here on appeal.
Bumap rests his claim mainly upon the fact that he was
appointed by the Secretary of War, contending that, there-
fore, only the Secretary of War could remove him (21 Ops.
Atty. Gen. 355), and that no action tantamount to a re-
moval by the Secretary was taken \mtil his successor was
appoint^. Before discussing the nature and effect of the
action taken, it is necessary to consider the general rules of
law governing appointment and removal in the civil service
of the United States, the statutes relating to the Office
of Public Buildings and Grounds, and those providing for
the appointment of a landscape architect therein.
First. The Constitution (Art. H, § 2) tonfers upon the
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BURNAP tr. UNITED STATES. 515
512. Opinion of the Oonrt.
Preddeiit the power to nominate^ and with the advice and
consent of the Senate to appoint, certain officers named
and all other officers established by law whose appoint-
ments are not otherwise therein provided for; but it
authorizes Congress to vest the appointment of inferior
officers either in the President alone, in the courts of law
or in the heads of departmenta (6 ()ps. Atty. Gen. 1). The
power to remove is, in the absence of statutory provision
to the contrary, an incident of the power to appoint. Ex
parte Hennen, 13 Pet. 230, 259, 260; Blakev. United States,
103 U. 8. 227, 231; United States v. AHred, 155 U. S. 591,
594; Keith v. United States, 177 TJ. S. 290, 293, 294; Reagan
V. United States, 182 U. S. 419, 426; SkurHeff v. United
States, 189 TJ. S. 311, 316. And the power of suspension is
an incident of the power of r^noval.
Section 169 of the Revised Statutes provides that:
''Eachliead of a Department is authorized to employ in
his Dq)artment such number of clerks of the several classes
recognized by law, and such messengers, assistant messen-
gers, copyists, watchmen, laborers, and other employ^,
and at such rates of compensation, respectively, as may
be appropriated for by Congress from year to year. "
The term head of a Dei>artment means, in Hub connec-
tion, the Secretary in charge of a great division of the
executive branch of the Government, Uke the State,'
Treasury, and War, who is a m^nber of the Cabinet. It
does not include heads of biureaus or lesser divisions.
United States v. Germaine, 99 TJ. S. 508, 510. Persons
employed in a bureau or division of a department are
as much ^nployees in the department within the meaning
of § 169 of the Revised Statutes as clerks or messengers
rendering service imder the immediate supervision of the
Secretary. Manning's Case, 13 Wall. 578, 580; United
States V. Ashfidd, 91 U. S. 317, 319. The term employ is
used as the equivalent of appoint. 21 Ops. Atty. Gen.
355> 356. The term clerks and other employees, as there
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616 OCTOBER TERM, 1919.
Opmion of the Court 252 IT. S.
used, is sufficiently broad to include persons filling posi-
tions which require technical skill, learning and profes-
sional training. 29 Ops. Atty. Gen. 116, 123;2lOps. Atty.
Gen. 363, 364; 20 Ops. Atty. Gen. 728. The distmction
between officer and employee in this connection does not
rest upon differences in the qualifications necessary to fill
the positions or in the character of the service to be per-
formed. Whether the incumbent is an officer or an em-
ployee is determined by the^manner in which Congress has
specifically provided for the creation of the several posi-
tions, their duties and appointment thereto. 15 Ops. Atty.
Gea. 3; 17 Ops. Atty. Gen. 532; 26 Ops. Atty. Gepi. 627; 29
Ops. Atty. Gen. 116; United States v. HartweU, 6 Wall. 385;
United States v. Moore, 95 U. S. 760, 762; United States v.
Perkins, 116 U. S. 483; United States v. Mauat, 124 U. S.
303; United Stales v. Hendee, 124 U. S. 309; United States
V. Smith, 124 U. S. 525; Auffmordt v. Hedden, 137 U. S.
310; United States v. SchlierhoU, 137 Fed. Rep. 616;
Martin v. United States, 168 Fed. Rep. 198.
Second. The powers and duties of the Office of Public
Buildings and Grounds had their origin in the Act of July
16, 1790, c. 28, 1 Stat. 130, which authorized the President
to appoint three Commissioners to lay out a district for the
permanent seat of the Government. By Act of May 1,
1802, c. 41, 2 Stat. 175, the offices of Commissioners were
aboUshed and their duties devolved upon a Superintend-
ent, to be appointed by the President. By Act of April 29,
1816, c. 150, 3 Stat. 324, the office of Superintendent was
abolished and hjs duties devolved upon a Commissioner of
PubUc Buildm^ By Act of March 2, 1867, c. 167, § 2,
14 Stat. 466, the office of Conmiissioner was abolished and
his duties devolved upon the Chief of Engineers. By
§ 1797 of the Revised Statutes as amended by Act of April
28, 1902, c. 594, ^2 Stat. 152, it is declared that the Chief
of Engineers has ''charge of the public buildings and
grounds in the District of Columbia, \mder such r^ula-
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BUKNAP V. UNITED STATES. 617
512. OpinkmoftheGaart
tioDS as may be prescribed by the President, through the
War Department." And § 1812 requires the Chief of En-
gineers, as Superintendent of Public Buildings and Grounds,
to submit annual reports to the Secretary of War to accom-
pany the annual message of the President to Congress.
Third. There is no statute which creates an office of
landscape architect in the Office of Public Buildings and
Grounds nor any which defines the duties of the position.
The only authority for the appointment or employment of
a landscape architect in that office is the legislative, execu-
tive, and judicial appropriation Act of June 17, 1910, c.
297, 36 Stat. 504 (and later appropriation acts in tho^same
form, 36 Stat. 1207; 37 Stat. 388, 766; 38 Stat. 482, 1024;
39 Stat. 93), which reads as follows:
" Public BxnLDiNas and Groxtnds.
'^Office of Public Buildings and Groimds: Assistant
Engineer, two thousand fom- himdred dollars; assistant
and chief clerk, two thousand fom- hundred dollars; clerk
of class four; clerk of class three; clerk And stenographer,
one thousand fom- hundred dollars; messenger; landscape
architect, two thousand four hundred dollars; surveyor,
and draftsman, one thousand five hundred dollars; in all^
fourt-een thousand three hundred and forty dollars.?
(Tlien follow the foremen and night and day watchmen in
the parks.)
Prior to July 1, 1910, similar appropriation acts had
provided for a ''landscape gardener'' at the same salary.
There is no statute which provides specifically by whom
the landscape architect in the Office of Public Btdldings
and Grounds shall be appointed. As the Office of Public
Buildings and Grounds is a part of the bureau of the Chief
of Engineers, and that biu-eau is in the War D^artment,
the Secretary of War would, under § 169, have the power*
to appoint the landscape architect as an employee in his
department, in the absence of other provision deeding with
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518 OCTOBER TERM, 1918.
Opinion of the Court 382n.&
the subject. 21 Ops. Atty. Gen. 365. But § 1799 <rf the
Revised Statutes provides that:
''The Chief of Engineers in charge of public buildings
and grounds is authorised to employ in his office and about
the public buildings and grounds under his control such
number of persons for such employments, and at such rates
of compensation, as may be appropriated for by Congress
from year to year.''
This more specific provimon excludes poBiti6ns in the
office of Public Buildings and Grounds from the operation
of the gsneral provision of § 169 conferring the power of
appafaotment upon the heads of departments. Compare
10 Dec. of Comptroller of Trees. 577, 583. The i^point-
nient of Bumap by the Secretary of War, instead of l^ the
Chief of Engineers, was without authority in law.
Fourth. As the power to remove is an incident of the
power to appoint, the Chief of Engineers would clearly
have b^ power to remove Bumap, if the aj^intment had
been made by him instead of by the Secretary of War.
The fact that Burcap was, by inadvertence, ai^winted by
the Secretary, does not preclude the Chief of Engineers
from exercising in req)ect to him the general power to re-
move employees in his office conferred, by implication, in
§ 1799 of the Revised Statutes. The defect in Bumap's
original f^^intment was cured by the acquiescence of
the Chief of Engineers throu^out five years, so that
Bumap's status was better than that of a mere de facto
officer. But it was not superior to what it would have been
if he had been regularly f^ypcdnted by the Chief of Engine
eers. Untied Staies v. Mauat, 124 U. S. 303.
Fifth. The question remains, whether there was a legal
exercise by the Chief of Engineers of his power of removal.
The sucfpension of Bumap was by letter from his imme-
diate superior, the officer in charge of the Office of Public
TuildingB and Grounds under the Chief of Engineors; and
to the latter the papers were promptly transmitted. The
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BURNAP V, UNITED STATES. 619
612. Opinioii of the CkHirt
discharge was by direct command of the CShief of Engi-
neers. Both the suepension a&d the discharge purported
to be ordered pursuant to Paragraph 13 of § 5 of General
Orders Number 5 of the Office of Chief of En^^eers, 1915,
being regulations governing the classified Civil Service as
applied to the Engineer Department at Large, approved
by the Civil Service Commission and the Secretary of
War.^ Bumap contends that the provisions of that para-
graph were inapplicable to his position; (1) because these
regulations relate to the Engineer Department at Large
and the Office of Public Buildings and Grounds is not
included therem; and (2) because they relate to employees
and that the landscape architect was an officer, not an
emidpyee. As has been shown Bumap was an employee.
But the main contention is wholly inmiaterial. If Para-
graph 13 does not apply to the position of landscape
architect, the exercise of the right of r^noval which rested
in the Chief of Engineers was governed only by the pro-
visions of the Act of August 24, 1912, c. 389, § 6, 37 Stat.
556,' and Civil Service Rule XII. For no r^^tions
^Par. 13: ''Dificharge for Cause. — ^Diachaiige for cause of any
regular^ appointed classified employee wili be subject to the provisions
of Civil Service Rule XII and cannot be made without the approval oi
the Chief of Enjpneers. An employee may be suspended without pay -
hy iheofficer in charge, who should at once furnish the employee with a,
statement in writing of the charges against him and give him a reason-
able time within which to make answer thereto in writing. As soon as
reply is received, or in case no reply is received within the time givea
him, an papers should be submitted to the Chief of Engineers with
full statement of the facts in the case and the officer's recommenda-
tions."
* C. 389, § 6: "No person in the classified civil service of the United
States shall be removed therefrom except for such cause as will promote
the effioieni^ of said service and for reasons given in writint,', and the
person Trho&d removal is soui^t shall have notice of the same aM of
any charges preferred against him, and be furnished with a copy
thereof, and also be allowed a reasonable time for personally answering
the same in writing; and affidavits in support thereof; etc."
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520 OCTOBER TERM, 1910.
OfHiuoQ of the Ooint. 282 U. 8.
relating to the matter appear to have been '^prescribed
by the President, throu^ the War Department" under
the authority reserved in Revised Statutes, § 1797, as
amended. It is not contended that the procedure adopted
in suspending and removing Bumap disr^;arded any re-
quirement of the Act of 1912 or of the Civil Service Rule.
Nor are we asked to review the discharge as having been
made witiiout adequate cause. The power of removal was
l^ally exercised by the Chief of Engineers; and no irreg-
ularity has been pointed out in the suspension which was
incident to it.
Sixth. As the power of discharge was vested in the Chief
of En^eers and was mia£Fected by the fact that the
appointment had been inadvertently made by the Secre-
tary of War, we have no occasion to consider the conten-
tion of Bumap, that it was beyond the Secretary's power
to delegate to the Chief of Engineers authority to remove
employees ' in his bureau. Nor need we consider the
contention of the Gov^iunent, that the action taken was
tantamoimt to a removal by the Secretary, because the
discharge was ordered by the Chief of Engineers after
consideration of the matter at Bumap's request by the
Secretary of War, a reference of it by him to the Judge
Advocate General, and a return of the papers by the Secre-
tary of War to the Chief of Elngineers for action in accord-
ance with the Judge Advocate General's suggestions.
The judgment of the Court of Claims is
AffirmedL
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ONEIDA NAV. CORP. v. JOB & 00. 621
Opinion of the Court.
ONEIDA NAVIGATION CORPORATION, CLAIM-
ANT OF THE SAILING VESSEL *TERCY R.
PYNE, 2d." Ac. v. W. & S. JOB & COMPANY, INC.
APPEAL FBOM THE DISTRICT COUBT OF THE X7NITBD 8TATBB
FOB THE SOXTTHEBN DI8TBICT OF NEW TOBK.
No. 260. Argued March 10, 1020.— Decided April 19, 1020.
In a libel of a vbbbA for damage to cargo due to unseaworthinesB, the
owner and claimant, having answered denying liability, by leave
filed a petition to bring in another party as indemnitor. HM, that
a decree diamiRHing such petition was not appealabld by the chiimant
to this court in advance of any determination of tiie maih isnie
o! claimant's liability. A ease cannot be brought up pieoemeiil.
CMns V. Miiler, arUe, 304.
Appeal dismissed.
The case is stated in the opinion.
Mr. Geo. WhiUfield Betts, Jr.^ with whom Mr. Oeorge C.
Sprague was on the brief, for appellant.
Mr. Peter S. Carter, for appellee, submitted.
Mb. Justice Bbandeis delivered the opinion of the
court.
James W. Smith and another libelled the Schooner
Percy R. Pyne 2d in the District Court of the United
States for the Southern District of New York claiming
damages for injury to cargo resulting from unseaworttii-^
ness due to the cutting away of timbers and frame for the
installation of an auxiliary engine. The Oneida Naviga-
tion Company claimed the vessel as owner and answered
denying liabiUty. Then it filed, by leave of court, a
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622- OCTOBER TERM, 1910.
Opinioii of tiM Court 8620.8.
petition to bring in, under Admiralty Rule 15 of that court
in JEuialogy to Admiralty Rule 60 of this court, W. & 8. Job
& Co., Inc., as dafenduits, alleging them to be the party
througfh whose fault, if any, the damages complained of had
occurred, and that if liability should be established it would
be entitled to be indemnified by them. W. & S. Job &
Co., Inc., excepted to the petition and denied jurisdiction
on the ground that the petition did not set forth a cause of
action in admiralty. Their exception was sustained and
the petition was dismissed on that ground. The case
comes here by direct appeal, tiie District Judge having
certified the question of jurisdiction.
Tlie petition to make W. & S. Job & Co., Inc., party
d^endants was merely an inciden^i in the progress of tl^
case in the District Court. The liability of indemnitoTB
thereby sought to be enforced would in no event arise un-
less the vessel should be held liable. Hie petitioner had as
claimant denied liability in its answer to the libei and the
issue thus raised had not been tried. While the decree
difgniHRing the petition as to W. & S. Job & Co., Inc., was
final as to them, there was no decree disposing of the case
below. A case may not be brought here in fragments.
This court has jurisdiction under § 238 of the Judicial
Code, as imder other sections, only from judgments which
are both final and complete. CMins v. Miller, decided by
this court March 29, 1020, ante, 364; Hohant v. Hamburff'
American Padcet Co., 148 U. 8. 262. The case was not
ripe for appeal. Although the objection was not raised by
the ^>pellee, the appeal is
Diemieaedfar want ofjuriedietUm.
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PENN MUTUAL CX). v. LEDERER. 628
Opinioii of the CkHirt
PENN MUTUAL LIFE INSURANCE COMPANY v.
LEDERER, COLLECTOR OF INTERNAL REVE-
NUE,
CSBnORABI TO THB CUtCUlT COTTBT OF APPBAXJ9 FOR IBB
THIBD CIBC17IT«
No. 489. Argued Mareh 22, 28, 1020.— Dedded April 19, 1920.
The Ineome Tax Law of Oetober 3, 1913, e. 16, 38 Stat. 172, { n G. (b),
piovkieB that Ufe iDsuranoe companiee "ahaU Dot indude ae in
any jrear mieh portion of any actual premium received from any in-
dividual policyholder as shall have been paid back or credited to
sueh individual policyholder, or treated as an abatement (^ premium
of such individual policyholder, within such srear,'' and that "there
y be deducted from gross income • • • the sums other than '
dividends paid within the jrear on policy and annuity oontiaets.''
FeU, that money derived by a mutual company from redundancy
of premiums paid in previous years, and paid to polipsrfaolderB dur-
ing the tax year as dividends in cash, not applied in abatement or
reduction of their current premiums, should not be deducted from
premium receipts in computing gross income. P) 527.
No aid m construing an act of Congress can be derived f ram the kgis-
lative history of another passed six yean later. P. 537. '
268 Fed. Rep. 81, afBimed.
The case is stated in the opinion.
Mr. Oeorge Wharton Pepper for petition'Sr.
Mr. Aseiekmt Attorney Oeneral Friersan {or respondent.
Mb. JusTiciB Bramdbis delivered th£ ppinion of the
court.
The Penn Mutual Life Insurance Company, a purely
mutual legal reserve company which issues level-premium
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S24 OCTOBER TERM, 1919.
Opnion of the Court. 262 U. 8.
insurance, brought this action in the District Court of the
United States for the Eastern District of Pennsylvania to
recover $6,865.03 which was assessed and collected as an
income tax of one per cent, upon the sum of $686,503,
alleged to have been wrongly included as a part of its
gross income', and hence also of its net income, for the
period from March 1, 1913, to December 31, 1913. The
latter sum equals the aggregate of the amoimts paid during
that period by the company to its policyholders in cash
dividends which were not used by them during that period
in payment of premimns. Tlie several amoimts making
up tiiis aggregate represent mainly a part of the so-called
redundancy in premiums paid by the respective policy-
holders in some previous year or /ears. Tliey are, in a
sense, a repayment of that part of Jie premium previously
pjtid which experience has proved was in excess of the
amoimt which had been assumed would be required to
meet the policy obligations (ordinarily termed losses) or
the legal reserve and the expense of conducting the busi-
ness.' The District Court allowed recovery of the full
amount with interest. (247 Fed. Rep. 559.) The Circuit
Court of Appeals for the Third (Circuit, holding that
nothing was recoverable except a single small item, re-
versed the judgment and awarded a new triaL (258 Fed.
Rep. 81.) A writ of certiorari from this court was then
aUowed. (260 U. S. 666.)
Whether the plaintiff is entitled to recover depends
wholly upon the construction to be given certain provi-
sions in § II G. (b) of the Revenue Act of October 3, 1913,
c. 16, 38 Stat. 114, 172, 173. The act enumerates among
^ The manner in which mutual level-premium life insurance com-
pam'es conduct their business, and the nature and application of
dividends are fully set forth in MtUtial Benefit Life Ins. Co. v. HerM,
198 Fed. Rep. 199; Connecticut General Life Ins. Co. v. Eaton, 218
Fed. Rep. 188; dnmecUad Mviual Life Ins. Co. v. Eaton, 218 Fed.
Rep. 206.
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PENN MUTUAL CO. v. LEDERER. 626
623. Opinion of the Court.
the corporations upon which the income tax is imposed,
''every insurance company'' other than ''fraternal
beneficiary societies, orders, or associations operating
under the lodge system or for the exclusive benefit of the
members of a fraternity itself operating under the lodge
system." It provides (G. (b) pp. 172-174) how the net
income of insurance companies shall be ascertained for
purposes of taxation, prescribing what shall be included
to determine the gross income of any year, and also
specifically what deductions from the ascertained gross
income shall be made in order to determine the net income
upon which the tax is assessed. Premium receipts are a
part of the gross income to be accounted for.
In applying to insiuimce companies the system of in-
come taxation in which the assessable net income is to be
ascertained by making enumerated deductions from the
gross income (including premium receipts) Congress
natm-ally provided how, in making the computation,^
repayment of the redimdancy in the premium should be
d^t with. In a mutual company, whatever the field of its
operation, the premium exacted is necessarily greater than
the expected cost of the insurance, as the redundancy in
the premium fiunishes the guaranty fund out of whi(;h
extraordinary losses may be met, while in a stock company
they may be met from the capital stock subscribed. It is
of tiie essence of mutual insurance that the excess in the
premium over the actual cost as later ascertained shall l^e
returned to the policyholder. Some payment to tiie
^The percentage of the redundancy to the premium varies, fn>m
year to year, greatly, in the several fields of insurance, and likewise in
the same year in the several companies in the same field. Where the
margin between the probable losses and those r^isonably possible is
very large, the return premiums rise often to 00 per cent, or more of 1 he
premium paid. Tins is true of the manufacturers' mutual fire insuraiice
companies of New England. See Report MassaohuBetts Insurance
Comnussioner (1913), vol. I, p. 16.
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626 OCTOBER TERM, IQlQi
Opimoii of the Court 282 IT. 8.
policyholder representing such excess is ordinarily made
by every mutual company every year; but the so-caUed
repayment or dividend is rarely made within the calendar
year in which the premium (of which it is supposed to be
the unused surplus) was paid. Congress treated the so-
called repayments or dividends in this way (p. 173) :
(a) Mutual fire companies ''shall not return as income
any portion of the premium deposits returned to thdr
policyholders.''
(b) Mutual marine companies ''shall be entitled to
include in deductions from gross income amounts repaid to
policyholders on accoimt of premiums previously paid by
them and interest paid upon such-amounts between the
ascertainment thereof and the payment thereof. ''
(c) life insurance companies (that is both stock and
strictly mutual) "shall not include as income in any year
such portion of any actual premium received from any
individual policyholder as shall have been paid back or
credited to such individual policyholder, or treated as an
abatement of premium of such individual policyholder,
within such year."
(d) For all insurance companies, whatever their field of
operation, and whether stock or mutual, the act provides
that there be deducted from gross income "the net addi-
tion, if any, required by law to be made within the year to
reserve fimds and the sums other than dividends paid
within the year on policy and annuity contracts.''
The Government contends, in substance, for the rule
that in figuring the gross income of life insurance conv-
panies, there shall be taken the aggregate of the year's net
prenuum receipts made up separately for eac^ policy-
holder.^ The Penn Mutual. Company contends for the
^ A separate aooouDt Is kept by the eompany with each poliiTfaolder.
In that account there is entered each jrear the charges of the premiums
payable and aO credits either for cash payments or by way of credit of
dividends, or by way oi abatement of piemium.
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PENN MUTUAL CO. i;. LEDERER. 627
523. Opinioii of the Court.
rule that in figuring the gross income there shall be taken
the aggr^;ate full premiums received by the company lees
the aggregate of all dividends paid by it to any policy-
holder by credit upon a premium or by abatement of a
premium and also of all dividends whatsoever paid to any
pohcyholder. in cash whether applied in payment of a
premium or not. The non-inclusion clause, (c) above,
excludes from gross income those premium receipts which
were actually or in effect paid by applying dividends.
The company seeks to graft upon the clause so restricted a
provision for what it calls non-including, but which in fact
is deducting, all cash dividends not so applied. In support
of this contention the company relies mainly, not upon the
words of the statute, but upon arguments which it bases
upon the nature of mutual insurance, upon the supposed
analogy of the rules prescribed in the statute for mutual
fire and marine companies and upon the alleged require-
meaiis of consistency.
First: The reason for the particular provision made by
Congress seems to be clear: Dividends may be made, and
by many of the companies have been made largely, by way
of abating or reducing the amount of the r^iewal pre-
mium.^ Where the dividend is so made the actual prem-
ium receipt of the year is obviously only the reduced
amount. But, as a matter of bookkeeping, the premium is
^ The dividend proviaoii of the Mutual Benefit Life Insiuaiioe Com-
pany involved in the HerM Case, 9upra, IdS Fed. Rep. 1)9, 204, was,
in part: "After this ix)licy shall have been in force ona year, each
year's premium subsequent^ paid shall be subject to reduction by
such dividend as may be apportioned by the directors." The dividend
provirion in some of the partidpatiDg poHoies involved in the Ccnir
neetiad OetmnU Life Ina. Co. Cam, mpra, 218 Fed. Rep. 188, 192, ma:
"Reduction of premiums as determined by the company will be made
annually beginning at the second jrear, or the insured may pay the full
premium and instruct the company to apply the amount of reduction
apportioned to him in any tee of the foUcwing plans:" (Then follow
four plans.)
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628 ^nEB. TERM, 1919.
Opnuon of tiw Coart. 2S2 U. 8.
filtered at the full rate and the abatement (that is, the
amount by which it was reduced) is entered as a credit.
The financial result both to the company and to the
policyholders is, however, exactly the same whether the
renewal premiimi is reduced by a dividend or whether the
renewal pr^nium remains imchanged but is paid in part
either by a credit or by cash received as a dividend. And
the entries in bookkeeping would be substantially the
same. Because the several ways of paying a dividend are,
as between the company and the policyholder, financial
equivalents, Congress, doubtless, concluded to make the
incidents th6 same, also, as respects income taxation.
Where the dividend was used to abate or reduce the full
or gross premium — the direction tq eliminate from the
apparent premium receipts is aptly expressed by the
phrase ''shall not include," used in clause (c) above.
Where the premium was left unchanged, but was paid in
part by a credit or cash derived from the divided the
instruction would be more properly expressed by a direc-
tion to deduct those credits. Congress doubtless used the
words ''shall not include" as applied also to these credits
because it eliminated them from the aggr^&te of taxable
premiums as being the equivalent of abatement of pre-
miums.
That such was the intention of Congress is confirmed by
the history of the non-inclusion clause, (c) above. The
provision in the Revenue Act of 1913, for taxing the in-
come of inpirance companies is in large part identical with
the provision for the special excise tax upon them imposed
by the Act of August 5, 1909, c. 6, § 38, 36 Stat. 112. By
the latter act the net income of insurance companies was,
also, to be ascertained by deducting from gross income
"sums other than dividends, paid within the year on
policy and annuity contracts"; but there was in that act
no non-inclusion clause whatsoever. The question arose
whether the provision in the Act of 1909, identical with (c)
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PENN MUTUAL CX). v. LEDERER. 629
823. Opinion of the Court.
above, prevented using in the computation the reduced
renewal premiums instead of the full prenAiuns, where the
reduction in the premium had been effected by means of
dividends. In Mutual Ben^ Life Insurance Co. v. Heroldy
198 Fed. Rep. 199, decided July 2d, 1912, it was held that
the renewal premium as reduced by such dividends should
be used in computing the gross premium; and it was said
(p. 212) that dividends so applied in reduction of renewal
premiums ''should not be confused with dividends de-
clared in the case of a full-paid participating policy,
wherein the policyholder has no further premium pay-
ments to make. Such payments having been duly met,
the policy has become at once a contract of insiuunce and .
of investment. The holder participates in the profits and
income of the invested funds of the company. " On writ
of error sued^ out by the Government the judgment en-
tered in the District Court was affirmed by the Circuit
Court of Appeals on January 27. 1913, 201 Fed. Rep. 918;
but that court stated that it refrained from expressing any
opinion concemirg dividends on full-paid policies, saying
that it did so ''not because we wish to suggest disapproval,
but merely because no opinion about these matters is
called for now, as th^ do not seem to be directly in-
volved. " The non-inclusion clause in the Revenue Act of
1913, (c) above, was doubtless framed to define what
amounts involved in divid^ids diould be ''non-included, "
or deducted, and thus to prevent any controversy arising
over the questions which had been raised under the Act of
1909.^ The i>etition for writ of certiorari applied for by
the Government was not denied by this court until
December 15, 1913, (231 U. S. 755), that is, after the
passage of the act.
^Substantially the same questions were involved, also, in Can-
neOicut Qeneral Life Iru. Co. v. EaUm, 218 Fed. R^. 188, and Canneo-
ticut Mukud Life Ins. Co. v. Eaion, 218 Fed. Rep.' 206, in idiich deci-
ak»8 were not, however, reached until the following year.
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630 OCTOBER TERM, Mia.
Opinion of tlM Court 3S2n.&
Second: It is argued that the nature of life inguranoe
dividends, is the same, whatever the diqKMition made of
them; and that Congress could not have intended to re-
lieve the companies from taxation to the esctent that
dividends are applied in payment of premiums and to tax
liiem to the extent that dividends are not so applied. If
Congress is to be assumed to have intended, lb obedience
to the demands of consistency, that all dividends declared
under life insurance policies should be treated alike in
connection with income taxation regardless of their dis-
position, the rule of consistency would require deductions
more far-reaching than those now claimed by the comr
pany. Why allow so-called non-inchision of amounts
equal to the dividends paid in cash but not implied in
reduction of renewal premium and disallow so-called
non-inclusion of amounts equal to the dividends paid by a
credit representing amounts retained by the company for
accumulation or to be otherwise used for the policy-
holders' benefit? The fact is, that Congress has acted
with entire consistency in laying down the rule by whidi
in computing gross earnings certain amounts only are
excluded; but the company has failed to recognise what
the principle is which Congress has consistently applied.
The principle applied is that of basing the taxation on
receipts of net premiums, instead of on gross premiums.
The amount equal to the aggregate of certain dividends is
excluded, althoue^ th^y are dividends, because by reascm
of their application the net premium reoeiptstof the tax
are to that extent less. Tliere is a striking difference
between an aggregate of individual premiums, each
reduced by means of dividfends, and an aggregate of full
premiums, from whidi it is sought to deduct amounts paid
out by the company which have no relation whatever to
premiums received within the tax year but which relate
to some other premiums which may have been received
many years earlier. Hie difference between the two
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PENN MUTUAL CX). v. LEDERER. 531
822. Opinion ol the Ooart
cases is such as may well have seemed to Congress suf-
ficient to justify the application of different rules of
taxation.
There is also a further significant difference. All life
insurance has in it the element of protection. That
afforded by fraternal foenefidary societies, as originally de-
vised, had in it only the element of protection. There the
premiums paid by the member were supposed to be suffi-
cient, and only sufficient, to pay the losses which will fall
during the current year ; just as premiums in fire, marine, or
casually insurance are supposed to cover only the losses of
the year or other term for which the insurance is written.
Fraternal life insurance has been exempted from all income
taxation; Congress having differentiated these societies, in
this respect as it had in others, from ordinary life in-
surance companies. Compare Supreme Council of the
Royal Arcanum v. Behrendy 247 U. S. 394. But in level-
premium life insurance, while the motive for taking it may
be mainly protection, the business is largely that of savings
investment. The premium is in the nature of a savings
deposit. Except where there are stockholders, the savings
bank pays back to the depositor his deposit with the
interest earned less the necessary expesDm of management.
The insurance compai^ does the same, the difference
being merely that the savings bank imdertakes to repay
to each individual depositor the whole of his deposit with
interest; while the life insurance company undertakes to
pay to each member of a class the average amount (regard-
ing the chances of life and death) ; so that those who do not
reach the average age get more than th^ have deposited,
that is, paid in premiums (including interest) and those
who JBXceed the average age less than th^ depodted
(including interest). The dividend of a life insurance
company may be regarded as paying back part of these
deposits called premiums. Hie dividend is made possible
because the amounts paid in as premium have earned
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632 OCTOBER TERM, 1919.
Opinion of the Court. 252 TT. 8.
more than it was assumed they would when the policy con-
tract was made, or because the expense of conducting the
business was less than it was then assumed it would be or be-
cause the mortality, that is the deaths in tlie class to which
the policyholder belongs, proved to be less than had then
been assumed in fixing the premium rate. When for any
or all of these reasons the net cost of the investment (that
is, the right to receive at death or at the endowment date
the agreed sum) has proved to be less than that for which
provision was made, the difference may be r^arded either
as profit on the investment or as a saving in the expense of
the protection. When the dividend is applied in reduction
of the renewal premium. Congress might well regard the
element of protection as predominant and treat the reduc-
tion of the premium paid by means of a dividend as merely
a lessening of the expense of protection. But after the
poUcy is paid up, the element of investment predominates
and Congress might reasonably regard the dividend sub-
stantially as profit on the investment.
Tlie dividends, aggregating $686,503, which the Penn
Mutual Company insists should have been "non-in-
cluded," or more properly deducted, from the gross in-
come, were, in part, dividends on the ordinary limited
payment life policies which had been paid-up. There are
othei-s which arose under pohcy contracts in which the
investment feature is more striking; for instance, the
Accelerative Endowment Policy or such special form of
contract as the 25-year "6% Investment Bond" matured
and paid March, 1913, on which the policyholder received
besides dividends, interest and a ''share of forfeitures."
In the latter, as in "Deferred Dividend" and other
semi-tontine policies, the dividend represents in part what
clearly could not be regarded as a repayment of excess
premium of the pohcyhold^ receiving the dividend. For
the "share of the forfeiture" which he receives is the share
of the redundancy in premium of other policyholdera who
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PENN MUTUAL CO. y. LEDERER. 533
523. Opinion of the Court.
did not persist in premium payments to the end of the
contract period.
Third: The non-inclusion clause here in question, (c)
above, is found in § II G. (b) in juxtaposition to the pro-
visions, concerning mutual fire and mutual marine com-
panies, clauses (a) and (b) above. The fact that in three
separate clauses three different rules are prescribed by
Congress for the treatment of redimdant premiums in the
three classes of insurance, would seem to be conclusive evi-
dence that Congress acted with deliberation and intended
to differentiate between them in respect to income taxar
tion. But the company, ignoring the differences in the
provisions concerning fire and marine companies respec-
tively, insists that mutual life insurance rests upon the
same principles as mutual fire and marine and that as the
clauses concerning fire and marine companies provide spe-
cifically for non-inclusion in or deduction from gross in-
come of all portions of premiums returned. Congress must
have intended to apply the same rule to all. Neither
premise nor conclusion is sound.
Mutuial fire, mutual marine and mutual life insurance
companies are analogous in that each performs the service
called insuring wholly for the benefit of their policyholders
and not like stock insurance companies in part for the
benefit of persons who as stockholders have provided
working capital on which they expect to receive dividends
representing profits from their investment. In other
words, these mutual companies are alike in that they are
cooperative enterprises. But in respect to the service
performed fire and marine companies differ fundamentally,
as above pointed out, from legal reserve life companies.
The thing for which a fire or marine insurance premium is
paid is protection, which ceases at the end of the term. If
after the end of the term a part of the premium is returned
to the policyholder, it is not returned as something pur-
chased with the premium, but as a part of the premium
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534 OCTOBER TERM, 1919.
Opinion of the Court. 2S2U.&
which was not required to pay for the protection; that is,
the esqpeDBB was less than estimated. On the other hand,
the service perf omied in level-pranium life insurance is
both protection and investment. Pk-emiums paid — not in
the tax year, but perhaps a generation earlier — have
earned so much for the codperators, that the company is
able to pay to each not only the ae^'eed amount but also
additional sums called dividends; and have earned these
additional sums, in part at least, by transactions not
among the members, but with others; as by lending the
moneyofthecodp^ratorsto third persons who pay a larger
rate of interest than it was assumed would be received on
investments. The fact that the investment resulting in
accumulation or dividend is made by a codperative as
distinguished from a capitalistic concern does hot prevent
the amount thereof being properly deemed a profit on the
investment. Nor does the fact that the profit was earned
by a cooperative concern afford basis for the argument
that Congress did not intend to tax the profit. Congress
exempted certain cooperative enterprises from all income
taxation, among others, mutual savings banks; but, with
the exception of fraternal beneficiary societies, it imposed
in express terms such taxation upon ''every insurance
company."^
The purpose of Congress to differentiate betwe^i mu-
tual fire and marine insurance companies on the one hand
and life insurance companies on the other is further mani-
fested by this: The provision concerning return premiums
in computation of tihe gross income of fire and marine in-
surance companies is limited in terms to mutual companies,
whereas the non-inclusion clause, (c) above, relating to life
^ The alleged unwisdom and injustioe of taxing mutual life insuianoe
companies while mutual savings banks were exempted had been
strongly pressed upon Congress. Briefs and statements filed with
Senate Committee on Finanoe on EL R. 3321 — Sizty-thizd Congress,
first session. Vol. 3, pp. 1065-20M.
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PENN MUTUAL CO. v. LEDERER. 635
623. Opbokm of the Ckxirt.
insuranoe companies, applies whether the company be a
stock or a mutual one. There is good reason to believe
that the failure to differentiate between stock and mutual
life msurance companies was not inadvertent. For while
there is a radical difference betwe^i stock fire and marine
comi>anies and mutual fire and marine companies, both in
respect to the conduct of the business and in the results to
policyholders, the participating policy commonly issued
by the stock life insurance company is, both in ri^ts con-
ferred and in financial results, substantially the same as the
policy issued by a purely mutual life insurance company.
The real difference between the two classes of life com-
panies as now conducted lies in the legal right of electing
directors and oflScers. In the stock company stockholders
have that right; in the mutual companies, the policy-
holders who are the members of the corporation.
The Penn Mutual Company, seeking to draw support
for its argument from legislation subsequent to the Rev-
enue Act of 1913, points also to the fact that by the Act
of September 8, 1916, c. 463, 39 Stat. 756, 768, § 12, sub-
section second, subdivision c, the rule for computing gross
income there provided for mutual fire insurance companies
was made applicable to mutual employers' liability,
mutual workmen's compensation and mutual casually
insurance companies. It asserts that thereby Congress
has manifested a settled policy to treat the taxable income
of mutual concerns as not including premimn refunds; and
that if mutual life insurance companies are not permitted
to ''exclude" them, these comi>anies will be the only
mutual concerns which are thus discriminated against.
Casualty insurance, in its various forms, like fire and
marine insurance, provides only protection, and the pre-
mium is wholly an expense. If such lata: l^islation could
be considered in construing the Act of 1913, the conclusion
to be drawn from it would be clearly the opposite of that
urged. The later act would tend to show that Congress
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636 OCTOBER TERM, 1919«
Opinion of the Court 252 U. 8.
persists in its determination to differentiate between life
and other forms of insurance.
Fourth: It is urged that in order to sustain the interpre-
tation given to the rumr^nebmon clause by the Circuit
Court of Appeals (which was, in effect, the interpretation
set forth above) it is necessary to interpolate in tiie clause
the words ''within such year," as shown in italics in
brackets, thus:
''And life insurance companies shall not include as in-
come in any year such portion of any actual premium
rec^ved from any individual policyholder [within such
year] as shall have been paid back or crklited to such
individual policyholder, or treated as an abatement of
pr^nium di such individual poUcyfaolder, within such
year."
What has been said above shows that no such interpo-
lation is necessary to sustain the construction ffvea by the
Circuit Court of Appeals. That coiu^ did not hold that
the permitted non-inclusion from the year's gnxe income
is limited to that portion of the premimn received within
the year which, by reason of a dividend, is paid back within
the same year. What the court held was that the non-
inclusion is limited to that portion of the premimn which,
although entered on the books as received, was not actu-
ally received, within th^ year, because the full premium
was, by means of the dividend, either reduced, or other-
wise wiped out to that extent. Nor does the Government
contend that any portion of a premium, not recdved
within the tax year, shall be included in computing the
year's gross income. On the other hand what the com-
pany is seeking is not to have "non-included" a part of the
premiums which were actually received within the year, or
which appear, as matter of bookkeeping to have been
received but actually were not. It is seeking to have the
aggregate of premiums actually received within the year
reduced by an amount which the company paid out within
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'^ENN MUTUAL CO. v. LEDERER. 637
523. Optnion of the Court.
the year; and which it paid out mainly on account of
premiiuns received long before the tax year. What it
seeks is not a nanrdnduaian of amounts paid in — but a
deduction of amounts paid out.
If the terms of the non-inclusion clause, (c) above,
standing alone, permitted of a doubt as to its proper con-
struction, the doubt would disappear when it is read in
connection with the deduction clause, (d) above. The
deduction there prescribed is of ''the sums other than
dividends paid within the year on policy and annuity
contracts. " This is tantamount to a direction that divi-
dends shall not be deducted. It was argued that the
dividends there referred to are ''conomercial'' dividends
like those upon capital stoc]c; and that those here involved
are dividends of a different charactar. But the dividends
which the deduction clause says, in effect, shall not be
deducted, are the very dividends here in question, that is
dividends ' ' on policy and annuity contracts. " Noiie such
may be deducted by any insurance company except as
expressly pro\dded for in the act, in clauses quoted above,
(a) (b) and (c). That is, clauses (a) (b) and (c) are, in
effect, exceptions to the general exclusion of dividends
from the permissible deductions as prescribed in clause
(d) above.
In support of the company's contention that the inter-
polation of the words "within the year" is necessary in
order to support the construction given to the act by the
Circuit Court of Appeals we are asked to consider the
l^islative history of th^ Revenue Act of 1918 (enacted
February 24, 1919, c. 18, 40 Stat. 1057) ; and specifically
to the fact that in the bill as introduced in and passed by
the House, the corresponding sectioa (233 (a)) contained
the words ''within the taxable year " and that these words
were stricken out by the Conference Committee (Report
No. 1037, 65th Cong., 3d sess.) The legislative history of
MX act may, where the meaning of the words used is doubt-
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638 OCTOBER TERM, 1919.
fuly be rasorted to as an aid to construction. Caminettiv.
United Staies, 242 U. &. 470, 490. But no aid could pos-
sibly be derived from the lei^slative history of another act
passed nearly six yea» after the one in question. Further
answer to the argument based on the legislative history of
the later act would, therefore, be inappropriate.
We find no enor in the j udg^nent of the Circuit Court of
Appeals. It is
Affimsdm
ESTATE OF P. D. BECKWITH, INC. r. COMMIS-
SIONER OF PATENTS.
CMVnOBABl TO IHB COUBT OF AmiAIA OF IHB PWTSJOr
OF COLUIIBIA.
No. 178. Aigiied jMuiuy 28» 199a— Deoided April 19, 1090.
The Trade-Mark Registration Act declares (|6) that no mark by
which the goods of tbTe owner may be distinguished from otho*
goods of the same class shall be refused registration on account of
the nature of such mark, with certain excepticms, and with the pro-
viso that no mark shall be registered which consists merely in wotds
or devices which are descriptive of the goods with yrbitAi Hhey-.tiie
used, or <tf the character or quality of such goods. HM, that a
mark consisting of a fanciful design in combination with certain
words forming part of it was not debarred from registration by reason
of the fact that some of the words — ^"Moistair HeatiDg SyBtem" —
were desciiptive; that to require the deletion of such descriptive
words because of their descriptive quality as a condition to registrar
tion <tf the mark, was erroneous; and that the act would be fully
complied with if registration were permitted with an apprcq[»iate
declaration on the part of the i4>pliauit disclaiming tfny right to the
exclusive use of the descriptive words except in the setting and re-
lation in which they appeared in the drawing, descr/tion and samples
filed with the application. P. 543.
While there is no specific provision for disdaimers in the statute, the
practice of using them is approved. P. 546.
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BECKWITH V. COMMR. OF PATENTS. 6S9
538. Opiiiion<tf the Court
The fltatate should be coDstraed liberally, m ftilfilhnent of its purpose,
to promote the doniestio aiid foreign trade of the oountiy. P. 545.
48 App. D. C. lib, reversed.
Thb case is stated in the opimoiL
Mr. Harry C. Howard for petitioner.
Mr. AssUtarU Attorney Oenerai Dama, for respondent,
submitted. Mr. Edward 0. CurHs, Special' Assistant to
the Attorn^ General, was on the brief.
Mr. JusncB Glarkb delivered the opinion of the court.
The petitioner, a corporation, filed an application in
the Patent QflBice for the rqpstration of a trade-mark,
which is described as follows:
''A design like a seal, comprising the head of an Indian
chief surmounting a scroll bearing his name, 'Doe-Wah-
Jack,' and surrounded by a circle, outside of which ap-
pear the words 'Round Oak' and ''Moistair Heating
^tem' in a circle, and the whole being surrounded by
a wreath of oak leaves.'^
It will be useful to reproduce the drawing filed with
this application:
It was averred that the petitioner had used the mark
for more than eighteen months before the application
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640 OCTOBER TERM, 19ia
Opinioii of the Court 262 U. 8.
was made by applying it to ''Hot air and combined hot
air and hot water heaters and furnaces ... by hav-
ing the same cast into the metal of which the eystems
are constructed."
The Commissioner found that the mark did not con-
flict with any other that was registered, and that the
petitioner was entitled to the exclusive use of it except-
ing the words ''Moistair Heating System.'' It was
ordered that the mark might be registered if the excepted
words, objectionable because descriptive, were ''a-ased ''
or ''removed " from it, but that the filing of a disclaimer
would not suffice to secure registration.
Not satisfied with this result, the petitioner appealed
to the Court of Appeals of the District of Columbia, and
its judgment affirming the decision of the Commissioner
of Patents is before us for review.
The ground of both decisions is that the words "Moist-
air Heating System '' are merely descriptive of a claimed
merit of the petitioner's system — ^that in the process
of heating, moisture, is added to the air — and that one
person may not lawfully monopolize the use of words
in general use which might be used with equal truthful-
ness to describe another system of heating. For this rear
son it was held that the case falls within the proviso of
the R^istration Act of 1905, declaring that no mark con-
sisting merely in words or devices which are descriptive
of the goods with which they are used or of the character
or qualily of such goods shall be r^^tered under the
terms of the act. (Act of February 20, 1905, c. 592, § 5,
33 Stat. 725, amended January 8, 1913, c. 7, 37 Stat. 649.)
No question of patent right or of unfair competition,
or that the design of the trade-mark is so simple as to
be a mere device or contrivance to evade the law and
secure the r^istration of non-registrable words, is in-
volved. Nofbrn lAnolUum Co. v. RinQwaU LmaUum Works,
46 App. D. C. 64, 69.
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BECKWITH u. CX)MMR. OP PATENTS. 641
538. Opinioii of the Court.
This statement makes it apparent that the question
presented for decision is: Whether the applicant may
lawfully register the words "Moistair Heating System"
when combined with the words "Round Oak," as a part
of its purely fanciful and arbitrary trade-mark design,
as shown in the drawing filed, and when claim to exclusive
use of the words apart from the mark shown in the draw-
ing is disclaimed on the record?
An accoimt of the process of decision, in the Patent
Office and in the Court of Appeals, by which the result
in this case was arrived at, as it appears in the brief of
the Commissioner of Patents, is suggestive and useful.
From this we learn that when a mark has been presented
for registration consisting merely (only) of descriptive
words or devices, registration has been uniformly refused.
When "composite" marks— such as contain both regis-
trable and non-registrable matter — have been presented
for registry with features in them which conflicted with
earlier marks, registered by other than the applicant,
the complete rejection, "eradication," of the conflicting
portions has been imif ormly required before registry was
allowed. But where there was no such conflict, and the
only objection was that descriptive words were used, the
practice of the Patent Office prior to the dedsicm, in 1909,
of Johnson v. Brandau, 32 App. D. C. 348, was to permit
the registration of marks containing such words, where
they were associated with registrable words or were a
part of an arbitrary or fanciful design or device, it being
considered not necessary to delete the descriptive matter,
even when it was an essential part of the composite trade-
mark as it had been used by the applicant, provided it
was clearly not susceptible of exclusive appropriation
under the general rules of law. After the decision of
Johnson v. Brandau, 32 App. D. C. 348, a practice grew
up in the Patent Office, not provided for in the statute,
of allowing an applicant to disclaim objectionable de^^
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542 OCTOBER TERM, 1910.
OfAakm of fhe Court 2S2n.a
acriptive wwds in oaaee wh«re to require their actual
ramoval would result in 00 changing the mark that it
would not readily be reoogoiaed as that ahown in the
drawing or specinifia filed with the application. THie
customary form of such disclaimiff was a stateoguent filed
that no daim was made to the designated words, as for
ezamplei '^Mpistair Heating System/' spart from the
mark shown in the drawing— this was interpreted as
TWflMiing that only when taken in ocmnection with the
remaining features of the marie did the applicant make
daim to their exclusive use. Ex parte IJUnoia Seed Co.,
219 0. G. 031.
Sudi disdainfier became a part of the fq)plicant's
statement in the record and necessarily formed a part
of the certificate of registration as it would appear in the
copies of it furnished to the i^yplicant and the public,
pursuant to § 11 of the act.
Then cameihe dedsioDs in FiMedc Soap Co. v. Kleeno
Mamffacturing Co.y 44 App. D. C. 6, and Nairn Linoleum
Co. y. BingwaU Linoleum Works, 46 App. D. C. 64, which,
says the Commissioner of Patents, were understood as
disapproving the practice of disclaimer, and since th^
were rendered, registration of merdy descriptive matter
has not been allowed in any form, but its actual ddetion
from the trade-mark drawiqg has been required, — ^with,
however, an i^parent excq[>tion in the case of Rhyne-
burgety 8 T. M. Rep. 467; 128 MS. Dec. 141. The judg-
ment we are considering requiring, as it does, the
'^dimination '' of the descriptive words, shows that the
GommissioDer correctly interpreted these two decisions
of the Court of Appeals.
It is apparent from this rehearsal that the Gommisdoner
of Patents has pronxpHy and cordially accepted for his
g^odance the deddous of the Court of .A|ipeals and, al-
1ii0U|^ he avoids a controversial attitude In his brief
and 9ves a colorless history of the practice of his office,
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BECKWITH V. COMMR. OP PATENTS. 543
538. Opinion of the Court.
still it 18 manifest that^ in this case and in others, the
coinrt has veiy radicaUy changed that practice with respect
to permitting registry of composite trade-marks and that
its decisions have turned upon the construction of the
second proviso, referred to/ in the fifth section of the
Registration Act, which is made the basis of the judgment
we are reviewing.
The Registration Act of 1905 (33 Stat. 724), amended
m 1906 (34 Stat. 168) and in 1909 (35 Stat. 627) and m
1913 (37 Stat. 649), without changing the substantive
law of trade-marks, provided, in the manner prescribed,
for the registration of marksi (subject to special excep-
tions) which, without the statute, would be entitled to
legal and equitable protection, and the case before us
calls chiefly for the construction of tiie iMt>vi8iona of § 5
of that act, which, so far as here involved,are as follows:
'^That no mark by which the goods of the owner of the
mark may be distinguished from other goods of the same
class shall he refused regisbraiiqn as a trade-mark on ao-
ootmt of the nature of such mark unless, etc. • • .
''Prot^ufed, That no tTiorX^tr/iu^comisfe . • • merely
in words or devices which are descriptive of the goods
with which th^ are used, or of the character or quality
of such goods . • . 8haU he registered under the termis
of this Act."
It was settled long prior to the Trade-Mark Registrar
tion Act that the law would not secure to any person the
exclusive use of a trade-mark consisting merely of words
descriptive of the qualities, ingredients or character-
istics of an article of trade. This for the reason that the
function of a trade-mark is to point distinctively, either
by its own meaning or by association, to the origin or
ownership of the wares to which it is applied, and words
merely descriptive of qualities, ingredients or character-
istics, when used alone, do not do this. Other like goods,
equal to them in all respects, may be manufactured or-
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644 OCTOBER TERM, IQlft
Opinion of Um Court 282n.&
dealt in I7 others, who, with equal truth, may use, and
must be left free to use, the same language of description
in placing their goods before the public. Canal Ca. v.
dark, 13 WaU. 311, 322, 323, 324; Manvfaeburing Ca. v.
Train&t, 101 U. S. 51, 54; Manhattan Medicine Ca. v.
Wood, 108 U. 3. 218, 222; Oaadyear^s India Rubber GUnm
Mfg. Ca. V. Oaadyear Rubber Ca., 128 U. S. 598; Lawrence
Mfg. Ca. V. Tenneeaee Mfg. Ca., 138 U. S. 637, 547; Brawn
Chemical Ca. v. Meyer, 139 U. S. 540; Elgin National
Watch Ca. v. lUinaia Wakh Case Ca., 179 U. S. 605; Standi
ardPaintCa. v. Trinidad AsphaU Mfg. Co., 220 U. S. 446.
Thus the proviso quoted, being simply an expression
in statutory form of the prior general rule of law that
words merdy descriptive are not a proper subject for
exclusive trade-mark appropriation, if the application in
this case had been to register only the words ^'Moistair
Heating System'' plainly it would have fallen within the
terms of the prohibition, for th^ are merely descriptive
of a claimed property or quality of the petitioner's heat-
ing system, — ^that by it moisture is imparted to the air in
the process of heating. But the application was not to
register these descriptive words ''merely, " alone and apart
from the mark shown in the drawing, but in a described
manner of association with other words, ^'Roimd Oak,"
which are not descriptive of any quality of applicant's
heating system, and as a definitdy positioned part of an
entirely fanciful and arbitrary design or seal, to which the
Ck>mmis8ioner f oimd the applicant had the exclusive
right.
Since the proviso prohibits the registration not of
merely descriptive words but of a trade-mark ''which
consists . . . merely" (only) of such words — ^the
distinction is substantial and plain— we think it suf-
ficiently clear that such a composite mark as we have
here does not fall within its terms. In this connection it
must be noted that the requirement of the ptatute that
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BECKWITH V. COMMR. OF PATENTS. 545
538. Opinion of the Court.
no trade-mark shall be refused registration, except in
designated cases, is just as imperative as the prohibition
of the proviso against registration in cases specified.
. While there is no specific provision for disclaimers in
the trade-mark statute, the practice of using them is
commended to our judgment by the stat^nent of the
Conunissioner of Patents that, so far as known, no harm .
came to the public from the practice of distingiiiflhing,
without deleting, non-registrable matter in the drawing
of the mark as registered, when a stat^nent, forming a
part of the record, was required tiiat the applicant was
not making claim to an exclusive appropriation of such
matter except in the inrecise relation and association in
which it appeared in the drawing and description.
It seems obvious that no one could be deceived as to
the scope of such a mark, ahd that the registrant would
be precluded by his disclaimer from setting up in the future
any exclusive right to the disclaimed part of it. It &eiemB
obvious also that to require the deletion of descriptive
words must result often in so cJianging the trade-mark
sought to be registered from the form in which it had been
used in actual trade that it would not be recognized as
the same mark as tiiat shown in the drawing, which the
statute requires to be filed with the application, or in ihe
specimens produced as actually used, and therefore reg-
istration would lose much, if not all, of its value. The
requhred omission might so change the mark that in an
infringement suit it could be successfully urged that the
registered mark had not been used, — and user is the
foundation of registry (§ 2). Of this last the case before
us furnishes an excell^it example. To strike out ' ' Moistair
Heating System" from the applicant's trade-mark would
so change its appearance that its value must be largely
lost as designating to prior purchasers or users the origin
of the heating system to wMch it was applied.
The commercial impression of a trade-mark is derived
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546 OCrrOBER TERM, 191%
Opinkm of the Court. 2S2t7*8.
from it as a whole, not from its elements separated and
considered in detail. For this reason it should be con-
sidered in its entirety (Johnaan v. Brandau^ supra) and
to strike out any considerable part of it, certainly any
conspicuous part of it, would be to greatly affect its
value. Of course, refusal to register a mark does not
prevent a former user from continuing its use, but it de-
prives him of the benefits of the statute, and this should
not Be done if it can be avoided by fair, even libatd,
construction of the act, designed as it is to promote the
domestic and foreign trade of our country.
Thus the case comes to this: That the Commissioner
found that the trade-mark presented for registration did
not conflict with any theretofore roistered and there is
no suggestion of unfair practice in the past or jcontem-
plated in the future; that it had been used for eighteen
months in the form proposed for r^stry; that the words
ordered to be stricken out from the drawing are descrip-
tive but the mark does not consist ^'merely'' in such
words, but is a composite of them with others, and with
an arbitrary design which, without these words, both the
Ciommissioner and the court found to be r^istrable; that
the language of the statute that no mark not within its
prohibitions or provisos shall be denied registration is
just as imp^ative as the prohibitory words of the pro-
viso; and, very certainly, that a disclaimer on the part
of applicant that no claim is made to the use of the words
''Moistair Heating System" apart from the mark as
shown in the drawing and as described, would preserve
to all others the right to use these words in the future to
truthfully describe a like property or result of another
ByBtem, provided only that they be not used iq a trade-
mark which so nearly resembles that of the petitioner
^'as to be likdy to cause confusion or mistake in the mind
of the public or to deceive purchasers" when applied "to
merchandise of the same descriptive properties" (§ 5).
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SIMPSON V. UNITED STATES. 647
538. Qyflabos.
Such hfing the ultimate facts of this controversy, we
cannot doubt that the Court of Appeals fell into error in
ruling that the words ''Moistaur Heating System'' must be
''eliminated" from the trade-mark of the applicant as it
had been theretofore iised, and that the requirement of
the act of Congress for the registration of trade-marks
would be fully complied with if r^istration of it were
permitted with an appropriate declaration on the part of
the applicant that no claim is made to the right to the
exclusive use of the descriptive words except in the eletting
and relation in which they appear in the drawing, d^
scription and samples of the trade-mark filed with the
application.
It results that the judgment of the Court of Appeals
must be
Mb. JxTsncB McRbtnolds dissents.
SIMPSON, SURVIVING EXECUTOR OF MOORE, v.
UNITED STATES.
APPEAL fBOM THB COXJBT OF CIiAIllB.
No. 213. Aigued March 17, 18, ld20.— Decided April 19, 1030.
In computiiig suooesaion taxes pasrable under the War Revenue Act
of 1898, upon legades of the net income for life from funds placed
with trustees for investment and reinvestment, it was lawful for the
OommisBioner of Internal Revenue to assess the legacies by means of
general tables based on approved mortuary tables and on four per
cent., a? tbe assumed vahie of mon^. P.-650. 30 Stat. 448, (§ 29,
30; Rev. Stats., SS 321, 3182.
The court takes judicial notice that, at the time when the taxes m-
volved in this case were collected, four per cent, was very geoeraDy
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648 OCTOBER TERM, 1919.
Opinion of the Court 262 U. 8.
assumed to be the fair value or earning power of money safely in-
vested. P. 550.
Where a will directed conversion of residuary estate into money and
its payment by the executors to a trustee of their selection, in trust
for certain legatees, and where the trustee had been selected and the
payments largely made, and there remained funds of the estate,
clearly exceeding the requirements of pending claims, the payment
of which to the trustee had become a duty of the executors enforce-
able by the legatees under the state law, held, that the interests of
the legatees in such funds were vested, within the meaning of the
• Refundmg Act of June 27, 1902, { 3, 32 Stat. 406. New York Code
ci Civil Procedure, 1899, ({2718, 2721 and 2722, considered.
P. 661.
Proof that a suit by stockholders to obtain an accounting for promotion
profits was pending against a firm of which a testator was a member,
• without showing the pleadings^ the Issues or character of the suit,
the amount or merit of the claim, or the result of the litigation,
hdd, insufficient to establish that legacies in funds in the hands
of his executors were not vested, within the meaning of the Refund-
ing Act of June 27, 1902, supra. P. 662.
63 Ct. Chns. 640, affirmed.
The case is stated in the opinion.
Mr. Thomas M. Day^ with whom Mr. H. T. Newcomb
was on the brief , for appellant.
The Solicitor General, with whom Mr. A. F. Myers was
on the brief, for the United States.
Mr. Justice Clarke delivered the opinion of the
coiu*t.
This is a suit to recover the whole, or failing that, a large
part of a succession tax assessed xrnder the Spanish War
Revenue Act of Jime 13, 1898, c. 448, 30 Stat. 448, and
paid by thei appellants as executors of the will of John G.
Moore, deceased, a citizen of New York, who died in June,
1899.
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SIMPSON V. UNITED STATES, 649
647. Opinion of the Court.
The assessment was made against the appellants as
persons having in charge or trust, as executors, legacies
arising from personal property, and the contention is that
right to recovery may be derived, ^ther from the Act of
Congress, approved July 27, 1912, c. 256, 37 Stat. 240,
dii:ecting the Secretary of the Treasury to refund the
amount of any claims which should be satisfactorily shown
to have been ''erroneously or illegally" assessed under
warrant of § 39 of the War Revenue Act, or from the Act,
approved June 27, 1902, c. 1160, 32 Stat. 406, which directs
the Secretary of the Treasury to refund to executors so
much of any tax as may have been collected under warrant
of that act '-'on contingent beneficial interests which shall
not have become vested prior to" July 1, 1902.
The decedent in his will directed his ececutors to con-
vert a large residuary estate into money, to divide the same
into three equal shares, and to transfer two of such shares
to a trustee, to be selected by them, in trust to invest and
reinvest and to pay to each of his two daughters the whole
of the net income of one share so long as she should live.
Pursuant to authority derived from § 31 of the Wai
Revenue Act and Rev. Stats., §§ 321 and 3182. the Com-
missioner of Internal Revenue, in order to provide for the
determination of the amount of taxes to be assessed oh
legacies such as are here involved, on December 16, 1898,
issued instructions to Collectors of Internal Revenue
throughout the coimtry, which contained tables showing
the present worth of life interests in personal property,
with directions for computing the tax upon the same.
These tables were based on "Actuaries'" or "Combined
Experience Tables," and were used in arriving at the
amounts paid in this case.
On June 30, 1899, letters testamentary were issued to
appellants as executors, and on April 1, 1901, the United
States Commissioner of fiitemal Revenue, piumiant to the
provisions of § 29 of the Spanish War Revenue Act, as-
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iSBO OCTOBER TERM, 1910.
QpiniooofttioCottrt. 262U.8.
seBsed a tax of about $12,000 oil tiie share of eadi daui^ter,
which was paid oii April 15, 1901.
On October 29, 1907, appellants presorted to the
Government their claim, which was rejected, for the re-
fund of 121,640.55 of the taxes so paid, /'or such greater
amount thereof as the Commissioner might find to be
refundable, under the Refunding Act of June 27, 1902, or
other remedial statutes."
The judgment of the Court of Claims, HigTini«nng the
amended petition as to the claims for refund of the tax
paid on the legacies of the two daugjiiterB, and on three
small legacies which will follow the disposition of these,
and need no further notice, is before us for review.
Of the two claims of error argued, the first is, that the
Court of Claims erred in refusing to hold that it was illegal
to use mortuary tables and to assume four per cent; as the
value of money in computing the tax that was paid, and
that, therefore, the whole amount of it should be refunded.
The objection is not to the particular table that was
used but to the use of any such table at aU— to the method.
Such tables, indeed the precise table which was made the
basis of the one used by the cdlector, had been resorted to
tor many years prior to 1899 by courts, legislatures and
insurance companies for the purpose of determining the
present value of future contingent interests in property,
and we take judicial notice of the fact that at the time
this tax was collected four per cent, was very generally
assumed to be the fair value or earning power of money
safely invested. Both the method and the rate adcqpted in
this case have been assumed by this court, without di»>
cussion, as proper in computing the amount of taxes to be
collected under this War Revenue Act in KrunoUon v.
Moore, 178 U. S. 41, 41; Umted States v. FtdOiiy Trust Co.,
222 U. S. 158; Rand v. United States, 249 U. 3. 503, 506,
aMMi in Henry y. United States, 251V. a. 39i. It is much
too late to successfully assail a method so general^ ap-
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SIMPSON V. UNITED STATES. 661
647. Qiuiiion of the Court
plied, and as to this claim of error the judgment of the
Court of Claims is affirmed.
The facts following are essential to the disposition of the
remaining question. The appellant executors appointed a
trust company trustee for the two dau^ters of decedent
and prior to July 1, 19Q2, they paid to it, in trust for each
of them the sum of $426,086.66. After making these pay-
ments the executors had in thdr custody in cash and
securities in excess of^$l,797,000, from which, prior to
March 16, 1906, th^ made further payments, amounting
approsamatdy to $500,000 to the trust fund for each of the
daugihters, thereby making each of them exceed $026;00p.
The assessment of each was $665,000 in April, 1001.
The contention is that the excess of the assessm^t
above the amount which h^d been actually paid to the
trustee prior to July 1, 1002, had not become vested prior
to that date, within the meaning of the Act of June 27,
1902 (32 Stat. 406, § 3), and that it should therefore be
refunded.
The law of New York in force when the estate was in
process of administration, provided (New York Code of
Civil Procedure, 1899, § 2721) that ''after the expmttion
of one year (from the time of granting letters testamen-
tary) the executors • . • must discharge the specific
legacies bequeathed by the will and pay general legacies,
if there be assets," and § 2722 gave to legatees the right to
petition in an appropriate court to compel paymait of
their l^acies after the expiration of such year.
Letters testamentary were granted to the appellants on
June 30, 1899, and we have seen that assets abundantly
sufficient to have increased the trust fund legacies of the
daughters much beyond the amount at whidi they were
assessed for taxation were in the custody of the executors
prior to July 1, 1902, and therefore under this law of New
Yoric it was their duty to have made such payments prior
to that date unless cause was shown for not so doing.
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S52 OCTOBEA TERM, 1910.
Opinion of the Court. 252 U. 8.
The state law also authorized (§ 2718) the executors to
publish a notice once in each week for six months, requir-
ing all creditors to present their claims against the estate,
and provided that in suits brought on any claim not pre-
sented within six months from the first publication of such
notice, the executors should not be chargeable for any
assets which they may have paid out in satisfaction of
legacies.
The appellants first published the notice to creditors on
April 25, 1900, and therefore th^ might safely have made
paym^t on the daughters' l^ades after the 1st of No-
vember, 1900, one year and eight months prior to July 1,
1902, unless cause to the contrary was shown.
The only excuse given in the record for not complying
with this state law is that in March, 1902, a stockholders'
suit was commenced against the partnership of Moore &
Schi^, of which the deceased was a member, in which an
accounting was sought for a large amount of promotion
profits in connection with the organization of the American
Malt Company. As to this the Ck>iu-t of Claims finds that
the evidence does not show the pleadingSi issues or the char-
acter of the suit, or the amount or merit of the claim, or the
result of the litigation. Obviously, such a showing of such
a suit cannot be considered to have been a genuine obstacle
to settiement of the estate, and the other claims agiunst
it were negligible in comparison with the available assets.
It is thus apparent that for many months prior to July
1, 1902, there were abundant assets with which to make
payments upon these two legacies, in an amoimt larger
than was necessary to make them equal to, and greater
than, that for whidi they were assessed for taxation; that
for many months before that date it was the legal duty of
the executors to make such payment; and that for a like
time the legatees had a statutory right to institute suit to
compel payment.
It is obvious that legacies which it was thus the l^al
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CANADIAN NORTHERN RY. C50. v. BOGEN. 663
647. SyDabus.
duty of the executors to pay before July 1, 1902, and for
compelling paym^t of which a statutory remedy was
given to tiie legatees before that date, were vested in pos-
session and eDJoyment, within the meaning of the Act of
June 27, 1902, as it was interpreted in Uiiiled States v.
Fideliiy Trust Co., 232 U, S. 158; McCoach v. Pratt, 236
U. S. 562, 567;andinffenri^ V. United States, 251 IX. S. 393.
The case would be one for an. increased assessment, rather
than for a refund, if the War Revenue Act had not been
repealed.
Affirmed.
Mb. Jubticb McRbtnoldb did not participate in the
discussion or decision of this case.
CANADIAN NORTHERN RAILWAY COMPANY v.
EGGEN.
CXRnOBABI TO THE CUtCUIT COURT OF APPBALS FOR THB
sioHTH ciRcnrr.
No. 281. Argued March 1, 1020.— Dedded April 19, 1020.
The "privileges and immunities'' clause of the Constitution, Art. IV,
S 2, protects rights which are in their nature fundamental, including
the right of a citiaen of one State to institute and maintain actions
in the courts ci another; but in that respectf the requirement is
satisfied if the non-tesident be given access to the courts upon terms
tiiat are reasonable and adequate for enforcing whatever rights he
may have> even thou^ the teims be not the same as an acoofded
to nsident eitiaeos. P. 502.
The power is in the courts, ultimately in this one, to decide whether
the terms allowed the non-resident Bfe reasonable and adequate.
Id. '
A Minnesota statute, in force smce 1858, provides that when a cause
of action has arisen outside of the Btate and, by the laws of the place
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664 OCTOBER TE»M, 191ft
Aigumeiit for Petitioiier. 262 U. 8.
where it arose, an action thereon is there baned by lapse of time,
no such action shall be mAint,ained in the State unless the plaintiff
be a citizen thereof who has owned the cause of action ever since it
accrued. Hdd constitutional as applied to an action in Minnesota
by a citixen of South Dakota against a Canadian corporation for
personal injuries sustained liy the plaintiff in Canada, the Canadian
limitation in such cases being one year, whereas the time allowed in
Minnesota, apart from the above provinon, is six yeara. P. 660.
255 Fed. Rep. 937, reversed.
Ths case is stated in the opinion.
Mr. WiUiam D. MitcheUy with whom Mr. Pierce BvOer
was on the brief, ioi petitioner :
The power to classify exists, and a difference in right
or privilege resulting from classification b not objection-
able, provided the classification las a reasonable basis,
and rests on a real distinction which bears a just relation
to the attempted classification and is not a mere arbi-
trary selection. Magcuny.IUinoMTru^ASainngBBo^
170 U.S. 283, 294.
Granting the power of classification, we must grant
government the right to select the differences upon which
the classification shall be based, and they need not be
great or conspicuous. Citizens* Tdephcne Co. y. FuUer^
229 U. S. 322, 331. Such classification need not be rither
logically appropriate or scientifically accurate. Distrid
of Cohmbia v. Brooke, 214 U. 8. 138, ISO. Chambers v.
BaUimore it Ohio R. R. Co., 207 U. S. 142, 148, 148, must
be read in the light of these principles.
The Constitution does not prohibit a discrimination
between residents of different States as to the time within
which a suit may be commeDced if it is baaed upon a
practical difference in the conditions wbkHi have sur-
rounded the prosecution of the chdm, twulting firom a
difference in residence. Residence, as affecting the facility
for bringing suit, is an important factor in all statutes (rf
limitation. A difference is made in the time allowed to
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CANADIAN NORTHERN RY. CX). v. EQGEN. ft66
563. Aigumeiit for Peftitknier.
bring suit against resident and non-resident defendants.
Such discrimination in favor of a readent defendant is
not invalid.
In the Minnesota statute, the basis for the distinction
made by the exception is not merely the facrt of reeidence
or citizenship in Minnesota, but the fact that the resident
plaintiff, ^o has owned the cause of action since it ac-
crued, cannot be charged with the same delinquency in
prosecuting his blaim against a non-resident as is charge-
able to a non-resident plaintiff or is imputed to a resident
plaintiff who has purchased the claim by assignment from
anon-resident. The statute is not a clear and hostile dis-
crimination against citizens of other States. Citizenship
is not the sole basis for the discrimination. The exception
favors only those who have owned the cause of action
snoe it accrued. Again, it is only where the foreign stat-
ute prescribes a shorter period of limitation than tihe
Minnesota statute that any difference exists between
resident and non-resident plaintiffs. It applies only to
causes of action arising outade of the State.
It may be suggested that the test applied by the stat-
ute is not residence, but citizenship, and therefore the
justification for classification fails. But the word '' cit-
izen," as used in state statutes, is often q^^onymous with
the word ^'resident" and may be so construed. Caimes
V. Cavmes, 29 Colorado, 260; Union Hotel Co. v. Hersee,
79 N. Y. 464; Smiih v. Bimnngham Waier Works Co., 104
Alabama, 315; Rieewiek v. Dovw, 19 Maryland, 82, 9S;
JtM V. Lawrence, 66 Massachusetts, 631; Bacon v. Board
cf &ate Tax ComnriseionerB, 126 Michigan, 22; Cchbs v.
Coleman, 14 Texas, 604, 607; State v. Trueteee, 11 Ohio
St. 24, 28; Baughman v. Natiowd Waterworks Co., 46
Fed. Rep. 4, 7; Harding v. Standard (HI Co., 182 Fed.
Bjep. 421; Devanney v. Hanson, 60 W. Va. 3; Sedgwidc v.
Sedgwidc, 60 Colorado, 164; Stevens V. LarwOl, 110 Mo.
App. 140.
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556 OCnOBER TERM, 191ft
Aigument for Petitioner. 262 U. 8.
The evident purpoee of the l^islature and the prin-
ciples imd^lying this statute would justify this interpre-
tation if necessary to sustain it. The word ''citizen"
was used to make it clear that permanent residence or
domicile, and not temporary resid^ce, is the test. But
if the word ''citizen" be accepted as having a different
meaning than "resident," the result is the same. Under
the Fourteenth Amendment, to be a citizen of Minnesota
a person must be a resident of the State.
If the validity of this statute be in doubt, l^islative
and judicial acquiescence in the validity of sudi statutes
for a long period should operate to resolve that doubt in
favor of the statute. Tlie statutes of many other States
are substantially identical in terms with, or embody the
same pirinciple as, the Minnesota statute. They use the
word "citizen," instead of "resident." Th^ have been
applied by tlid-coiu*ts in hundreds of cases, covering over
a period of nearly three-quarters of a century. See, for
example, Penfidd v. Chesapeake Ac. R. B. Co., 13^ U. S.
351.
The validity of such statutes has been questioned in
but four cases {Chemung Canal Bank v. Lowery, 98
U. S. 72; AuUman it Taylor Co. v. Syme, 79 Fed. Rep.
288; Babineon v. Oceamc Steam Nao. Co., 112 N. Y. 315;
KUdi V. Angle, 220 N. Y. 347), but in each the discrimina-
tion between residents and non-residents has been sus-
tained. If there be doubt as to <^e constitutionality of
the law, this long acquiescence would be persuasive, and
should be controlling. Stuart v. Zxitrd, 1 Cranch, 299;
Fidi v. CUxrk, 143 U. S. 649, 691.
Althouj^ there is a diff er^ice between a statute making
a distinction between citizens and one making a distino-
tion between residents, only aliens could take exception
to the use of the word "citizen" instead of "resident"
The privileges and inunimities clause does not apply to
aliens, and, as to the equal protection clause, it is enou|^
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CANADIAN NORTHERN RY. CO. v. EGGEN. 867
553. Aigiiment for Respondent.
to say that no alien is a party to this suit, and only those
injuriously affected can urge the invalidity of a statute.
SUmdard Stock Food Co. y. Wr%gU,225 V. S. 540.
Mr. Ernest A. Miehdy with whom Afr. Tom Davis was
on the bri^, for respondent:
The effect and intent of the Minnesota statute is to
give to citizens of Minnesota privileges which are denied
to non-dtizeps. Fletcher y. Spaulding, 9 Minnesota, 54.
The statute permits a discrimination based solely on the
groimd of citizenship.
A right of action to recover damages for an injury is
property, which the legislature has no power to destroy.
Angle v. Chicago Ac. Ry. Co., IS! TJ. S. 1. The action
being properly brought, the State cannot keep and retain
this privilege for its own citizens and deny it to citizens
of other States. The word ''privileges" must be confined
to those privileges which are fundamental ; and includes
the rie^t to institute and maintain actions of any kind in
the courts of the State. Corfidd v. CoryeU, 4 Wash. C. C.
371, 380. See also Paul v. Virginia, 8 WaU. 168, 180;
Ward V. Maryland, 12 Wall. 418, 430; Cole v. Cunningham,
133 U. S. 107, 114; Slaughter-Houee Cases, 16 Wall. 36,
77. The right is not ''merely procedural."
Respondent is denied the right to sedc redress in the
courts of Minnesota, because he is not a citizen of Minne-
sota, but is a citisen of South Dakota. Article IV , § 2, of
the Constitution, intended to confer a general citizen-
ship upon an citizens of the United States. Cole v. Cunr
ningham, supra; and because the discrimination in the
statute is based solely on citizenship, the statute must falL
That the Minnesota statute is unconstitutional is con-
clueively settled by Chambers v. Baltimore A Ohio R. R.
Co., 207 U. S. 142. That case leaves it imdisputed that
the ri{^t to maintain actions in the courts is one of the
fundam^tal privileges guaranteed and protected by the
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S68 OCTOBER TERM, 191ft
OpinkmoftiieOoiiii. 362V.B.
GoDstitaticm, and that this ri|^t must be given to non-
citizens the same as to dtisens, no more, no less, and
without any restrictions or reservations that are not of
equal application to citizens and non-citizens. See also
Blakey. McClung, 172 U. S. 239, 266; ChaJkerv. Birming-
ham it Northwestern Ry. Co., 249 U. S. S22; MaxwM v.
Bughee, 250 U. S. 525.
The contention that to hold the statute unconstitutional
would nullify statutes in existence for many years is not
of great weight. Sloeum v. New York Life Ins. Co., 228
U. S. 364.
The statute also contravenes the Fourteenth Amend-
ment.
Chemung Canal Bank v. Lowery, 93 U. S. 72, is not in
point. The question of the authority of the legislature to
pass the statute there involved is left wholly untouched.
The question here is not a question of a reason for the
statute; it is a question of power.
None of the cases cited by petitioner, holding generally
that a reasonable classification is not a violation of the
privileges and immunities clause, hold that any State
may take away any fundamental ri|^t or privilege of a
dtizoi of the United States solely because he does not
happen to be a citizen of that State.
Mb. JusncB Clabxb delivered the opinion of the court.
Tlie only question presented for dedmon in this case
is as to the validity of § 7709 (rf the Statutes of Mfamesota
(General Statutes of Minnesota, 1913), which reads:
''When a cause of action has arisen outside of this
state and, l^ the laws of the place where it arose, an
action therecm is there barred by lapse of time, no such
action shall be maintaind in this state unless the plaiiH
ti£F be a citizen of the state who has owned the cause of
action ever since it accrued."
The Circuit Court of Appeals, reversing the District
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CANADIAN NORTHERN RY. (30. v. EGGEN. 669
868. Opinkm of the Ck>urt.
Court/ held this statute invalid for the reason that the
exemption in favor of citizens of Minnesota rendered it
repugnant to Article IV, § 2, of the Constitution of the
United States, which declares that ''The citizens of each
State shall be entitled to all privileges and inununities
of citizens in the several States."
The action was commenced in the District Court of
the United States for the District of Minnesota, Second
Division, by the respondent, a citizen of South Dakota,
against the petitioner, a corporation organized undar
the laws of the Dominion of Canada, to recovw damages
for personal injuries sustained by him on November 29,
1913, when employed by the petitions as a switchman in
its yards at Humboldt, in the Province of Saskatchewan.
The respondent, a citizen and resident of South Dakota,
went to Canada and entered the employ of the petitioner
as a switchman a short time prior to the accident com-
plained of. He remained in Canada for six months after
the accident and then returned to live in South Dakota.
He commenced this action on October 15, 1916, almost
two years after the date of the acddent. By the laws of
Canada, where the cause of action arose, an action of this
kind must be commenced within one year &om the time
injury was sustained. If the statute <k Minnesota, above
quoted is valid, it is applicable to the action, which,
being barred in Canada, cannot be maintained in Mmne-
sota by a non-reodent plainti£F. If, however, the statute
is invalid, the general statute of limitations of Minnesota,
allowing a period of sue years within which to commence
action, would be applicable. The record properly presents
the claim of the petitioner that the Circuit Court of Ap-
peals erred in holding the statute involved unconstitu-
ticmal and vxnd.
It is^plain that the iot assaibd was not eoaded for
the puxifbee of creating an arbitrary or vexatious dis-
crimination against non-residents of Minnesota.
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560 OCTOBEa TERBC, Un&
OpIoioDoftlieOoiiii. 2S2V.B.
It has been in force ever since the State was admitted
into the Union in 1868; it is in terms lurecisely the same
as those of several other States, and in substance it does
not differ from those of many more. It gives a non-resi-
dent the same ri|^ts in the Minnesota courts as a resi-
dent dtisen has, for a time equal to that of tho statute of
limitations where his cause of action arose. If a resident
citizen acquires such a cause of action after it has accrued,
his rii^ts are limited precisdy as those of the non-reo-
dent are, by the laws of the place where it arose. If the
limitation of the foreign State is. equal to or longer than
that of the Minnesota statute, the non-resident's position
is as favorable as that of the citiaen.
It is only when the foreign limitation is shorter than
that of Minnesota, and when the non-resident who owns
the cause of action from the time when it arose has slept
on his rii^ts until it is barred in the foreign State (which
han>ei]8 to be the respondent's case), that inequality
resulte-~and for this we are asked to declare a statute
unconstitutional which has been in force for sixty years. .
This court has never attempted to formulate a com-
prehensive list of the ri^te included within the ''privileges
and immunities " clause of the Constitution, Art. IV, ^
§ 2, but it has repeatedly approved as authoritetive the
statement by Mr. Justice Washington, in 1823, in Car^
fidd V. CaryM, 4 Wash. C. C. 371, 380 (the first federal
case in which this clause was considered), saying: ''We
fed no hesitation in confining these expressions to those
privileges md immunities which are, in their nature,
fundamental." Slaiughter-HaMe Ca$es, 16 Wall. 36, 76;
Blake v. McClung, 172 U. S. 239, 248; Chambers v. BalH-
mare A Ohio R.R. Co., 2m V.S. 1^,155. hxUnBCorfield
Caee the court included in a partial list of such funda-
mental privileges, '"Hie ri|^t of a citisen of one state,
... to institute and maintjiin actions of any kind in
the courto of another."
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CANADIAN NORTHERN 1SY. CX). v. BGGEN. 561
653. Opimon of the Cooit.
The State of Afinneeota, in the statute we are consider^
ing, recognissed this right of citizens of other States to
institute and maintain suits in its ooxurts as a fundar
mental right, protected by the Constitution, and for one
year from the time his cause of action accrued the re^
spondent was ^ven all of the rights which citizens of
Minnesota had undw it. The discrimination of which
he complains could arise only fix»m his own n^ect.
This is not disputed, nor can it be fairly claimed that
the limitation of one 3rear is unduly short, having regard
to the likelihood of tiie dispersing of witnesses to acdi-
dents such as that in which the respondent was injured,
their exposure to injury and death, and the failure of
memory as to the minute details of conduct on which
questions of negligence so often turn. — ^Thus, the hold-
ing of the Circuit Court of Appeals comes to this, that
the privil^e and immunity clause of the Constitution
guarantees to a non-resident precisely the same rights
in the courts of a State as resident citizens have, and
that any statute which gives him a less, even though it
be an adequate remedy, is imconstitutional and void.
Such a literal interpretation of the clause cannot be
accepted.
From very early in our history, requirements have been
imposed upon non-residents in many, perhaps in all, of
the States as a condition of resorting to their courts,
which have not been imposed upon resident citizens.
For instance^ secinity for costs has very generally been
required of a non-resident, but not of a resident citizen,
and a non-resident's property in many States may be
attached under conditions which would not justify the:
attaching of a reeddent citizen's property. This court
has said of such requirements:
''Such a regulation of the int^imal affairs of a State
cannot reasonably be characterized as hostile to the
fundamental ri^ts of citizens of other States. • . .
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562 0C3T0BER TERM, 1019.
Opinion of the Court. 262 U. 8.
It has never been supposed that regulations of that
character materially interfered with the enjoyment by
citizens of each State of the privileges and immunities
secured b;y the Constitution to citizens of the several
States." Blake v. McClung, 172 U. S. 239, 256.
The principle on which this holding rests is that the
constitutional requirement is satisfied if the non-resident
is given access to the courts of the State upon terms
which in themselves are reasonable and adequate for the
enforcing of any rights he may have, even thou^ th^
may not be technically and precisely the same in extent
as those accorded to resident citizens. The power is in
the courts, ultimately in this court, to determine the
adequacy and reasonableness of such terms. A man can-
not be 9aid to be denied, in a constitutional or in any
rational sense, the privilege of resorting to courts to en-
force his rights when he is given free access to them for
a length of time reasonably sufficient to enable an ordi-
narily diligent man to institute proceedings for their pro-
tection.
This is the principle on which this court has repeatedly
ruled that contracts were not impaired in a constitutional
sense by change in limitation statutes which reduced
the time for commencing actions upon them, provided
a reasonable time was given for commencing suit before
the new bar took effect. Sohn v. TFoteraon, 17 Wall. 596;
Terry v. Anderson, 95 U. S. 628, 632; Tennessee v. Sneed,
96 U. S. 69, 74; AnJUmi v. Greenhow, 107 U. S. 769, 774.
A like result to that which we are announcing was
reached with respect to similar statutes, in Chemung
Canal Bank v. Lawery, 93 U. S. 72; by the Circuit Court
of Appeals, Second Circuit, in AuUman dk Taylor Co. v.
Syme, 79 Fed. Rep. 238; in Klotz v. Angle, 220 N. Y. 347,
and in Robinson v. Oceanic Steam Namgation Co., 112
N. Y. 315^ 324. In this last case the Court of Appesh
of New York pertinently saiys:
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PENNSYLVANIA v. WEST VIRGINIA. 663
658. Syllabus.
''A oonstruotion of the constitutional limitation [the one
we are considering] which would apply it to such a case as
this would strike down a large body of laws which have
existed in all the states from the foundation of the govern-
menty making some discrimination between residents
an<f non-residents in legsl proceedings and other matters."
The laws of Minnesota gave to the non-resident r&-
Bpfmdemt free access to its courts, for the purpose of en-
f orcmg any right which he may have had, for a year, —
as long a lime as was given him for that purpose by the
laws under which he chose to live and work — and having
niQg^ected to avail himself of that law, he may not success-
fully complain because his expired right to maintain suit
elsewhere is not revived for his benefit by the laws of the
State to which he went for the sole purpose of prosecuting
his suit. The privilege extended to him for enforcing
bis daim was reasonably sufficient and adequate and the
statute is a valid law.
It results that the judgment of the Circuit Court of
Appeab must be reversed and that of the tMstrict Court
affinned.
Reversed.
COMMONWEALTH OF PENNSYLVANIA v. STATE
OF WEST VIRGINIA.
STATE OF OmO v. STATE OF WEST VIRGINIA.
IN BQt7IT7.
N08. 28 aadSi, Origvnal. Motioiis for appointiiMnt of spedal master, of
onmmifHifmer and to conaolidate submitted February 2, 1SI20.— Older
entered April 19, 1920.
Order ConBoUdaiing Cauaea fcr the Purpaae of Taking Te^imoni^Dea-'
ignaiUng Timnfor Taking Teitimony and AppainUng ConwuUgioner.
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564 OCTOBER TERM, lOig.
Order. 252 U. S.
On Consideratiom of the respective motions of the
complainants for the appointment of a Special Master
and of the defendant for the appointment of a Comr
missioner to take the testimony and report the same to
the Comi; and of the motions to consolidate the cases for
the purpose of taking such testimony,
It is now here Ordered that the motions to consoli-
date the cases for the purpose of taking the proofs be,
and the same are hereby, granted.
It is Further Ordered that Mr. Levi Cooke, of the
District of Columbia, be, and he is hereby, appointed a
Commissioner to take and return the testhnony in these
causes, with the powers of a Master in Chancery, as
provided in the rules of this Court; but said Commissioner
shall not make any findings of fact or state any ocmdu-
sions of law.
It is Further Ordered that the complainants shall
take their evidence, at such place or places as they may
indicate, between the first day of May, 1920, and the
first day of October, 1920, upon giving ten d&ys* notice
of the time and place of taking such evidence to the counsel
for the defendant; that the defendant may take evidence,
at such place or places as it may indicate, between the
first day of October, 1920, and the first day of March,
1921, upon giving ten dasrs' notice of the time and place
of taking such evidence to the counsel for the complain-
ants; that the complainants shall take thw evidence in
rebuttal between the first day of March, 1921, and the
first day of April, 1921, at such place or places as they
may indicate, upon giving ten days' notice to counsel for
defendant, and the defendant shall then conclude the
taking of its evidence in surrebuttal on or before the &cst
day of May, 1921, upon giving ten da]rs' notice of the
time and place of taking such evidence to the counsel for
complainants. Pravidedy however^ that if complainants
shall conclude the taking of their evidence in chief before
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PENNSYLVANU v. WEST VIRGINIA. 566
563. Older.
the first day of October, 1920, and shall give notice thereof,
that time for the taking of evidence in chief on the part
of defendant shall begin to run fifteen days after the giv-
ing of said notice by the complainants; and if the de-
fendant shall conclude the taking of its evidence before
the first day of March, 1021, and shall give notice thereof,
the thirty-one days' time for the taking of evidence in
rebuttal on bdialf of the complainants shall b^in to run
fifteen days after the giving of said notice by the de-
fendant; and the thirty days' time for the taking of evi-
dence on behalf of defendant in surrebuttal shall begin to
run from the termination of said thirty days' allowed for
the taking of the evidence in rebuttal by the complain-
ants; but nothing in this proviso contained shall operate
or be construed to postpone the ultimate dates for the
commencement of the time for the taking of the de-
fendant's evidence in chief, the complainants' evidence
in rebuttal and the defendant's evidence in surrebuttal,
respectively, first above specified.
It is Furthek Ordered that the said complainants
and the defendant, respectively, shall make such de-
posits with the Clerk of this Court for fees, costs and
expenses of the said Clerk and of the said Commissioner
as they may from time to time be requested by said Clerk.
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OCTOBER TERM, 1919. 667
252 U. B. DedsioDB Per Caiiam, Eto.
DECISIONS PER CURIAM, FROM MARCH 1, 1920,
TO AND INCLUDING APRIL 19, 1920, NOT IN-
CLUDING ACTION ON PETITIONS FOR WRITS
OF CERTIORARI.
>No. 418. Pkudential Insurance Company of Amer-
ica V. Robert T. Cheek. Error to the Supreme Court of
the State of Missouri. Motion to dismiss submitted
March 1, 1920. Decided March 8, 1920. Per Curiam.
Dismissed for want of jurisdiction upon the authority of
Schlosser v. HemphiU, 198 U. S. 173, 175; Louisiana
Navigation Co. v. Oyster Commission of Louisiana, 226
U. S. 99, 101; Grays Harbor Co. v. Coats-Fordney Co., 243
U. S. 251, 255; Bruce v. Tohin, 245 U. S. 18, 19. Mr.
Samuel W. Fordyce, Jr., and Mr. Thomas W. White for
plaintiff in error. Mr. Frederick H. Bacon for defendant in
error.
No. 669. Gulf & Ship Island Railroad Company
BT AL. V. Carl Boone bt al., etc. Error to the Supreme
Court of the State of Mississippi. Motion to dismiss or
affirm submitted March 1, 1920. Decided March 8, 1920.
Per Curiam. Dismissed for want of jurisdiction upon the
authority of McCorquodale v, Texas, 211 U. S. 432; Con-
solidated Turnpike Co. v. Norfolk, etc., Ry. Co., 228 U. S.
326, 334; St. Louis dk San Francisco R. R. Co. v. Shepherd,
240 U. S. 240, 241; Bilby v. Stewart, 246 U. S. 255, 257.
Afr. T. J. WHls and Mr. B. E. Eaton for plaintiffs in error.
Mr. George Anderson for defendants in er^r.
No. 692. Cheatham Electric SwrpcHiNO Device
Company t;. Transit Dsvelopbcent Company bt al.
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668 OCTOBER TERM, 1919.
Dedskxis Per Curiam, Eie. 262 U. 8.
Appeal from the District Court qf the United States for
the Eastern District of New York. Motion to dismiss or
affirm submitted March 1, 1920. Decided March 8, 1920.
Per Curiam. Dismissed for want of jurisdiction upon the
authority of Aspen Mining & Smelting Co. v. BiUings,
150 U. S. 31, 37; Brawn v. AUan Water Co., 222 U. S.
326, 332-334; Metropolitan Water Co. v. Kaw VaUey Dis-
trict, 223 U. S. 519, 522; Shapiro v. United States, 235
U. S. 412, 416. And see Red Jacket, Jr., Coal Co. v. Unii^
Thacker Coal Co., 24S U. S. 531. Mr. Albert M. Austin
tor appdlant. Mr. Thomas J. Johnston for appellees.
No. . Union Trust CoifPANT v. Woodwabb ft
LoTHBOP. Petition for- allowance of an appeal herdn
submitted March 1, 1920. Denied March 8, 1920.
Mr. WiUiam 0. Johnson for petitioner.
No. ^, Original. Ex parte; In telbMatter of J Auas
F. Bishop, Administratob, etc., Petitioneb. Motion
for leave to file a petition for a writ of prohibition herein
submitted March 1, 1920. Denied March 8, 1920.
' Mr. Harry W. Standidge for petitioner.
No. 312. John M. Tananbvigz v. People of the
State of Illinois. Error to the Supreme^ Court of the
State of Illinois. Motion to dismiss submitted March 8,
1920. Decided March 15, 1920. Per Curiam. Dismissed
for want of jurisdiction upon the authority of: (1) Con^
solidaied Turnpike Co. v. Norfolk, etc., Ry. Co., 228 U. S.
326, 334; St. Louis & San Francisco R. R. Co. v. Shepherd,
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OCTOBER TERM, lOia 669
2B3X7.S. Dediioiis Bar Cuij«m, Bte.
240 U. a 340, 241; BUby v. Stewart, 246 U. S. 266, 267.
(2) Brofan y. UnUed States, 236 U. S. 216, 218; United
Surety Co. v. American FrvU Co., 238 IT. S. 140, 142\
Sugarman v. United States, 249 U. S. 182, 184. (3) Sod-
tion 237 of the Jiidicial Code, as amended by the Act of
September 6, 1916, o. 448, § 2, 39 Stat. 726. Mr. Emory J.
SmdA for plaintiff in enor. Mr.EdwardJ.Bruindageajad
Mr. Edward C. FUdi for defendant in enor.
No. 262. VraaiNU and Wist VinoiinA Goal Gom-
PANT 0. GsmgN Charuis. Eiror to the Gircuit Gourt of
Appeals for the Fourth Gircuit. Motion to dismiss sub-
mitted March 8, 1920. Decided March 15, 1920. Per
Curiam. Disnussed for want of jurisdiction vqwn the
tnithority of: (1) Section 128 of the Judicial Gode; ShuUhie
V. MeDougal, 226 U. S. 561, 568; HuU v. Burr, 234 U. S.
712, 720; St. Anthony Churdi y. Penntyhama B. B. Co.,
237 U. S. 675, 577; Detaware, Lackawanna dk Western
B. B. Co. y. Yurkmis,23S U.3. 439, 444. (2) /Spencer y.
Duplan Sak Co., 191 U. S. 626, 530; Devine y. Los Angeles,
702 U. S. 313, 333; ShuUhis y. McDougd, 225 U. S. 561,
569. Jlfr.il.ilf.B«bfter and Mr. /S.B.iitM for plaintiff in
eiTor. Mr. WHUam k. Worth, Mr. A . S. Higenb^tham and
Ifr. Edgar Lee Oreeeer fat defendant in enor.
No. 230. G. G. Tatf Gompamt v. Statb ot Iowa.
Error to the Supreme Gourt of the State of Iowa. Ar-
gued March 12, 1920. Decided March 15, 1920. Per
Curiam. Dismissed for want of jurisdiction upon the
authority of the Act of Septembor 6, 1916, c. 448, § 6,
39 Stat. 726, 727. Mr. Fred P. Carr and Mr. Bobert M.
HawiM for plamtiff in enor, submitted. Mr.F.C.Damd-
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S^rO OCTOBER TERM, 1019l
DeoWoiM Per Curiam, Ele. S82 U. 8.
9on, with whom Mr. H. M. Hauner was on the brief, for
defendant in error.
No. 286. Jaicbb P. Pabsonb v. William H. Moor
ST AL. Error to the Supreme Court of the State of Ohio.
Argued March 12, 1020. Decided March 15, 1020. Per
Curiam. Disnussed for want of jurisdiction upon the
authority of § 237 of the Judicial Code, as amended by
the Act of September 6, 1016, c. 448, § 2, 30 Stat. 726.
Mr. Charles F. Caruei and Mr. C. A. Thacher, for plaintiff
in error, submitted. Mr. Herbert P. WkUney for defend-
ants in error.
No. — , Oriipnal. Statu of Nsw Jxnainr v. A. Mrr-
CHBLL Palmbr, Attobnbt General, ST AL. Qu motiou
for leave to file original bill. Motion submitted March 8,
1020. Order entered March 15, 1020.
Order. Application for leave to file bill granted and
process ordered; but should the Attorney General be
advised to move to dismiss, a motion to advance the
hearing on the motion to dismiss to the earUest prao~
ticable day will be entmtained, in order that the issues
arising from such motion may be considered in connection
with the controversies now under advisement resulting
from the original bill filed by the State of Rhode Island and
other causes iuvolving kindred questions which are now
also under submission. Mr. Thomas F. McCran for com-
plainant.
No. 111. Union Pacific Coal Compant v. Mark A.
Skinner, Ck>LLBCTOR of Internal Rbvenue. Cer-
tiorari to the Circuit Court of Appeals for the Eighth
Circuit. Submitted December 10, 1010. Decided March
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OCTOBER TERM, 1010. 671
262 U. B. Decisions Per Curiam, Etc.
22, 1920. Per Curiam. AflSnned with costs upon the
authority of Lynch v. HarrJby, 247 U. S. 330. Mr. Henry
W. Clark for petitioner. The ScUcitor Oeneral and Afr. A.
F. Myer% for respondent.
No. 227. McCat Enginbisring Compant v. UNrngD
Statess. Appeal from the Court of Claims. Argued
March 11, 12, 1020. Decided March 22, 1020. Per
Curiam. A£Snned by an equally divided court. Mr.
Justice McR^ynolds took no part in the decision of this
case. Afr. Owrge A. Rvng, with whom Mr. M. WaUan
Hendry and Afr. Oearge R. Shields were on the brief, for
appellant. Afr. Aeaistant Attorney Oeneral tkunsy with
whom Mr, Chas, F. Janes was on the brief, for the United
States.
No. 241. Kansas City Bom & Nut Compant t^. Kan-
sas Cmr Light & Powbr Coiipant. Error to the Su-
preme Court of the State of Missouri. Argued March 15,
1020. Decided March 22, 1020. Per Curiam. AflSrmed
upon the authority of Union Dry Goods Co. v. Oeorgia
Public Service Corparaiian, 248 U. S. 372. Afr. Rees
Turpin for plaintiff in enror. Afr. John H. Lucas, with
whom Afr. Frank Hagerman was on the brief, for defend-
ant in eiTor.
No. 267. Nbw Orlbanb Land Company v. Wiuab
J. RouBSBLy Administratob, etc., bt al. Error to the
Supreme Court of the State of Louisiana. Argued March
10, 1020. Decided March 22, 1020. Per Curiam. Dii»-
missed for want of jurisdiction upon the authority of
1237 of. the Judicial Code, as amended 1^ the Act of
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672 OCTOBER TERM, 1910.
DeoMOM Per Camm, Ele. 962 U. GL
September 6, 1016, o. 448, § 2, 30 Stat. 726. , Mr. Charles
Louguey with whom Mr. W. 0. Hart was on the brief, for
plaintiff in error. Mr. WUUam Winam WaU, for defrad-
antB in enor, submitted.
No. 261. Edwabd C. Mason, ab hb ib Tstnam nr
Bankruptct, btc., v. Thomas J. Shannon st al. Erot
to the Superior dmrt of the State of Massachusetts,
Argued March 10, 1020. Decided March 22, 1020. Per
Curiam. Dismissed for want of jurisdiction xxpoa the
authority of § 237 of the Judicial Code, as amended by
the Act of Sq3tember 6, 1016, c. 448, § 2, 30 Stat. 726.
Mr. Harold WiUiamSy Jr., with whom Mr. CharleB B. Fag
was on the brieCB, for plaintiff in «Tor. Mr. John T.
Hvghes, with whom Mr. James H. Vahey and Mr. PhOip
Mansfield were on the brief, for defendants in enor.
No. 541. United StATBs et al. v. Alaska Stbamhhtp
Company et al. Appeal from the District Court of the
United States for the South^n District of New York.
Argued December 16, 17, 1010. Order entered March 22,
1020. Counsel requested to file briefs concerning the
effect upon the issues herein involved resulting &om the
act of Congress terminating the federal control of railroads
and amending the act to rq^^te commerce in certain
particulars, approved February 2^, 1020. [See 263 U. S.
113.]
No. 207. Queens LANn & Tttlb Compakt bt al. p. ^
Kings County Trust Company vr al. > Appeal from the
District Court of the United States for the Eastern Dis-
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OCTOBER TERM, 19Kf. 678
252 n. 8. Dedsionfl Per Curiam, Eto.
trict of New York. Argued March 26, 1920. Decided
April 19, 1920. Per Curiam. Affirmed with costs upon
the authority of Farrea v. O'Brien, 199 U. S. 89, 100;
Goodrich v. Ferris, 214 U. S. 71, 79; BroJan v. United
States, 236 U. S. 216, 218; Sugarman v. United States,
249 XT. S. 182, 184. And see Blumenstock Bros. Advertising
Agency v. Curtis PtMishing Co., this day decided, ante,
436. Afr. TTiSiam (?. CooA^ for appellants. Mr.OeorgeB.
Brower for appellees.
No. 266. Mart Willem, a Cbeditob, etc., t;. Dawbon
E. Bradley, Tbttbtee, etc. Appeal from the District
Court of the United States for the Southern District of
Ohio. Ai^ed March 22, 1920. Decided April 19, 1920.
Per Curiam. Dismissed for want of jurisdiction iqpon the
authority of FarreU v. O'Brien, 199 TJ. S. 89, 100; Empire
State-Idaho Mining Co. v. Hanley, 206 U. S. 226, 232;
Goodrich v. Ferris, 214 U. S. 71, 79; Brolan v. United
States, 236 U. S. 216, 218; Sugarman v. United States, 249
U. S. 182, 184. Afr, WiUiam W. Symmes, with whom
Mr. Said S. Klein and Mr. Stanley D. WiUis were on the
brief, for appellant. Mr. Paid V. ConnoOy, with whom ,
Mr. Thomas A. ConnoUy, Mr. Dawson E. Bradley and <
Mr. George W. Cowles were on the brief, for appellee.
No. 282. MvntopoiJTAN West SmE Euhtatbd Rail-
way Company bt al. v. Maclay Hoyne, State's At-
ToiwBY, ETC., BT AL.; and
No. 283. Metropolitan West SmE Elevated Rail-
way Company bt al. v. Sanitary District op Chicago
ETAL. EiTor to the Supreme Court of the State of Illinois.
Argued March 25, 1920. Decided April 19, 1920. Pet
Curiam. Dismissed for want of jurisdiction upon thd
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574 OCTTOBER TERM, 1910.
( F^ Curiam, Ete. 3S2U.8.
authcxrity of § 237 of the Judicial Code, as amended by
the Act of September 6, 1916, c. 448, $ 2, 39 Stat. 726.
Mr. Frank J. Loesch and Mr. Timoihy J. Scofidd, with
whom Mr. Addison L. Oardner and Mr. QUBbert E. Porter
were on the briefe, for plaintiffs in error. Mr. Edmund D.
Adcocky with whom Mr. Oeorge I.Haight was on the brief,
for defendants in error in No. 282. Mr. C. ArA WUUagnB^
for defendants in enxxr in No. 283, submitted.
No. 295. E. W. Blancbtt v. Statv of New Mexico.
Error to the Supreme Ck>urt of the State of New Menoo.
Submitted March 25, 1920. Decided ApriI19, 1920. Per
Curiam. Dismissed for want of jurisdiction upon the
authority of § 237 of the Judicial Ckxie, as amended by
the Act of Sq>tember 6, 1916, c. 448, $ 2, 39 Stat. 726.
Mr. A. B. Renehan for plaintiff in eiior. Mr. 0. 0.
Afkrenj Mr. Harry 8. Bowman and Mr. N. D. Meyer for
defendant in error.
No. 423. Chicago & NosmwasTEBN Railway Coh-
PANT V. Hbbican Van de Zamdb. Error to the Supreme
Court of the State of Wisconsin. Motion to dismiss or
affirm submitted March 29, 1920. Decided ^ril 19, 1920.
Per Curiam. Dismissed for want of jurisdiction upon the
authority of § 237 of the Judicial Code, as amended by
the Act of Sq[>tember 6, 1916, c. 448, $ 2, 39 Stat. 726.
Mr. R. N. Van Doren for plaintiff in error. Mi;. Robert A.
Kaftan for defendant in error.
No. 233. Unite© Statbs p. Waynb . r^TiNrr, Kbn-
TUCKT. Appeal from the Court of XJlaims. Argued
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OCTOBER TERM, 1919. 678
252 U.S. DedsioDs Per Coriam, Bto.
March 12, 1920. Decided April 19, 1920. Per Curiam.
Affinned upon the authority of: (1) United States v. Cress,
243 U. S. 316, 329; United States v. Welch, 217 U. S. 333,
339; United States y.Grizzard, 219 U. S. 180, 185. (2) St.
Louis V. Western Union Telegraph Co., 148 U. S. 92, 101;
Western Uni&n Telegraph Co. v. Richmond, 224 U. S. 160,
169. And see Stodcton v. BaUimore & New York R. R.
Co., 32 Fed. Rep. 9. (3) FarreUv. O'Brien, 199 U. S. 89,
100; Goodrich v. Ferris, 214 U. S. 71, 79; Brolan v. United
States, 236 U. S. 216, 218; Sugarman v. United States, 249
U. S. 182, 184. Mr. Aseistani Attorney General Davis,
with whom The SdUcUor General and Mr. Geo. T. Star--
mont were on the brief, for the United States. Mr. Jach-
son H. ^Ralston, with whom Mr. George W. Hott was on
the brief, for appellee.
No. 263. B. T. Backus v. N0BF014K Southsbn Rail-
road Company. Error to the Supreme Court of Appeals
of the State of Virginia. Argued March 22, 1920. De-
cided April 19, 1920. Per Curiam. Dismissed for want
of jurisdiction upon the authority of § 237 of the Judicial
Code, as amended by the Act of September 6, 1916, c. 448,
§ 2, 39 Stat. 726. Mr. J. Edward Cole, with whom Mr.
Edward R.3aird, Jr., was on the briefs, for plaintiff in
error. Mr.Jas. G. Martin for defendant in error.
No. 287. F. R. Glascock st al. v. Ellis McDanibl
ET AL., MiNOBS, BY J. 0. Cravbns, Guardian. Error to
the Supreme Court of the State of Oklahoma. Submitted
March 22, 1920. Decided April 19, 1920. Per Curiam.
Dismissed for want of jurisdiction upon the authority of
§ 237 of the Judicial Code, as amended by the Act of
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676 OCTTOBER TERM, 1019.
DeoUonscmPetttioiM for Writs of CWtioni^ 2S2JJ.S.
September 6,1916,0.448, §2, SO Stat. 726. Mr.WiUiam
B. Moore and Mr. Oeorge S. Ramsey for plaintiffs in error.
Mr. OrarU Foreman^ Mr. James D. Simma and Mr. Charles
F. Ttunyan for defendants in enor.
DECISIONS ON PETITIONS FOR WRITS OF CER-
TIORARI, FROM MARCH 1, 1920, TO AND IN-
CLUDING APRIL 19, 1920.
(A.) PETITIONS GRANTED.*
No. 697. John P. Galbbaith v. John Vallblt,
TBtJSTBB, BTC. Maich 8, 1920. Petition for a writ of
certiorari to the Circuit Court of Appeals for the Eighth
Circuit granted. Mr. Fred B. Dodge for petitioner.
Mr. Francis J. Murphy for respondent.
No. 712. Westebn Union Tblborafh Company 9.
Addcb Spbiqht. March 8, 1920. Petition for a writ of
.certiorari to the Supreme Court of the State of North
Carolina granted. Mr. Francis Raymond Stark, Mr. Char-
les W. TiUett and Mr. Thomas C. GtOhrie for petitioner.
Mr. Murray AUen for respondent.
No. 746. Hbnby Ebechman t^. UNmsD States.
March 8, 1920. Petition for a writ of certiorari to the
Circuit Court of Appeals for the Second Circuit granted.
Mr. Harrison P. Lindolbfury and Mr. Edward Schoen for
petitioner. No brief filed for the United States.
1 For petitbns denied, see poai, 677.
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OCTOBER TERM, 1919. 677
2S2n.& DBQWoD8(mPetttbD8 for Writs of Oertioni^
Nos. 779 and 780. Unitibd States v. National Subbtt
Company. April 19, 1920. Petition for writs of certiorari
to the Circuit Court of Appeals for ttie Eighth Circuit
granted. The Solidior General and Mr. Aseiatant AUamey
Oenerdi SpeOaey for the United States. Mr. S. W. Ferdyoe
and Mr. Thomas W. White for respondent.
No. 836. H. Snowdbn Mabshall, as Rbcbhtbr, btc*
V. People op the State op New York. April 19, 1920.
Petition for a writ of certiorari to the Circuit Court of
Appeals for the Second Circuit granted. Mr.A.S.OHbert
and Mr. WUUam J. Hughes for petitioner. Mr. CorUandt
A. Johnson for reefpondent.
(B.) PETITIONS DENIED.
No. 678. CmcAQo, Rook Island & Pacipic Railway
Company v. O^C. Swam. March 8, 1920. Petition for a
writ of certiorari to the Supreme Court of the State of
Iowa denied. Mr. Joseph 0. OanMSj Mr. Thomas P.
LiUlepage and Mr. Sidney F. Taliaferro for petitioner.
Harriet B. Evar^ for respondent.
No. 682. J. B. PoLLABD V. United States. March 8,
1920. Petition for a writ of certiorari to the Circuit Com*
of Appeals for the Fifth Circuit denied. Mr. WiUiam H.
AtweU for petitioner. Mr. Assistant Attorney General
Stewart and Mr. H. S. Ridgely for the United States.
No. 686. Ada Gbifpith v. United States. March 8,
1920. Petition fora writ of Q^iprim to the Circuit Coifft
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678 OCTTOBER TERM, 1919.
DeoiaoDB on Ftotajons f or Writs of CMioniL 2S2n..&
of Appeals for the Seventh Circuit denied. Mr. Benjamin
C BocftrocA for petitioner. Mr. Assistant Attorney Oeneral
Stewart and Mr. H. S. Ridgdy for the United States.
No. 701. Fredebick M. Eilbcbr, Trustee, etc., v.
Charles H. Keith, Trustee, etc. March 8, 1920.
Petition for a writ of certiorari to the Circuit Court of
Appeals for the First Circuit denied. Mr. EJbridge R.
Anderson for petitioner. Mr. Lee Af . Friedman and Mr.
Percy A. Athertan for respondent.
No. 703. Rome Lane, on Behalf of Himself and
Others v. Equptable Trust Company of New York.
March 8, 1920. Petition for a writ of certiorari to the
Circuit Court of Appeals for the Eighth Circuit denied.
Mr. Wells H. Blodgett and Mr. Clifford B. Allen for peti-
tioner. Mr. 0. W. Murray and Mr. Lawrence Qreer for
respondent.
No. 704. Maria Eloisa Rocha v. Emilia Tuason y
Patino et al. March 8, 1920. Petition for a writ of
certiorari to the Supreme Court of the Philippine Islands
denied. Mr. W. A. Kincaid, Mr. Alex. BriOon and Mr.
Evans Broume for petitioner. No appearance for respond-
ents.
No. 711. Hudson Navigation Company v. J. Aron &
CoMPAi<?Y, Inc., et al. March 8, 1920. Petition for a writ
of certiorari to the Circuit Court of Appeals for the Second
Circuit denied. Mr. 8eth Shepard and Mr. StuaH 0.
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OCTOBER TERM, 1019. 570
252U.& DeoiBkmscmPMltioDsforWritiorOerti^^
CHhbaney for petitioDfir. Mr. Charles R. Hiekox and Mr.
Oeo. H. Mitchell for respondente.
No. 718. Camp Bibd, Ldcitbd, t^. Frank W. HofWBBrF,
AS CoLLBCTOB OF INTERNAL Revbnub, btc. March 8,
1920. Petition for a writ of certiorari to the Circuit Court
of Appeals for the Eighth Circuit denied. Mr. WtUiam V.
Foc^e« for petitioner. TheScUciUn'OeneralBndMr.W.C.
Herran for respondent.
No. 721. PHiLLin CoiiPANT V. Btbon F. EvasFFF,
Trustee, etc. March 8, 1920. Petition for a writ of
certiorari to the Circuit Court of Appeals for the Sixth
Circuit denied. Mr. WiUiam L. Carpenter for petitioner.
Mr. Clarence A. Lightner and Mr. Stewart Handey for
respondent.
No. 722. Alfbxd R. Swann v. W. W. Austell, Exec-
utor, etc., bt al. March 8, 1920. Petition for a writ
of certiorari to the Circuit Court of Appeals for the
Fifth Circuit denied. Mr. Daniel W. Rountree and Mr.
Clifford L. Andereon for petitioner. Mr. Jado J. Spalding
and Mr. CharUe T. HopMne for respondents.
No. 732. WiLLLUi F. Hanrahan v. Pacific Trans-
port Company, Ltd. March 8, 1920. Petition for a writ
of certiorari to the Circuit Court of Appeals for the Second
Circuit denied. Mr. Sitae B. AxteU and Mr. Fayette B.
Dow for petitioner. Mr. Robert S* Brekine and Mr. L. de
Orove Potter for respondent.
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680 OCTOBER TERM, 1919.
DedBbiis <m PetitioDS f(Hr Writs of Gertioi^ 3B2n.S.
No. 748. E. B. Capps, ADiaingTRATOB, btc. t^. Atlan-
tic Coast Line Railroad Cobipany. March 8, 1920.
Petition for a writ of certiorari to the Supreme Court of
the State of North Carolina denied. Mr. James S. Man-
ning for petitioner. Mr. Frederic D. McKenney^ Mr. J.
Spalding Flannery and Mr. P. A. WiUcax for req)0Dd6nt.
No. 749. J. W. Atkins v. L. G. Gabrbtt. March 8,
1920. Petition for a writ of certiorari to the Circuit Court
of Appeals for the Fifth Circuit denied. Mr. WaUer 8.
Penfieldj Mr. W. B. Spencer and Mr. Charles Payne Fenner
for petitioner. No appearance for reepoDdeat.
No. 750. Martanne Shipping Compant, Clahiant
OF Steamship ^^ Martanne/' v. Rambero Iron Works.
March 8, 1920. Petition for a writ of certiorari to the
Circuit Court of Appeals for the Second Circuit denied.
Mr. Horace L. Cheyney and Mr. Ralph J. M. BuUawa for
petitioner. Mr. Francis Martin for respondent.
No. 764. Cricket Steamship. Company v. John P.
Parry. March 8, 1920. Petition for a writ of certiorari
to the Circuit Court of Appeals for the Second Circuit
denied. Mr. Cletius Keating for petitioner. Mr. Siias B.
Axtell for respondent.
No. 709. WAi/nsR F. Britton, Trustee, etc., v.
Union Investment Company. Mandi 15. 1920. Petition
for a writ of certiorari to the Circuit Court of Appeals for
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OCTOBER TERM, 1019. 581
252 U. 8. Deoinaiis on IMtioiiB tor Writs of GedJoml
the Eighth Circuit denied. Mr. Harrison L. Schmitt Jpr
petitioner. Mr. WiUtam A. Lanccmter and Mr. David F.
Simpson for respondent.
No. 725. Wavfse M. Rbbdbb bt al. v. U^iitbd SrcATas.
March 15, 1920. Petition for a writ of certiorari to the
Circuit Court of Appeals for the Eighth Circuit denied.
Mr. John W. Seothom for petitioners. Mr. Assistant
Attorney Oeneral Stewart and Mr. W. C. Herron for the
United States.
No. 7S0. Atchafaiata Lakd Company v. Paul Cap-
DsviBLLBy AuDiTOB, ST AL. Mardi 15, 1920. Petiti<Hi for
a writ of certiorari to the Supreme Court of the State of
Louisiana denied.* Mr. Oeorge Janvier for petitioner. No
a|ypeaiance for respondents.
No. 716. E. J. Frazibr v. Sivltb of Qbbgon. Mahsh 22,
1920. Petition for a writ of certiorari to the Supreme
Court of the State of Oregon denied. Mr. Enos S. Stock-
bridge for petitioner. Mr. Oeorge M. Brown for respond-
ent.
No. 723. Alfbbd J. Ejbppbucamn bt al., Exbcutdbs
AND TrUSTBES, BTC. V. A. MiTCHBLL PaUIBR, AS AUEN
Pbopertt QjswtODiKH. March 22, ld20. Petition for a
writ of certiorari to the Court of Chancery of the State of
New Jers^ denied. Mr. Edward M. CoUe for petitioners.
Mr. Assistant Attorney Oeneral SpeOacy for respondent.
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582 OCTOBER TEBM, 10181
DMfaioMooPtotitioiMitoWiHiorCariiowL S62U.&
No. 724. Cabl Gosfbl sr al., Pabtnsbs, stc. v.
A. MiTCHSLL Fjluom, AS AuxMr FlEtopxBrrr CvmaDviH;
March 22, 1920. Petition for a writ of certiorari to the
Court of Chancefy of the State of New Jersey deniecL
Mr. Rvby R. Vale for petitioners. Mr. A$9Utanl Attorney
Oeneral SpeOaey for respondent.
No. 736. LouiB Db F. Munobb v. FmnrroNa Tnos ft
RiTBBER Company; and
No. 736. LoxTis Da F. MtTNom v. B. F. Goodrich
Company. March 22, 1920. Petition for writs of cer-
tiorari to the Circuit Court of Appeak for the Second Cir-
cuit denied. Mr. WHliam A. Redding ior petitioner.
Mr. Charlee Neaee, Mr. WUUam 0. MeKnight and Mr.
Bdward Rector for respondents.
No. 747. American Orb Rbclamahon Company v.
DwiOHT & Lloyd Sintering Cobipany, Inc. March 22,
1920. Petition for a writ of certiorari to the Circuit Court
of Appeals for the Second Circuit denied. Mr. Henry B.
Gbyley for petitioner. Af r. Otto C. TTientfii for respondent.
No. 757. Empire Fuel Company v. J. E. Lyons.
March 22, 1920. Petition for a writ of certiorari to tlie
Circuit Court of Appeals for the Sixth Circuit denied.
Mr. Arthur 8. Dayton^ Mr. MeUrin 0. Sperry and Mr.
Frank E. Wood for petitioner. Mr. Murray Seaeongood for
respondent.
No. 770. Carl H. Richardson, as Tritbtbe, etc. v.
Germania Bank of tbe City or New York. March 22,
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OCTTOBER TERM, 1919. 683
S52 n. S. DoAaaoB on PetitioiiB for Writs of OertiontL
1920. Petition for a writ of oertiorari to the Circuit Court
of Appeals for the Second Circuit denied. Mr. CarroU 0.
WaUer for petitioner. Mr. Bernard Hershkopf for re-
spondent.
No. 783. S. J. LiNDSBT V. United States. March 22,
1920. Petition for a writ of certiorari to the Circuit Court
of Appeals for the Fourth Circuit denied. Mr. A. Johna-
tan Ackiss for petitioner. Mr. Awiatant Attcmey General
Friereon for the United States.
No. 784. Atchison, Topbka & Santa Fe Railway
Company t^. Industrial Cobcmission of the Stats of
Ilunois (Maria Kiley, Administratrix, etc.).
March 22, 1920. Petition for a writ of certiorari to the
Supreme Court of the'State of Illinois denied. Mr. Oar-
diner Laikrap for petitioner. Mr. Lea L. Danahae for
No. 479. HoxTSTON & I'exas Central Railroad Com-
pany V. City of Ennis bt al. March 29, 1920. Petition
for a writ of certiorari to the Court of Civil Appeals for
the Fifth Supreme Judicial District of the State of Texas
denied. Mr. H. M. Oarwaady Mr. J. L. Oamman and
Mr. Jesae Andrews for petitioner. Mr. Bhadee S. Baker for
respondents.
No. 745. Antonio Cismebos Chapa v. United States.
March 29, 1920. Petition for a writ of certiorari to the
Circuit Court of Appeals for the Fifth Circuit denied.
Afr. C. M. Chambers for petitioner. Mr. Aseistant Attar-'
ney General Stewart and Mr. H. 8. Bidgely for the United
States.
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684 OCTOBER TERM, 1919.
DedsioDs on Petitioiis for Writs of Certiorari. 252 U. fr
No. 760. Central Elevator Company OF Bai/timobb
CiTT V. Naam Looze Vennoot Schap, etc. March ^,
1920. Petition for a writ of certiorari to the Circuit Court
of Appeals for the Fourth Circuit denied. Mr. Frederic 2).
McKenney and Mr, Shirley Carter for petitioner. Mr.
Charles R. Hickox and Mr. John M. WodUey for respond-
ent.
No. 761. Pennsylvania Railrioad Company v. Naam
LoozE Yennoot Schap, etc. March 29, 1920. Petition
for a writ of certiorari to the Circuit Court of Appeals for
the Fourth Circuit denied. Mr. Frederic D. McKermey
and Mr. Shirley Carter for petitioner. Mr. Charles R.
Hickox and Mr. John M. Woolsey for respondent.
No. 762. Central Elevator Company of Bai/eemorb
City v. Edwin Dyason, Master of the Steamship
" Welbeck Hall/' etc. March 29, 1920. Petition for a
writ of certioiuri to the Circuit Court of Appeals for the
Fourth Circuit denied. Mr. Frederic D. McKenney and
Mr. Shirley Carter for petitioner. Mr. James K. Symmers
for respondent.
No. 763. Pennsylvania Railroad Company v. Edwin
Dyason, Master of the Steamship ''Welbeck Hall/'
ETC. March 29, 1920. Petition for a writ of certiorari to
the Circuit Court of Appeals for the Fourth Circuit
denied. Mr. Frederic D. McKenney and Mr. Shirley
Carter for petitioner. Mr. James K. Symmers for respond-
ent.
No. 766. V. F. Miller tf. United States. March 29,
1920. Petition for a writ of certiorari to the Circuit Court
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OCTOBER TERM, 1019. 686
252 U. 8. Deddons on PetitioDs for Writs of Gertioran.
of Appeals for the Fifth Circuit denied. Mr. A. M. Cham'
bers for petitioner. Mr. Aaristant Attorney General
Stewart and Mr. H. S. Ridgdy for the United States.
No. 773. Francb & Canada Stbamship Corporation
V. EoNRAD Storgard. March 29, 1920. Petition for a
writ of certiorari to the Circuit Court of Appeals for the
Second Circuit denied. Mr. Bertrand L. PetUgrew for
petitioner. Mr. Silas B. Axtell for respondent.
No. 774. SouTHWBSTBRN Gas & Blectric Company
t^. Cut of Shrbvbport. March 29, 1920. Petition for a
writ of certiorari to the Circuit Court of Appeals for the
Fifth Circtiit denied. Mr. Max Pom for petitioner. No
appearance for respondent.
No. 778. Alec E^rickson v. John A. Roebunq's
Sons Company of New York. March 29, 1920. Peti-
tion for a writ of certiorari to the Circuit Court of Appeals
for the Second Circuit denied. Mr. Silas B. AxteU for
petitioner. Mr. Bertrand L. Pettigrew for respondent.
No. 787. Karl SANDoiREN et al. v. UiiSTBR Steamship
Company/Ltd., Owner and Claimant, etc. March 29,
1920. Petition for a writ of certiorari to the Chrcuit Court
of Api)eal8 for the Fifth Circuit denied. Mr. WiUiam J.
Waguespack for petitioners. No appearance for respond-
ent.
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586 OCTOBEB TERM, 1019.
DeoUouoD Petitions for Writa of OertioniL 26211.8.
No. 693. Bbnjamin Horowitz st al. i;. Unitbd
SriLTBS. Error to the Circuit Court of Appeals for the
Second Circuit. April 19, 1920. Petition for a writ of
certiorari herein denied. Mr. John J. Fibsgerald and
Mr. Elijah A . Zoline, for plaintiffs in error, in support of
the petition. Mr. AsHstant Attorney Oeneral Stewart, for
the United States, in opposition to the petition.
No. 737. Babber & Cohpant, Inc. v. Stbamship
'^Enutbfobd/' LnoTBD. April 19, 1920. Petition for a
writ of certiorari to the Circuit Court of Appeals for the
.Second Circuit denied. Jlfr.D..Ro0er£tt{f{ar for petitioner.
Mr. Charles R. Hickox and Mr. L. de Grove Potter for
respondent.
No. 753. AsTHjjR Bain t^. Unitbd St/ltbs. April 19,
1920. Petition for a writ of certiorari to the Circuit Court
of Appeals for the Sixth Circuit denied. Mr. Ahram M.
TUhnan for petitioner. Mr. AseietatU Attorney Oeneral
Stewart and Mr. H. S. Ridydy for the United States.
No. 768. Chablbs L. Babndbr t^. United States.
April 19, 1920. Petition for a writ of certiorari to the
Circuit Court of Appeals for the Ninth Circuit denied.
Mr. Oeorge D. CcUine for petitioner. Mr. Assistant Attor-
ney Oeneral Stewart and Mr. H. S. Bidgdy for the United
StateR.
No. 759. Wbbb Jat et al. v. Frederick Wbinbebo
bt al. April 19, 1920. Petition for a writ of certiorari to
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OCTOBER TERM, 1919. 687
252 U. 8. Dedsioiis on Petitions for Writs of Certiorari.
the Circuit Court of Appeals for the Seventh Circuit
d^ed. Mr. Chatles S. Burton and Mr. George L. Wilkin-
son for petitioners. Mr. R. A. Parker and Mr. Elliott J.
Stoddard for respondents.
No. 769. JsssB C. Washburn et al. v. E. N. Gil-
lespie. April 19, 1920. Petition for a writ of certiorari
to the Circuit Court of Appeals for the Eighth Circuit
denied. Mr. L. T. Michener^ Mr. Henry S. Johnston and
Mr. Horace Speed for petitioners. No appearance for
respondent.
No. 772. MuRLB L. Rowe, as Trustee, etc. v.
James L. Drohen et al. April 19, 1920. Petition for a
writ of certiorari to the Circuit Court of Appeals for the
Second Circuit denied. Mr. Herman J. Westwood for
petitioner. Mr. Grafton L. McOiU and Mr. Francis S.
Maguire for respondents.
No. 785. Shelley B. Hutchinson v. Wiluam M.
Sperrt et al. April 19, 1920. Petition for a writ of
certiorari to the Circuit Court of Appeals tor the Third
Circuit denied. Afr. William Mayo Atkinson for peti-
tioner. Mr. W. Benton Crisp and Mr. Frederick GeUer
for respondents.
No. 799. Christl^ Tjosevig et al. v. T. J. Donohoe
ET AL. April 19, 1920. Petition for a writ of certiorari
to the Circuit Court of Appeals for the Ninth Circuit
denied. Mr. John Rustgard for petitioners. Mr. Edmund
Smith for respondents.
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588 OCTOBER TERM, 1919.
I Diqweed of Without Consideration by the Court 252 U. 8.
No. 804. Nbw York Central Railroad Company^
Cladcant, stc. v. John S. Howxll bt al. April 19,
1920. Petitioii for a writ of certiorari to the Circuit
Court of Appeals for the Second Circuit denied. Mr.
Oscar R. Houston for petitioner. No appearance for
respondents.
No. 834. Elizabbth Dbnnt Grbgo v. Francis P.
Garvan, Aubn Propbrtt.Cubtodian; and
No. 8d5."A. J. Eblly, Jr., irr al., Trubtbbs, btc. v.
Francis P. Gabvan, Alisn Propertt Custodian.
April 19, 1920. Petition for writs of certiorari to the
Supreme Court of the State of Pennsylvania denied.
Mr. Frederic W. MiUer for petit oners. Mr. Assistant
Attorney Oeneral SpeUacy for respondent.
CASES DISPOSED OF WITHOUT CONSIDERATION
BY THE COURT, FROM MARCH 1, 1920, TO AND
INCLUDING APRIL 19, 1920.
No. 225. D. H. Gill et al. v. Citt of Dallas et al.
Error to the Court of Civil Appeals f oi the Fifth Supreme
Judicial District of the State of Texas. March 5, 1920.
Dismissed with costs, pursuant to the tenth rule. Mr.
WiUiam H. Clark for plaintiffs in error. No appearance
for defendants in error.
No. 237. The Globe Works v. Uktied States.
Appeal from the Court of Claims. March 11, 1920. Dis-
mioaed, pursuant to the sixteenth rule, on motion of
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OCTOBER TERM, 1910* 589
252 U.S. OMeBl>iQX)BedofWiliioatQ>ii8idemtionbytIi6Coiu^
Mr. AsMtard Attorney Cfeneral Davis for the United
States. Mr. John S. Blabr for appellant.
No. 293. Unitbo) Statds v. H. L. Sprinklb. Error to
the District Court of the United States for the Southern
District of Florida. March 15, 1920. Dismissed, on
motion of The SolicUor General for the United States.
Afr. N. P. Bryan for defendant in enor.
No. 267. E. B. HowABD, State Audhos of ihb Stab
OFOKiAEfOMA, 9. H.V.Fo8nBXTAL.,BTC. Appeal fiom
the District Court of the United States for the Westem
District of Oklahoma. March 19, 1920. Dismissed trith
costs, on motion of counsel for appellant. Iff. S. P.
FreeUng and Mr. John B. Harriean tar appeUant. Iff.
John HyBwford jmd Iff. Frank B. Bwfford for appellaea.
No. 204. Bt. LousBi' Iron Mouhtain A Soctbbbn
Railwat Gompamt 9. H. T. Tbub, Jb. Enor to the
S<q>rem0 Court of the State of OUahoma^ March 22,
1920. Dismissed with costs, on motion of counsel for
plamtiff in enor. Mr. Thcmae B. Pryar for plaintiff, in
enor. Iff. Fime B. BidiU for defendant in enor.
No. 298. Union PAcmc Railboab Compakt ir al. v.
W.fi. Jbnkinbbtal. EhxortotheSiqinineGouitofthe
State of NebrasKa. March 24, 1020. Dis0»8Si3d wMb
costs, pursuant toihe tenth rule. Mr.ChadeeH ShaK
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590 OCTOBER TERM, 191%
Caaes Dispoaed of Without Consideration Iqr tbe Gourt 252 U. S.
and Mr. WiUiam E. Flynn for plaintiffs in esrror. No
appearance for defendants in error.
No. 347. National Sttbett Ck>]fPANr v. UNmED
States for the use of American Sheet Metal Works
ET AL. Appeal from the Circuit Court of Appeals for the
Fifth Circuit. ^March 29, 1920. Dismissed with costs,
on motion of counsel for appellant. Mr. WiUiam B.
Orani and Mr. WiUiam J. Qriffin for appellant. Mr. J. S.
Sexton for appellees.
No. 209. Louis C. Tiffany, Sole Surviving Execu-
tor, ETC. t^. United States. Appeal from the Court of
Claims. April 19, 1920. Reversed, upon confession of
error, and cause remanded for further proceedings in
conformity with law, on motion of The Solidiar Oeneral
for the United States. Mr. Simon Lyon and Mr. R. B. H.
Lyon for appellant.
No. 502. Southern Cotton Oil Compakt st al. 9.
St. Louis, Iron Mountain & Southern Railway Com-
pany. Appeal from the District Court of the United
States for the Eastern District of Arkansas. April 19,
•1920. Dismissed with costs, per stipulation. Mr. W. JB.
Hemingway J Mr. 0. B. BoBe and Mr. J. F. Loughborough
for appellants. Mr. J. M. Moore for appellee.
No. 608. Delaware, Lackawanna & Western Rail-
road Company et al. v. Marie L. Thompson. Certifi-
cate from the Circuit Court of Appeals for the Third Cir-
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OCTOBER TERM, 1919. 591
282 n. EL CSbsbb Disposed of Without Consideration by the Court.
cuit. April 19, 1920. Dismissed, per stipulation. Mr. J.
Hoyden OUver for Delaware, Lackawanna & Western
Railroad Co. et al. Mr. Simon Lyon and Mr. B. B. H.
Lyon for Thompson.
No. 796. New Yobx Evbnino Post Company v.
John Abmstbono Chaloner. On petition for a writ of
certiorari to the Circuit Court of Appeals for the Second
Circuit. April 19, 1920. Dismissed, on motion of counsel
for petitioner. Mr. WiUiam M. TVherry, Jr.^ for peti-
tioner. No appearance for respondent.
No. 366. Chicago, Rock Island & Pacific Railway
Company v. Road Improvbmbnt Disteuct No. 1 of
Praibib County, Arkansas. Error to the Supreme
Court of the State of Arkansas. April 19, 1920. Dis-
missed with costs, on motion of counsel for plaintiff in
error. Mr. Thomas S. Buzbee, Mr. Thomas P. LttOe-
page, Mr. Sidney F.^TaUaferro, Mr. Oeorge B. Pugh, Mr.
J. O.OambleajidMr. W. F.Dickinson for plaintiff in error.
Mr. Charles A. Watts for defendant in error.
No. 367. Missouri Pacific Railroad Company bt al.
V. MoNROB County Road Imfroybmbnt District bt al.
Error to the Supreme @ourt of the State of Arkansas.
April 19, 1920. Dismissed with costs, on motion of coun-
sel for plaintiffs in error. Mr. Thomas S. Bud)eej Mr.
Thomas P. LUOspage, Mr. Sidney F. TaUaferro, Mr.
Oeorge B. Pugh, Mr. J. 0. OamUe, Mr. W. F. Dickinson
and Mr. Troy Pace for plaintiffs in error. Mr. W. E.
Hemingway, Mr. G. B. Rose, Mr. D. H. CanirM and
Mr. J. F. Loughborough for defendants in enxxr.
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INDEX.
PAOI
ABANDONMXNT. See Patent! for InTentiont, 4.
AOOOUNTINa. See Malls, 1.
A0TXON8 AND DXFXN8X8. See particular titles.
A0T8 OF OONO&I88. See Table at front of volume; Con-
gress; 8tatutes.
ADEQUATE BIMIDT. See Iquity, 1-4.
ADMINI8TBATtON:
Of estates. See Taiation, II, 3, 4.
ADMIKI8TBATXVX C0K8TBUCTI0K. See SUtutes, 6-9.
ADMIKISTBATIVI DICI8IOK8. See Interstate Oom-
meroe Aets; Mines and Mining, 5, 7.
ADMINI8TBATXVX OFFICERS. See OlBoers and Im-
ployees.
ADMIRALTY:
1. Appeal; Final Judgment. Decree dismissing petition to
bring in another party as indemnitor Dot appealable in ad-
vance of determination of main issue. Oneida Nav.
Carp. r.Jab dtCa 521
2. Charter Party; ArhitraUan. Provision for arbitration of
disputes and that party attempting to revoke submission
shall pay estimated freight as liquidated damages, inappli-
cable where there was not merely a dispute in carrying out
contract, but a substantial repudiation of it, by shipown-
er's declining to go on with voyage unless freight rate in-
creased. Th^AOanien 313
3. Id. Damages; Penality. Clause: " Penalty for non-per-
formance to be proved damages, not exceeding estimated
(593)
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694 INDEX.
ADMXEALTY— CofitmiiAl. vMoa
amount of freight," inapplicable where shipowner repudi-
ated contract by refusing to go on with voyage. Id.
4. Id. Such clause provides penalty and leaves ordinary
liability under contract unchanged. Id.
5. Id. Presumption, that rule on continent of Europe is
same as in England and United States. Id.
6. Seamen's Ad, 1916; Right to Demand Wage: Benefits
of § 4 apply to foreign seamen on foreign vessels, as well as
to American seamen on such vessels. StraihMTn 8. S. Co.
V. Dillon 348
Thompeon v. Lucae 358
7. Id. ConeiittUiondlity. Section is valid as applied to
foreign seaman who shipped abroad on foreign vessel under
contract withholding payment of wages until end of voy-
age. Id.
8. Id. Wages DemandMe. Not limited to those earned in
port of United States; demand in such port need not be de-
ferred 5 days from arrival of vessel there. Id.
ADMISSIONS. See Evidence,!, 2; Pleading* 2.
ADVSBSX CLAIMS. See Mines and Mining, 9 el Mg.
ADVIBSI POSSXSSION. See Mines and Mining, 9 el seq.
ADVSBTISINaAaXNOIXS. See Anti-Tmst Aot. 2.
AaRIOULTU&l» SIO&ITABT OF. See Treaties, 2.
AMXNDMXNT. See Patents for Inventions, 3, 4.
AMOUHT IH OONTBOVSBS Y. See Jnrisditftioat IV, 2, 8.
ANSWiE. See Pleading, 2.
ANTI-TBUSTAOT;
1. ResaU Price AgrernnmOs; Paimded Afikks. Sale 1^
manufacturer to other manufacturers and jobbers in sev-
eral States, under agreements to observe resale prices fixed
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INDEX. 505
ANTI-»TEiniT ACT— Cofilintied. pact
by vendor, AeM to nBtrain trade in viQlati<m of {1. UnUed
States y. Schroder' 8 Son, Ine 85
2. Advertising Contracts; Interstate Commerce; Triple Dam-
ages. BusinesB with publishers of placing advertisements
for manufacturers and merchants in magasines published
and distributed throughout United States, is not inter-
state commerce; and claim for triple damages from refusal
of publisher to accept such advertisements pursuant to at-
tempt of publisher to monopolize business of publishing
advertising matter fails to state cause of action of sub-
stantial character. BlumenaiU>ckBros.y.CwixsPvib,Co 436
3. /d. JutisdiicHon of DisMct Court. A daim under the
statute, real and substantial, most be set up. Id.
APPEAL AND XEBOB. See Jorisdiotion ; Parties, 6; Pro-
eedtire.
APPBAEAHOX. Bee Jvrlsdletlon, VI, 2.
APPOXlfTMXNT. See Officers and Xmplojeei.
APPOBTXONMXNT:
Of direct taxes. See Oonstttutlonal Law, XIL
APPBOPBXATION8. See Claims, 1,
ABBITBAnON. See Admiraltj, 2.
ABXAN8A8. See Boundaries, 1.
AEMT. See Oonrt-Martlal; Criminal Law, 3 el Mg.
ABTI0LB8 OF WAB. Bee Conrt-KartiaL
A88X88MXVT8. See Constitutional Law, XI, 4, 10; Xm,
i) Mines and Mining, 13, 16; Taxation.
A88IOKMXNT. See Claims, 4.
A88iaNMXNT8 OF XEBOB. See Jorisdietlon, n, 1»-
15.
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606 INDEX.
ASSUMPTION OF BISK. See Xmployvn' LUblUty Aet, pact
3; MMter And Senrant, 1, 2.
ATTACHMINT. See MineB and Mining, 11.
ATTORNEYS.
Fees; suit to establish equitable right in fund appropriated
by Congress. See Claims, 2.
AUTHORS. See Contracts, 1-4.
BANKS AND BANKING. See BiUs and Notes; National
Banks.
BARRATRY. See Constitutional Law, XI, 5, 13.
BILLS AND NOTIS:
1. Bona Fide Holder; Forged Draft. Drawee who pays
draft drawn to drawer's order, upon which drawer's signa-
ture and endorsement are forged, cannot recover from bona
fide holder for value, guilty ci no bad faith or negligence
contributing to success of forgery. United SlaUe v. Chaae
National Bank .485
2. Id. Mistake of Fact, To recover money as paid under
mistake of fact, plaintiff must show that defendant can not
in good conscience retain it. Id,
BIRDS, MIGRATORY. See Treaties.
BONA FIDI HOLDER. See BUls and Notes, 1.
BOUNDARIES:
1. ArkaneoB-Mxesiseippi. Decree appointing, empower-
ing and instructing commissioners to locate, etc., part of
boundary. ArkaneaeY. Mieeieaippi 344
2. Wieconeif^Minneeota; EnablinQ Aefo, 1846^ 18S7, con-
sidered, in connection with historical and other facts and
circumstances, in determining the "mouth of the St. Louis
River," as intended by Wisconsin Enabling Act. Minne^
eota V. Wieconein 273
3. Id, Upper and Lower Sti Louie Bays. Boundary Md to
run through middle of Lower Bay to deep channel leading
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INDEX. 697
B0UNDABI18— Cofiiinuerf. paob
into Upper Bay, to a point, thenoe westward along direbt
median course through waters not less than 8 ft. deep, ap-
proximately one mile to deep channel to which it leads, and
thence, following this, up-stream. Id.
4. Rule of the Thalweg. In applying rule, the deepest
water and the principal navigable channel are not neces-
sarily the same. It refers to actual or probable use in the
ordinary course ; and to adopt in this case a narrow, crooked
channel close to shore in preference to a safer and more
direct one with sufficient water would defeat its purpose.
Id.
CANADA. See Treaties, 1.
CAPITAL AND INCOMI. See Taiation, I.
CABBIIB8. See Admiralty, 2-5; Employers' Liability
Act; Safety Appliance Act.
Street railways. See Franehises.
Pipe lines. Bee Interstate Commerce, 3.
Valuation. See Interstate Commerce Acts.
Transportation of mails. See Mails.
Land grants. See Public Lands, II.
1. Negligence; Pereanal Injury. By laws of Panama, rail-
road is liable for injuries resulting from criminal negligence
of servant in running engine at rate prohibited by Police
Code. Panama R. R. v. Toppin. 308
2. Id. Reepondeat Superior. Rule of, applies in Panama;
due care in selecting servant no defense. Id.
3. Paesengere; Paw; Rdeaee from Liability fcr Negligence.
Employee undertaking interstate journey, injured while
traveling on company's line on pass good only between
points in Ohio, hdd traveling, at time of injury, intrastate,
so that validity of release depended on laws of Ohio. New
York Central R.R.y. Mohney 1 62
4. Id. Wilful Negligence. Release from all liability for
ne^gence ineffective where injury results from wilful and
wanton ne^gence of carrier's servants. Id.
5. Separaie Coach Regulations; Inieretaie Commerce. State
law requiring separalaon of idiite and colored passengers
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598 INDEX.
GABBmS-CofiimiMf. paa
hM not invalid as ^n^lied to intenirbaa nStttrnd, owned
by local corporation and lying wholly within State, while
in control of allied street car qrrtem over which can and
. passengers are transported to another State without
change for a single fare. Smith dmngtan de. By. ▼. Ken-
tucky 309
CincinnaHde.Ry.y. Kenlueky 408
OATTU. See Indians, 3, 4.
CXEnOBARI. See Jurisdiction, II, 2, 9, 10.
OHAETXR PART Y. See Adinlraitj» 2-6.
CHUF of XNOIKnBS. See Ofllcers and Imployees, 7-9.
CXECVITOOVBTOFAFPXALS. See Jorlsdtetlon, II (2);
III; IV, 3.
Cinxs. See Franchises.
CinZINS.
Privileges and immunities. See Oonstltutlonal Law, VI.
Diversity of citisens]up. See Jnrisdiotiony III, 1; IV, 6.
CIVIL AUTHORITY. See Oonrt-llartial.
CIVIL LAW. See Panama.
CIVIL 8XRVI0X. See Officers and Xmployeea, 9.
CLAIM8:
Collecting and adjusting daims; state regulation of busH
nesB. See ConsUtuUonal Law, XI, 6, 13.
Pay under mail transportation contracts. See Malls.
Refund of succession taxes. See Taxation, II.
1. Payment; Ministeridl Duty, Where fund appropriated
1>y Congress for payment to specified person in satisfaction
of finding of Court of Claims, duty of Treasury officials to
pay it over IS ministerial. Houetonv.OrmeB 469
2. Id. Suit Ayainet United Statee or Qjlker$; Attomey't
Fees. Suit by one having equitable right in fund to estab-
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INDEX. 609
GLAIK8-<7onlintfaci. vAom
lish such right and require Treasury officials to pay fund to
receiver, is not a suit against United States, and may be
maintained in courts of the District of Columbia if owner
and officials are made parties and bound by decree so that it
may afford acquittance to the Government. Id.
8. Id, 8Uu$ of DM, Immaterial in such cases, if owner .
voluntarily appears and answers without objecting to ju-
risdiction. Id.
4. AmgwmmL Rev. Btats., | 3477, does not prevent
assignment by operation of law after claim has been al^
lowed. Id.
CLIBK8. See OAcers And Imployeea.
CLOUD ON TITLI. See Equity, 1-^.
OOLLIOnON SU8INS88. See Oonstitutional XiSW, XI,
6,13.
OOLOBADO:
Denver Charier. Affords property owners hearing respect-
ing assessments for public improvements. Pamoomh v.
Denver 7
COMBINATIOV8. See Anti-Trust Aot.
COMKIBOI. See OonstitutionaL Law, III; Interstott
Oommerce; Interstate Commerce Acts.
COKMI88IONIB:
To locate boundary. See Boundaries, 1.
Original cases; appointment. See Penneylvania v. Weei
Virginia M3
COMin88IONBB OF XNTBBNAL BBVBNUB. See Taxa-
tion, II, 1.
COKKON CABBIBB8. See Carriers; Employers' LUbU-
itj Act; Interstate Commeree Acts; 8afet7 AppUanee
Act.
COMMON LAW. See Bmployers' LiabiUty Aet» 6.
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600 INDEX.
OOMKUNITY PBOPIBTT. See Mines and Kiniiift 10. paoi
OOMFTBOLLIE OF TBI ^UBBINCT. See NAtional
Banks.
CONDIMNATION. See Interstate Gommeroe Aets; Ju-
risdiction, II, 12; IV, 8.
OONFUCT OF LAWS. See Admiralty.
Camera; Rekaae from Liability for Negligence; Law Cheem-'
ing. Employee undertaking interstate journey, injured
while traveling on company's line on psfls good only be-
tween points in Ohio, held traveling, at time of injury, in-
trastate, so that validity of release depended on laws of
Ohio. New York Central R.R.Y.Mohney 152
GONOBI88:
For acts cited. See Table at front of volimie; Statutes.
For powers. See Oonstitutional Law.
1. LegieUUxte Approval; Adminietraiive ConetrucHon of
StattUe. Repeated re6nactment without substantial change
may amount to implied legislative approval of construction
<^ statute by executive officers. National Lead Co. v.
United States 140
2. Legidative Hiatory. Of later act of Cong^'ess, no aid to
construction of earlier one. Penn Mutual Life Ins. Co, v.
Lederer 523
0ON8IDXBATION. See Kails, 7, 8.
G0N8PIBA0T. See Criminal Law, 1, 3 el seg.
0ON8OLIDATI0N:
Of original cases, for taking of testimony. See PennsyU
vaniav. West Virginia 568
CONSTITUTIONAL LAW:
I. General, p. 601.
II. Judicial Power, p. 601.
III. Commerce Clause, p. 601.
IV. Contract Clause, p. 603.
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INDEX. 601
CONSTITUTIONAL LAW-<J(miinued. taob
V. FuU Faith and Credit, p. 603.
VI. Privileges and ImmunitieB, p. 603.
VII. Treaties; Enforcement Legislation, p. 606.
VIII. Fifth Amendment, p. 605.
IX. Seventh Amendment; Jury, p. 605.
X. Tenth Amendment; Reserved Powers, p. 606.
XI. Fourteeath Amendment:
(1) General, p. 606.
(2) Notice and Hearing, p. 606.
(3) Liberty and Property; Police Power, p. 606.
(4) Equal Protection of the Laws, p. 607.
(5) Taxation, p. 607.
XII. Sixteenth Amendment; Income Tax, p. 608.
XIII. Testing Constitutionality, p. 606.
See JurUdietion ; Proeedore.
Direct taxes; apportionment. See XII, ii^ra.
Relief against unconstitutional tax lien. See Xquity, 1-4.
I. General.
1. State Taxation, Qovemmental jurisdiction depends
upon power to enforce mandate of the State by action
taken within its borders either in personam or in rem,
Shaffer v. Carter 87
2. Id, Income Tax, State may tax income derived from
local property and business owned and managed from with-
out by a dtisen of another State. Id, Trarie v. Yale ft
Towne Mfg, Co.... 60
3. Id. DoMe Taxation. Constitution does not forbid
double taxation by the States. Shaffer v. Carter 37
II. Judioial Power.
Reasonableness of Statutes, Power to determine whether
terms upon which non-residents are permitted to maintain
actions in another State are reasonable and adequate, is in
the courts, ultimately in this one. Canadian Northern By,
V. Eggen 553
m. Commerce Clause.
1, WhatisInterstateCommeree; PipeLines; Rates, Trans-
mission and sale of gas, produced in one State and trans-
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602 INDEX.
COV8TITUTIONAL LAW— Conttniied. paob
ported and f urniahed directly to oonsumen in another by
pipe lines from source of supply^ b interstate oommeroe;
but, in absence of contrary congressional regulation, is sub-
ject to local regulation <rf rates. Penntyhfonia Oob Co. v.
PtMieSenrieeCamm 28
2. Id. Reed AmendmerU; Traneportationf by owner of
whiskey for personal use, in his own automobile, into pro-
hibition State, is transportation in interstate emnmeroe.
UndiedSiateB y. Simpeon 466
3. ^ Id. Foreign Carparaiuma; Coneeyaneee; Deiivery of
Deeds. Power to require sisternstate corporations to file
articles with local official as condition to acquisition of land
within State, and rule that conveyances are governed by
lex loci rei site, are not a£Feoted by delivery of deeds in
another State; the transaction does not thus become
matter of interstate commerce. Mtmday v. Wiecanein
TruHCo *4W
4. Camera; Separate Coach Lowe. State law requiring sep-
aration of white and colored psssengers held not invalid as
applied to interurban railroad, owned by local corporation
and lying wholly within State, while in control of allied
street car gystem over which cars and passengers are trans-
ported to another State without change for a sini^e fare.
'South Covififftandc. By. y. Keniuek » 399
CineinnaH Ac. Ry. v. Kerducky 408
6. InapeetianLaw; PrimleifeTax. lioense tax on distribu-
tors and retail dealers in gasoline, AeU not an inspection law
but a privilege tax, and a burden on interstate eommeroe.
Aakren v. ConHnerUal OH Co 444
6. Id. Sake; Original Paekoffea. If separable, law is valid
as applied to sales from original packages in retail quanti-
ties. Id.
7. Id. Bxeiae on Looai Dealing. No discrimination against
other States because commodity not produced in taxing
State but comes whoUy from others. Id.
8. State Income Tax. Net income from interstate com-
merce is taxable under general income tax law. Shaffer v.
Carter 87
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INDEX. 608
OOKSTXTUnoVAL LAW— Conlmiiad. 9Am
IV. Oontraet OlauM.
1. SUUe I fwome Tax; Bf^orc$mmU; R^guUMoncf Corporate
Business. Requirement that employen withhold and pay
tax on incomes of nonHreridentB arising within State from
salaries or wages is not unreasonable as applied to sister*
state corporation carrying on local business without con-
tract limiting regulatory power of taxing State. Traeis v.
YaledToume MJg.Co 60
2. Stre^ Railway Franchise, Company's obligation to re-
pave streets between and next it^ rails hdi to extend to use
of materials adopted by. city in repaying rest of street.
Milwaukee Elec. Ry. y, Milwaukee 100
8. Id. cay's Determination of Kind of PaeemenL Not
arbitrary or unreasonable to require company to instal
more expensive kind. Id.
4. Foreign Corporations; Conseyanees. As to subsequent
tnuisactions, state law invalidating conveyances of local
realty taken by sister-state ccMrporations before they have
filed articles with local official, is valid. Mundaiy v. Wis-
consin TruH Coj 490
5. Id. Power to so oondition aequisitioo of land, and rule
that conveyanoes are governed by lex loci rei sUm^ are not
affected by delivery of deeds in another State; the transac-
tion does not thus become matter of interstate commeroe.
Id.
V. ruUFatthaadCrodit.
1. Judffmentfor Wrongfvd Death. Statute denying jurisdic-
tion to Illinois courts where death occurs in another State,
construed as applying to action on sister-state judgment
founded on such cause of action, b invalid. Kenney v.
Supreme Lodife -: 411
2. Id. Alabama law, giving right of action, cannot, by
declaration that such actions cannot be maintained else-
where, affect right to enforce by actions in another State, a
judgment recovered on such cause of action in Alabama. Id.
YI. Privllefes and Immunities. Art.VI»Sa.
1. State Income Tax; NonHresidents. State may tax ui-
eome derived from local property and business owned and
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eM INDEX.
OOHSTITUnOHAL LAW— CoiHintMi. pjoi
managed from without by a citlsen <rf a&ottMT Btota. Bktf'
fery.Carier 37
Tram v. YaU A Towns Mfg. Co 60
2. Id. DeducHona. Fact that law permits rendente to
deduct losses sustained without as wdl as those sustained
within State, while non-residents may deduct only those
occurring within it, does not violate this clause. Id.
8. Id. NonHftndi&nU. State may enforce tax, as to non-
residents employed within her borders, by requiring em-
ployers to withhold and pay it from salaries or wages; no^
discrimination results from omission of requirement in case
of residents. Traituv.YciUATowneMfg.Co 60
4. Id. RuidenUandCUiMens. " Resident" and " citisen"
are not synonymous, but a tax which discriminates against
all non-residents necessarily includes those who are cHiiena
of other States. Id.
6. Id. Dodfidiona. Exemptions to residents, with no equiv-
alent exemptions to non-residentS| abridge privileges and
immunities. Id.
ft. Id. Such disonminmticm not overoome by exdttding
from taxable income of nob-residents annuities, interest
and dividends not part oi inoome from local busineeB or
oomqMition, sobjeot to the tax. Id.
7. Id. Abridgment of privileges and immunities cannot
be condoned by other States or cured by retaliation. Id.
8. Right to Sue. Clause protects rights which are in their
nature fundamental, including right cf citisen of one State
to sue in courts of another. Canadian Northern Ry. v.
Sggen 558
9. Id. CondiHone. Requirement, is satisfied if non-resi-
dent be given access to courts upon terms reasonable and
adequate for enforcing whatever rights he may have, even
though the terms are not the same as are accorded to reo-
dent citisens. Id.
10. Id. ReaeonMenees; Power cf Cimrito, to decide
whether terms allowed non-resident are reasonable and
adequate. Id.
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INDEX. 605
' dONSTITUTIDllAL LAW— CemimtMd. paqb
11. Id. LimiUaianB. Statute barring suit on oauae of
action arising outside of State when action is barred by laws
of place where it arose, unless plaintiff is a citizen and has
owned cause of action since it accrued, hdd oonstitutionaL
Id.
VII. Treaties; Inforcement Legislation.
1. Afi^a<oryBird7r6ai^,iP/^, providing for proiection of
birds in United States-and Canada, within treaty-making
power. MiMottri v. Holland 416
2. Id. Ad of 1918, prohibiting killing, etc., of birds in-
cluded in terms of treaty, except as permitted by regula-
tions of Secretary of Agriculture, valid as necessary
means of effectuating treaty. Id.
3. Id. Reserved RighU of States. The treaty and statute
do not infringe property rights or sovereign powers reserved
by Tenth Amendment. Id.
4. Id. With respect to such rights, treaty-making power
is not limited to what may be done by an unaided act of
Congress. Id.
VIII. Tifth Amendment.
Liberty of Contract; Due Process; Foreign Seamen. Provi-
sions of Seamen's Act of 1915, respecting right to demand
wages, held valid as applied to foreign seaman who shipped
abroad on foreign vessel under contract withholding pay-
ment of wages until end of voyage. Stratheam S. 8. Co. v.
DiOan 348
Tfiompsan v. Lucas 358
IX. Seventh Amendment; Jury.
Amendment does not forbid jury of less than twelve in case
under Federal Employers' Liability Act tried in state
court. Chicago, R. f. A Pac. Ry. v. Ward 18
X. Tenth Amendment; Beserved Powers.
1. Migratory Birds. Treaty of 1916 with Great Britain,
and enforcement le^slation of 1918, do not infringe prop^
erty rights or sovereign powws reserved to the States.
Missouri v. Holland 416
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606 INDEX.
CONSTITUTIONAL LAW— €Wtniie<2. faob
2. Id. With respect to such rights, treaty-making power
is not limited to what may be done by an unaided act of
Congress. Id.
XI. Toorteenth Amendment.
(1) Oeneral.
1. Double Taxatian, Amendment does not forbid double
taxation by States. Shaffer v. Carter. 37
2. Procedure. Refusal to transfer cause from division of
Supreme Court of Missouri to court in banc does not violate
constitutional right. OoldemUhr. PrendergadConetr.Co. , . Vl
(2) N(Mee and Hearing.
3. Bates; Judicial Teet; PendUiee. Provisions of Okla-
homa law relating to enforcement by penalties of rates fixed
by state commission violates Amendment, without regard
to question of insufficiency of rates. Oklahoma Operating
Co. V. Love 331
OklahamaQinCo.v.Oklahama 339
4. PtMic Improvements; Assessments. Denver Charier,
a£Fords hearing respeicting local assessments and empowers
Board of Supervisors to determine complaints before as-
sessments are made. Pameomb V. Denver 7
(3) Liberty and Property; Police Power.
5. Collection Business. Rights of layman engaged in col-
lecting and adjusting claims not infringed by state law
prohibiting solicitation of such employment. McClpskey v.
Tobin 107
6. Street Bailway Paving. Where franchise contract obli-
gates company to repave between and next its rails with ma-
terial used by city in repaving rrsi of street, and city's regu-
latory power has not been precluded by contract, city may
determine in the first instance kind of pavement public
necessity demands; court cannot say it was unreasonable to
require company to instal more expensive kind. Mihvavkee
Elec, By, v. Milwaukee 100
7. Id. Effect on Income. Company cannot escape con-
tractual duty to repave on ground that expense will reduce
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INDEX. 607
OON3TITUTIONAL LAW — C<mt%nved. paob
income below leasonable return upon property used in its
business. Id.
8. Foreign CorporaHana; Conveyances. As to subsequent
transactions, state law invalidating conveyances of local
realty taken by sister-state corporations before they have
filed articles with local official, does not violate due process
clause. Mundayy. Wisconsin TruatCo 499
9. Id. Power to so condition acquisition of land, and
rule that conveyances are governed by lex loci ret nte, are
not affected by delivery of deeds in another State; the
transaction does not thus become matter of interstate
commerce. Id.
10. Public Improvements; AeeesemenU, Exclusion from
sewer district of city park held not to render assessment on
other property invalid. Goldsmith v. Prendergast Conatr.
Co 12
(4) Equal Protection of the Laws. See 10, supra.
11. Judicial Decisions. Uniformity not guaranteed. Aft7-
waukee Elec. Ry. v. Milwaukee 100
12. Id. No ground for complaint where state courts after
judgment complained of, rendered another, claimed to be
irreconcilable with it on matter of law, in suit between
strangers. Id.
13. Collection Business, Rights of layman engaged in col-
lecting and adjusting claims not infringed by state law pro-
hibiting solicitation of such employment. McCloskey v.
Tolnn 107
14. State Income Tax; Non-residents; Deductions'. Fact
that law permits residents to deduct losses sustained with-
out as weir as those sustained within State, while non-
residents may deduct only those occurring within it, does
not violate this clause. Shaffer v. Carter 37
Travis v. Yale & Towne Mfg. Co 60
15. Income Tax. State may tax income derived from local
property and business owned and managed from without by
a citizen of another State. Shaffer v. Carter 37
(5) Taxation. See supra, 1, 4, 10, 14, 15.
16. State Income Tax; Lien. Without deciding whether
enforcement of tax on income derived by non-resident from
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60S INDEX.
00H8TITUTI0NAL LAW-^onHna^. pam
part of his property within a State by imponng UeQon all his
property there situate violates due process clause, hM, that
State was justified in treating properties and business of
producer of oil and gas, who went on with thdr operation
after income tax law was enacted, as an entity, producing
the income and subject to the lien. Shaffer v. Carter 87
17. Id. Withholding ai Soiarce. State may enforce tax on
incomes of non-residents arising within her borders by re-
quiring employers to withhold and pay it from salaries or
wages. Travis v. Yale A Totone Mfg. Co 60
18. Id. Such requirement is not unreasonable as applied
to sister-state corporation carrying on local business with-
out contract limiting regulatory power of taxing State. Id.
XII. Sixteenth Amendment; Income Tax.
1. Stock Dividends. May not be taxed, as income to stock-
bolder, without apportionment, when made lawfully and in
goodfaith. Eisner y. Macomber 189
2. Id. Art. 7, § ;e, d. S; Art. 7, § P, d. 4. Act of 1916, to
extent that it imposes such taxes, conflicts with these
provisions. 7d.
3. Id. These provisions limit the extension, by con-
struction, of the Amendment. Id.
4. Id. What is Income. Determined in each case accord-
ing to truth and substance, without regard to form. 7d.
5. 7d. A tax on stock dividends is a tax on capital in-
crease and not on income; such taxes must be apportioned
according to population in the several States.- 7d.
XIII. Testing Oonstlttttionality.
1. Effect of Law. Practical operation and effect determina-
tive. Shaffer v. Carter 37
2. Parties Interested. Parties who do not avail <rf op-
portunity to be heard before local board cannot com-
plain of assessments as unconstitutional. Fameomb v.
7>eniier 7
CONSTEVGTION. See Admiralty; Anti-Trust Act;
Boundaries, 2-4; Claims, 4; Colorado; Constitutional
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INDEX. 609
OOmTRVOTlOV—ConHnued. paqb
Law; Oontraett; Oourt-Martlal; OrimlnAl Law; Cua-
toms Law; Death; DeadB, 1; Imployerg' Liability Aot;
Franehises; Indians; Interstate Gommeree Acts;
Intozicatinff Liquors; Jurisdiction; Limitations;
Hails; Mines and Mining; National Banks; OfElcers
and Imployees; Panama; Patents for InTentions;
Public Lands; Safety Appliance Act; Statutes; Taxa-
tion; Trade-Marks; Treaties.
Accepting state court's oonstaruction of contract. See
Procedure, II, 2.
OONTBACTS. See Franchises.
Foreign seamen's wageis. See Admiralty, 6-8.
Resale price agreements. See Anti-Trust Act, 1.
Impairment of obligation. See Constitutional Law, IV.
Liberty of contract. Id. VIII.
Between railroads, for through service; eifect on relation
to employees. See employers' Liability Act, 2.
Mail transportation. See Mails.
Consideration. See Id,, 7, 8.
Construction by state court; when accepted. See 'Pro-
cedure, II, 2.
1. Copyrighted Play; License to Produce. Contract corir
strued as to duration of grant. Manners v. Morosco 317
2. Id: Held not to convey right to represent in motion
pictures. Id.
3. Id. Implied covenant by grantor not to use reserved
motion picture rights to destruction of rights granted. Id,
4. Id. Injunction. Author entitled to injunction against
representation in motion pictures, on condition that he also
shall abstain from such representation. Id.
6. Charter Party; ArbitroHon;"* Nonr-perfarmance. Provi-
sion for arbitration of disputes and that party attempting
to revoke submission shall pay estimated freight as liqui-
dated damages, hdd inapplicable where there was not
merely a dispute in carrying out contract, but a substantial
repudiation of it, by shipowner's declining to go on with
voyage unless freight rate increased. The Atlanten 313
6. Id. Damages; Penalty. Clause: '' Penalty for non-
performance to be proved damages, not exceeding esti-
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610 INDEX.
OOHTKACTS— Cofiitniied. paos
mated amount of freight/' hM inapplicable where ship-
owner repudiated contract by refusing to go on with
voyage. Id.
7. Id. Such clause provides penalty and leaves ordinary
liability under contract unchanged. Id.
8. Recording; Nevada Law. Contract for share in pro-
ceeds of mining location with right to have it made produc-
tive need not be recorded to be good inter partes. Cole v.
Ralph 286
CONTRIBUTORY NSOLIOKNCK. See Imployers' Lift-
bility Act, 4.
CONVSYANCK8. See Deads; Mines and Mining, 8, 10.
CONTICnON. See Court-Martial; Criminal Law, 7, 9, 13.
COPYRIGHT:
Plays; license to produce. See Contracts, 1-4.
CORPORATIONS. See Franchises; Gas; Insurance; Na-
tional Banks.
Eminent domain. See Jurisdiction, II, 12; IV, 8.
Stock dividends. See Taxation, I, 2-8.
1. Foreign; Conveyances. State law invalidating convey-
ances of local realty taken by sister-state corporations be-
fore they have filed articles with local official, violates
neither contract nor due process clause. Munday v. Wis-
consin Trust Co 499
2. Id, Power to so condition acquisition of land, and rule
that conveyances are governed by the lex loci rei sita, are
not affected by delivery of deeds in another State; the
transaction does not thus become matter of interstate
commerce. Id.
3. Income Tax. Requiring withholding andvpayment of
income tax from salaries and wages as to non-residents em-
ployed within State, is not unreasonable as applied to sister-
state corporation doing local business without contract
limiting regulatory power of taxing State. Travis v. Yaie
& Towns Mfg. Co ',.. 60
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INDEX. 611
OOBFOBATION8— Conftntied. pacdi
4. Id, Power of State is not affected by fact that corpora-
tion may find it more convenient to pay employees and
keep accounts in State ci origin and principal place of busi-
ness. Id,
COVET or 0LAIM8. SeeClalms; Jurlsdietion, VI,1.
Suit in, for refund of succession taxes. See Taxation, II.
GOimT-MAETIAL:
1. Crimes; Civil and Military JurisdicHan; Articles of War,
Jurisdiction to try and punish for murder committed by
soldier in federal service upon civilian while nation is at
war, but within jurisdiction of a State where hostilities are
not present, is not vested exclusively in military court-
martial by Articles of War of 1916. CcidvM v. Parker .... 376
2. Id, Conviction and sentence in state court are not
void. Id,
COVBTS. See Admiralty, 1; Anti-Trnst Aet, 3; Claims;
Constitutional Law, II; Court- Martial; Squity; Juris-
diction; Mandamus; Pleading, 9; Procedure; Statutes.
Power over administrative decisions. See Interstate
Commeretf Acts; Mines and Mining, 5, 7.
Right of non-resident to sue. See Constitutional Law,
VI, 8-11.
Instructions. See Employers' Liability Act, 4; Master
and Servant, 1.
Judicial decisions. See Constitutional Law, XI, 11> 12.
CBSDITOE8:
Attachment. See Mines and Mining, 11.
CEIMINAL CODE. See Criminal Law, 1.
CEIMINAL LAW. See Anti-Trust Act, 1; Intoxieating
Liquors.
Barratry. See Constitutional Law, XI, 5, 13.
Crimes committed by persons in military service; jurisdic-
tion to try and punish. See Court-Martial.
1. Forei(fn ErdistmefU. Engaging another to go to Mexico
to join revolutionary forces, under promise of commission
and reimbursement for exx)en8es, is a ** retaining" within
§ 10, Crim. Code. Oayon v. McCarthy 171
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612 INDEX.
CRIMINAL LAW— <!oniini4ed. paob
2. Id, Probable Cause, Evidence held sufficient to 8U9-
tain order of removal. Id.
3. Espionage Act; Conspiracy; Circulating False Reports.
Not essential that conspirators shall have agreed in ad-
vance upon precise method of violating the law. Pierce v.
United States 239
4. Id. Indictment; Overt Acts. While averment of conspiracy
cannot be aided by allegations of overt acts and conspiracy
is not punishable unless such acts were committed, they
need not be in themselves criminal, still less constitute the
very crime which is the object of the conspiracy. Id.
5. Id. Intent. Averments that defendants unlawfully,
wilfully or feloniously committed the forbidden acts import
unlawful motive. Id.
6. Id. Court and Jury. Whether statements circulated
tended to produce consequences forbidden by act, as al-
leged, held matter to be determined by jury, and not by
court on demurrer. Id.
7. Id. Evidence. HM to warrant jury's finding that de-
fendants, in violation of act, conspired to commit and
committed ofiFense of attempting to cause insubordination
in military forces, and conveyed false statements with
intent to interfere with those forces in war with Germany,
by circulating printed matter tending to produce those
results. Id.
8. Id. Intent. Fact that defendants understood contents
of pamphlets furnished of itself ground for attributing to
them an intent, and for finding that they attempted, to
bring about such consequences as reasonably might be
anticipated from their distribution. Id.
0. Id. Falsity; Public Knowledge. Where falsity of state-
ments is plainly matter of common knowledge and public
fact, other evidence on subject is not needed to sustain
verdict of guilty. Id,
10. Id. Jury. Should determine whether statements
should be taken literally or in an innocent, figurative sense,
in view of class of people among whom statements were
circulated. Id.
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INDEX. 613
CRIMINAL LAW — Continued. PAcn
11. Id. ReckleMAct. To circulate false statements reck-
lessly is equivalent to circulating with knowledge of falsity.
Id.
12. Id. Fact that statements purport to comment on facts
of public knowledge, does not remove them from purview
of§3ofact. Id.
13. Id. Sentence. Insufficiency of one of several counts
upon which concurrent sentences have been imposed does
not necessitate reversal where other counts sustain total
punishment. Id.
CRIMINAL NXOLIOENCI. See Master and Berrant, 3.
CROW INDIANS. See Indians, 2.
CTOTOM8 LAW. See SUtutes, 6, 7.
Drawback; Act of 1894, § SiS. Where imported linseed was
manufactured into linseed oil and oil-cake, drawback on
oil-cake, which alone was exported, should be computed
on basis of respective values of two products -and not ac-
cording to respective weights. National Lead Co. v. United
States : 140
DAMAOI8. See Admiralty, 2-5; Anti-Trust Act, 2;
Death; Interstate Commerce Acts.
Penalties. See Equity, 7-9; Indians, 3, 4; Judgments, 1.
Amount involved. See Jurisdiction, IV, 2, 3.
Pain; PanamaLaw. Under Civ. Code, Art. 2341, damages
for physical pain are allowable in personal injury case.
Panama R. R. v. Toppin 308
DSATH:
1. Action for Damages; Judgments. Statute denying juris-
diction to Illinois courts where death occiuv in another
State, construed as applying to-action on sister-state judg-
ment founded on such cause of action, is invalid. Kenney
V. Supreme Lodge 411
2. Id. Alabama law, giving right of action, cannot, by
declaration that such actions cannot be maintained else-
where, affect right to enforce by action in another State a
judgment recovered on such cause of action in Alabama.
Id.
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614 INDEX.
DIBT: FAOB
Situs of. See Jurisdiction, VI, 2.
DICLABATION. See Pleading, 2-6.
DECBII8. See Judgments; Procedure, 1, 1, 2.
DEDUCTIONS. See Mails, 9-11 ; Taxation, 1, 1 ; III, 4, 8-15.
DSED8. See Contracts, 1-4; Mines and Mining, 8, 10.
Recording. See Contracts, 8.
1. Revenue Stamps, Absence of, does not make deed
invalid or inadmissible in evidence under Act of October 22,
1914. CoUv.Ralph 286
2. Foreign Corporations. State law invalidating convey-
ances of local realty taken by sister-state corporations be-
fore they have filed articles with local official, violates
neither contract nor due process clause. Munday v. Wi^
conein Trust Co 499
3. Id. Power to so condition acquisition of land, and rule
that conveyances are governed by lex loci rei sites, are not
a£Fected by delivery of deeds in another State; the transac-
tion does not thus become matter of interstate commerce.
DBLBQATION OP POWER. See Constitutional Law, X.
DBLIVBEY. See Deeds, 3.
DBMimBKE. See Pleading, 9.
DENVER CHARTER. See Colorado.
DIRECT TAXES. See Constitutional I^aw, XII.
DISCHARGE. See Officers and Employeea.
DISCLAIMER. See Trade-Marks, 3, 4.
DISCOVERT. See Mines and Mining.
DISTRICT COURT. See Jurisdiction, II (3); m, 1; IV;
Procedure, II, 7.
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INDEX. 615
DISTRIOT OF OOLVMBIA. See Jurlsdietloii, IV, 6; VI. paoi
DIVSE8ITT or OITinNSHXP. See JuriidieUoii, III, 1;
IV, 6.
DZVIDINDB. See Tantlon, I.
DOCVMINTS. See Contraott; Deeds.
DOUBLE TAXAnOH. See Conitttattoaml Law, I, 3.
DBAWBACX. See Cuitomt Law.
DUI PEOCI88. Bee OontUtatioaml Law, VIII; XI (3), (5).
DUTIX8. See Cuitomt Law.
SA8IMINT. See PubUc LandB, n, 1.
BJSCTMSNT. See Pleading, 2.
SMININT DOMAIN. See Interstate Commeroe Aots;
JurlsdictloBt U, 12; IV, 8.
SMPLOTXE AND IMPLOTXE. See Employers' LUbilitj
Aot; Master and 8erTant; Oflieers and Employees;
8af ety AppUanoe Aet.
Seamen's wages. See Admiralty, 6-8.
Liability of carrier for injury to employee traveling on free
pass. See Carriers, 3, 4.
Withholding and pasring state income tax from salaries
and wages. See Taxation, III, 8-11.
EMPLOYEB8' LIABILITY ACT. See Master and 8erT-
ant, 1, 2; 8afety Appliance Aet.
1. "Employee" and "employed" used in act in natural
sense, importing conventional relation of employer and
employee. HuU v. PkUa. A Reading Ry. 475
2. Seniee on Another Line. Agreement for through frei^t
service between two railroads, AeM not to make employee of
one company employee of other, within meaning of aet,
while operating on oth^ 's line. Id,
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616 INDEX.
UfPLOtEM' LZABZUTT ACT--C&ritimmi. ta
3. AnumpUan of Risk, Negligence of Cihemployee, when
ground of aotioD, in same relation aa that of employer.
Chicago, R. I. A Pac. Ry. v. Wai^d 18
4. ConbribtUary Negligence, Error of charge that contribu-
tory negligence prevents recovery under act, being favor-
able to defendants, does not require reversal of judgment
against them. Id.
5. Jury; Leee than Twdve* Seventh Amendment does not
forbid, in case under federal act tried in state court. Id.
6. Joinder; AcUone and Parttee. Rule of state pleading
and practice, applied to cases under federal and state em-
ployers' liability laws, which prevents employee from su-
ing jointly, in a single count, the railroad under federal
statute ^nd a co-employee at common law, does not in-
fringe right derived from federal statute. Lee v. Central of
Georgia Ry., 109
IQVAL PEOTICnON 07 THl LAWS. Sefr Consttta-
tional Law, XI (4).
IQUIT Y. See Olalms, 2; Injunetlon ; Eeeeiven.
Decrees in original cases. See Proeedure, 1, 1, 2.
United States as trustee of Indian lands ceded by treaty.
See Indians, 1, 2.
1. Inadeqtiaie Legal Remedy. Equity will relieve against
unconstitutional tax lien, clouding ti^e to real property, if
there be no complete remedy at law. Shaffer v. Carter 87
2. Id. QvoBre: Whether Oklahoma laws afford ade-
quate legal remedy in case where constitutionality of state
income tax law is in question? Id.
3. Id. Oklahoma taxing laws afford no lee;al remedy for
removing cloud caused by invalid lien for income tax. Id.
4. Canrplete Rdief. Having aoquired jurisdiction, equity
affords complete relief. Id.
6. Injunction; Copyrighted Play. Author granting license
to produce play hM entitled to enjoin representation in
motion pictures, on condition that he also abstain f^m
such representation. Mannerev.Mcflroeco 317
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INDEX. 617
SQUITT— Conitnuei. paos
6. SuU by Stale; Protecting Sovereign RighU. Right to
regulate taking oi game is sufficient jurisdictional basis
for bill to enjoin enforcement of federal regulations over
subject alleged to be unconstitutional«i Miaeouri v. Hol-
land 416
7. Retaining Juriedidum, Jurisdiction of District Court
having attached in suit to enjoin rate-fixing order and
imuuuuA xjA pt^iialties, it is not divested by change in '
state law permitting direct review of order in state court.
Oklahoma Operating Co. v. Love 331
8. Id, Form of Decree. Id.
9. Res Judicaia; Action for Statutory Penalty, by United
States, for trespass, not barred by earlier decree in equity
awarding injunction and nominal damages but denying
claim for penalty as incompatible with equity jurisdiction.
AehSheep Co. v. UnitedStatee 159
10. Matter f in chancery; original cases: appointment.
Penneylvania v. West Virginia 563
SBBOB AND APPEAL. See Jurisdiotion; Parties, 6; Pro-
eedure.
S8PIONAOK ACT. See Criminal Law, 3 et eeq.
I8TOPPIL. See Judgmenta, 1 ; MaiU, 3-6.
SVIDSNCS. See Criminal Law, 2, 6-10; Judieial Notice;
Jurisdiction, II, 12, 13; Safety Appliance Act, 2.
Presumption. See Admiralty, 5; Criminal Law, 8.
Instructions. See Employers' Liability Aot, 4; Master
and Servant, 1.
Duty of Interstate Commerce Commission to receive evi-
dence under valuation Act of 1913. See Interstate Com-
mereeActB.
Evidence of discovery, possession, and trespass. See
Mines and Mining, 5, 18, 19.
1. Admissions; Location Notice. Adverse placer claimant
does not admit validity of pre-existing lode location by
posting lode location notice through mistake, promptly
corrected and not misleading. Cole v. Ralph 286
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618 INDEX.
inDIVOl— CofiltfiUMl. vAom
2. BmidU. Generally, and qieeifieaQy in Nevada, recit-
als of discovery, in looation notiocB, are aelfHNrving deola-
rations, not evidenee against adverBeciaimanta. Id.
3. Deeds; Stampe. Absence of revenue stamps does not
make deed inadmissible in evidence under Act of Octo-
ber 22, 1914. Id.
4. Of Pending Suit, against firm of which testator was a
member, held insufficient to establish that legacies were
not vested, within Refunding Act of 1902, without showing
the pleadings, the issues, the amount or merit of the claim,
or the result of the litigation. Simpson v. UniUd States . . . 547
5. Findings of State Cammiseian, when made part of final
proofs in injunction suit in District Court. Oldakoma
Operating Co. v. Lose 331
6. Original Cases, Order consolidating causes for taking of
testimony, designating times for taking testimony, and
appointing commissioner. Pennsyhania v. West Virginia . 663
IXSCVTIVS DSPAETMINT8. Se Officers and Im-
ployees.
Construction of statutes by. See Statutes, 6-9.
IXSCUTIVS OrnCEBB. See Glalms, 1, 2; MaUs, 1, 11;
Mandamus; Mines and Mining, 1; National Banks;
Officers and Employees; Parties, 6^; Public Lands, I;
Taxation, II, 1; Treaties, 2.
Administrative decisions. See Interstate Commeree
Acts; Mines And Mining, 5, 7.
Administrative construction. See Statutes, 6-9.
EZECUTOES AND ADMINISTEATOES. See Taxation,
11, 1, 3.
BXPOETS. See Customs Law.
BXTEADITION. See Jurisdiction, II, &-7.
FACTS. See Judicial Notice.
Administrative decisions. Bee Interstate Commeree
Acta; Mines and Mining* 5, 7.
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INDEX. 610
WAOTB-CanHfiued.
Findings. See Olaims, 1; Orlminal Law, 7-10; Jurisdie-
tion, IV, 10; Prooadura, II, 1.
Mistake of. See Bills aad Notes, 2; MaUs, 3.
riDERALEMPLOYlEB. See Offlears and Employees.
FEDERAL EMPLOYERS' LIABIUTT ACT. See Em-
ployers' UabUlty Aot.
FEDERAL MiaRATORT BIRD LAW. SeeTreatiet.
FEDERAL QUESTION. See Jurisdiction, II, 3, 10-16; IV,
4,7,8.
FIFTH AMENDMENT. See Oonstitutional Law, VIII.
FINAL JUDGMENT. See Jurisdlotion, II, 4-8; in.
FINES. See Mails, 9-11.
FORECLOSURE. See PubUo Lands, II, 3.
FOREION CORPORATIONS. See Corporations.
FOREiaN ENLISTMENT. See Criminal Law, 1.
FOREiaN JUDGMENTS. See Constitutional Law, V.
FOREION LAW. See Admiralty, 5.
FOREiaN SEAMEN. See Admiralty, 6-8.
FOREST RESERVES. See Mines and Mining, 1-5.
FORGERY. See Bills and Notes, 1.
FOURTEENTH AMENDMENT. See Constitutional Law,
XI.
FRANCHISES:
Eminent domain. See Jurisdiction, II, 12; IV, 8.
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620 INDEX
WKAKOBlB'EB—CoTUinued. pAioa
1. Street Btntwaya; Repanng JStreeU. CompuifB franchiae
obligation to repave between and next its raib hdd to extend
to use of materials adopted by city in repaying rest of street.
MUtoaukee Elec. Ry. v. Mitwavkee 100
2. Id. Where citjr's regulatory power not precluded by
contract, it may determine kind of pavement public neces-
sity demands, and court cannot say that it is unreasdnable
to require company to instal asphalt on concrete founda-
tion which city had adopted to replace macadam and which
was more expensive. 7d.
3. /d. Effed on Income. Company cannot escape duty to
repave upon ground that expense will reduce income below
reasonable return upon property used in its business. Id.
FRAUD. See Bills and Notes, 1.
F&liaHT. See Admiralty, 2-5.
FRZV0L0U8 QXnSTION. See Jurisdiotion, TV, 8.
FULL FAITH AND ORKDIT. See OonsUtutional Law, V.
QAMl. See Treaties.
GAB.
Rates. See OonsUtutional Lawt III, 1.
Oklahoma Oroee Production Tax. Payment hM not to
relieve gas producing companies from taxation under state
income tax law, Shaffer y. Carter 87
aABOUNV. SeeOon8titationalLaWtin,5-7.
aOVERNmNT 1MPI.0YI18. See omeera and Km-
ployees.
GRAND CANTON OF THl COLORADO. See PubUo
IiandSy I.
GRAZING. See Indians, 3, 4.
GRIAT BRITAIN. See Treaties, 1.
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INDEX. 621
GEOSSZHOOm. See Taxation, 1,1. paiu
HABKA8 OOBPIFS. See Juritdlclon, II, 5-7.
HKAJttNa See Conitltutloiua Law, XI (2); Mlnet and
Minliiir,?.
mGHWATB. See VraaehlMt.
HUSBAND AN0 Win.
Commimity property. See Mines and Uininff, 10.
IMPAIRMENT 07 OONTRAOT OBLIGATION. See
Oonititutlonal Law, IV.
IMP0BT8. See Oustoms Law.
IMPBOVBMBNT DISTRICTS. See Conititutional Law*
XI, 4, 10; XUI, 2; Taxation, III, 19.
INOOMl TAX. See Oonititutional Law, XII; Bqnityt
1-4; Taxation, I; III, 2-15.
INDIANS. See Judffmente, 1; Statutet, 3.
1. Cemanunder Treaty; Title. Whether United States be-
oomes trustee or acquires unrestricted title, depends upon
terms of treaty by which cession was made. Ash Sheep Co.
Y. UnitedStatee 169
2. Id. Crow Agreement. Act of 1904 established relation
of trustee and beneficiary, the Indians ceding possessory
rights in lands of which fee was in United States and
United States undertaking to sell to settlers and apply pro-
ceeds for benefit of Indians. Id.
3. Id. PvblieLands or Indian Lande. Such lands are In-
dian lands, within Rev. Stats., $ 2117, imposing penalty
for driving stock to range and feed on Indian lands. Id.
4. Id. lUegal Chranng. Section includes sheep under term
"cattle." Id.
INDIOTMKNT. See Pleading, 7-10.
INHIRITANOK TAX. See Taiation, n.
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622 INDEX.
INJUNOTION. See Iquity, 5-9; National bankt; Proea-s paqb
dura, II, 6, 8.
Appeal from order refusing preliminary injunction. See
Jurisdiction, II, 8.
Original Suits, Order granting preliminary injunction and
appointing receiver. Oklahoma v. Texas 372
INSPECTION TAX. See Constitutional Law, III, 5-7.
INSTRUCTIONS. See Employers' LiabUity Act, 4; Mas-
ter and Serrant, 1.
INSURANCE:
Mutual Lfevel'Premium Companies; Income Tax. In com-
puting gross income, under § II G (b) of Act of 1913, money
derived from redundancy of premiums received in previous
years, and paid to policyholders during tax year as divi-
dends in cash, not applied in reduction of current premi-
ums, should not be deducted from premium receipts. Penn
MutualLife Ins. Co. v. Lederer 523
INTENT. See Criminal Law, 5, 8, 11.
INTEREST. See Judicial Notiee.
INTERIOR, SECRETARY OP. See Mines and Min-
ing, 5, 7.
INTERNAL REVENUE. See Taxation, I, II.
INTERNATIONAL EXTRADITION. See Jurisdietion.
II, 5-7.
INTERNATIONAL LAW. See Admiralty, 6-8; Boundaries;
Treaties.
Extradition. See Jurisdiction, II, 5-7.
INTERSTATE COMIURCE. See Constitutional Law,
III; Interstate Commerce Acts.
Employment in. See Employers' Liability Act, 2.
1. Advertising Contracts. Business with publishers of
placing advertisements for manufacturers and merchants in
magazines published throughout United States, is not
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INDEX. 623
INTER8TATS OOMMIRCE— CofOtnued. paqb
interstate oommerce, although circulation and distribution
of publications themselves be such. Blumenstock Bro9. v.
CurtU Pub. Co 436
2. Conveyances; Foreign CorporoHona. Delivery of deeds
to local realty in another State does not render transaction
matter of interstate commerce. Munday v. Wisconsin
TrustCo 499
3. Piping and Sale of Gas, produced in one State and trans-
ported and furnished directly to consumers in another by
means of pipe lines from source of supply, is interstate com-
merce. Pennsylvania Gas Co. v. PvbUc Service Comm 23
4. Transportation; Reed Amendment. Transportation by
owner of whiskey for personal use, in his own automobile,
into prohibition State, held transportation in interstate
commerce. UnitedStates v. Simpson 465
5. Interstate or InJtraetate Passenger; Law Determining
Validity of Release for Negligence. Employee undertaking
interstate journey, injured while traveling on his com*
pany's line on pass good only between points in Ohio, hdd
traveling, at time of injury, intrastate, so that validity of
release depended on laws of Ohio. New York Central R. R.
v. Mohney 162
INTKR8TATK OOMMKROK A0T8. See Antl-Trust Act;
Employers' Liability Aet; Intozioating Liquors;
Safety Appliance Aet; Trade-Marks.
Valuation Act of 191S. Refusal of Commission to receive
and act upon evidence concerning present cost of condem-
nation and damages or of purchase of lands, rights of way
and terminals in excess of original cost or present value,
apart from improvements, held not justified by difficulties
involved in performing statutory duty; and railroad whose
interests were affected entitled to writ of mandamus.
Kansas City Southern Ry.Y.InterHate Commerce Comm 178
INTERSTATE OOMMSROS OOMMISSION. See Inter-
state Oommeroe Acta.
INTERVENTION. See Admiralty, 1.
By United States, in original suit. See (Mahcma v. Texas 372
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624 INDEX.
INTOXIOATINa UQU0R8: paob
Reed AmendmerU; IfUerstaUCammeree. Tranqsortaticm by
owner for personal use, in his own automobile, into prohibi-
tion State, held unlawful if liquor not intended for excepted
purposes. United States v. Simpean 405
INVENTIONS. See Patantf for InTantioiii.
JOINDIR. See Pleading, 1.
JUDaMENTS. dee Parties, 7.
Finality. See Jurisdietion, II, 4-8; III.
Injunction. See Equity, 5-7.
Administrative decisions. See Interstate Oommeroe
Acts; Mines and Mining, 5, 7.
Full faith and credit. Sec Constitutional Law, V.
On stipulation. See Chesbrough v. Northern Trust Co 83
1. Estoppel; Res Judicata, Action by United States to
recover statutory penalty for trespass is not barred by ear-
lier decree of injunction and nominal damages but denying
daim for penalty as incompatible with equity jurisdicti<Hi.
AshSheepCo.w, UnitedStates 150
2. Temporary Injunction; Questions for Final Hearing.
Whether act taxing business in its interstate and intrastate
aspects is separable as to latter, reserved for final hearing,
where relative importance of two classes of business could
not be ascertained from case made on application for tem-
porary injunction. Askren v. Continental Oil Co 444
3. Injunction of State Rates. Form of Decree. Oklahoma
Operating Co, v. Love 331
4. Original Cases. Decree appointing, empowering and
instructing commissioners to locate part of boundary.
Arkansas v. Mississippi 344
JUDICIAL CODE. See JurUdietion.
JUDICIAL DECISIONS. See Constttutional Law, XI,. 11,
12.
JUDICIAL NOTICE:
Rate of Interest. Fact that 4 per cent, was assumed to be
fair value or earning power of money safely invested.
^v. Uniied States. ., 547
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INDEX. 625
JUDICIAL POWIE. See OonitituUoiud Lftw, IL paos
JITRIBDIOTION:
I. In General, p. 625.
II. Jurisdiction of thifl Court:
(1) Original, p. 625.
(2) Over Circuit Court of Appeals, p. 625.
(3) Over District Court, p. 626.
(4) Over State Courts, p. 626.
III. Jurisdiction of Circuit Court of Appeals, p. 627.
IV. Jurisdiction of District Court, p. 627.
v. Jurisdiction of State Courts, p. 628.
VI. Jurisdiction of Courts of DistHct of Columbia, p. 629.
See Admiralty; Oonstltutlonal Law; Equity; Proce-
dure.
Of administrative officers. See Interstate Oommeroe
Acta; BClnes and Mining, 5, 7.
Federal question. See II, 3, 10-16; IV, 4, 7, 8, infra.
Local question. See II, 16, ivfra.
I. In Ctoneral.
Power to determine whether terms upon which non-rerf-
dents are permitted to maintain actions in another State
are reasonable and adequate, is in the courts, ultimately in
this one. Canadian Northern Ry. y. Eggen 553
II. Juritdiotion of this Court.
(1) Original
1. Mandamus or ProhibiHon. May not be resorted to
when there is right to writ of error or appeal. Ex parte
Tiffany 32
(2) Over OireuU Court of Appeala. See lU^ infra.
2. CerHorari; Complete Decision. When this court may
limit review to matter considered by Court of Appeals and
remand for needed action on other questions, or proceed to
complete decision. Cole v« Ralph 286
(3) Over District Court. See III, 1 ; IV, infra.
3. DeddinQ all Que^ions. Decision in another case of
constitutional question forming basis for writ of error pre-
viously sued out under Jud. Code, { 238, does not divest
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626 INDEX.
jnBI8DICTION--<7oramtied. rioa
this court of jurisdiction to determine other questione
raised. Pierce v. UnUed States 238
4. Final Judgment; Admiralty, Decree dismissing claim-
ant's petition to bring in another party as indemnitor, not
appealable in advance of determination of main issue.
Oneida Nav, Corp. v. Job dt Co 621
5. Id, Habeas Corpus. Judgment in proceeding involving
construction of treaty not appealable unless final. Collins
V. Miller 364
6. Id, Raising Objection. This court will examine and
determine question of finality, whether raised by parties
or not. Id.
7. Judgment not Final. Judgment dealing with detention
of relator for foreign extradition on three charges, and
denying relief as to one but assuming to order further hear-
ing by commissioner as to the others. Id.
See Parties, 6.
3. Preliminary Injunction. Where court not only refuses
injunction but dismisses bill, appeal should be under Jud.
Ckxie, i 238, from final decree, and not under § 266. Shaffer
V. Carter 37
(4J Over State Courts. See V, infra.
9. Error or Certiorari. Judgment of state Supreme Court
giving meaning and efiFect to statute which brings it in con-
flict with Constitution is reviewable by writ of error. Ken^
ney v. Supreme Lodge 411
10. Id. Claim that tax is void because of discrimination
of officials in making assessments, but which does not draw
in question before state court validity of statute under
which they acted, will not support writ of error. Jett Bros,
Co. V. Carrollton 1
11. Raising Federal Question; Rehearing. Petition, merely
overruled by state court without oinnion, is not a basis for
writ of error. Id.
12. Id. Not raised by ruling of trial oourt admitting in
evidence special charter claimed to omitrayene Four-
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INDEX. 627
jnU8DIOnON--Con^ntied. pagb
teenth Amendment in granting powers of eminent do-
main not conferred on rival company organized under
general law. Hxatffoaaee Power Co. v. CarolinorTennessee
Co 341
13. 7d. Not raieed in state Supreme Court by assignment
alleging error in admitting such evidence and not mention-
ing Amendment. Id.
14. Id. Constitutional question not presented by assign-
ments or otherwise, or passed upon, in state Supreme
Court, does not afford jurisdiction to review. Id.
15. Id, When Too hole. When raised by petition for writ
of error and assignments filed here; allowance by chief jus-
tice of state court does not cure omission. Id.
16. Local Queaiion; Contract Rights. Whether state statute
is intended to validate contract previously unenforceable
under state law is for state courts to decide, and involves no
federal question. Munday v. Wisconsin Trust Co 409
in. Jurisdiotion of Circuit Court of Appeals. See II (2),
supra.
1. Final Decisions. Order of District Court denying appli-
cation of state receiver to vacate federal receivership, in
case depending on diverse citizenship, and to have assets of
insolvent corporation turned over to him for distribution,
etc., on ground that proceedings in state court had de-
prived District Court of jurisdiction, held a final decision,
within Jud. Code, § 128, appealable to Circuit Court of
Appeals. Ex parte Tiffany 32
2. Id. " Final decision" means same thing as ''final judg-
ments and decrees" in former acts regulating ap];>ellate
jurisdiction. Id.
IV. Juritdietion of Distriot Court. See II (3), supra.
1. Suit by StatCy to protect right to regulate taking of game is
sufficient jurisdictional bads, apart from pecuniary interest,
for bill to enjoin enforcement of federal regulations over the
subject alle^ to be unconstitutional. Missouri v. HoUand 416
2. Amount Involved; Tort Action. Amount involved in tort
b damages claimed if declaration discloses nothing render-
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628 INDEX.
JUBISDIOTION— <7afU»nue(2.
ing such a recovery impoesible and no bad faith appears.
Chesbroughy, Narihem Trust Co 83
3. Id. After removal by defendant from a state court and
judgment rendered against him in District Court and Cir-
cuit Court of Appeals, this court, in absence of clear error,
will not deny the jurisdiction upon ground that requisite
amount was not involved. Id.
4. When Cause of Action Ariaes under Law of Vniied
StaieB. When appropriate statement by plaintiff, unaided
by anticipation or avoidance of defenses, disclqses that it
involves validity, construction or effect of an act of Con-
gress. First NaiionalBank v. WiUiams 504
5. Id. National Banks; Service of Process. Suit to restrain
Comptroller of Currency from malicious and unlawful
practices, is suit to enjoin him under National Banking
Law, within Jud. Code, §§ 24, 49; must be in district where
bank is established; process may be served elsewhere. Id.
6. Diverse CUigenship, can not confer jurisdiction over
defendant's objection, in district where neither party re-
sides. BlumenetockBros. v. Curtis Pub. Co 436
7. Federal Question; Sherman Act. To confer jurisdiction
over action for triple damages, a claim under the statute,
real and substantial, must be set up. Id.
8. ' Ffivolous Federal Question. Claim of company, incorpo-
rated under general law, of violation by state agency of
contract and property rights respecting rights of way and
condemnation, hM insufficient. Cuyahoga Power Co. v.
Northern Ohio Co 388
0. StaJte Rales; Injunction. Jurisdiction having attached
in suit to enjoin order not divested by change in state
law permitting direct review of order in state court, OkLor
homa Operating Co. v. Love 331
10. Id. Findings cf State Commission. When subject to
review of District Court. Id.
v. Jurisdiction of State Courto. See II (4) ; III, 1; TV, 0,10,
supra.
Removal. See IV, 3, sufyro.
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INDEX. 629
JURISDIOnON-^onliniied. pagb
1. Cnines;CiMandMUiiaryJun8dietion. JuriscUctioii of
state court to try and punish for miArder committed by
soldier in federal service upon civilian while nation is at
war. CaldweU v. Parker , 376
2. Id. Such jurisdiction not vested exclusively in military
court-martial by Articles of War of 1916. Id.
3. Action for Wrongfvl Death, Enforcement of sister-state
judgment. Kenney v. SupremeLodge 411
VI. JurlBdietlon of Oourta of Diatriot of OolumbU. See
IV, 6, 9upra.
1. Suit Against Oovemmenl Officers, Suit by one having
equitable right in fund appropriated by Congress pursuant
to finding of Court of Claims, to establish such right and
require Treasury officials to pay fund to receiver, is not a
suit against United States, and may be maintained in
courts of District of Columbia if owner and officials are
made parties and bound by decree so that it may afford
acquittance to Government. Houston v. Ortnes 469
2. Id, Situs of Debt, Immaterial, in such cases, if owner
voluntarily appears and answers without objecting to
jurisdiction. Id.
JUET. See Oonatltutional Law, IX; Oriminal Law, 6, 7,
10; Mines and BClning, 18.
Instructions. See Employors' Liability Aot, 4; Master
and Servant, 1.
LABIL8. See Trade-Marks.
LACH18. See Patents for Inventioni, 4.
LAND DEPARTMINT. See Mines and Mining, 5, 7.
LANDS. See Deeds; Indians; Mines and Mining; PubUe
Lands,
Assessments; local improvements. See Oonstitutional
Law, XI, 4, 10; XIII, 2.
Eminent domain. See Jurisdiction, II, 12; IV, 8.
Belief against unconstitutional tax lien, clouding title. See
Kquity, 1-4.
Valuation, railroad lands. See Interstate Oommeroe
Acts.
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630 INDEX.
IJUID80APK ARGHITEOT. See Offlo«rt and liiiploytM, paob
6-9.
LEOA0II8. See Tmzatlon, II.
LEGISLATIVE HISTORY. See Statutes, 1.
LIBERTY or CONTRACT. See Conititutional Law,
VIII.
LICENSE:
To produce copyrighted play. See Oontraeta, 1-4.
Taxes. See Constitutional Law, III, 5-7.
UEN. See Claims, 2; Taxation, III, 7.
Relief against unconstitutional tax lien. See Equity,
1-4.
LIMITATIONS:
Time allowed, under patent law, for filing a second or divi-
sional application. See Patemts for Inventions.
1. NonrreHde^nta, Statute barring suit on cause of action
arising outside of State when action is barred by laws of
place where it arose, unless plaintiff is a citizen and has
owned cause of action since it accrued, hdd constitutional.
Canadian Northern Ry. v. Eggen 663
2. United States; Mail Trampartation Contracts, Right to
recover overpayments, due to mistake of fact, not barred
by time. Grand Trunk Western Ry. v. United States 112
3. Mining Claims; Rev. Stats., § tSSt, providing that
where /claim has been held a^d worked for period pre-
^ scribed by state statutes of limitations evidence thereof shall
be sufficient t(> establish right to patent in absence of ad-
verse claim, does not dispense with, or cure absence of,
discoveiy. Cole v. Ralph , 286
LIMITED LIABILITY. See Carriers, 3, 4.
LIQUIDATED DAMAGES. See Admiralty, 2.
LIQUORS. See Intoxicating Liquors.
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INDEX. 631
LOOAL LAW« See Interstate Commerce; Juritdletlon, paob
II, 16.
LOCATION. See Mines and Mining.
MAILS:
1. TranspartcUion; Pay; Overpayments under Earlier Con-
trade. Right of Postmaster General to deduct from cur-
rent contract, without waiting for amount to be ascertained
by suit. Grand Trunk Western Ry. v. UnitedSiates 112
2. Id. Limitations. Right of United States to recover
overpayments not barred by time. Id.
3. Id. Construction; Mistake of Fact. Rule that long-
continued construction of statute by department should
not be changed to injury of parties relying thereon, does
not apply to practice in making overpayments, due to mis-
take of fact. Id.
4. Land-Aided Roads; Duty to Carry at Rates Directed by
Congress. Attaches to road like easement. Id.
6. Id. Grant by Congress to State. Duty attaches where
company accepts State's patent and disposes of land,
whether it was in fact aided by grant in building road or
not. Id.
6. Id, Purchaser under Foreclosure, to which company's
interest in lands was made subject as after-acquired prop-
erty covered by mortgage, is in no better position. Id.
7. Id. Failure of Consideration. Obligation attaches, how-
ever disproportionate the aid to cost of construction, not-
withstanding company relied on other lands included in
state patent but which it lost through state decisions hold-
ing them inapplicable to its road imder granting act and
state law passed in pursuance of it. Id.
8. Id. Obligation cannot be escaped because contract
with State, resting on entire consideration, in part illegal,
was void, where United States was not a party to contract
and where its reversionary title was relinquished by Con-
I to State. Id.
9. Transportation; Schedules; Fines. Railroad which con-
tracts to carry mails upon conditions prescribed by law is
liable to fines or deductions from compensation for failures
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632 INDEX.
MAIM — Continued. paob
to maintain mail train scheduleB. KaneoB CUy Southern
Ry. V. United States 147
10. Id. DepoHmental Construction. Fact that Post
Office Department long abstained from making such deduc-
tions under Rev. Stats., $ 3962, where delays were less than
24 hours, does not amount to construing section as inappli-
cable to shorter delays. Id.
11. Id. Such construction cannot be claimed by company
whose contract was made after order of Postmaster General
for deductions in future when trains arrived 15 or more
minutes late, and soon after Act of 1906, directing imposi-
tion of fines for failure to comply ¥dth contracts respecting
times of arrival and departure of trains. Id.
MANDAMUS:
1. Error or Appeal, May not be resorted to when there is
right to writ of error or appeal. Ex parte Tiffany 32
2. Interstate Commerce Commission; Valuation Act of 1918,
To compel Commission to receive and act upon .evidence
concerning present cost of condemnation and damages or of
purchase of lands, rights of way and terminals in excess of
original cost or present value, apart from improvements.
Kansas City SoiUhem Ry. v. Interstate Commerce Comm. . . . 178
MARITIME LAW. See Admiralty.
MARRIED WOMEN:
Conununity property. See Mines and Mining, 10.
MASTER. See Equity, 10.
MASTER AND SERVANT. See Employers' LiabUity Act;
Safety Appliance Act.
Seamen's wages. See Admiralty, 6-8.
Liability of carrier for injury to employee traveling on free
pass. See Carriers, 3, 4.
Effect on relation, of agreement between railroads for
through service. See Employers' Liability Act, 2.
Withholding; and paying state income tax from salaries
and wages. See Taxation, III, 8-11.
Federal employees ; appointment and removal. See Offlcerv
and Employees.
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INDEX. 633
MA8TKR AND BKRVANT-^on^niied. paob
1. AsnLmptian of Bisk; IfiBtrueHans. Inaoourate to
charge without qualification that servant does not assume
risk created by master's ne^gence, the rule being other-
wise where negligence and danger are so obvious that care-
ful person would observe and appreciate them. Chicago^
B.I.APac.Ry.y.Ward 18
2. Id. Defense inapplicable when injury arises from single
act of negligence creating a sudden emergency without
warning to servant or opportunity to judge of resulting
danger. Id.
3. Negligence of Servant. . By laws of Panama, ndliroad is
liable for injuries resulting from criminal nei^igence of serv-
ant in running engine at rate prohibited by Police Code.
Panama B. ft. v. Toppin 308
4. Id. SeUdion of Servani. Rule of rMpofideol mtpenor ap-
plies in Panama; due care in selecting servant no defense.
Id.
5. Id. Damages; Pain. In Panama damages for physical
pain are allowable. Id.
MiaRATORT BIRDS. SeeTrtetles.
MILITARY rOROBB. Sec Court-MartUl; Orimlnal Law,
3 el seq.
MINB8 AND MINING. See Public Lands, I.
1. Forest and Monument Beserves. Inclusion of part of
national forest within monument reserve under Act of 1006,
by proclamation of President, hdd to withdraw common
area, except as to valid claims previously acquired, from
operation of mineral land law. Cameron y. United States.. 450
2. Id. Discovery. Mineral character and adequate dis-
covery within location essential to validity of claim. Id.
3. Id. Valid Claims. To bring claim within exception of
** valid claims'' in proclamation establishing monument
reserve, claim must be founded on adequate discovery
made before reservation. Id.
4. Id. Discovery must be such as to justify expenditure of
time and means to develop a paying mine. Id..
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634 INDEX.
MINS8 AND uaniXQ—CanHnued. pagi
5. Invalid LocaUana; JuriadicHon of Secrdary af Inierior.
Finding of non-mineral character and that location not
supported by discovery antedating reservation, is conclu-
sive as to invalidity of claim within monument reserve in
subsequent suit by Government to enjoin claimant from
occupying land and obstructing its use as part of the re-
serve. Id.
6. Id, Mining location which has not gone to patent is of
no higher quality, and no more immune from attack and
investigation, than unpatented claims under homestead
and kindred laws. Id.
7. Id. Secretary may determine, after notice and hearing,
whether location is valid, and, if found invalid, declare it
null and void. Id.
8. Cantracta; Recording; Nevada Law. Contract for share
in proceeds of mining location with right to have it made
productive need not be recorded to be good inter partes.
Cole V. Ralph 286
9. Id. Adverse Suit; Parties. One who has such contrac-
tual interest is proper party to adverse suit to protect claim,
and, under Nevada law, may come in as plaintiff before
trial. Id.
10. Location; Community Property; Nevada Law. Interest
in claim arising from husband's location and deeded to his
wife for money consideration is community property; and
husband may file adverse claim against hostile application
for patent and sue to protect claim in his own name. Id.
11. Right to File Adverse Claim or Suit. Locator not di-
vested by prior attachment of his interest, but his acts
inure to benefit of those who afterwards, through attach-
ment, succeed to his interest; and they may be substituted
as plaintiffs when such interest has fully passed to them.
Id.
12. Misnomer. Adverse clum not invalidated by misnomer
of claimant due to inadvertence, by which no one is misled or
harmed. Id.
13. Discovery; Assessment Work; Adverse Proceedings.
Rules of mining law restated, respecting rights of explor-
ers, lode and placer locators, significance and distinction of
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INDEX. 635
MINS8 AND MamG—C<mHnvsd. •
discovery and asseflsment work, and nature and effect of
adverse proceedings. Id.
14. Id. Placer discovery will not sustain lode location,
nor a lode discovery a^placer location. Id.
15. Id, Location — acts whereby boun(iaries of claim are
marked — confers no rights in absence of discovery. Id.
16. Id. Assessment work does not take place of discovery.
Id.
17. Id. . Junior placer location with earlier placer discov-
ery prevails over senior lode location with later lode dis-
covery^ Id.
18. Evidence of Discovery. Held sufficient to go to jury
on question of prior discovery as between lode and placer
claims, and as to whether latter initiated by trespass or
peaceably and openly or even with acquiescence of lode
claimant. Id.
19. Of Poesessiqn. Presence of buildings on daim but
not used in connection with it hdd evidence of claim-
ant's actual possession of them, but ineffectual to prevent
others from entering claim peaceably and in good faith
under mining laws. Id*
20. Location; NoUce; Admiesions. Adverse placer claimant
does not admit validity of pre-existing lode location by
posting lode location notice through mistake, promptly
corrected and not misleading. Id.
t
21. Id. Generally, and specifically in Nevada, recitals of
discovery, in location botices, are self-serving declarations,
not evidence against adverse claimants. Id.
22. Long Possemon as Ground for Patent. Rev. Stats.,
1 2332, providing that where claim has been held and
worked for period prescribed by state statutes evidence
thereof shall be sufficient to establish right to patent in
absence of adverae claim, does not dispense with, or cure
absence of, discovery. Id.
23. Id. "To Work,'* To do something toward making
claim productive. Id.
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a36 INDEX.
MINNESOTA. See BoundariM, 2-4. ^jjm
MI8NOMXB. SeeParU6S,4.
MISSISSIPPI. SeeBoundftries, 1.
MISSOUBI:
Refusal to transfer cause from division of Supreme Court
to court in banc violates no constitutional right. Oddsmith
V. Prendergast Conslr. Co*. ,. : 12
MISTAKE. See Mines and Mining, 12, 20.
Of fact. See Bills and Notes, 2; Mails, S.
MONEY. See Bills and Notes ; Judicial NoUce.
MONOPOLIES. See AnU-Trust Act.
MONUMENT BESEBVES. See Mines and Mining, 1-6;
Public Lands, I.
MOBTOAOES. See PubUc Lands, n,^^ 3.
MOBTUABT TABLES. See Taxation, H, 1.
MOTION PICTUBES. Bee Contracts, 1-4.
MOTIVE. See Criminal Law, 5, 8, 11.
MVNICIPAUTIES. See Franchises; Constitutional Law,
XI, 4, 10.
MUBDEB. See Court-Martial.
MUTUAL INSUBANCE COMPANIES. See Insurance.
NATIONAL BANKS:
Jtaisdictum of District Court; Jttd. Code, §§ Hf 4^' S^ to
restrain Comptroller of Currency from malicious and un-
lawful practices, is suit to enjoin him under National
Banking Law; must be in district where bank established;
service may be elsewhere. Fird NaHonolBanky.WiUiama, 504
NATIONAL POBBSTS. See Mines and Mining, 1-5.
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INDEX. est
NATIONAL MONUMBNT8. See Mines wd Mining, l-6;PAaB
Pablic Lands, I.
NATiaABLS WATXB8. See Bbundwies, 2-4.
NA7T. See Criminal Law, 3 et seg.
NXaLiaXNCX. See Bills and Notes, 1; CarHers, 1-4;
Death; Employers' Liability Act, 3, 4; Master and
Servant; Safety Appliance Act, 2.
Action against co-employee at common law. See Employ-
ers'LiabUity Act, 6.
NXaOtIABI« PAPEB. See BiUs and Notes.
NEVADA. See Mines and Mining, g-10, 21.
NEWSPAPEB8. See Anti-Trust Act, 2.
NEW TOBK:
Income Tax Law. See Taxation, IlX 2-4, 8-15.
NON-BXSIDBNT8. Sed Constitutional Law, VI; Juris-
' diction, in, 1; IV, 5, 6; Limitations, 1; Taxation, III,
2-16.
NOTICE. See Constitutional Law, XI (2); Judicial No^
tioe; Mines and Mining, 7, 20-22; PubUc Lands, II, 1.
OPHCEBS AND BMPLOTBB8. See Malls^ 1,11; Manda-
mus; Mines and Mining, 1; National Banks; Parties,
&-8; PubUo Lands, I; Taxation, II, 1; Treaties, 2.
Administrative decisions. See Interstate * Commerce
Acts; Mines and Mining, 5, 7.
Administrative construction. See Statutes, 6-9.
Suit against. See Jurisdiction, VI.
1. AppaifUmeniand Removal, Power to remove is incident
of powjer to appdnt, and power to suspend im incident of
power of removal. Burnap v. United Stake 512
2, Id. Ret. StiUe., § 169; EmploymerU by " Head of De-
porfmefUy'Vineaiis Secretary in cl^ffge.of great division of
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638 INDEX.
OmOSBI AMD SMPLOTUB— CoNlifiiML paob
ezeoutive branch— a inember of the Cabinel; does not in^
dude heads of bureaus. Id.
8. Id. '-fiiipfey^ equivalent of i4>point. Id. .
4. Id. '*Clerk$ " and "other employees" include persons
filling positions which require technical skill, learning and
professional training. Id. .
6. Id. Qgieerar Employee. Status detennined by manner
in which Congress has provided for creation of positioosy
their duties and appointment thereto. Id.
6. Id. Landscape ArckUed, in Office of Public Buildings
and Grounds, is an emfloiyee. Id.
7. Id. Chuf of Engineere; PvbUe BuUdinge and Oraunde.
Appointment c^ landscape architect not to be made by
ScOTetary of War under Rev. Stats., § 169, but by Chief of
Bngineersi under specific authmty of Rev. Stats., 1 1799.
Id.
8. Id. Power to Remoee landscape architecti is with Chief
of Engineers, and unaffected by fact that appointment was
made without authority by ScOTetary of War. Id.
9. Id. CinlSemceRulee. Powerof Chief of Engineenis
to be exercised in manner prescribed I^ Act of Aug. 24,
1912, and Civil Service Rule XII. Id.
10. Commieeianer, to take testimony in original case;
appointment. See Penneylvania v. Weei Virginia 563
11. MinieleriallhUy; PaymmU iff Funds. Where fund is ap-
propriated by Congress for payment to specified person in
satisfaction of finding pf Court of Claims, duty of Treasury
officials to pay it over is ministerial. HoueUmy.Ormu.. .. 469
OIL COHPANIXS. See C<mstdtatloiua Law. Ill, &-!.
Oklahama Gross Production Tax. Payment hdd not to re-
lieve oil producing companies from taxation under. state
income tax law. Shaffer v. Carter 37
OKLAHOHA. See Taxation, III, 1-7.
1. Taxing laws afford no legal remedy for removing a
doud caused by invalid lien for an income tax. Shaffer v.
Cortor.....,, .... 87
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INDEX. 689
OKLAHOMA— Conliniied. pam
2. Rales; Judicial T€$i; PeruMei. ProvirfoiuiTClatuig to
enforcement by penalties of rates fixed by state oommission
held void under Fourteenth Amendment, without regard to
question of insufficiency of rates. Oklahoma Operating Co.
Y.Love : 331
OklahomaOinCo.Y^fOg^^homa. 339
OUaiNAL 0A8B8. See Ihrooedure, I.
OUOIHAL JUEX8DICTION. See Jurlsdiotion, II (1).
OEXOINAL PAOXAOB. See qoMtlttttional Law, III, &
PAIN. See Panama, 3.
PANAMA:
1. Master and Servant; Negligence. Railroad is liable for
injuries resulting from criminal negligence of servant in
running engine at rate prohibited by Panama Police Code.
Panama R. R. v. Toppin 308
2. Id, Selection (^Servant; Respondeat Superior^ rule of,
applies in Panama; due care in selecting servant no do- '
, fense. Id,
3. Id. Damages; Pain. Under Civ. Code, Art. 3841,
damages for physicial pain are allowable.' Id.
PABTn8. See Admiralty, 1; Oonstitutioiial Law, XIII, 2.
To contracts. See Contracts, 8.
1. Adverse Suit; Mining Claim. One having contractual
interest in mining location is proper party to advene suit
to protect claim, and, under Nevada law, may come in as
plaintiff before trial. Cole v. Ralph 286
2. /d. Community Property. Under Nevada law husband
may file adverse claim against hostile application for
patent and sue to protect claim in his own name. Id.'
3. Id Attachment Creditors; Substitution. Locator of
claim not divested of right to file adverse claim or suit by
prior attachment of his interest; his acts inure to benefit of
attachment creditors, who may be substituted as plaintiffs
when interest has fully passed to them. Id.
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640 INDEX.
FAfliTin-*Coii(iiitf«l. PAca
4. Id. MimtnhercfClaimanL Does not invalidate advene
daiin when ^ud to inad vertenoe. Id,
t: J(nnder;Emiihyert^IAainlityAct8. Rule of state plead-
ing and practice, applied to cases iinder the f^er al and state
laws, which prevents employee from suing jointly, in a
sin^e count, the railroad under the federal statute and a co-
emplpyee at common law, does not infringe right undet the
fedend.statute. Lee v.' Central pfOeorgia Ry lOi^.
6. Appeal; HabeoM Carpue. IMper party to appeal from
jud^ent directing marshal to release person held for,
foreign extradition ia the mazshalt i^ot oomplaining foreign
oonsul. Ccfflins v. Miller 364
7. Federal Offieere. Suit by one having equitable right in
fund appropriated by Congresspur^uant to finding of Court
of Claims, to establish such right and require Treasury ofll-
dals to pay fund to receiver, is not suit against United
States, and may be maintqaned in I district of Columbia if
owner and officials are made parties and bound by decree ao
that it may afford aoquittaiice to Qovemment. Hauetan v.
Ormes. : 469
8. Id. Appearance. SUue of debt immaterial, if owner
voluntarily appears and answers without bbiecting to juria*
diotioli. Id.
9. UniiedSUUee; Inierventian; Original 8^^ Order grant-
ing leave to intervene. Oklahoma v. Texae 372
PASSkNafftS. See Carrfon, 3-5.
PAT8NT OFFICE. See Patents for Inventions; Trade*
Harks.
PATINT8 FOB IM?llTTION8:
Validity of reside price agreements for patented articles.
See Anti-Trust Aet, 1.
1. Divieumal Appltealiane; lAmHaiione. Inventor whose
application disclosed b^t did not olaipi invention later pat>
ented to another, allowed two yean after such patent issueil .
within which to file second or divisional ap^pation claiining
invention. Chapmany.Wintroatii^.i 196
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INDEX. 041
FATSNT8 FOB IMVJUITlONft— CotOiniied. taom
2. Id. Thb period may not be restricted by oourts on
ground that delay may be prejudicial to pubtic or private
interests. Id.
3. Id. AmendmerU. Second application is not amendment
to original application and so subject to one-year limitation
of Rev. Stats., § 4894. Id.
4. Id. Abandonment; Lachea. Right to make it not lost by
laches or abandonment, merely because of dday not exceed*
ing two years allowed by statute. Id.
PATSNT8 FOB LANDS. See Mines and Mining; Fnblie
Lands.
PAVIKO. See Franchises.
PATMBNT. See BlUs and Notes; Claims, 1, 2.
Recovery of overpayments by United States, under mail
transportation contracts. See MaOs, 1-3.
PBNALTIE8. See Admiralty. 3-5; Constitutional Law, XI,
3; Equity, 7-9; Indians, 3, 4; Judgments, 1; Mails, ^11.
PXBFOBMANCB. See Oontraets, 5-7.
PXB80NAL INJXTBT. See Xmployws' UabiUty Aet; Mas-
ter and Servant; Safety Appliance Act.
PIPB UNX8. See Constitutional Law, III, 1.
PLATS. See Contraets, 1-4.
PLXADINO:
Necessity for showing pleadings, issues, ete., as proof of
pending suit. See Xiidenoe, 4.
1. Joinder; Caueee of Action. Rule of state pleading and
practice, applied to cases under federal and state employers'
liability laws, which prevents employee from suing jointly,
in a single count, railroad under the federal statute and co-
employee at common law, does not infringe right under the
federal statute. Lee v. Cenirxd of Georgia Ry 109
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642 INDEX.
PLlADnra— C<m<miied. w^am
2. DedaraHon; Ejectment. Aflsertion of defendant's posses-
mon, in answer, cures omission to aver it in complaint. Cole
y. Ralph 288
3. Id. Waiver. Objections to defects of pleading should be
timely and not defened for advantage at trial. Id.
4. Id. Setting up Claim under Federal Statute. In action
for triple damages under Anti-Trust Act, declaration must
set up claim of a real and substantial character. Blvmenr
etock Bros. v. Curtie Pvb.Co 436
5. Id. Action Ariees under Law of United States, when ap-
propriate statement by plaintiff , unaided by anticipation or
avoidance of defenses, discloses that it involves validity,
construction or effect of act of Congress. First National
Banky.WiUiama 504
6. Id. Tort Action; Amount Inioolvedf IB dsjnsigpBclBhnedii
declaration discloses nothing rendering such recovery im-
possible and no bad faith appears. Chesbrough v. Northern
Trud Co 83
7. Indictment; Conspiracy; Overt Acts. While averment of
conspiracy cannot be aided by allegations of overt acts and
conspiracy is not pumshable unless such acts were com-
mitted, they need not be in themselves criminal, still less
constitute the very crime which is the object of the conspir-
acy. Pieros v. United States 289
8. Id. Intent. Averments that defendants unlawfully, wil-
fully or feloniously committed the forbidden acts import
unlawful motive. Id.
9. Id. Questions open on Demurrer. Whether false state-
ments circulated tended to produce consequences forbidden
by Espionage Act, as alleged, hdd mattor to be determined
by jury, and not by court on demurrer. Id.
10. Id. Sentence; Sufficiency of Indictment. Insufficiency of
one of several counts upon which concurrent sentences have
been imposed does not necessitate reversal where other
counts sustain total punishment. Id.
POLZCX POWXB. See Constitutional Law.
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INDEX. 843
POSSESSION. See Mines and Mining; Pleading, 2. paqb
Vested, of legacy. See Taxation, II, 3.
POSTMASTIB OBHSRAL. See Malli, 1, 11.
POST OPFICS DXPAETMSNT. See Maili.
PBBBUITMS. See Xnanranea.
PBBSXDXNT. See Mines and Mining, 1; PubUo Lands, I.
PBB8VMPTION. See Admiralty, 5; Criminal Law, 8.
PBIVILiaSS AND IMMUMITISS. See Oonstittttional
Law, VI.
PBIVILiax TAX. See Gopstitutional Law, HI, &-7.
PEOCXDUBl. See Court-Martial; Criminal Law; Dam-
ages; Equity; Xridence; Judicial Notice; Jurisdiction;
Limitations; Mandamus; Parties; Patents for In-
ventions; Pleading; Prohibition; Statutes; Trade-
Marks.
Administrative decisions. See Interstate Commoroe
Acts; Minea and Mining, 5, 7.
Certiorari. See Jurisdiction, II, 2, 9, 10.
Demurrer. See Pleading, 9.
Federal question. See Jurisdiction, II, 3, 10-16; IV, 4, 7, 8.
Injuncti<m. See Bquity, 5-9; National Banks; infra^ II,
6, 8.
Instructions. See Employers' Liability Act, 4; Master
' and Senrant, 1.
Intervention. See Admiralty, 1; Parties, 9.
Joinder; actions and parties. *See Pleading, 1.
Judgments, finality. See Jurisdiction, II, 4-8; III.
Jiuy; less than twelve. See Employers' Liability Act, 6.
Id, Questions for. See Criminal Law, 6, 7, 10.
Local question. See Jurisdiction, II, 16.
Misnomer. See Parties, 4.
Objections; defects in pleading. See Pleading, 2, 3.
Penalties. See Equity, 7-9; Indians, 3, 4; Jiidgmentt» !•
Process, service of. See Jurisdiction, IV, 5.
Rehearing. See Id., II, 11.
Removal. See Id., IV, 3; Criminal Law, 2.
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044 INDEX.
PBOOSDVSl-<7ofi<iniied.
Reveraal. See Griminml Law, 18; Smploypn' LiablUtf
Aet, 4.
Sentence. See Coort-Martlal; Criminal Law, 18.
Stipulation, judgment on. See Chetbrough v. Northern
Tnui Co 88
Substitution. See Parties, 8.'
Transfer, to court in banc, in Missouri. See OoldsmHh ▼.
PrendergaH Constr. Co 12
Verdict. See Criminal Law, 9.
Waiver. See Pleading, 8.
I. Original Cases.
1. Decrw appointing, empowering and Instructing commis-
sioners to locate, etc., part of boundary. ArkanMt v.
Mississippi 344
2. Injunction; Receiver. Order granting injunction and
appointing receiver. Oklahoma v. Texas 372
3. Order ConsoUdaHng causes for taking of testimony, des-
ignating times for taking testimony, and appointing com-
missioner. Pennsjfivaniav. West Virffinia 663
II. Boope of Beview.
1. Fads; Concurrent Findings, of two courts bdow, on
question of negligence, accepted by this court. Boehmer v.
Pennsylvania R, R 406
2. State ConstrucHan; Vlaim of Contract Right. This court
accepts construction of contract by state Supreme Court, if
matter is fairly in doubt. MilwaidBeeElec. Ry.Y.MihoaulBee 100
3. Certiorari; Complete Decision. When this court may
limit review to matter considered by Circuit Court of Ap-
peals and remand for needed action on other questions, or
proceed to complete decision. Colev. Ralph 286
4. Judgment Not Pinal; Raising Objection. Where jurisdic-
tion depends on finality of judgment under review, this
court will examine and determine question, whether raised
by parties or not. CoUinsY.MiUer — 364
5. NonrfederalQue^ions. Decision in another case of con-
stitutional question forming basis for writ of error previously
sued out under Jud. Code, § 238, (loes not divest this court
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INDEX. 646
PBOOSDUBB— <7(miiniied. pact
of jurisdiction to determine other queBtions raised. Pierce
V. UnUedSUUes 239
. 6. ' Temporary Injunction; QuesHone for Pinal Hearing,
Whether act taxing business in its interstate and intrastate
aspects is separable as to the latter, reserved for final hearing,
where relative importance of two classes of business could
not be ascertained from case as made on application for
temporary injunction. Aekren v. ConHnentalOilCo — ,. .. 444
7. Fo2Ioioing'J!l0ei8»ofi«B«2rnp; Amount 7n«o{«ed. After judg-
ment for plaintiff in District Court and Circuit Court of
Appeals, this court, in absence of clear error, will not deny
jurisdiction upon ground that requisite amount was not in**
volved. Che^brough v. Northern Trust Co 83
8. Injunction of State Rates, Scope and form of decree.
Oklahoma Operating Co, v. Love 331
icSiB.
PBOCXn, 8XBVICS OF. See Jurisdiction, IV, 5.
PBOCLAMATION. See Mines and Mining, 1, 3; Publie
Lands, I.
PBOmBXTION:
May not be resorted to when there is right to writ of error
or appeal. Ex parte Tiffany 32
PBOPXBTT, COMMUNITY. See Mines and Mining, 10.
PUBLICATION. See Anti-Trust Act, 2; Criminal Law, 3
et seq.
PUBUC BUILDINOS AND OBOUNDS. See Officers and
Employees, 6-9.
PUBLIC XMPLOTBB8. See Officers and Employees.
PUBLIC LANDS:
Relation of United States to lands ceded by Crow Indians,
and status of such lands with respect to Rev. Stats., § 2117,
imposing penalty for gracing. See Indians.
I. National Monuments. See Mines and Mining, 1-5.
Power to Reserve. The Grand Canyon of the Colorado is
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646 INDEX.
PUBLIC LAUDS— Conlintied. pagb
an object of scientific intereet, within Act of 1906, on-
powering President to reserve such objects as national
monuments. Cameron v. United SUUea 450
n. Bailroad Qranta.
1. Mail Transportatian; Land^dded Roods; Pay. Duty to
carry at rates directed by Congress attaches to road like
easement. Grand Trunk WeelemRy. v. UnUedStatee 112
2. Id. Grant by Congress to State. Duty attaches where
company accepts State's patent and disposes of land,
whether it was in fact aided by grant in building road or
not. Id.
3. Id. Purchaser under Foredosure, to which companjr's
interest in lands was made subject as after-acquired prop*
erty covered by mortgage, is in no better position. Id.
4. Id. Failure of Consideration. Obligation attaches, not-
withstanding company relied on other lands included in
state patent but which it lost through state decisions holding
them inapplicable to its road under granting act and state
law passed in pursuance of it. Id.
5. Id. Obligation to carry mails camiot be escaped be-
cause State's conveyance, resting on entire considera-
tion, in part illegal, was void, where United States was
not a party to contract and where its reversionary title was
relinquished by Congress to State. Id.
PUBLIC OFPICBBS. See Offlears and Employees.
RACE SXaBiaATIGK. See ConaUtational Law, HI, 4.
BAILBOAD8. See CarHers; Employers' LiabiUty Act;
Panama; Public Lands, II; Safety Appliance Act.
Valuation of lands, etc. See Interstate Commerce Acts.
Compensation for mail transportation. See Mails.
Street railways. 'See Franchises.
BATES. See Equity, 7, 8.
Gas companies. See Conftitutional Law, III, 1.
Laundries and cotton-ginning companies. Id., XI, 3.
Mail transportation. See Maila^
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INDEX. 647
RlXL PBOPIBTT. See DmcIb; Indians; Minei and Min- pagb
Inff ; Public Lands.
Asseesments; local improvements. See Constitutional
Law, XI, 4, 10; XIII, 2.
Eminent domain. See Jurisdietlon, II, 12; IV, 8.
Relief against unconstitutional tax lien, clouding title. See
Equity, 1-4.
Valuation, raihoad lands. SeeZntarstata GommarM Aeta.
RSCKIVXB8. See Claims, 2; Jurisdietion, III, 1.
Original SuiUs. Order granting injunction and appointing
receiver. Oklahoma v. Texa» 372
BBCXTAL8. See Xiidanaa, 2.
BICOBDATION OP IH8TBUMXNT8. See Contraots, 8.
BlCBUITXNa. See Criminal Law, 1.
BIED AMXNDMXNT. See Intozieatinf Liquors.
BlPUNDIKa ACTS. See Taxation, U.
BiaiST&ATION. See Trade-Harks.
BIHIA&IKO. See Jurisdietion, II, 11.
B1LEA8B. See Carriers, 3, 4.
BBMOVAL. See Criminal Law, 2; Jurisdietion, IV, 3;
Offloers and Employees.
BE8ALB. See Anti-Trust Aet, 1.
BE8EB7ATION8. See Mines and Mining.
BE8EBVED POWEB8. See Constitutional Law, X.
BE8IDEKCE. See Constitutional Law, VI; Jurisdiction,
III, 1; IV, 5, 6; Limitations, 1; Taxation, III, 2-15.
BE8 JUDICATA. See Judgments, 1.
BE8PONDEAT 8UPEBIOB. See Master and Servant, 4.
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648 INDEX.
RS8TBAIHT OF T&ADS. See Anti-Trust Aet. paoi
"RITAININa." See CrimiMl Law» 1.
BIYINTTX. SeeTmxation.
Stampe. See Deeds, 1.
RIVSB8AL. See Criminal Law, 13; Employers' UabUity
Act, 4.
8A7BTT APPUAHOX AOT:
1.. Qrablranaand HandhcldB. Requirement of § 4 does not
ihean that handholds on sides of cars shall be supplied at all
four comers, but is satisfied if they are. placed on diagonally
opposite comers. Boehmer v. Pennsylvania R. R — 406
2. Id. NegUoence; Findings of Lower Courts. Whether rail-
road was negligent in not notifying brakeman that car was
not supplied with handholds on sides at all four comers,
held a matter dependent on appreciation of peculiar facts
concerning which this court will accept concurrent judgment
of two courts below. Id.
8T. LOUI8 RIVIB. See Boundaries, 2.
8ALK8. See Constitutional Law, III, 1, 6.
Resale price agreements. See Anti-Trust Act, 1. ,
8BAMXir8 ACT. See Admiralty, 6^.
8BCBBTABT OF AaBICULTUBB. See Tireatles, 2.
8XCBBTABT OF THI INTBUOB. See Mines and Min-
ing, 5, 7.
8BCBETABT OF THB TBBA8UBT. See Jurisdiction,
VI.
8BCBBTABT OF WAB. See Officers and Bmployaes, 7, 8.
8BLF-8EBVINO DECLABATION. See Biidenoe, 2.
8B]rTBVCB. See Court-Martial; Criminal Law. 13.
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. . INDEX. 640
I
81BVICI OF PBOCI88. See Juriidietioii, IV, 6. paob
8IVXMTH AMIMOMIMT. See ConitituUonal Law, IX.
8HABIHOL01B8. See ConitituUoiua Law, XII; Taia-
tion, I, 2-8.
8HIBF. See Indlau, 3, 4.
8HIBMANACT. See Anti-Trust Act.
8ITU8, OF DIET. See Juriidietion, VI, 2.
8IZTBENTH AMINOMINT. See ConiUtutiaaal Law,
XIL
8TAlfP8. See Deedi, 1.
8TAT18. See Boundariei; Oonititutional Law; Oourt-
Martial; Juriidietion; Taxation, III.
Citiieiis; privileges and immunities. See Constitutional
Law, VI.
Reserved powers. See Id., X.
^Judgments; full faith and credit. See Id,, V.
Rates. See Id., Ill, 1; XI, a; Equity, 7, 8.
Suit by. See Jurisdiction, IV, 1.
Original suits. See Proeedure, I.
Pleading and practice. See Pleading, 1.
Lands. See Public Lands, II, 2-5.
Income tax. See Taxation, III, 2-15.
Sovereign R%ght8;0ame Laws. Protection of right to regulate
taking of game is sufficient jurisdictional basis for bill to
enjoin federal regulations over the subject alleged to be un-
constitutional. Mieeauri v. Holland 416
STATirTBS. See Admiralty, 6-8; Antl*Trast Act; Bound-
rics, 2-4; Claims, 4; Colorado; Constltatlonal Law;
Court-Kartial; Criminal Law; Customs Law; DsaUi;
Beads, I; Bmployeni' Liability Act; Indians; Interstate
Commorcc Acts; Intoxicating Liquors; Limitations;
Kails; Mines and Mining; National Banks; Officers
and Employees; Panama; Patents for Inventions;
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650 INDEX.
8TATUT1S— Con<tnu0(2. pagb
Publie Landi; Safety Appliance Act; Tazstion; Trade-
Merks; Treaties. See also Table of Sti^tutes Cited, at
front of volume.
1. Legislative History, Of later act of CongraaB, no aid to
construction of earlier one. Penn Mutual Life Ins. Co, v.
Lederer 523
2. Tide, of Seamen* e Act, 1916, eonsiatent with construction
extending benefits to foreign seamen on foreign vessels.
StraiheamS.S.Co.y. Dillon 348
3. Strict Conetruetion; Penal Statute, Rule of strict con-
struction not violated by allowing woi*ds full meaning or
more extended of two meanings, where such construction
harmonises with context and promotes objects of legislation.
AehSheepCo, v. UnitedStatee 159
4. Liberal Construction; Trade-Mark Registration Act, to
be construed liberally, in fulfillment of purpose, to promote
domestic and foreign trade. Beckwith v. Commiesioner of
Patents 538
5. Limitations; Patent Statutes. Courts may not restrict
time allowed to file second or divisional application, upon
ground that deUy may be prejudicial to public or private
interests. Chapman v, Winiroath ' 126
6. Departmental Contraction, Much weight is given to
contemporaneous and long-continued construction of
indefinite or ambiguous statute by executive department
charged with its administration. National Lead Co. v.
United States 140
7. Id. Repeated reSnactment without change may
amount to implied legislative approval of construction by
executive officers. Id,
8. Id, Rule that long-continued construction should not
be changed to injury of parties relying thereon in contract-
ing with Government, does not apply to practice in making
overpayments on mail transportation contracts, due to
mistake of fact. Grand Trunk Western Ry. v. United ^
States 112
9. Id. Fact that Post Office Department long abstained
from making deductions from compensation for failures to
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INDEX. 661
STATUTlS-^onimtied. pagb
maintain mail train sohedulea under Rev. Stats., § 3962,
where delays were less than 24 hours, does not amount to
construing that section as inapplicable to shorter delays.
Kansas City SotUhem Ry, v. UnUedStaUs 147
8T00K OXVID1ND8. See Oonatitutional Law, XII; Tax-
ation, I, 2-8.
8TBUT BAILWA78. See Oarrien, 5; rranohisM.
8TBnT8 AND mOHWATS. See rranohises.
8UB8TITUTION. See Parties, 3.
8UCCB88IOH TAZB8. See Taxation, II.
8UBBTIB8. See Admiralty, 1.
TAXATION:
Revenue stamps. See Deeds, 1.
Relief against unconstitutional tax lien. See Equity, 1-4.
Local improvements; validity of assessments. See Oonsti-
tutional Law, XI, 4, 10.
L Federal Income Tax.
1. Insurance Companies; Premium Receipts; Cross Income.
In computing gross income of mutual level-premium com-
panies, under § II G (b) of Act of 1013, money derived from
redundancy of premiums paid in previous years, and paid to
policyholders during tax year as dividends in cash, not
applied in reduction of current premiums, should not be
deducted from premium recdpts. Penn MtUttal Life Ins,
Co. y.Lederer. 623
2. Stock Dividends. May not be taxed, as income to stock-
holder, without apportionment, when made lawfully and in
good faith against profits accumulated by corporation since
March 1, 1913. Eisnery. Macomher 189
3. Id. The Act of 1916, to the extent that it imposes such
taxes, is unconstitutional. Id.
4. Id. The provisions of Ck>nstitution for apportionment of
direct taxes necessarily limit the extension, by construction,
ci the Sixteenth Amendment. Id.
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662 INDEX.
TAXATION — Continued. tMom
5. Id, What U Ine&mef Dotermined in each OMe Acoord-
ing to truth and substance without regard to form. Id.
6. Id, Income is gain derived from capital, from labor, or
from both combined, including pi'ofit gained through sale or
conversion of capital. Id,
7. Id, Growth of value in capital investment 18 not income;
income is essentially a gain or profit in itself of exchangeable
value, proceeding from capital, severed from it, and derived
or received by the taxpayer for his separate use, benefit and
disposal. Id.
8. Id, A stock dividend takes nothing from property ci
corporation and adds nothing to that of shareholder; a tax
on such dividends is a tax on capital increase and not on in-
come, and to be valid such taxes must be apportioned ac-
cording to population in the several States. Id,
II. War Eevenue Aet, 18M; Refunding Acts.
1. l^(wie8;lAfeIrUere9t; Computation of Value. In comput-
ing taxes upon legacies of net income for life from trust fund,
Commissioner of Intcniol Revenue cotdd assess legacies by
means of approved mortuary tables and on 4 per cent, as as-
sumed value of money. Simpson v. United Stales 647
2. Id. Rale of Interest; Judicial Notice, That 4 per cent,
was assumed to be fair value or earning power of moaey
safely invested. Id.
3. Id, Vested Interests. Interest of legatees in residuary
estate, under will directing conversion and payment to
trustees, held vested, within Refunding Act of 1902, where
trustee had been selected and payment partly made, and
full payment was enforceable by beneficiaries. Id.
4. Id. Claims Pending. Proof of pending suit against firm
of which testator was a member, held insufficient to es*
tablish legacies were not vested, without showing the plead-
ings, the issues, the amount or merit of the claims or the
result €i the litigation. Id,
ni. state TazaUoB.
1. OosernmentalJurisditiian^diBpeiDdBnTpoia
mandate of the State by action taken within its borders
either tfipsrsofiam or tnrsm. Shaffer y. Carter 37
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INDEX. 663
TAXAnOir-<7afi^niiei. pagb
2. Income Tax; NofHretidefUa. State may tax income de-
rived from local property and business owned and manr
aged from without by citisen of another State. Id, TravU
V. YaUkTowneMfg.Co 60
3. Id. Such power is not inconsistent with the privileges
and immunities and equal protection clauses. Id,
4. Id, Provision permitting residents to deduct losses
sustained without as well as those sustained within the
State, while non-residents may deduct only those occurring
within it, does not violate privileges and immunities or
equal protection olauaes. Id.
6. Id. ItUenUUe Commerce, Net income from, is taxable
under state law providing for a general income tax. Shaffer
y.Carier 37
6. Id, OUahamaOroes Production Tax, on oil end geseom--
panics, was substitute for ad valorem property tax, and pay-
ment of it does not relieve producer from taxation under
income tax law. /d.
7. Id. Lien on all Property Within 8taU. State held justi*
fied in treating properties and business of producer of oil and
gas, who went on with their operation after income tax law
was enacted, as an entity, producing the income and subject
to the lien. Id,
8. Id. Withholding at Source. State may enforoe tax
on incomes arising within her borders, as to non-residents
there employed, by requiring employers to withhold and
pay it from salaries and wages. Traeie v. Yale & Toume
Mfg.Co 60
9. Id. 0mi8si<m of requirement in case <A residents is not
an unconstitutional discrimination against non-residents.
Id,
10. Id. Regulation of Corporate Bueineee. Such require-
ment is not unreasonable as applied to sister-state corpora-
tion doing local business without contract limiting regula-
tory power of taxing State. Id.
11. Id. Power of State is not affected by fact that corpora-
tion may find it more convenient to pay.employees and keep
accounts in State of origin and principal plaee oi businsiB.
Id.
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664 INDEX.
TAXATION—Coniintied. rAcra
12. Id. RenderUa and CUixens. A geDeral taxing aoheme
which discriminates against all non-residents necessarily in-
cludes those who are citisens of other States. Id.
13. Id, DiscriminaHan. Allowance of exemptions to red-
dents, with no equivalent exemptions to non-residents,
abridges privileges and immunities clause of Art. IV. Id.
14. Id. Such discrimination not overcome by excluding
from taxable income of non-residents annuities, interest
and dividends not part of income from local busineaei or
occupation, subject to the tax. Id.
15. Id, Abridgment of privileges and immunities cannot
be condoned by other States or cured by retaliation. Id.
16. Inspection Law; Prinlege Tax. License tax on distrib-
uton and retail dealers in gasoline, hdd not an inspection
but a privilege tax, a burden on interstate commerce. Aah-
ren v, CantinenUd Oil Co..... 444
17. Id. Sales from Oriffinal Paekagee. If separable, law is
valid as applied to sales from original packages in retail
quantities. Id.
18. Id. Exeiee on Local Dealing. Does not discriminate
against other States because commodity not produced in
taxing State but comes wholly from others: Id.
19. Local ImprovemenU. On discretion of taxing officials
to exclude property not necjBSBarily benefited from local
assessment district. Ooldsmith v. Prendergast Conetr. Co.. .. 12
TINTH AMBNDMINT. See Gonstltutional Law, X.
THALWBO, BUUB OF. See Boundaries, 4.
THBATUCAL PBODUCTIOH8. See Oontraeto, 1-4.
TIME. See Oontracts, 1; Limitatlpiis.
Laches. See Patents for Inventions, 4.
TITLB. See Indians, 1 ; Mines and Mining; Public L%nds.
Cloud on; removal. See Bquitr» 1^-
T0BT8. See Death.
Amount involved. See Juriadiotion, IV, 2, 3.
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INDEX. 665
TBAOI-MABK8: paob
1. RegittraUan; Descriptive Wards. Mark oonsistiiig of
fanciful design in combination with words forming part of it
not debarred from registration under § 5 of Trade-Mark
Act because some of the words are descriptive. Beckwith v.
Commissioner of PaienU 638
2. Id. It IS erroneous to require deletion of such words as
condition to registration. Id,
3. Id. Disclaimer, Act complied with if registration per-
mitted with disclaimer of right to exclusive use of descriptive
words except in setting and relation in iiiiich they appeared
in drawing, description and samples filed. Id.
4. Id. Practice. While there is no specific proviMon for
disclaimers in the statute, the practice of using them is
commendable. Id.
6. Id. lAfteroZCoiMlrtfeium, of statute, In fulfillment of pur-
pose, to promote domestic and foreign trade. Id.
TRAirSPOBTATXON. See Carriers, 3-5; Interstate Com-
merce Aets; Intoxioating Liquors.
TBBA8UB7, 81CBITAB7 OF. See Jurisdiotlon, VI.
TBIATII8. See Indians, 1, 2; Jurisdiction, n, 5.
1. Migratory Bird Treaty, 19t6, providing for protection of
birds in United States and Canada, held within treaty-
making power. Missouri v. Holland 416
'2. Id. Bf^oreemerU LeyidaHon. Act <tf 1918, prohibiting
killing, etc., of birds included in terms of treaty, except as
permitted by regulations of Secretary of Agriculture, is
valid. Id.
3. Id. Reserved RighU of Staies. The treaty and statute
do not infringe property rights or sovereign powers reserved
by Tenth Amendment. Id.
4. Id. With respect to rights reserved to States, the treaty-
making power is not limited to what may be done by an un-
aided act of Congress. Id.
TIW8FA88. See Indians, 3, 4; Mines and lfininf» 18, 19.
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656 INDEX.
TBIAL. See Criminal Law» 6 et seq.; Implojen' Liability paob
Aot» 5; Parties, 1, 3; Pleadlnff, 3.
TBU8T8 AND TBUSTBBS. See Taxation, II.
United States; Indian lands ceded in trust. See Indl-
I, 1, 2.
VHITBD 8TATB8. See Clalmi; Court-llartial; Llmita-
tloni, 2; Malls; National Banks; Offieers and Bm-
ployeos; PubUe Lands.
Trustee of lands ceded by Indian treaty. See Indians, 1, 2.
Right to sue for statutory penalty after earlier decree of
injunction. See Judfrnents, 1.
Suit against. See Jurlsdlotion^ YI.
Obstructing recruiting. See Criminal Law, 3 et aeg.
Intervention, in original suit. See Oklahoma v. Texas 372
VALUATION ACT OF UU. See Interstate Commerca
Acts.
VBNDOB AND VBNOBB;
Resale price agreements. See Anti-Trust Aet| 1.
VBBDICT. See Criminal Law, 9.
VB88BL8. See Admiralty.
VB8TBD INTBBB8T8. See Taxation, U.
WAOB8. See Admiralty, 6^.
WAIVBB. See Pleading, 3.
WAB. See Court-Martial.
Espionage Act. See Criminal Law, 3 ei eeq,
WAB BIVBNUB ACT, 1888. See Taxation, 11.
WAB, 8BCBBTAB7 OF. See Offlowrs and BmployMS, 7, 8.
WATBB8. See Boundaries, 2-4.
WILL8:
Suooession taxes. See Taxation, II.
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INDEX. 657
WI80ON8IN. See BouBdMries, 2-4. pagb
W0BD8 AND PHBA8X8:
1. ''Qerks." SceBumapy. UnUedSlaieB .. 612
2. "Employ." See W._
3. " Employee " and "^employed." See HiM. ▼. Philq. A
Reading. Hy 476
4. " Head of Department." See Bumfip v. United States . 612
6. " Final decision." QeeBx parte Tiffany. 32
5. /' Incomc.*'^ SeeEisner v. Macomber ,^ 189
7. " Public lands " and " Indian lands." See Aeh Sheep Co.
V. UniiedStatee ...;.. 169
8. " Resident " and " oitisen." See Trmne v. Yaie A
Toume Mfg. Co. 60
9. " Retaining." SeeGayonY. McCarthy. 171
10. "Scientific interest/' objects of. See Cameron v.
UniiedStatee 460
11. "Sheep" are " caUle." See Aeh Sheep Co. v. United
States 169
12. "Towork"amininfrclaim. BeeCole^. Ralph 286
WBITIN08. See Bills and Notes; Contracts; Deeds;
Trade-Marks.
WBIT OF BBBOB. Sco Jurisdiction; Brooedure.
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