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Digitized by 


Digitized by 


Digitized by 


Digitized by 


Digitized by 








FROM MARCH 1, 1920, TO APRIL 19, 1920 





Digitized by LjOOQLC 

OovTVonv IMO, WW 

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. 


Digitized by 



or THB 



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. 

1 For allotment of The Chief Juetioe and Anoeiate JustioeB amobg 
tiie several eireuitB see next page. 

Digitized by 


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 

For the Third ^Circuit, Mahlon Pitney, Associate 

For the Fourth Circuit, Edward D. Whitb, Chief 

For the Fifth Circuit, J. C. McRetnolds, Associate 

For the Sixth Circuit, William R. Day, Associate 

For the Seventh Circuit, John H. Clarke, Associate 

For the Eighth Circuit, Willis Van Devantbr, Asso- 
ciate Justice. 
For the Ninth Circuit, Joseph McKenna, Associate 

October 30, 1916. 

^ For next previous allotment see 241 U. 8., p. iv. 

Digitized by 




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 


Digitized by 



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 

Digitized by 



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 

Digitized by 




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 

Digitized by 



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 

Digitized by 




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 

Digitized by 



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 

Digitized by 




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 

Digitized by 



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 

Digitized by 



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 

Digitized by 




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 

Digitized by 



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 

Digitized by 




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 

Digitized by 


Digitized by 





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 


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 

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 


Digitized by 





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 


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 

Digitized by 




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 

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 


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 

Digitized by 





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 


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 

Digitized by 





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 

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 

Digitized by 





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- 


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 

Lee 9. Central of Ga. Ry., 21 

Ga. App. 558; 147 Ga. 428 

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 

Digitized by 





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 

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 




Millingar v. Hartupee, 6 

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. 

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. 

New Entfand Oil Co. 

CoDgdon, 152 Calif. 211 




Digitized by 





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 

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 

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 

Digitized by 





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 



Sohulenbeig 9. Haniman, 21 

Wall. 44 123 

Seaboard Air Line Ry. 9. 

Horton,233U.S.492 21 

Sean 9. Akron, 246 U. 8. 242 

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 

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 

Digitized by 





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 


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 

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 

Digitized by 





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 

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 


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 

Digitized by 





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 


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 


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. 

Williams 9. Morgan, 111 U. S 

WiDiams 9. Vreeland, 260 

U. S. 295 
Wintroath 9. Chiqpman, 47 

App. D. C. 428 
WiBoonain 9. Duluth, 96 U. S. 

Wisconsin 9. Pelican Ins. Co., 

127 U. S. 265 
Wkconsin Cent. R. R. 9. 

United States, 164 U. S. 

"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. 

Yard Case, 38 L.D. 59 
Youi«, Jb parte, 200 U. S. 

123 335,337,338 

Zeifer9.Dovdbr«13Aria.331 308 













Digitized by 




OL) BMxans or 

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 

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 


Digitized by 





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 


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 

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 

Digitized by 




1915, Mareh 


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, 

§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) 


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 


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. 





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 

Digitized by 





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 


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 


Civ. Code, §4512 Ill 

Employers' Liability Act HI 


Const 4 

Ky. Stats., §796.... 400, 409 

§4105 3 

§4107 6 

§4114 3 


Const., 44th Amendment 

216, 234 

1867, Laws, p. 346 118 

§4 124 

§11 123 

1877, Laws, May 14.... 119 

1881, Laws, p. 362 120. 


Gen. Stats., 1913, § 7709. 558 


Woerner's Rev. Code, 
St. Louis, 1907,121.. 17 


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 


351,369,360 73 

362,363,366 74 

ie Civ. Pro. 1899, 

2718 652 

§§2721,2722 561 

North Carolina. 

Const 343 


Const., Art. I, § 19 396 

Art. XIII, §6.. 392 
Gen. Code, 1910, 

§§ 10128, 10134 389 

§12940 407 

Page A Adams Gen. 
Code, §§614^^ 398 


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 


1917, Laws, c. 133 107 

Penal Code, Art. 421... 107 

Digitized by 





1917, LawB, 0. 211 602 

StatB., 1911, S 1770b (2), 
(10).. 601 

Wifloonam (CrniL) 


§1770j(l) 602 



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. 

1903, Nov. 18, 33 Statl 
2234 310 


1819, Feb. 22, 8 Stat. 
262 872 

Australia, WeBtem. 

Dividflod Duties Aet 

(D.) FoBxiQN Laws. 



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 

Digitized by 


Digitized by 



or TBB 






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 


Digitized by 



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 

Digitized by 


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. 

Digitized by 

Google _ 


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 

Digitized by 


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 

Digitized by 


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 

Digitized by 



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. 




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 a s sessments 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- 

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 

Digitized by 



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.'' 

Digitized by 



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 

Digitized by 


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 



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 

Digitized by 


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, 

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- 

Digitized by 



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 

Digitized by 


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- 

Digitized by 


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 

Digitized by 


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- 

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. 

Digitized by 


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. 




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 

Digitized by 


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- 

Digitized by 


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. 

Digitized by 


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 

Digitized by 

Google _ 

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. 

Digitized by 


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 




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. 

Digitized by 


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 

Digitized by 


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; 

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. 

Digitized by 


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 

Digitized by 


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 

Digitized by 


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^ 

Digitized by 


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 

Digitized by 


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- 

Digitized by 


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. 


Digitized by 


32 OCTOBER TERM, 1919. 

Aigument for Petitaooer. 262 U. 8. 


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. 

Digitized by 



32. AzgumfliitforBeBpondaiit 

Such IS the effect of the decision in Highland Avenue 
A BeUR.R. Co. v. Columbian Equipment Co., 168 U. S. 

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. 

Digitized by 


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 

Digitized by 



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 

Digitized by 


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; 

Digitized by 



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. 



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. 

Digitized by 



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- 

•The tax is directed against the income as such, entirely 
separate from the business or property out of which it 

Digitized by 



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, 

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 

Digitized by 


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 

Digitized by 



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 

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 

Digitized by 


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- 

Digitized by 



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 

Digitized by 


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 

Digitized by 



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 

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, 

Digitized by 


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 

Digitized by 



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 

Digitized by 



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. 

Digitized by 



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 

Digitized by 


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 

Digitized by 



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 p roperl y , 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* 

Digitized by 


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 

Digitized by 



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, 

Digitized by 



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 

Digitized by 



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- 

Digitized by 


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 

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 

Digitized by 



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, 

Digitized by 



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^ 

Digitized by 



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. 

Digitized by 


60 OCTOBER TERM» 1919. 

QsrOftbus. 262 U. a 



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 

Digitized by 



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 

Digitized by 


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 

Digitized by 


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 propert y , 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. 

Digitized by 


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, 

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, 

Digitized by 



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.^ 

Digitized by 


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. 

Digitized by 



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. 

Digitized by 


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 

Digitized by 



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- 

Digitized by 


70 OCTOBER TEEIM, 1919. 

Aigument for AiipeOae.« 

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, 

Digitized by 



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. 

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 

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 

Digitized by 

Google — 

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 

Digitized by 


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 

Digitized by 


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 

Digitized by 



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 

Digitized by 


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 

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- 

Digitized by 


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 

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 

Digitized by 



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 

Digitized by 


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 

Digitized by 



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 

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 

Digitized by 


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. 

Digitized by 


OpisidQ of the Court 



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 

Digitized by 


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 


Digitized by 


Atgnmeat for the United States. 



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- 

Digitized by 


86 OCTOBEll TERM. 1919. 

Aigument for the United States. 2S2 U. S. 

tailersy and enhancing the prices paid by the consuming 

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- 

Digitized by 


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- 

Digitized by 


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 

Digitized by 


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- 

Digitized by 


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 

Digitized by 


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- 

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 

Digitized by 


92 OCTOBER TERM, 1919. 

Aigument for Defendant in Error. 2S2 U. 8. 

the goods which he does not own that the law concerns 

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 

Digitized by 


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- 

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« 

Digitized by 


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 

Digitized by 


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 

Digitized by 


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 

Digitized by 


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 

Digitized by 


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 

Digitized by 


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 

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 

Digitized by 


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- 



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 

Digitized by 



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- 

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 

A petition for a writ of mandamus was brought by the 
City of Milwaukee in a lower court of the State df Wis- 

Digitized by 


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 

Digitized by 


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/' 

Digitized by 


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 

Third: The company insists that the * ordinance of 

Digitized by 


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 

Digitized by 



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- 

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.'' 


Mr. Justicb Pitnst and Mb. Juemca McRbynolds 

Digitized by 



Opinion of the Court. 




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. 


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 

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- 

Digitized by 


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. 


Digitized by 


LEE V. CENTRAL OF GA, RY, 00, 109 

Opinioii of the Court 




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 

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- 

Digitized by 


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 

Digitized by 



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 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. 

Digitized by 


112 OCTTOBER TERM, 101& 

Qyilabus. 2B2U.& 


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- 

Digitized by 



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; 

Digitized by 


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. 

Digitized by 


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 

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 

Digitized by 


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 

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 

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 

Digitized by 


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." 

Digitized by 


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." 

Digitized by 


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 

Digitized by 


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." 

Digitized by 


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 

Digitized by 


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 

Digitized by 


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- 

Digitized by 


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, 

Digitized by 


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 


Digitized by 



126 CXTTOBER TERM, 19ia 

Aiguiaent for Petitionen. 262 U. B. 



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 

Digitized by 



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 

Digitized by 


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 

Digitized by 



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^ 

Digitized by 


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 

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, 

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 

Digitized by 



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., 

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. 

Digitized by 


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 

Digitized by 



126. OptnioQ of the Court. 


'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 

Digitized by 


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., 

Digitized by 



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 

Digitized by 


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 

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 

Digitized by 



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 

Digitized by 


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- 

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 

Digitized by 



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- 

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 


Mr. Jusncio McRbtnolds dissents. 

Digitized by 


140 OCTOBER TESM, 1010. 

Aigument for AppeUant. 282 U. B. 


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- 

Digitized by 


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 

Digitized by 


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. 

Digitized by 


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 

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 

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 

Digitized by 


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? 

Digitized by 


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- 

Digitized by 


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 

Digitized by 


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 



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 

Digitized by 


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 

Digitized by 


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. 

Digitized by 


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- 

Digitized by 


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 


Digitized by 


Ifi2 OCTOBER TERM, 1019. 

Opinion of the Court. 2fi2U.8. 



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. 


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 

Digitized by 


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^, 

Digitized by 


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 

Digitized by 


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 

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 

Digitized by 


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- 

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 

Digitized by 


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 

Digitized by 


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 


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. 

Digitized by 



Argument for Ash Sheep Ck>. 



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: 

Digitized by 


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 

Digitized by 



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- 

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 

Digitized by 


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. 

Digitized by 



150. Opinion of the Court. 

Mr. Jubticb Clarkb delivered the opinion of the court. 

These two cases were argued and will be decided to- 

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- 

Digitized by 


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. 

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- 

Digitized by 



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 

''That nothing in this Act contained shall in any manner 
bind the United States to purchase any portion of the land 

Digitized by 


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- 

Digitized by 



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. 

Digitized by 


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 

Digitized by 



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 

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. 

Digitized by 


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 


Digitized by 


GAYON V. McCarthy. 171 


GAYON V. McCarthy, united states mar- 
shal FOR the southern DISTRICT OF NEW 


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. 


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 

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 

Digitized by 


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. 

Digitized by 


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 

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- 

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 

Digitized by 


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 

Digitized by 


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 p re s en ted his letter to Naranjo who. 

Digitized by 


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 

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 

Digitized by 


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 

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 

Digitized by 


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 




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 

Digitized by 



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. 

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 

Digitized by 


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. 

Digitized by 


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- 

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. 

Digitized by 


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 

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. 


'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- 

Digitized by 


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 

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 

Digitized by 


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 

''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 

Digitized by 


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 

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- 

Digitized by 


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, 

''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 

The Commission in its answer, either stating or con- 

Digitized by 


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 

Digitized by 


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. 

Digitized by 






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.&. 

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. 

Digitized by 


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 

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. 

Digitized by 



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- 

Digitized by 


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 

Digitized by 



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 

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. 

Digitized by 


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- 

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 

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" 

Digitized by 



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, 

Digitized by 


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- 

Digitized by 



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 

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 

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.] 

Digitized by 


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' 

Digitized by 



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- 

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 

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 

Digitized by 


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 



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 

Digitized by 



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- 

Digitized by 



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 

Digitized by 



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 

Digitized by 


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- 

Digitized by 



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 

Digitized by 


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- 

Digitized by 



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 

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 
proper ty, 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 

Digitized by 

Google — 

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 

Digitized by 



189* Opinkm of the Court 

from the compaay he can do so only by dispoedng of his 

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 

Digitized by 


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 

Digitized by 



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 

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. 

Digitized by 


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 

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. 

Digitized by 



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 

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 

Digitized by 



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 

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 

Digitized by 


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." 

Digitized by 



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), 

Digitized by 

Google — 

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 

Digitized by 



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, 

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 

Digitized by 



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, 

Digitized by 


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. 

Digitized by 



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 

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 

Digitized by 


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." 

Digitized by 



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, 

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 

Digitized by 



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 

S u ppoae 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 b or r ow ing 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- 

Digitized by 



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 

Digitized by 


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 

Digitized by 



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. 

Digitized by 


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. 

Digitized by 



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 

Digitized by 


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., 

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- 

Digitized by 



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 

Digitized by 


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£ 

Digitized by 



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 

Digitized by 


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. 

Digitized by 






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. 

Digitized by 


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. 


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 

Digitized by 



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., 

Digitized by 


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 

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. 

Digitized by 



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 

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. 

Digitized by 


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- 

Digitized by 



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 

/'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 

"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. 

Digitized by 


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; 

Digitized by 



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* 

Digitized by 


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 

Digitized by 



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 

Digitized by 


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 

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, 

Digitized by 



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 

Digitized by 


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- 

Digitized by 



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- 

Digitized by 

Google — 

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- 

Digitized by 



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 

Digitized by 


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 

(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: 


By Irwin St. John Tucker. 


''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 

Into that seething, heaving swamp of torn flesh and 

Digitized by 



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! 


''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 

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 

Digitized by 


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. 


''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. 

Digitized by 



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 

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 


'^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; 

Digitized by 


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 

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! 


''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; 

Digitized by 



239. Brandbis and Holmes, JJ., diasentiiig. 

'Get ready for the commercial war that will follow this 

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 

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 

Then remember that the price you paid was not the 
purchase price for justice, but the penalty price for your 
stupidity 1 


^'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 

Digitized by 


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 

— 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. 

Digitized by 



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 

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 

Until then — ^you will keep on pajdng the price! 


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 

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Cut this out or copy it and send it to us. We will see 
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Please send me samples of its literature. 



City State .." 

First: From this leaflet, which is divided into six 

Digitized by 


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 

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 

. Digitized by 



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 

(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.]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. . 

Digitized by 


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 

Digitized by 



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, 

Digitized by 


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. 

Digitized by 



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.) 

Digitized by 


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 

Digitized by 



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 

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." 

Digitized by 


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. 

Digitized by 



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." 



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 

Digitized by 


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. 

Digitized by 



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 

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 

Digitized by 


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. 

Digitized by 



Opinion of the Court. 


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 

Digitized by 


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 

Digitized by 



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 

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 

Digitized by 


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>- 

Digitized by 



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 

Digitized by 


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 

Digitized by 



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- 

Mr. Justicb Brandbis concurs in the result. 

Digitized by 


SflOBx LiNX— Skstghsd from Msadx'b Chart. 
Soak: About two-ihirds qf an inch to 1 mile. 

Digitized by 


• 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. 
(The words *' Fishermana Island" have been added.) 

-To The FaUs To Lake Superior- 

Digitized by 


286 OCTOBER TERM, 1919. 

Syllabus. 2d2U.& 



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. 

Digitized by 



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 

Digitized by 



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, 

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. 

Digitized by 



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, 

Digitized by 


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 

Digitized by 


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»* 

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 

Digitized by 


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 

Digitized by 



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" 

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 

Digitized by 


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. 

Digitized by 


(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. 

'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- 

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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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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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 

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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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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286. Opjnion of the Ck>urt. 

bility and effect of § 2332 of the Revised Statutes, which 

"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 

Digitized by 


(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. 



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 

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, 

Digitized by 


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. 

Digitized by 


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 

^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). 

Digitized by 



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. 




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. 

Digitized by 


814 OCTOBER TERM, 1019. 

Opmion of the Court. 2S2 U. & 


repudiated the oontract by refusing to go on iritfa the vc^yage. P. 

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 

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* 

Digitized by 



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 

Digitized by 


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. 

Digitized by 



Aigument for PetitioiMr. 



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. 

(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. 

(4) Plaintiff is entitied to an injunction against r epre s en tation 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: 

Digitized by 


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 

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 

Digitized by 



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. 

Digitized by 


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 

Digitized by 



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 

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 

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 

Digitized by 


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 

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 

Digitized by 



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 

Digitized by 


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 


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. 

Digitized by 



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 

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. 

Digitized by 


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 

Digitized by 



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 

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, 

Digitized by 


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 

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 

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 

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- 

Digitized by 



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 

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 

Digitized by 


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 

Digitized by 


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. 



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, 

Digitized by 


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. 


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 

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 

Digitized by 


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 

Digitized by 


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^. 

Digitized by 


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 

Digitized by 


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 

Digitized by 


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 

Digitized by 


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. 


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. 

Digitized by 



Opinion of the Court 



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 

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 

Digitized by 


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. 


Digitized by 


Coonad f or Ffetftifla. 




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 

Digitized by 

Google — 

342 OCTOBER TERM, 1919. 

Opmion (4 the Court 252 U. 8. 

Mr. JusncB Brandeis delivered the opinion of the 

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 

Digitized by 


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 

Dismieeed for want cf jurieSdiML 



No. 7, Oiigina]. Entered Maroh 22, 1020, upon motioo submitted 

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 

Digitized by 



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 

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 

Digitized by 


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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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. 


gbbhorabi to thb citouir court of appeals for ths 

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- 

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- 

(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 

Digitized by 


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 

Digitized by 


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- 

Mr. Frederic R. Coudert and Mr. Howard Thayer 
KingAvry for the British Embassy, by special leave of 

The Solicitor Oeneral, with whom Mr. A. P. MyerSf 
was on the brief, for the United States, by efpedal leave of 

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 

Digitized by 


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 

Digitized by 



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 

Digitized by 


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 

Digitized by 



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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Google — 

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 

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 

Digitized by 



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 


Digitized by Google ^ 

368 OCTOBER TERM, 1919. 

Argument for Petitionfir. 262 U. S. 



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- 

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 

Digitized by 



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 

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 

This contract is not contrary to public policy simply 

Digitized by 


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- 

Digitized by 



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* 

Digitized by 


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 

Digitized by 



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 

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. 

Digitized by 


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. 




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. 

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. 

Digitized by 



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 

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 

Digitized by 


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 

Digitized by 



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^ 

Digitized by 


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 

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 

Digitized by 


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 

Digitized by 


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 

Digitized by 



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. 

Digitized by 


372 OCTOBER TERM, 1919. 

Order. 25211.8. 



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- 

3. Jacob M. Dickinson, Esquire, of Chicago, lUinois, 

Digitized by 



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 


Digitized by 


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 

Digitized by 



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-^ 

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 

Digitized by 


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. 



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. 


Digitized by 



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^ 

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 

Digitized by 


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 

Digitized by 



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. 

Digitized by 


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 


Mb. Chief Jubtigb Whitb ddivered the opinion of the 

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 

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 

Digitized by 



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 

Digitized by 


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. - 

''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 

Digitized by 



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 

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 

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 

Digitized by 


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 

Digitized by 



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. 

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 

Digitized by 


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 

Digitized by 



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 

Digitized by 


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 




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 

Digitized by 



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. 

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 

Digitized by 


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- 

Digitized by 


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 

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 

Digitized by 


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^ it of the rights and franchises 
of plaintiff and tiie deprivation of its property for private 

Digitized by 


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 

Mr. CarrcU 0. WdUer, with whom Mr. WiUiam Z. 
Davis and Mr. John L. Wells were on the briefs, for ap- 

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. 

Digitized by 


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 

Digitized by 


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 

Digitized by 


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 

Digitized by 


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 

Digitized by 



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 

" 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 

Digitized by 


«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 

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. 



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 

Digitized by 


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 

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 

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.] 

Digitized by 


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 

Digitized by 


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- 

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 
point on ti 

Digitized by 


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 

Digitized by 



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 

Digitized by 


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- 

Digitized by 


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 

Digitized by 


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 

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 

Digitized by 


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. 



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. 

Digitized by 


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 

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 

Digitized by 


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 

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 

Digitized by 



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 

Mr. Justice Van Dbyamtbb and Mb. Justicb Ptinbt 
concur in this dissent. 



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. 

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. 

Digitized by 


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 

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 

Digitized by 



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 

Digitized by 


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 

Digitized by LjOO^IC 


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- 

Digitized by 


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 

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. 



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. 

Digitized by 



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. 

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. 

Digitized by 


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 

Digitized by 



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, 

Digitized by 


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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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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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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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 

There are many national questions affecting alone this 
Government or the people of the United States with which 

Digitized by 



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^ 

Digitized by 


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 

Digitized by 



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 

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, 

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 

Digitized by 


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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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- 

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 

Digitized by 



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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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. 

Digitized by 



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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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. . 

Digitized by 



Counsel for ItetieB. 252 U. S. 



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. 


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. 

Digitized by 


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 

Digitized by 


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 

Digitized by 




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- 

Digitized by 


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. 

Digitized by 


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 

Digitized by 


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 

Digitized by 


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. 

Digitized by 

Google — 

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- 

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. 






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 

Digitized by 



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. 


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- 

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 

Digitized by 


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 

Digitized by 



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 

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 

Digitized by 

Google — 

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 

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 

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 

Digitized by 



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 

Digitized by 


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 



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- 

Digitized by 



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 

DigjtizedbyLjOOQiC . 

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, 

Digitized by 



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 

Digitized by 


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 

Digitized by 



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. 

Digitized by 


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 

Digitized by 



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 

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 

Digitized by 


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 

Digitized by 



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 

Digitized by 


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 

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 

Digitized by 



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 

Digitized by 


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 

Digitized by 



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. 

Digitized by 



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. 

Digitized by 



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. 



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 

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. 

Digitized by 


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