UNITED STATES REPORTS VOLUME 292 CASES ADJUDGED IN THE SUPREME COURT AT OCTOBER TERM, 1933 From March 20,1934 to and Including June 4, 1934 ERNEST KNAEBEL REPORTER UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON : 1934 For sale by the Superintendent of Documents, Washington, D.C. - Price $1.50 (Buckram) Erratum.—291 U. S. 363, line 12, “ 1934 ” should read 1933. ii JUSTICES OF THE SUPREME COURT DURING THE TIME OF THESE REPORTS 1 CHARLES EVANS HUGHES, Chief Justice. WILLIS VAN DEVANTER, Associate Justice. JAMES CLARK McREYNOLDS, Associate Justice. LOUIS D. BRANDEIS, Associate Justice. GEORGE SUTHERLAND, Associate Justice. PIERCE BUTLER, Associate Justice. HARLAN FISKE STONE, Associate Justice. OWEN J. ROBERTS, Associate Justice. BENJAMIN N. CARDOZO, Associate Justice. HOMER S. CUMMINGS, Attorney General. J. CRAWFORD BIGGS, Solicitor General. CHARLES ELMORE CROPLEY, Clerk. FRANK KEY GREEN, Marshal. xFor allotment of the Chief Justice and Associate Justices among the several circuits, see next page. in SUPREME COURT OF THE UNITED STATES Allotment of Justices 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 acts of Congress in such case made and provided, and that such allotment be entered of record, viz: For the First Circuit, Louis Dembitz Brandeis, Associate Justice. For the Second Circuit, Harlan Fiske Stone, Associate Justice. For the Third Circuit, Owen J. Roberts, Associate Justice. For the Fourth Circuit, Charles Evans Hughes, Chief Justice. For the Fifth Circuit, Benjamin N. Cardozo, Associate Justice. For the Sixth Circuit, James C. McReynolds, Associate Justice. For the Seventh Circuit, Willis Van Devanter, Associate Justice. For the Eighth Circuit, Pierce Butler, Associate Justice. For the Ninth Circuit, George Sutherland, Associate Justice. For the Tenth Circuit, Willis Van Devanter, Associate Justice. March 28, 1932. IV TABLE OF CASES REPORTED Page Abelson, Hershon v.............................. 642 Aderhold, Davis v............................... 647 Aderhold, Lee v................................. 633 Ainsworth, U.S. ex rei., Continental Co. v.. 615, 641 Alabama, Bridges v............................ 633 Aleograph Co. v. Western Electric Co............ 656 Alexander v. Missouri State Life Ins. Co........ 650 Allman, Washington Loan & Trust Co. v........... 649 A. Magnano Co. v. Hamilton....................... 40 Amchanitzky v. Sinnott........................... 636 American National Ins. Co. v. Bass.............. 643 Ames v. Helvering................................ 635 Anderson, Rossmoore v.......................... 630 Ängsten, Illinois ex rei. Cobine v.............. 612, 648 Ansell, Long v.................................. 619 Anthony, Frothingham v.......................... 655 Apartment Corp. v. Helvering.................... 631 Arcola Sugar Mills Co., Burnham v............... 630 Arizona v. California....................... 341, 601 Armour Fertilizer Works, Sanders v.......... 190, 612 Aschenbrenner v. U.S. Fidelity & Guaranty Co... 80, 615 Assiniboine Indian Tribe v. United States....... 606 Atlantic Coast Line R. Co. v. Stringfellow...... 625 Avery v. Commissioner........................... 210 A. W. Perry, Inc., Irving Trust Co. v........... 620 Bachrach, Manufacturers Trust Co. v............. 647 Baker, Meseck Towing & Transp. Co. v. 636 Bank of America Nat. Assn., Irving Trust Co. v... 628 Banks v. Corning Bank & Trust Co................ 653 Barefield, Life & Casualty Ins. Co. v........... 600 Barium, The John J., Detroit Trust Co. v........ 619 v VI TABLE OF CASES REPORTED. Page Barium, The Thomas, Detroit Trust Co. v........ 619 Barry v. United States......................... 648 Bass, American National Ins. Co. v............. 643 Bauman v. Chicago & N. W. Ry. Co............... 632 Bausch & Lomb Optical Co. v. United States..... 645 Bausch & Lomb Optical Co., Wahlgren v...... 615, 639 Beale v. New York............................... 633 Bensinger v. Hilles............................. 652 Benson, Missouri Pacific R. Co. v............... 641 Benson, Northwest Bancorporation v.............. 606 Benson v. Sullivan.............................. 604 Benton v. United States......................... 642 Betts v. Railroad Commission.................... 604 Bickell, Lee v.................................. 415 Bigelow v. Bowers............................... 656 Blagden, New York ex rel., v. Lynch........ 602, 608 Bliss, Helvering v.............................. 617 Blumenthal v. Greenfield........................ 633 Bodenheimer v. Confederate Memorial Assn....... 629 Bondholders’ Committee v. Realty Associates Corp. 628 Bonner v. New England Newspaper Pub. Co....... 625 Bonner, New England Newspaper Pub. Co. v....... 625 Boston & Maine Railroad v. Fernald.............. 641 Bowers, Bigelow v............................... 656 Bowers, City Bank Farmers Trust Co. v.......... 644 Bowers, Jamison v............................... 658 Bowers, Title Guarantee & Trust Co. v............ 628 Boynton v. Hutchinson Gas Co................... 601 Braverman v. Terrill Bond & Mortgage Co........ 600 Brewer, Hill v................................. 626 Brewster, Poresky v........................7.... 612 Brewster v. United States...................... 246 Bridges v. Alabama.............................. 633 British-American Tobacco Co. v. Helvering...... 619* Brock v. Wainer................................ 640 Brooklyn Edison Co., Electric Cable Joint Co. v.... 69 Brotherhood of Locomotive Firemen v. Pinkston... 621 TABLE OF CASES REPORTED. vii Page Brown v. Irving Trust Co......................... 607 Brown, Tennessee ex rei. Lea v................... 638 Brownell, Metropolitan Casualty Ins. Co. v........ 620 Brusselback v. Chicago Joint Stock Land Bank...... 641 Burnett, Standard Pipe Line Co. v................ 649 Burnham v. Arcola Sugar Mills Co................. 630 Burns Mortgage Co. v. Fried...................... 487 Byars, Nashville, C. & St. L. Ry. v.............. 629 California, Arizona v........................ 341, 601 California, Gillis v............................. 620 California, Hall v.............................. 614 Campbell, Humble Oil & Rfg. Co. v................ 648 Capen, Millen v.................................. 639 Carcaba, McNair v................................ 646 Cargile, New York Trust Co. v.................... 625 Carpenter v. Ludlum.............................. 655 Catterlin v. Ohio................................ 614 Cedar Park Cemetery Assn. v. Commissioner......... 639 Charles Ilfeld Co. v. Hernandez................... 62 Chassaniol v. Greenwood.......................... 601 Chevrolet Motor Co. v. Watson.................... 637 Chicago Joint Stock Land Bank, Brusselback v......641 Chicago, M., St. P. & P. R. Co. v. O’Connor....... 651 Chicago & N. W. Ry. Co., Bauman v................ 632 Chicago & N. W. Ry. Co., Rowley v................ 618 C. H. Sprague & Son Co., Helvering v............ 612 City Bank Farmers Trust Co. v. Bowers............ 644 Clark v. Williard................................ 112 Cloudy Realty Corp. v. Irving Trust Co........... 653 Cobine, Illinois ex rei., v. Ängsten......... 612, 648 Coe, Cregier v................................... 604 Colgate, Helvering v............................. 617 Colorado, Dill v................................. 609 Columbia Transportation Co., International Milling Co. v............................................ 511 Columbus Gas & Fuel Co. v. Public Utilities Comm’n......................................... 398, 603 VIII TABLE OF CASES REPORTED. Page Comer v. Washington............................. 610 Commercial Standard Ins. Co. v. Davis........... 627 Commissioner, Avery v.......................... 210 Commissioner, Cedar Park Cemetery Assn, v....... 639 Commissioner, Glaser v.......................... 654 Commissioner, Rockford Life Ins. Co. v.......... 382 Commissioner, Spring City Foundry Co. v..... 182, 613 Commissioner, Street v.......................... 637 Commissioner, Tyson v........................... 657 Commissioner, Von Weise v..................... 655 Concordia Fire Ins. Co. v. Illinois............. 535 Confederate Memorial Assn., Bodenheimer v..... 629 Consolidated Rendering Co. v. United States.....656 Continental Casualty Co. v. United States... 615, 641 Continental Oil Co. v. Helvering............ 627 Corning Bank & Trust Co., Banks v............... 653 Cottrell, Delaware & Hudson R. Corp, v.......... 638 Creek Nation, United States v................... 616 Cregier v. Coe.................................. 604 Cuyahoga Valley Ry. Co., Gilvary v............... 57 Daggett, K.C. Structural Steel Co. v............ 630 Dann, Washington Gas Light Co. v................ 649 Davis v. Aderhold............................... 647 Davis, Commercial Standard Ins. Co. v........... 627 Davis, McNair v............................... 647 Davis (D. P.) Properties, Hurst v............... 648 Day ton Power & Light Co. v. Public Utilities Comm’n........................................ 290 Delaware, Ghadiali v............................ 653 Delaware & Hudson R. Corp. v. Cottrell........ 638 Delaware River Bridge Comm’n, McGarrity v... 19, 607 Delta & Pine Land Co., Hartford Acc. Co. v.. 143, 607 Dern, U.S. ex rel. N.Y. Warehouse Assn, v... 642 Detroit Trust Co. v. The John J. Barium......... 619 Detroit Trust Co. v. The Thomas Barium.......... 619 Deutsche Gold und Silber Scheideanstalt Vormals Roessler, Woodson v.......................... 449 TABLE OF CASES REPORTED. ix Page Dill v. Colorado................................. 609 Dinuba Associates, Ltd. v. Killefer Mfg. Co...... 623 District of Columbia, May v..................... 630 D. P. Davis Properties, Hurst v................. 648 Duke, Ex parte................................... 602 Duncan v. United States........................ 646 Dunlap v. United States.......................... 653 Dunn v. Interstate Bond Co....................... 645 Eastman Kodak Co. v. Gray........................ 332 Eaton v. Harwood................................. 636 Edwards, Jamison v............................. 658 Electric Cable Joint Co. v. Edison Co............. 69 Elliot v. Lombard................................ 139 Empire Box Corp., Interstate Box Co. v........... 657 Ex parte Duke.................................... 602 Ex parte Martin.................................. 603 Ex parte Steckler................................ 610 Fagan, Parker Brothers v....... i................ 638 Fairport, P. & E. R. Co. v. Meredith............. 589 Federal Land Bank v. Warner....................... 53 Federal Radio Comm’n v. Nelson Bros. Co.......... 613 Federal Radio Comm’n v. North Shore Church....... 613 Federal Radio Comm’n, Unity School v............. 646 Fernald, Boston & Maine Railroad v............... 641 Ferrand v. New York Life Ins. Co................. 644 Fidelity & Deposit Co., Lewis v.................. 559 Findlay v. Florida East Coast Ry. Co............. 623 Fine v. United States............................ 622 First National Bank, Maricopa County v........... 644 First National Bank-Detroit, Posselius v......... 627 First Real Estate & Inv. Co., Willis v....... 604, 626 Fiske v. Missouri................................ 636 Florida v. United States........................... 1 Florida East Coast Ry. Co., Findlay v............ 623 Fort Myers Drainage District, Vans Agnew v....... 643 Frankel, Ruwitch v.............................. 653 Fried, Burns Mortgage Co. v..................... 487 X TABLE OF CASES REPORTED. Page Frothingham v. Anthony.......................... 655 Furlaud, McCandless v........................... 617 Gallivan, U.S. ex rel., v. Hill................. 642 Gardner, Minnich v............................... 48 Gay v, Ruff...................................... 25 General Paint Corp. v. Kramer.................... 623 Genova, St. Paul Bridge & T. Ry. Co. v.......... 630 George v. United States.......................... 634 Ghadiali v. Delaware............................. 653 Gildersleeve No. 325, The, v. Howard............ 635 Gildersleeve Shipbuilding Co. v. The K. R. Hickey.. 654 Gillis v. California............................. 620 Gilvary v. Cuyahoga Valley Ry. Co................ 57 Glanz v. United American Trust & S. Bank........ 643 Glaser v. Commissioner.......................... 654 Golding v. United States........................ 643 Goldsmith v. New York Life Ins. Co.............. 650 Goltra, Warner v................................ 617 Gottlieb v. White............................... 657 Grandin Farmers Co-Op. Co., Langer v............ 605 Gray, Eastman Kodak Co. v...................... 332 Gray v. Hopkins................................. 643 Greenfield, Blumenthal v........................ 633 Greenwood, Chassaniol v........................ 601 Griffith, New England Newspaper Pub. Co. v...... 625 Grosjean, Trinityfarm Construction Co. v........ 604 Guardian Casualty Co. v. Toledo................. 611 Guardian Trust Co. v. Keith..................... 652 Gully v. Interstate Natural Gas Co............... 16 Gypsy Oil Co. v. Oklahoma Tax Comm’n........ 605, 611 Hall v. California.............................. 614 Hamilton, A. Magnano Co. v..................... 40 Hansborough, Keys y.............................. 629 Harbison, Helvering v........................... 617 Harpers Ferry & Potomac Bridge Co. v. Comm’n.... 624 Harrison, Perkins v.............................. 634 Harrison, Upton v................................ 633 TABLE OF CASES REPORTED. xi Page Hartford Accident & Ind. Co. v. Delta Co..... 143, 607 Hartford-Empire Co., Shawkee Mfg. Co. v.......... 640 Harwood, Eaton v................................. 636 Healy v. Ratta............................... 263, 607 Heister, Lehigh & New England R. Co. v........... 638 Helvering, Ames v................................ 635 Helvering, Apartment Corp, v.................... 631 Helvering v. Bliss............................... 617 Helvering, British-American Tobacco Co. v.......619 Helvering v. C. H. Sprague & Son Co.............. 612 Helvering v. Colgate............................. 617 Helvering, Continental Oil Co. v.................. 627 Helvering v. Harbison............................ 617 Helvering, Howell v.............................. 654 Helvering v. Independent Life Ins. Co............ 371 Helvering, Johnson, Drake & Piper, Inc. v........ 650 Helvering v. Lynchburg Trust & Savings Bank...... 640 Helvering v. Morgan’s, Inc....................... 618 Helvering, National Paper Products Co. v......... 621 Helvering, New Colonial Ice Co. v................ 435 Helvering v. New York Trust Co............... 455, 616 Helvering, New York Trust Co. v............ 455,616 Helvering v. Northern Coal Co.................... 612 Helvering, Ohio v.................. 360,601,602,605 Helvering, Olson v............................... 637 Helvering v. Oswego & Syracuse R. Co............. 612 Helvering, Pomeroy v............................. 635 Helvering v. Powers.............................. 620 Helvering v. St. Louis S. W. Ry. Co.............. 626 Helvering v. Stockholms Enskilda Bank........... 618 Helvering, Terre Haute Electric Co. v............ 624 Helvering, Tricon v.............................. 655 Helvering v. U.S. Refractories Corp.............. 612 Helvering, Week v................................ 657 Helvering v. Western Union....................... 636 Helvering v. Wiese............................... 614 Helvering, Zellerbach Paper Co. v................ 621 XII TABLE OF CASES REPORTED. Page Henderson, U.S. Radiator Corp, v................ 650 Hernandez, Charles Ilfeld Co. v................... 62 Hershon v. Abelson............................... 642 Hickey, The Katherine R., Gildersleeve Co. v.... 654 Hill v. Brewer................................... 626 Hill, McNally v.................................. 619 Hill, U.S. ex rel. Gallivan v...................... 642 Hill, U.S. ex rel. Nerbonne v..................... 634 Hilles, Bensinger v.............................. 652 Hines, U.S. ex rel. Wilkinson v................... 632 Hopkins, Gray v.................................. 643 Houck, Lutz v.................................... 603 Howard, The Gildersleeve No. 325 v............... 635 Howell v. Helvering.............................. 654 Humble Oil & Rfg. Co. v. Campbell................ 648 Hunt, Local Loan Co. v........................... 234 Hurst v. D. P. Davis Properties.................. 648 Hutchinson Gas Co., Boynton v.................... 601 Huteson v. United States......................... 627 Ickes v. Virginia-Colorado Corp.................. 620 Ilfeld (Charles) Co. v. Hernandez................. 62 Illinois, Concordia Fire Ins. Co. v.............. 535 Illinois Bankers Life Assn. v. Talley............ 604 Illinois Bell Telephone Co. v. Lindheimer. .v..... 151 Illinois Bell Telephone Co., Lindheimer v........ 151 Illinois Commerce Comm’n v. United States......... 474 Illinois ex rel. Cobine v. Ängsten.......... 612, 648 Imperial Coal Sales Co., Virginia v.............. 619 Indemnity Insurance Co. v. Sloan................. 625 Independent Life Ins. Co., Helvering v........... 371 Indian Valley R. Co. v. United States............ 608 International Milling Co. v. Columbia Transporta- tion Co.......................................... 511 Interstate Bond Co., Dunn v...................... 645 Interstate Folding Box Co. v. Empire Box Corp.... 657 Interstate Natural Gas Co., Gully v............... 16 Irving Trust Co. v. A. W. Perry, Inc............. 620 Irving Trust Co. v. Bank of America Nat. Assn..... 628 TABLE OF CASES REPORTED. xm Page Irving Trust Co., Brown v....................... 607 Irving Trust Co., Cloudy Realty Corp, v......... 653 Irving Trust Co., Manhattan Properties v........ 607 Irving Trust Co., Utilities Power & L. Co. v.... 641 Jadrijevics, Nelson v........................... 652 Jamison v. Bowers.............................. 658 Jamison v. Edwards............................. 658 Jamison v. Lowe................................ 658 Jerrell, New York Central R. Co. v.............. 646 Jindra v. United States........................ 651 John J. Barium, The, Detroit Trust Co. v.......... 619 Johnson, Monamotor Oil Co. v..................... 86 Johnson, Drake & Piper, Inc. v. Helvering....... 650 Kansas City Structural Steel Co. v. Daggett..... 630 Karlson v. United States........................ 246 Katherine R. Hickey, The, Gildersleeve Co. v.... 654 Keets, Keys v................................... 629 Keith, Guardian Trust Co. v..................... 652 Keys v. Hansborough............................. 629 Keys v. Keets................................... 629 Killefer Mfg. Co., Dinuba Associates, Ltd. v.... 623 Knass v. Madison & Kedzie State Bank........ 599, 604 Knoxville, W. J. Savage Co. v................... 623 Kramer, General Paint Corp, v................... 623 Langer v. Grandin Farmers Co-Op. Co............. 605 Larsen v. Northland Transportation Co............ 20 Lawrenceburg Warehouse Co., Striplin v........ 645 Lea, Tennessee ex rel., v. Brown................ 638 Lee v. Aderhold................................. 633 Lee v. Bickell................................. 415 Lehigh & New England R. Co. v. Heister.......... 638 Lehigh Valley R. Co. v, McGrath................. 637 Lewis v. Fidelity & Deposit Co.................. 559 Lewis v. Simon.................................. 634 Life & Casualty Ins. Co. v. Barefield........... 600 Life & Casualty Ins. Co. v. McCray.............. 600 Lindheimer v. Illinois Bell Telephone Co........ 151 XIV TABLE OF CASES REPORTED. Paga Lindheimer, Illinois Bell Telephone Co. v.... 151 Local Loan Co. v. Hunt....................... 234 Lombard, Elliot v............................ 139 Long v. Ansell............................... 619 Long v. Michigan............................. 647 Loughran v. Loughran..................... 216,615 Loughran, Loughran v..................... 216,615 Louisiana, Silsby v.......................... 599 Lowe, Jamison v.............................. 658 Ludlum, Carpenter v.......................... 655 Lutz v. Houck................................ 603 Lynch, New York ex rel. Blagden v......... 602, 608 Lynch v. New York ex rel. Pierson............ 616 Lynch, New York ex rel. Sackett v........... 604 Lynch v. United States.................... 571, 616 Lynchburg Trust & Savings Bank, Helvering v... 640 Madison & Kedzie State Bank, Knass v...... 599, 604 Magnano (A.) Co. v. Hamilton.................. 40 Manhattan Properties v. Irving Trust Co...... 607 Manufacturers Trust Co. v. Bachrach.......... 647 Marcum v. Marcum............................. 651 Marcum, Marcum v............................. 651 Maricopa County v. First National Bank.......* 644 Maricopa County v. Phoenix National Bank...... 644 Maricopa County v. Phoenix Savings Bank & T. Co.. 644 Maricopa County v. Tempe National Bank........ 644 Maricopa County v. Valley Bank & Trust Co..... 644 Marshall v. New York......................... 622 Martin, Ex parte............................. 603 May v. District of Columbia.................. 630 McCandless v. Furlaud........................ 617 McCombs, Pacific Mutual Life Ins. Co. v...... 624 McCray, Life & Casualty Ins. Co. v........... 600 McGarrity v. Delaware River Bridge Comm’n... 19, 607 McGrath, Lehigh Valley R. Co. v.............. 637 McIntosh v. Seymour.......................... 652 McKnett v. St. Louis & San Francisco Ry. Co.. 230, 613 TABLE OF CASES REPORTED. xv Page McLaughlin, Standard Oil Co. v.............. 605, 631 McNair v. Carcaba............................. 646 McNair v. Davis................................. 647 McNally v. Hill................................. 619 Meredith, Fairport, P. & E. R. Co. v............ 589 Meseck Towing & T. Co. v. Baker................. 636 Meseck Towing & T. Co. v. Ryan.................. 636 Meseck Towing & T. Co. v. Smith-Murphy Co........ 636 Metropolitan Casualty Ins. Co. v. Brownell....... 620 Michigan, Long v................................ 647 Mid-Continent Petroleum Corp., Sauder v..... 272, 613 Millen v. Capen................................. 639 Mills Alloys, Inc., Stoody Co. v................ 637 Mills Novelty Co., O’Ryan v................. 609, 615 Minnich v. Gardner............................... 48 Mississippi, Monaco v........................... 313 Mississippi, Nickey v........................... 393 Mississippi, Principality of Monaco v........... 313 Mississippi Valley Barge Line Co. v. United States. 282 Missouri, Fiske v............................... 636 Missouri v. Missouri Pacific Ry. Co.......... 13, 603 Missouri Pacific Ry. Co. v. Benson.............. 641 Missouri Pacific Ry. Co., Missouri v......... 13, 603 Missouri Pacific Ry. Co. v. Treece.............. 626 Missouri State Life Ins. Co., Alexander v....... 650 Monaco v. Mississippi........................... 313 Monahos, Navigazione Libera Triestina Societa Anonyme v......................................... 647 Monamotor Oil Co. v. Johnson..................... 86 Morgan’s, Inc., Helvering v...................... 618 Morse v. United States........................... 652 Mulligan, U.S. ex rel. Seeman v................. 654 Mutual Life Ins. Co. v. Wells Fargo Bank & U. T. Co. 601 Myers v. United States.......................... 629 Nashville, C. & St. L. Ry. v. Byars............. 629 Natalino, St. Paul Bridge & T. Ry. Co. v........ 631 National Paper Products Co. v. Helvering.........621 61745°—34----n XVI TABLE OF CASES REPORTED. Page National Surety Co. v. Toledo.................. 611 National Surety Co., Ulmen v................... 624 Navigazione Libera Triestina Società Anonyme v. Monahos........................................ 647 Navigazione Libera Triestina Società Anonyme v. Romeo & Co..................................... 647 Nebraska, Thimgan v............................ 656 Nelson v. Jadrijevics.......................... 652 Nelson Bros. Bond & M. Co., Radio Comm’n v...... 613 Nerbonne, U.S. ex rei., v. Hill................ 634 New Colonial Ice Co. v. Helvering.............. 435 Newcomb v. York Ice Machinery Corp............. 658 New England Newspaper Pub. Co. v. Bonner..... 625 New England Newspaper Pub. Co., Bonner v..... 625 New England Newspaper Pub. Co. v. Griffith... 625 Newfoundland Export & S. Co., United British S.S. Co. v.......................................... 651 New York, Beale v.............................. 633 New York, Marshall v........................... 622 New York, Small v.............................. 634 New York, Smith v.....................;........ 606 New York Central R. Co. v. Jerrell............. 646 New York ex rei. Blagden v. Lynch.......... 602, 608 New York ex rei. Pierson, Lynch v................ 616 New York ex rei. Sackett v. Lynch.............. 604 New York Life Ins. Co., Ferrand v................ 644 New York Life Ins. Co., Goldsmith v............ 650 New York Trust Co. v. Cargile.................. 625 New York Trust Co. v. Helvering............ 455,616 New York Trust Co., Helvering v............ 455, 616 New York Warehouse Assn., U.S. ex rei., v. Dern.... 642 Nickey v. Mississippi.......................... 393 Noakes v. Standard Oil Co...................... 628 Northern Coal Co., Helvering v................... 612 Northland Transportation Co., Larsen v.......... 20 North Shore Church, Radio Comm’n v............. 613 Northwest Bancorporation v. Benson............. 606 TABLE OF CASES REPORTED. XVII Page Northwestern Fire & M. Ins. Co. v. Seaboard Co.... 635 Northwestern Mutual Life Ins. Co. v. West...... 627 O’Connor, Chicago, M., St. P. & P. R. Co. v.... 651 Ohio, Catterlin v............................. 614 Ohio v. Helvering.................. 360, 601, 602, 605 Ohio v. United States......................... 498 Ohio, United States v........................ 498 Oklahoma ex rel. School District No. 40, Walden v.. 639 Oklahoma Gas & Electric Co. v. Oklahoma Packing Co............................................ 386 Oklahoma Packing Co., Oklahoma Gas & Electric Co. v......................................... 386 Oklahoma Tax Comm’n, Gypsy Oil Co. v....... 605, 611 Olson v. Helvering............................ 637 Olson v. United States........................ 246 O’Ryan v. Mills Novelty Co................. 609, 615 Oswego & Syracuse R. Co., Helvering v......... 612 Owsley v. United States....................... 635 Pacific Mutual Life Ins. Co. v. McCombs....... 624 Page, Perry v................................. 632 Parker Brothers v. Fagan...................... 638 Patten v. United States....................... 645 Perkins v. Harrison........................... 634 Perry v. Page................................. 632 Perry (A. W.), Inc., Irving Trust Co. v.J......... 620 Petroleum Navigation Co. v. Utility Oil Corp... 655 Phoenix National Bank, Maricopa County v....... 644 Phoenix Savings Bank & T. Co., Maricopa County v. 644 Pierson, New York ex rel., Lynch v............ 616 Pima County v. Southern Arizona Bank & T. Co... 644 Pinkston, Brotherhood of Locomotive Firemen v.... 621 Pokora v. Wabash Ry. Co........................ 98 Pomeroy v. Helvering........................... 635 Poresky v. Brewster............................. 612 Posselius v. First Nat. Bank-Detroit............ 627 Pottorf!, Texas & Pacific Ry. Co. v............... 600 Powers, Helvering v............................. 620 XVIII TABLE OF CASES REPORTED. Page Prevette, v. United States...................... 622 Price v. United States.......................... 632 Principality of Monaco v. Mississippi............313 Public Service Comm’n, Harpers Ferry Bridge Co. v. 624 Public Utilities Comm’n, Columbus Gas Co. v.. 398, 603 Public Utilities Comm’n, Day ton Power Co. v..... 290 Public Utility Comm’rs, West Shore R. Co. v...... 624 Puget Sound Power & Light Co. v. Seattle......... 603 Radio Corporation v. Radio Engineering Laboratories *...................................... Railroad Commission, Betts v.................... 604 Ralph Sollitt & Sons Co. v. Virginia........ 599, 604 Ratta, Healy v.............................. 263, 607 Realty Associates Securities Corp., Bondholders’ Committee v..................................... 628 Reynolds v. United States................... 443,616 Roberts v. Washington Trust Co.............. 608, 613 Robinson v. Waltham National Bank............... 657 Robinson v. Waltham Trust Co.................... 657 Rockford Life Ins. Co. v. Commissioner.......... 382 Romeo & Co., Navigazione Libera Triestina Società Anonyme v........................................ 647 Roos, Texas Company v............................ 649 Rossmoore v. Anderson............................ 630 Rowley v. Chicago & N. W. Ry. Co................ 618 Rubio v. Sotto................................... 622 Ruff, Gay v...................................... 25 Ruwitch v. Frankel............................... 653 Ryan, Meseck Towing & Transp. Co. v.............. 636 *No. 619. Radio Corporation of America v. Radio Engineering Laboratories, Inc. Certiorari to the Circuit Court of Appeals for the Second Circuit, 66 F. (2d) 768. Opinion rendered in this case on May 21, 1934, directing a reversal, was withheld from publication because of a pending petition for rehearing. By order made at the October Term, 1934, October 8, 1934, which denied rehearing, the opinion was amended. It will be reported in volume 293 U. S. p. 1. TABLE OF CASES REPORTED. XIX Page Sackett, New York ex rel., v. Lynch............ 604 St. Louis & S. F. Ry. Co., McKnett v........ 230, 613 St. Louis S. W. Ry. Co., Helvering v........... 626 St. Paul Bridge & T. Ry. Co. v. Genova......... 630 St. Paul Bridge & T. Ry. Co. v. Natalino....... 631 St. Petersburg, Utley v...................... 106, 604 Sanders v. Armour Fertilizer Works.......... 190, 612 San Gabriel, South Pasadena v.................. 602 Sauder v. Mid-Continent Petroleum Corp...... 272, 613 Savage (W. J.) Co. v. Knoxville.............. 623 School District No. 40, Oklahoma ex rel., Walden v.. 639 Seaboard Sand & Gravel Co., N. W. Ins. Co. v..... 635 Seattle, Puget Sound Power & L. Co. v.......... 603 Seeman, U.S. ex rel., v. Mulligan.............. 654 Seymour, McIntosh v............................ 652 Shawkee Mfg. Co. v. Hartford-Empire Co........... 640 Silsby v. Louisiana............................ 599 Simon, Lewis v................................. 634 Simpson v. Stern............................... 649 Sinnott, Amchanitzky v......................... 636 Sloan, Indemnity Insurance Co. v................ 625 Small v. New York.............................. 634 Smith v. New York.............................. 606 Smith v. United States..........................337 Smith-Murphy Co., Meseck Towing Co. v............ 636 Sollitt (Ralph) & Sons Co. v. Virginia...... 599,604 Sotto, Rubio v................................ 622 Southern Arizona Bank & T. Co., Pima County v... 644 South Pasadena v. San Gabriel.................. 602 Sprague (C. H.) & Son Co., Helvering v......... 612 Spring City Foundry Co. v. Commissioner..... 182, 613 Standard Oil Co. v. McLaughlin.............. 605, 631 Standard Oil Co., Noakes v..................... 628 Standard Oil Co. v. Thompson................... 631 Standard Pipe Line Co. v. Burnett.............. 649 Standard Surety & Casualty Co. v. Toledo....... 611 Steckler, Ex parte............................. 610 XX TABLE OF CASES REPORTED. Page Stem, Simpson v................................. 649 Stockholms Enskilda Bank, Helvering v.......... 618 Stoody Co. v. Mills Alloys, Inc................ 637 Street v. Commissioner.......................... 637 Stringfellow, Atlantic Coast Line R. Co. v...... 625 Striplin v. Lawrenceburg Warehouse Co.......... 645 Sullivan, Benson v.............................. 604 Talley, Illinois Bankers Life Assn, v........... 604 Telman v. United States......................... 650 Tempe National Bank, Maricopa County v.......... 644 Tennessee ex rel. Lea v. Brown.................. 638 Terre Haute Electric Co. v. Helvering........... 624 Terrill Bond & Mortgage Co., Braverman v........ 600 Texas v. United States.......................... 522 Texas Company v. Roos........................... 649 Texas & Pacific Ry. Co. v. Pottorff............. 600 Thimgan v. Nebraska............................. 656 Thomas, W. B. Worthen Co. v..................... 426 Thomas Barium, The, Detroit Trust Co. v......... 619 Thompson, Standard Oil Co. v.................... 631 Title Guarantee & Trust Co. v. Bowers........... 628 Toledo, Guardian Casualty Co. v................. 611 Toledo, National Surety Co. v.................... 611 Toledo, Standard Surety Co. v.................... 611 Toledo, U.S. Fidelity & G. Co. v................ 611 Toledo, Van Schaick v........................... 611 Treece, Missouri Pacific R. Co. v.................. 626 Tricou v. Helvering............................. 655 Trinityfarm Construction Co. v. Grosjean........ 604 Tyson v. Commissioner........................... 657 Ulmen v. National Surety Co..................... 624 United American Trust & S. Bank, Glanz v........ 643 United British Steamship Co. v. Newfoundland Co.. 651 United States, Assiniboine Indian Tribe v....... 606 United States, Barry v.......................... 648 United States, Bausch & Lomb Optical Co. v...... 645 United States, Benton v......................... 642 TABLE OF CASES REPORTED. xxi Page United States, Brewster v........................ 246 United States, Consolidated Rendering Co. v...... 656 United States v. Creek Nation................... 616 United States, Duncan v......................... 646 United States, Dunlap v......................... 653 United States, Fine v........................... 622 United States, Florida v......................... 1 United States, George v......................... 634 United States, Golding v........................ 643 United States, Huteson v........................ 627 United States, Illinois Commerce Comm’n v........ 474 United States, Indian Valley R. Co. v............. 608 United States, Jindra v.......................... 651 United States, Karlson v........................ 246 United States, Lynch v...................... 571,616 United States, Mississippi Valley Co. v......... 282 United States, Morse v.......................... 652 United States, Myers v........................ 629 United States v. Ohio........;.................. 498 United States, Ohio v....... i................... 498 United States, Olson v. \246 United States, Owsley v.......................... 635 United States, Patten v.......................... 645 United States, Prevette v....................... 622 United States, Price v.......................... 632 United States, Reynolds v................... 443, 616 United States, Smith v.......................... 337 United States, Telman v......................... 650 United States, Texas v.......................... 522 United States, Willoughby Camera Stores v........ 640 United States, Wilner v...................... 571, 617 U.S. ex rel. Ainsworth, Continental Co. v.... 615, 641 U.S. ex rel. Gallivan v. Hill................... 642 U.S. ex rel'. Nerbonne v. Hill.................. 634 U.S. ex rel. N.Y. Warehouse Assn. v. Dem........ 642 U.S. ex rel. Seeman v. Mulligan................. 654 U.S. ex rel. Wilkinson v-. Hines................ 632 XXII TABLE OF CASES REPORTED. Page U.S. Fidelity & Guaranty Co., Aschenbrenner v.. 80, 615 U.S. Fidelity & Guaranty Co. v. Toledo....... 611 U.S. Fidelity & Guaranty Co., Waco v.\....... 618 U.S. Radiator Corp. v. Henderson............. 650 U.S. Refractories Corp., Helvering v......... 612 Unity School of Christianity v. Radio Comm’n.. 646 Upton v. Harrison............................ 633 Utilities Power & L. Corp. v. Irving Trust Co. 641 Utility Oil Corp., Petroleum Navigation Co. v. 655 Utley v. St. Petersburg.................. 106,604 Valley Bank & Trust Co., Maricopa County v.... 644 Vans Agnew v. Fort Myers Drainage Dist........ 643 Van Schaick v. Toledo........................ 611 Virginia v. Imperial Coal Sales Co........... 619 Virginia, Ralph Sollitt & Sons Co. v...... 599, 604 Virginia-Colorado Development Corp., Ickes v__ 620 Von Weise v. Commissioner.................... 655 Wabash Ry. Co., Pokora v...................... 98 Waco v. U.S. Fidelity & Guaranty Co.......... 618 Wahlgren v. Bausch & Lomb Optical Co...... 615, 639 Wainer, Brock v................................ 640 Walden v. Oklahoma ex rei. School District No. 40.. 639 Waltham National Bank, Robinson v.............. 657 Waltham Trust Co., Robinson v.................. 657 Warner, Federal Land Bank v.................... 53 Warner v. Goltra............................... 617 Washington, Comer v........................... 610 Washington Gas Light Co. v. Danh............. 649 Washington Loan & Trust Co. v. Allman........ 649 Washington Trust Co., Roberts v............. 608, 613 Watson, Chevrolet Motor Co. v................ 637 W. B. Worthen Co. v. Thomas.................. 426 Week v. Helvering............................ 657 Wells Fargo Bank & U. T. Co., Mutual Life Ins. Co. v............................601 West, Northwestern Mutual Life Ins. Co. v..... 627 Western Electric Co., Aleograph Co. v........ 656 TABLE OF CASES REPORTED. XXIII Page Western Union, Helvering v........................ 636 West Shore R. Co. v. Public Utility Comm’rs........ 624 White, Gottlieb v................................. 657 Wiese, Helvering v................................ 614 Wilkinson, U.S. ex rel., v. Hines................. 632 Williard, Clark v................................. 112 Willis v. First Real Estate & Inv. Co.......... 604, 626 Willoughby Camera Stores v. United States.......... 640 Wilner v. United States....................... 571,617 W. J. Savage Co. v. Knoxville..................... 623 Woodson v. Deutsche Gold und Silber Scheideanstalt Vormals Roessler............................... 449 Worthen (W. B.) Co. v. Thomas..................... 426 York Ice Machinery Corp., Newcomb v............ 658 Zellerbach Paper Co. v. Helvering................. 621 TABLE OF CASES Cited in Opinions Page. Page. Abell v. Boynton, 95 Fla. 984 111 American Express Co. v. Abie State Bank v. Bryan, Caldwell, 244 U.S. 617 484,487 282 U.S. 765 112 American Locomotive Co. v. Abramson v. Abramson, 60 Histed, 18 F. (2d) 656 28 App.D.C. 119 226 American Mfg. Co. v. U.S. Acme Oil & M. Co. v. Wil- Shipping Board, 7 F. (2d) liams, 140 Cal. 681 279 565 494 Acree v. Whitley, 136 Ark. American National Co. v. 149 431 United States, 274 U.S. 99 185 Adams Express Co. v. Ohio, American Net & Twine Co. v. 165 U.S. 194 553 Worthington, 141 U.S. 468 466 Aetna Accident & Liability American Ry. Express Co. v. Co. v. Miller, 54 Mont. 377 128 Kentucky, 273 U.S. 269 Aetna Life Ins. Co. v. Davis, 119,611 191 Fed. 343 82 American Sugar Refining Co. Aetna Life Ins. Co. v. Dun- v. Louisiana, 179 U.S. 89 558 ken, 266 U.S. 389 149, 150 American Surety Co. v. Bald- Alabama v. United States, win, 287 U.S. 156 206,396 279 U.S. 229 605,607 Amirault, Estate of, 22 Ariz. Alaska Fish Co. v. Smith, 122 54 255 U.S. 44 44,45 Anchor Co. v. Commissioner, Allegheny Oil Co. v. Snyder, 42 F. (2d) 99 299 106 Fed. 764 279 Anderson v. Fidelity & Casu- • Alloway v. Nashville, 88 alty Co., 228 N.Y. 475 85 Tenn. 510 259 Anderson v. Forty-Two Altitude Oil Co. v. People, Broadway Co., 239 U.S. 69 381 70 Colo. 452 93 Anderson v. Wilson, 289 U.S. Alton R. Co. v. United 20 462 States, 287 U.S. 229 290 Anglo-American Provision A. Magnano Co. v. Hamilton, S’; ?a™ pn>™ion Co., 292 U.S. 40 . 373 , TTO 232 American Bank v. Rollins, 99 ”■ BuiMo’ 221 U'S' R1. Mass. 313 206 Appleby „ New York, 271 American Bank & T. Co. v. us 364 431 federal Reserve Bank, 256 Arizona v. California, 283 U.S. 350 289 u s 423 344 American Baseball Club v. Arkadelphia Milling Co. v. Philadelphia, 290 U.S. 595 599 St. Louis S. W. Ry. Co., American Construction Co. 249 U.S. 134 15 v. Jacksonville, T. & K. W. Armour & Co. v. Virginia, Ry. Co., 148 U.S. 372 30 246 U.S. 1 558 XXV XXVI TABLE OF CASES CITED. Page. Armour Packing Co. v. Lacy, 200 U.S. 226 558 Assessors v. Osborne, 9 Wall. 567 18 Assigned Car Cases, 274 U.S. 564 12,481 Atchison, T. & S. F. Ry. Co. v. Holloway, 71 Kan. 1 83,84 Atchison, T. & S. F. Ry. Co. v. Reesman, 60 Fed. 370 596 Atchison, T. & S. F. Ry. Co. v. Taylor, 196 Fed. 878 598 Atchison, T. & S. F. Ry. Co. v. United States, 284 U.S. 248 311,480 Atchison, T. & S. F. Ry. Co. v. Wells, 265 U.S. 101 517,518,521 Athol Mfg. Co. v. Commis- sioner, 54 F. (2d) 230 442 Atlantic Coast Line v. Georgia, 234 U.S. 280 60 Atlantic Coast Line R. Co. v. Mims, 242 U.S. 532 614 Atlantic Coast Line Ry. Co. v. Railroad Comm’n, 281 Fed. 321 268, 269, 271 Austin v. Ohio Fuel Oil Co., 218 Ky. 310 280 Ayers, In re, 123 U.S. 443 322,582 Babbitt v. Read, 236 Fed. 42 494 Bager, In re, 47 F. (2d) 951 79 Bakelite Corp., Ex parte, 279 U.S. 438 368 Ball, In re, 123 Fed. 164 569 Baltimore & Ohio R. Co. v. Goodman, 275 U.S. 66 99, 102,103 Baltimore & Ohio R. Co. v. Hostetter, 240 U.S. 620 207 Baltzer v. North Carolina, 161 U.S. 240 582 Baltzer & Taaks v. North Carolina, 161 U.S. 246 582 Bandini v. Superior Court, 284 U.S. 18 609 Bank of Kentucky v. Wister, 2 Pet. 318 370 Bank of Minden v. Clement, 256 U.S. 126 432 Page. Bank of the United States v. Cuthbertson, 67 F. (2d) 182 495 Bank of the United States v. Daniels, 12 Pet. 32 493 Bank of the United States v. Tyler, 4 Pet. 366 493 Banton v. Belt Line Ry. Corp., 268 U.S. 413 308, 414 Bardes v. Hawarden Bank, 178 U.S. 524 240 Barker v. Edwards, 259 Fed. 484 125 Barker v. Sartori, 66 Wash. 260 496 Barnette v. Wells Fargo Bank, 270 U.S. 438 28,40 Barrett v. Van Pelt, 268 U.S. 85 465 Barry v. Edmunds, 116 U.S. 550 268 Barth v. Backus, 140 N.Y. 230 121 Barton Bros. v. Texas Produce Co., 136 Fed. 355 244 Bateman v. Fargason, 4 Fed. 32 229 Bate Refrigerating Co. v. Sulzberger, 157 U.S. 1 464 Bates v. Bodie, 245 U.S. 520 25 Becker v. Illinois Central R. Co., 250 Ill. 40 203,207,208 Becker v. Submarine Oil Co., 55 Cal. App. 698 280 Beers v. Arkansas, 20 How. 527 322,582 Bell’s Gap R. Co. v. Pennsylvania, 134 U.S. 232 553 Benefactor, The, 103 U.S. 239 24 Benner v. Philadelphia & Reading R. Co., 262 Pa. 307 103 Berens v. Byram, 26 F. (2d) 953 . 28 Bemheimer v. Converse, 206 U.S. 516 121 Berry v. Smith, 3 Wash. C.C. 60 51 Berryman v. Billings Mutual Heating Co., 44 Mont. 517 125,126 TABLE OF CASES CITED. XXVII Page. Berryman v. Whitman College, 222 U.S. 334 271 Bigelow v. Andress, 31 Ill. 322 206 Binns v. United States, 194 U.S. 486 31 Bitterman v. Louisville & N. R. Co., 207 U.S. 205 269 Blalock, In re, 31 F. (2d) 612 564 Board of Comm’rs v. Com-pania General, 249 U.S. 425 609 Board of Trustees v. United States, 289 U.S. 48 368 Bock v. Perkins, 139 U.S. 628 34 Bockover v. Life Assn., 77 Va. 85 121,122,123 Bond v. Hume, 243 U.S. 15 150 Bonham v. Badgley, 7 Ill. 622 226 Boom Co. v. Patterson, 98 U.S. 403 255,256,257 Booth v. Clark, 17 How. 322 121 Boston, The City of, 159 Fed. 257 23 Boston Chamber of Commerce v. Boston, 217 U.S. 189 259 Bostwick v. Brinkerhoff, 106 U.S. 3 133 Bothwell v. Buckbee, Mears Co., 275 U.S. 274 227 Bowen v. Chase, 94 U.S. 812 462 Bowers v. Kerbaugh-Empire Co., 271 U.S. 170 379 Bowman v. Continental Oil Co., 256 U.S. 642 93 Boyd v. Royal Indemnity Co., 120 Oh. St. 515 84 Bradford Electric Light Co. v. Clapper, 286 U.S. 145 228 Bradley v. Washington, A. & G. Steam-Packet Co., 13 Pet. 89 466 Brashear v. West, 7 Pet. 608 206 Bray v. Wallingford, 20 Conn. 416 371 Brewster v. Lanyon Zinc Co., 140 Fed. 801 279,281 Page. Briscoe v. Bank of Kentucky, 11 Pet. 257 322,370 Bristol v. Washington County, 177 U.S. 133 396 Bromley v. McCaughn, 280 U.S. 124 379 Brooks v. Martin, 2 Wall. 70 228 Brooks-Scanlon Corp. v. United States, 265 U.S. 106 257 Broswood Oil & Gas Co. v. Mary Oil & Gas Co., 164 Okla. 200 281 Brown v. Duchesne, 19 How. 183 464 Brown v. Helvering, 291 U.S. 193 66,185 Brown v. Maryland, 12 Wheat. 419 93 Brown v. Vossen, 112 Mo. App. 676 496 Brun v. Mann, 151 Fed. 145 239 Brushaber v. Union Pac. R. Co., 240 U.S. 1 44,378,381 Budd v. New York, 143 U.S. 517 603 B urk-Waggoner Assn. v. Hopkins, 269 U.S. 110 379 Burnes Nat. Bank v. Duncan, 265 U.S. 17 565 Burnet v. Aluminum Goods Co., 287 U.S. 544 68 Burnet v. Clark, 287 U.S. 410 442 Burnet v. Commonwealth Improvement Co., 287 U.S. 415 442 Burnet v. Guggenheim, 288 U.S. 280 425,462 Burnet v. Harmel, 287 U.S. 103 405 Burnet v. Houston, 283 U.S. 223 66 Burnet v. Imperial Elevator Co., 66 F. (2d) 643 . 69 Burnet v. Riggs Nat. Bank, 57 F. (2d) 980 69 Burnet v. Thompson Oil & Gas Co., 283 U.S. 301 381 Buswell v. Supreme Sitting of Order of Iron Hall, 161 Mass. 224 129 XXVIII TABLE OF CASES CITED. Page. Butler v. Boston & Savannah S.S. Co., 130 U.S. 527 24 Byrne v. Kansas City, Ft. S. & M. R. Co., 61 Fed. 605 494 Calhoun v. Massie, 253 U.S. 170 579 Canadian Northern Ry. Co. v. Eggen, 252 U.S. 553 233 Cannon Mfg. Co. v. Cudahy Co., 267 U.S. 333 442 Capital City State Bank v. Swift, 290 Fed. 505 494 Capitol Transportation Co. v. Cambria Steel Co., 249 U.S. 334 24 Carico v. Wilmore, 51 Fed. 196 37 Carlisle Packing Co. v. Sandanger, 259 U.S. 255 24 Casey v. United States, 276 U.S. 413 614 Cedergren v. Massachusetts Bonding & Ins. Co., 292 Fed. 5 86 Central Railroad & Banking Co. v. Carr, 76 Ala. 388 231 Chambers v. Baltimore & Ohio R. Co., 207 U.S. 142 232 Charles River Bridge v. Warren Bridge, 11 Pet. 420 368 Charleston v. Public Service Comm’n, 110 W. Va. 245 300,408,413 Charlotte Harbor & Northern Ry. Co. v. Welles, 260 U.S. 8 571 Cherokee Nation v. Georgia, 5 Pet. 1 330 Chesapeake & Ohio Ry. Co. v. United States, 283 U.S. 35 608 Chicago v. Phoenix Ins. Co., 126 Ill. 276 551 Chicago & Alton R. Co. v. Wiswall, 23 Wall. 507 28 Chicago, B. & Q. Ry. Co. v. Chicago, 166 U.S. 226 259 Chicago, B. & Q. Ry. Co. v. Willard, 220 U.S. 413 30 Chicago & E. I. R. Co. v. Jennings, 190 Ill. 478 84 Page. Chicago, I. & L. Ry. Co. v. United States, 270 U.S. 287 286 Chicago, M. & St. P. Ry. Co. v. Minneapolis Civic Assn., 247 U.S. 490 442 Chicago, M., St. P. & P. Ry. Co. v. Risty, 276 U.S. 567 109, 111 Chicago, R. I. & P. Ry. v. Sturm, 174 U.S. 710 204, 205, 208 Chicago, R. I. & P. Ry. Co. v. United States, 274 U.S. 29 287 Child Labor Tax Case, 259 U.S. 20 44,46 Chisholm v. Georgia, 2 Dall. 419 325,327,329 Citizens Bank v. Cannon, 164 U.S. 319 271 Citizens Loan Assn. v. Boston & Maine R. Co., 196 Mass. 528 242 Citizens Nat. Bank v. Kentucky, 217 U.S. 443 93 City Bank Farmers’ Trust Co. v. Schnader, 291 U.S. 24 18 City of Boston, The, 159 Fed. 257 23 Claiborne - Annapolis Ferry Co. v. United States, 285 U.S. 382 608 dark v. Wooster, 119 U.S. 322 390 dark’s Ferry Bridge Co. v. Public Service Comm’n, 291 U.S. 227 167,255 Cogliano v. Ferguson, 245 Mass. 364 123 Cohens v. Virginia, 6 Wheat. 264 321,327 Cole v. Cunningham, 133 U.S. 107 121,204 Cole v. Garland, 107 Fed. 759 29 Colgate v. United States, 280 U.S. 43 606 Collector v. Day, 11 Wall. 113 368 TABLE OF CASES CITED. XXIX Page. Collin County Nat. Bank v. Commissioner, 48 F. (2d) 207 184,188 Collins, Ex parte, 277 U.S. 565 390,391 Colombia v. Cauca Co., 190 U.S. 524 323 Colorado v. Symes, 286 U.S. 510 33 Colorado v. United States, 271 U.S. 153 531,535 Colquitt v. Simpson, 72 Ga. 501 562 Columbus Gas & Fuel Corp. v. Public Utilities Comm’n, 127 Oh. St. 109 298 Colvin v. Jacksonville, 158 U.S. 456 267 Comer v. Washington, 292 U.S. 610 612 Commercial Bank v. Buckner, 20 How. 108 241 Commercial State Bank v. Pierce, 176 la. 722 208 Commissioner v. Adams, 54 F. (2d) 228 215 Commissioner v. Apartment Corp, 67 F. (2d) 3 69 Commissioner v. Bingham, 35 F. (2d) 503 215 Commissioner v. Gottlieb, 265 U.S. 310 464 Commissioner v. Lafayette Life Ins. Co, 67 F. (2d) 209 378 Commissioner v. Rockford Life Ins. Co, 67 F. (2d) 213 378 Commonwealth v. Lane, 113 Mass. 458 223,224 Conan v. Ely, 91 Minn. 127 259 Concrete Appliances Co. v. Gomery, 269 U.S. 177 80 Connolly v. Union Sewer Pipe Co, 184 U.S. 540 228 Conqueror, The, 166 U.S. 110 299 Continental Life Ins. Co. v. Newman, 219 Ala. 311 85 Converse v. Hamilton, 224 U.S. 243 121,228 Page. Cook v. United States, 288 U.S. 102 360 Cooke v. United States, 91 U.S. 389 579 Cooper v. United States, 280 U.S. 409 462 Cordell v. N. Y. C. & H. R.R. Co, 70 N.Y. 119 102 Corfield v. Coryell, 4 Wash. PC 371 983 Cornell v. Coyne, 192 U.S. 418 595 Cox v. Hart, 260 U.S. 427 449,571 Coyne v. Prouty, 289 U.S. 704 609 Crittenden v. Widrevitz, 272 Fed. 871 493,495 Crooks v. Harrelson, 282 U.S. 55 470 Cross Lake Club v. Louisiana, 224 U.S. 632 610 Crouch v. United States, 266 U.S. 180 587 Crowell v. Benson, 285 U.S. 22 12 Croxall v. Shererd, 5 Wall. 268 462 Cullinan v. Walker, 262 U.S. 134 439 Cumberland Coal Co. v. Board of Revision, 284 U.S. 23 394,549 Curran v. Arkansas, 15 How. 304 370 Currie v. Waverly & N.Y. B. R. Co, 52 N.J.L. 381 259 Daley v. Boston, R. B. & L. R. Co, 241 Mass. 78 84 Dalton v. Bowers, 287 U.S. 404 442 Darrington v. Bank of Alabama, 13 How. 12 322, 582 Daughetee v. Ohio Oil Co, 263 Ill. 518 279,280 Davidson Grocery Co. v. Lucas, 59 App.D.C. 176 184,188 Davis v. Cleveland, C, C. & St. L. Ry. Co, 217 U.S. 157 521 XXX TABLE OF CASES CITED. Page. Davis v. Elmira Savings Bank, 161 U.S. 275 569 Davis v. Farmers Co-operative Equity Co., 262 U.S. 312 517,518,530 Davis v. Mills, 99 Fed. 39 269 Davis v. N. Y. C. & H. R. R. Co., 47 N.Y. 400 106 Davis v. Pere Marquette R. Co., 241 Mich. 166 106 Davis v. Slocomb, 263 U.S. 158 36 Davis v. South Carolina, 107 U.S. 597 37,39 Davis v. Wolfe, 263 U.S. 239 595 Dawson v. Kentucky Distilleries Co., 255 U.S. 288 378 Dayton-Goose Creek Ry. Co. v. United States, 263 U.S. 456 530 Dayton Power & L. Co. v. Public Utilities Comm’n, 292 U.S. 290 400-414 Day ton Power & L. Co. v. Public Utilities Comm’n, 127 Oh. St. 137 298 Deery v. Cray, 10 Wall. 263 466 DeForest Radio Co. v. General Electric Co., 283 U.S. 664 80 DeGroot v. United States, 5 Wall. 419 581,582 Delaware v. Emerson, 8 Fed. 411 37 Denker v. Mid-Continent Petroleum Corp., 56 F. (2d) 725 281 Denman v. Slayton, 282 U.S. 514 381 Denver v. Denver Union Water Co., 246 U.S. 178 167 Denver v. N. Y. Trust Co., 229 U.S. 123 30 Denver & R. G. R. Co. v. Mills, 222 Fed. 481 259 Denver & R. G. W. R. Co. v. Terte, 284 U.S. 284 519,520,521 Deschenes v. Tailman, 248 N.Y. 33 114 Desha v. Baker, 3 Ark. 509 429 Des Moines Gas Co. v. Des Moines, 238 U.S. 153 311 Page. Detroit Bridge Co. v. Tax Board, 287 U.S. 295 558 De Vaughan v. Hutchinson, 165 U.S. 566 225 Dewey v. Des Moines, 173 U.S. 193 20,397 Dexter Horton Nat. Bank v. Hawkins, 190 Fed. 924 118 Dickson v. Dickson’s Heirs, 1 Yerg. 110 227 Dietzsch v. Huidekoper, 103 U.S. 494 239 Dimpfel v. Wilson, 107 Md. 329 226 Dinsmoor v. Combs, 177 Ky. 740 279 Disconto Gesellschaft v. Umbreit, 208 U.S. 570 122 Dobson v. St. Louis S. F. Ry. Co., 223 Mo. App. 812 101,104,106 Dodge v. Norlin, 133 Fed. 363 240 Doe v. Considine, 6 Wall. 458 462 Dolan v. D. & H. C. Co., 71 N.Y. 285 106 Dolge v. Commercial Casualty Ins. Co., 211 App. Div. 112 86 Donnell v. Herring-Hall-Mar- vin Safe Co., 208 U.S. 267 442 Dorchy v. Kansas, 264 U.S. 286 129,587 Douglas v. New York, N. H. & H. R. Co., 279 U.S. 377 233 Doyle v. Mitchell Bros. Co., 247 U.S. 179 379 Duane, In re, 261 Fed. 242 34 Dudley v. Dudley, 151 Iowa 142 223 Duhne v. New Jersey, 251 U.S. 311 321,322,330 DuPont Powder Co. v. Mas-land, 244 U.S. 100 30 Durousseau v. United States, 6 Cranch 307 15 Earle v. Pennsylvania, 178 U.S. 449 568 East River Co., In re, 266 U.S. 355 23 Eberle v. Mayer, 1 Rawle (Pa.) 366 50 TABLE OF CASES CITED. XXXI Page. Edelman v. Boeing Air Transport, Inc., 289 U.S. 249 93 Educational Films Corp. v. Ward, 282 U.S. 379 550,551 Edward Hines Trustees v. United States, 263 U.S. 143 286 Edwards v. Kearzey, 96 U.S. 595 432 Eighmy v. Poucher, 83 Fed. 855 | 34 Eisner v. Macomber, 252 U.S. 189 378,379 Elgin v. Marshall, 106 U.S. 578 267,270 Elliott v. Empire Natural Gas Co., 4 F. (2d) 493 269,271 Elliott v. Superior Court, 168 Cal. 727 125 Elliott v. Wheelock, 34 F. (2d) 213 28,36 Embree v. Hanna, 5 Johns. 100 208 Engel v. Davenport, 271 U.S. 33 36 Enterprise Irrigation District v. Canal Co., 248 U.S. 157 111,611 Equitable Life Assurance Society v. Brown, 187 U.S. 808 599 Equitable Life Assurance Society v. Vogel’s Executrix, 76 Ala. 441 282 Erb v. Morasch, 177 U.S. 584 84 Erie City v. Public Service Comm’n, 278 Pa. 512 407 Evansville & B. G. Packet Co. v. Chero Cola Bottling Co., 271 U.S. 19 24 Eversole v. Eversole, 169 Ky. 793 227 Ewell v. Daggs, 108 U.S. 143 571 Fahnestock v. Schoyer, 9 Watts 102 492 Fales v. Easthampton, 162 Mass. 422 259 Farber v. Mutual Life Ins. Co.,, 250 Mass. 250 84 Farmers’ Nat. Bank v. Sutton Mfg. Co., 52 Fed. 191 496 61745°—34-------in Page. Farncomb v. Denver, 252 U.S. 7 110 Fauntleroy v. Lum, 210 U.S. 230 228,233 Fawcett v. Supreme Sitting of Order of Iron Hall, 64 Conn. 170 129 Fawcus Machine Co. v. United States, 282 U.S. 375 470 Federal Land Bank v. Crosland, 261 U.S. 374 550,551 Feibelman v. Packard, 109 U.S. 421 34 Fellows, In re, 43 F. (2d) 122 243 Ferrell v. Evans, 25 Mont. 444 126 Fidelity & Casualty Co. v. Board of Review, 264 Ill. 11 548,552 Fidelity & Casualty Co. v. Morrison, 129 Ill. App. 360 82, 84 Fidelity & Deposit Co. v. Kokrda, 66 F. (2d) 641 565 First Nat. Bank v. Bosler, 297 Pa. 353 497 First Nat. Bank v. Fellows, 244 U.S. 416 565 First Nat. Bank v. Hartford, 273 U.S. 548 565 First Nat. Bank v. Missouri, 263 U.S. 640 566 Fisher v. New Orleans, 218 U.S. 438 610, 611 Fisk v. Jefferson Police Jury, 116 U.S. 131 432 Fitts v. National Life Assn., 130 Ala. 413 119 Flannelly v. Delaware & Hudson Co., 225 U.S. 597 102 Flash v. Conn, 109 U.S. 371 493 Fleischmann Construction Co. v. United States, 270 U.S. 349 336 Fletcher’s Appeal, 17 Leg. Int. (Phila. 1860) 300 50 Flink v. Paladini, 279 U.S. 59 24 Flint v. Stone Tracy Co., 220 U.S. 107 552 Florida v. Huston, 283 Fed. 687 33 Florida v. Mellon, 273 U.S, 12 43 XXXII TABLE OF CASES CITED. Page. Florida v. United States, 282 U.S. 194 3,9,479,483,501 Florida v. United States, 292 U.S. 1 286, 479, 483, 484, 501, 532 Floyd Acceptances, The, 7 Wall. 666 579 Focke v. Blum, 82 Tex. 436 208 Ford Hydro-Electric Co. v. Neely, 13 F. (2d) 361 259 Ford Motor Co. v. Automobile Ins. Co., 13 F. (2d) 415 33 Forgay v. Conrad, 6 How. 201 119 Forsell v. Pittsburgh & Montana Copper Co., 42 Mont. 412 126 Forsyth v. Hammond, 166 U.S. 506 30 Foster v. Pollack Co., 173 Ark. 48 429 Francis Wright, The, 105 U.S. 381 16 Freeburger’s Appeal, 40 Pa. 244 51 Freeman v. Howe, 24 How. 450 239 French v. Barber Asphalt Co., 181 U.S. 324 44, 111 French v. Long, 42 F. (2d) 45 240 French Bank Case, 53 Cal. 495 125 Frisbie v. United States, 157 U.S. 160 577 Fry v. Charter Oak Life Ins. Co., 31 Fed. 197 122 Gableman v. Peoria, D. & E. Ry., 179 U.S. 335 34 Gadbury v. Ohio & Indiana Consol. Gas Co., 162 Ind. 9 279 Gallardo v. Quested, 29 F. (2d) 897 269 Galveston Electric Co. v. Galveston, 258 U.S. 388 412 Garcia v. Vela, 216 U.S. 598 601 Gardner v. Caldwell, 16 Mont. 221 . 125 Garity v. Gigie, 130 Mass. 184 206 Garrison v. United States, 7 WaU. 688 579 Page. General Motors Co. v. Swan Carburetor Co., 44 F. (2d) 24 337 George County Bridge Co. v. Catlett, 161 Miss. 120 396 Georgia v. Bolton, 11 Fed. 217 37 Georgia v. Chattanooga, 264 U.S. 472 369 Georgia v. O’Grady, 3 Woods 496 37 Georgia Public Service Comm’n v. United States, 283 U.S. 765 479, 487, 511, 608 Georgia Railroad & Banking Co. v. Stanley, 38 Ga. App. 773 104, 106 Georgia Ry. Co. v. Decatur, 262 U.S. 432 133, 136 Georgia Ry. & Power Co. v. Railroad Comm’n, 262 U.S. 625 167 Gerlach v. Chicago, R. I. & P. Ry. Co., 65 F. (2d) 862 337 German Nat. Bank v. Speck- ert, 181 U.S. 405 29 Gibson v. Shufeldt, 122 U.S. 27 267 Giddings v. Holter, 19 Mont. 263 370 Gilbert v. Hewetson, 79 Minn. 326 121 Gilbert v. Shouse, 61 F. (2d) 398 244 GUIs v. N.Y.C. & St. L. R. Co., 342 in. 455 103 Gilmer v. Stone, 120 U.S. 586 466 Gilmore v. Hirst, 56 Kan. 626 496 Gilna v. Barker, 78 Mont. 357 127 Gil vary v. Cuyahoga Valley Ry. Co., 292 U.S. 57 598 Girard Trust Co. v. Ocean & Lake Realty Co., 286 U.S. 523 610 Gleason v. Duffy, 116 Fed. 298 23 Glenn v. Field Packing Co., 290 U.S. 177 426 Glenwood Light & Water Co. v. Mutual Light, H. & P. Co., 239 U.S. 121 271 TABLE OF CASES CITED. XXXIII Page. Glover Specialties Co., In re, 18 F. (2d) 314 569 Gloyd v. Commissioner, 63 F. (2d) 649 299 Goldfield Consolidated Mines v. Scott, 247 U.S. 126 405 Gollnick v. Mengel, 112 Minn. 349 227 Goodrich v. Detroit, 184 U.S. 432 109 Goodwin v. Standard Oil Co., 290 Fed. 92 280, 281 Gordon v. United States, 7 Wall. 188 582 Grand Trunk R. Co. v. Ives, 144U.S. 408 102,104 Great Western Mining Co. v. Harris, 198 U.S. 561 121 Green, Ex parte, 286 U.S. 437 22,23 Green v. Compagnia Generale, 82 Fed. 490 347 Green v. Van Buskirk, 7 Wall. 139 206 Gregg v. Savage, 51 Ill. App. 281 206,207 Gregg Dyeing Co. v. Query, 286 U.S. 472 494 Gromer v. Standard Dredging Co., 224 U.S. 362 599 Gross v. U.S. Mortgage Co., 108 U.S. 477 571 Groves v. Sentell, 153 U.S. 465 200 Guffey v. Smith, 237 U.S. 101 281 Guffey (J. M.) Petroleum Co. v. Jeff Chaison Townsite Co., 48 Tex. Civ. App. 555 279 Gulf Export Co. v. State, 112 Miss. 452 319 Gulf Oil Corp. v. Lewellyn, 248 U.S. 71 441,442 Gulf Refining Co. v. United States, 269 U.S. 125 118,133,136 Gully v. Interstate Natural Gas Co., 292 U.S. 16 392 Gumbel v. Pitkin, 113 U.S. 545 118 Gunn v. Barry, 15 Wall. 610 432 Page. Gunning v. Cooley, 281 U.S. 90 262 Guste v. United States, 55 F. (2d) 115 259 Gutelius v. Stanbon, 39 F. (2d) 621 494,495,496 Hadley v. Commissioner, 59 App.D.C. 139 215 Hagar v. Reclamation District No. 108, 111 U.S. 701 109 Hailes v. Van Wormer, 20 Wall. 353 80 Hall v. South Penn Oil Co., 71 W.Va. 82 279 Hamilton v. Kentucky Distilleries & Warehouse Co., 251 U.S. 146 579 Hamilton v. Rathbone, 175 U.S. 414 469 Hanover Fire Ins. Co. v. Carr, 317 Ill. 366 551 Hanover Fire Ins. Co. v. Harding, 327 Ill. 590 538, 542, 544, 545, 547, 551 Hanover Ins. Co. v. Harding, 272 U.S. 494 551,552 Hanover Nat. Bank v. Moyses, 186 U.S. 181 241, 244 Hanratty v. Dougherty, 71 Pa. Super. Ct. 248 491 Hans v. Louisiana, 134 U.S. 1 322, 325, 327, 328, 330, 582 Hardie v. Swafford Bros. Dry Goods Co., 165 Fed. 588 244 Hardin-Wyandot Lighting Co. v. Public Utilities Comm’n, 118 Oh. St. 592 411 Hardin-Wyandot Lighting Co. v. Upper Sandusky, 251 U.S. 173 610 Harris v. Balk, 198 U.S. 215 204, 205, 207, 209 Harris v. Ohio Oil Co., 57 Oh. St. 118 279 Hartford Accident & I. Co. v. Bunn, 285 U.S. 169 133,141 Hartford Accident & I. Co. v. Nelson Mfg. Co., 291 U.S. 352 426 Hartford Accident & I. Co. v. Southern Pac. Co., 273 U.S. 207 24 XXXIV TABLE OF CASES CITED. Page. Hartford Fire Ins. Co. v. Chicago, M. & St. P. Ry. Co., 62 Fed. 904 571 Hartford Life Ins. Co. v. Johnson, 249 U.S. 490 614 Harvey Co. v. Malley, 288 U.S. 415 337 Haseltine v. Central Bank, 183 U.S. 130 133, 134 Havemeyer v. Superior Court, 84 Cal. 327 125 Havens, In re, 272 Fed. 975 240 Hayes v. Michigan Central R. Co., Ill U.S. 228 597 Hayes v. Missouri, 120 U.S. 68 603 Hays v. Gainesville Street Ry. Co., 70 Tex. 602 598 Head v. Hargrave, 105 U.S. 45 299 Healy v. Ratta, 289 U.S. 701 18, 392 Healy v. Ratta, 292 U.S. 263 391, 392, 606 Healy v. Ratta, 67 F. (2d) 554 19 Hebert v. Louisiana, 272 U.S. 312 611 Heiner v. Colonial Trust Co., 275 U.S. 232 470 Heiner v. Donnan, 285 U.S. 312 44, 469 Hellman v. Goldstone, 161 Fed. 913 240 Helvering v. Falk, 291 U.S. 183 405 Helvering v. Independent Life Ins. Co., 292 U.S. 371 384, 385, 440 Helvering v. Newport Co., 291 U.S. 485 615 Henderson v. Mayer, 225 U.S. 631 569 Henderson v. Palmer Union Oil Co., 29 Cal. App. 451 125 Henderson Bridge Co. v. Henderson City, 173 U.S. 592 44 Herrera v. Pan American Co., 300 Fed. 563 36 Herschel (R.) Mfg. Co. v. Great States Corp., 26 F. (2d) 362 80 Page. Hervey v. R.I. Locomotive Works, 93 U.S. 664 122 H. H. Miller Industries v. Commissioner, 61 F. (2d) 412 442 Hiawassee Power Co. v. Carolina-Tennessee Co., 252 U.S. 341 614 Hicklin v. Coney, 290 U.S. 169 600 Hill v. Wallace, 259 U.S. 44 367, 421 Hines v. Cooper, 205 Ala. 70 103 Hipolite Egg Co. v. United States, 220 U.S. 45 579 Hires v. Atlantic City R. Co., 66 N.J.L. 30 102 Hobbs, Ex parte, 280 U.S. 168 391, 392 Hocking Valley Ry. Co. v. Public Utilities Comm’n, 100 Oh. St. 321 302, 406 Hoffman v. Foraker, 274 U.S. 21 519,521 Hoffmans, The, 171 Fed. 455 23 Hoke v. United States, 227 U.S. 308 579 Höllerbach v. United States, 233 U.S. 165 579 Hollins v. Brierfield Coal & Iron Co., 150 U.S. 371 126 Holloway v. McCormick, 41 Okla. 1 227 Holt v. Indiana Mfg. Co., 176 U.S. 68 271 Home Bldg. & Loan Assn. v. Blaisdell, 290 U.S. 398 432, 434, 579, 580 Home Discount Co., In re, 147 Fed. 538 243 Home Insurance Co. v. Dick, 281 U.S. 397 149,150, 227 Hooper v. California, 155 U.S. 648 149 Hornthall v. Collector, 9 Wall. 560 32 Houston v. Southwestern Bell Tel. Co,, 259 U.S. 318 413 Houston & T. C. R. Co. v. Texas, 177 U.S. 66 431 Hovey v. McDonald, 109 U.S. 150 118 TABLE OF CASES CITED. xxxv Page. Page. Huckshold v. St. Louis, I. M. Jefferson Island Salt Co. v. & S. R. Co., 90 Mo. 548 106 Longyear Co., 210 Ala. Humphrey v. Tatman, 198 352 232 U.S. 91 568 Jennings v. Southern Carbon Humphreys Oil Co. v. Tatum, Co., 73 W.Va. 215 280 26 F. (2d) 882 281 Jensen, In re, 50 N.Y.Supp. Hunt v. N. Y. Cotton Ex- 653 371 change, 205 U.S. 322 269,271 J. M. Guffey Petroleum Co. Hupp v. Union Pacific R. Co., v. Jeff Chaison Townsite 99 Neb. 654 242 Co., 48 Tex. Civ. App. 555 279 Hygrade Provision Co. v. Jockmus v. Claussen & Sherman, 266 U.S. 497 610 Knight, 47 F. (2d) 766 494 Illinois Central R. Co. v. Cot- Johnson v. Commissioner, 52 ter, 31 Ky.L.Rep. 679 83 F. (2d) 727 463 Illinois Central R. Co. v. Nel- Johnson v. Seaboard Air Line son, 173 Fed. 915 597 R. Co., 163 N.C. 431 101 Illinois Central R. Co. v. Pub- Johnson’s Estate, 29 Pa. Sup. lie Utilities Comm’n, 245 Ct. 255 227 U.S. 493 60 Jones v. Guaranty & Indem- Imhoff-Berg Silk Dyeing Co. nity Co., 101 U.S. 622 571 v. United States, 43 F. (2d) Jones v. McGill, 46 F. (2d) 836 582 334 28 Indiana v. Woram, 6 Hill 33 370 Jones v. Prairie Oil & Gas Indiana Oil, G. & D. Co. v. Co., 273 U.S. 195 494 McCrory, 42 Okla. 136 Jordan v. Roche, 228 U.S. 279, 280 436 469 Indian Motocycle Co. v. Journeymen Stone Cutters United States, 283 U.S. 570 368 Assn. v. United States, 278 Industrial Cotton Mills v. U.S. 566 601 Commissioner, 61 F. (2d) Judson v. Central Vermont 291 442 R- Co., 158 N.Y. 597 103 International & Great North- Julian v. Central Trust Co., ern Ry. Co. v. Anderson 193 U.S. 93 239 County, 246 U.S. 424 535 Junction R. Co. v. Bank of International Shoe Co. v. Pin- Ashland, 12 Wall. 226 493 kus, 278 U.S. 261 61 Kansas v. Colorado, 185 U.S. Interstate Commerce Comm’n T_ 1^ . 329 v. Louisville & N R Co Kansas v. United States, 204 227 U.S. 88 12,286 33}. , 321 Interstate Commerce Comm’n Kansas City Southern Ry. v. Oregon-Washington R. D1St-’ orq & N. Co., 288 U.S. 14 608 v 15 F* k2^ 69o us 423 167 Iowa-Des Moines Nat. Bank Keatlev v Futpv 226 TT v. Bennett, 284 U.S. 239 549 399 ’ 114 121 iron Age Publishing Co v. Keel v. Larkin, 72 Ala. 493 ’ 50 Western Union, 83 Ala. Kenney v. Supreme Lodge, T 498 tt • j o 231 252 U-S- 411 228, 233 Jacobs v. Umted States, 290 Kent, Santee & Co.’s Appeal US- 13 255 87 Pa. 165 50 XXXVI TABLE OF CASES CITED. Page. Kentucky v. Powers, 139 Fed. 452 29 Kentucky Finance Corp. v. Paramount Auto Exchange, 262 U.S. 544 549 Kentucky Highlands R. Co. v. Creal, 166 Ky. 469 83 Kerr v. South Park Comm’rs, 117 U.S. 379 256 Key v. Carolina & N.W. R. Co., 150 S.C. 29 104, 106 Killian v. Ebbinghaus, 110 U.S. 568 200 King v. Cross, 175 U.S. 396 204, 205 Kingdom of Roumania v. Guaranty Trust Co., 250 Fed. 341 323 King of Spain v. Oliver, 2 Wash. C.C. 429 323 Kinsler v. Casualty Co., 103 Neb. 382 122, 123 Klein v. Board of Supervisors, 282 U.S. 19 442 Kleppner v. Lemon, 176 Pa. 502 279 Kline v. Burke Construction Co., 260 U.S. 226 270 Knapp v. Byram, 21 F. (2d) 226 28, 36 Knights of Pythias v. Meyer, 265 U.S. 30 494, 600 Knott v. Missouri Pacific Ry. Co., 230 U.S. 509 14, 15 Knoxville v. Knoxville Wa- ter Co., 212 U.S. 1 167, 405 Kobey v. Hoffman, 229 Fed. 486 493, 495, 496 Kogler v. Miller, 288 Fed. 806 582 Koster v. Southern Pac. Co., 207 Cal. 753 106 LaBourgogne, 210 U.S. 95 24 Lackmann v. Supreme Council, 142 Cal. 22 122 Lahongrais, In re, 5 F. (2d) 899 240 Lancashire Ins. Co. v. Corbetts, 165 Ill. 592 203, 207 Lancaster County v. Trimble, 34 Neb. 752 371 Lang v. New York Central R. Co., 255 U.S. 455 595 Page. Langnes v. Green, 282 U.S. 531 22, 23 Lapina v. Wilhams, 232 U.S. 78 595 Lavine v. California, 286 U.S. 528 609 Lawrence v. Norton, 13 Fed. 1 34 Lawrence v. State Tax Comm’n, 286 U.S. 276 112, 558 Leach v. California, 287 U.S. 579 609 Lee v. Baird, 139 Ala. 526 231 Leitch v. Northern Pac. Ry. Co., 95 Minn. 35 242 Leonard v. Vicksburg, S. &. P. R. Co, 198 U.S. 416 112 Lessen v. Lindsey, 238 App. Div. 262 497 Levering & Garrigues Co. v. Morrin, 289 U.S. 103 109, 390 Levi v. Loevenhart & Co, 138 Ky. 133 242 Lewellyn v. Electric Reduction Co, 275 U.S. 243 189, 337 Liggett Co. v. Lee, 288 U.S. 517 554 Lindheimer v. Illinois Bell Tel. Co, 292 U.S. 151 405 Lindsley v. Natural Carbonic Gas Co, 220 U.S. 61 554 Lineberry, In re, 183 Fed. 338 243 Lion Bonding Co. v. Karatz, 262 U.S. 77 120, 267 Lister v. Donlan, 85 Mont. 571 496 Loan Assn. v. Topeka, 20 Wall. 655 44 Logan Gas Co. v. Public Utilities Comm’n, 124 Oh. St. 248 298 Londoner v. Denver, 210 U.S. 373 109 London Guarantee & A. Co. v. Ladd, 299 Fed. 562 82, 86 Long Sault Development Co. v. Call, 242 U.S. 272 610 Los Angeles Gas & Elec. Corp. v. Railroad Comm’n, 289 U.S. 287 164, 257, 298, 305, 308, 309, 310,311,411,413 Lottery Case, 188 U.S. 321 579 TABLE OF CASES CITED. XXXVII Page. Loughran v. Loughran, 292 U.S. 216 233 Louisiana v. Texas, 176 U.S. 1 329 Louisiana Commission v. Texas & N. 0. R. Co., 284 U.S. 125 511 Louisiana Navigation Co. v. Oyster Comm’n, 226 U.S. 99 133, 135 Louisiana & Pine Bluff Ry. Co. v. United States, 257 U.S. 114 286 Louisville Gas & Elec. Co. v. Coleman, 277 U.S. 32 549, 550 Louisville & N. R. Co. v. Deer, 200 U.S. 176 207 Louisville & N. R. Co. v. Dooley, 78 Ala. 524 231 Louisville & N. R. Co. v. Lay- ton, 243 U.S. 617 595, 596 Louisville & N. R. Co. v. Summers, 125 Fed. 719 101 Love v. Fort Dodge R. Co., 207 Iowa 1278 103 Luckenbach S.S. Co. v. United States, 272 U.S. 533 16 Machine Co. v. Murphy, 97 U.S. 120 80 Mack v. Dailey, 3 F. (2d) 534 493,495 MacLäughlin v. Alliance Ins. Co., 286 U.S. 244 379 Magnano (A.) Co. v. Hamilton, 292 U.S. 40 558 Maguire v. Trefry, 253 U.S. 12 462 Mallin v. Wenham, 209 Ill. 252 243 Mansfield, C. & L. M. Ry. Co. v. Swan, 111 U.S. 379 18, 392 Manufacturers’ Finance Corp. v. Vye-Neill Co,, 62 F. (2d) 625 494 Manufacturers Ry. Co. v. United States, 246 U.S. 457 481 Marion v. Sneeden, 291 U.S. 262 564, 568 Marion Phosphate Co. v. Perry, 74 Fed. 425 119 Page. Marr v. United States, 268 U.S. 536 439 Marsh, In re, 51 Fed. 277 38 Marshall Paper Co., In re, 102 Fed. 872 240 Marstaller v. Mills, 143 N.Y. 398 119 Martin v. Dryden, 6 Ill. 187 203 Martin v. Foreman, 18 Ark. 249 429 Martin v. State, 24 Tex. 61 370 Martyne v. American Union Fire Ins. Co., 216 N.Y. 183 114, 122, 123 Marye v. Baltimore & Ohio R. Co., 127 U.S. 117 396 Maryland v. Soper (No. 1), 270 U.S. 9 33 Maryland v. Soper (No. 2), 270 U.S. 36 33 Massachusetts v. Mellon, 262 U.S. 447 43 Matarazzo v. Hustis, 256 Fed. 882 28 Mathews v. Metropolitan Street Ry. Co., 156 Mo. App. 715 83 Matthew Addy S.S. Corp., Ex parte, 256 U.S. 417 29 Matthews, In re, 122 Fed. 248 38 Matthews v. Rodgers, 284 U.S. 521 269, 270 Maxey v. Somerton State Bank, 22 Ariz. 371 54 Mayo v. Dockery, 108 Fed. 897 34 McAllister v. Fair, 72 Kan. 533 227 McCardle, Ex parte, 7 Wall. 506 15 McCauley v. Commissioner, 44 F. (2d) 919 469 McCaulley, The S. A., 99 Fed. 302 23 McClellan v. Chipman, 164 U.S. 347 566 McClintock v. Bolton, 6 Ariz. 370 54 McComb v. Commissioners, 91 U.S. 1 133 McCoy v, Shaw, 277 U.S. 302 112 XXXVIII TABLE OF CASES CITED. Page. McCray v. United States, 195 U.S. 27 44 McCulloch v. Maryland, 4 Wheat. 316 44, 368 McCullough v. Virginia, 172 U.S. 102 431 McDonald v. Seligman, 81 Fed. 753 239 McDonogh’s Executors v. Murdoch, 15 How. 367 462 McElwee v. Wilce, 80 Ill. App. 338 206 McGarry v. Lewis Coal Co., 93 Mo. 237 208 McGoon v. Scales, 9 Wall. 23 119 McGovern v. New York, 229 U.S. 363 259 McLaughlin v. McLaughlin, 85 Pa. 317 50 McLaughlin v. Pacific Lumber Co., 66 F. (2d) 895 69 McLaughlin Bros. v. Hallo- well, 228 U.S. 278 29 McMillen v. Anderson, 95 U.S. 37 396 McNeill v. Southern Ry. Co., 202 U.S. 543 268 Meccano, Ltd. v. Wanamaker, 253 U.S. 136 605 Meister v. Moore, 96 U.S. 76 223 Mente v. Townsend, 68 Ark. 391 430 Mentz v. Hamman, 5 Whart. 150 50 Mercantile Bank v. New York, 121 U.S. 138 565 Merchants Warehouse Co. v. United States, 283 U.S. 501 12 Merges v. Altenbrand, 45 Mont. 355 127 Merle-Smith v. Commissioner, 42 F. (2d) 837 469 Metcalf v. Central Vermont R. Co., 78 Conn. 614 103 Metropolitan Devices Corp. v. Cleveland Elec. Illumi- nating Co., 36 F. (2d) 477 70 Metropolitan Water Co. v. Kaw Valley District, 223 U.S. 519 118 Page. Michigan Central R. Co. v. Mix, 278 U.S. 492 517 Mid-Northern Oil Co. v. Montana, 268 U.S. 45 534 Mieyr v. Federal Surety Co., 94 Mont. 508 117 Milheim v. Moffat Tunnel District, 262 U.S. 710 110 Miller, In re, 42 Fed. 307 38 Miller v. Kosch, 74 Hun 50 51 Miller v. N. Y. C. R. Co., 226 App. Div. 205 106 Miller v. Union Pacific R. Co., 290 U.S. 227 100, 592 Miller v. Wilson, 236 U.S. 373 603 Miller (H. H.) Industries v. Commissioner, 61 F. (2d) 412 442 Miller’s Estate, In re, 239 Mich. 455 223 Minneapolis, St. P. & S. S. M. Ry. Co. v. C. L. Merrick Co, 254 U.S. 376 109 Minneapolis, St. P. & S. S. M. Ry. Co. v. Popplar, 237 U.S. 369 61 Minnehaha Nat. Bank v. Commissioner, 28 F. (2d) 763 184,188 Minnesota v. Hitchcock, 185 U.S. 373 321 Minnesota Rate Cases, 2^0 U.S. 352 255, 257, 259 Minnich v. Gardner, 292 U.S. 48 569 Mississippi & M. R. Co. v. Ward, 2 Black 485 268 Missouri v. Fiske, 290 U.S. 18 329 Missouri v. Illinois, 180 U.S. 208 327, 329, 331 Missouri v. Public Service Comm’n, 273 U.S. 126 129 Missouri ex rel. St. Louis, B. & M. R. Co. v. Taylor, 266 U.S. 200 518, 519, 521 Missouri Pacific R. Co. v. Clarendon Boat Oar Co., 257 U.S. 533 232 Missouri Rate Cases, 230 U.S. 474 14, 15 TABLE OF CASES CITED. XXXIX Page. Mitchell v. United States, 267 U.S. 341 259 Monarch Discount Co. v. C. & 0. Ry. Co., 285 Ill. 233 243 Mondou v. New York, N. H. & H. R. Co., 223 U.S. 1 233 Monongahela Navigation Co. v. United States, 148 U.S. 312 254 Monongahela River Consol. Co. v. Hurst, 200 Fed. 711 23 Moore v. Chesapeake & Ohio Ry. Co., 291 U.S. 205 60, 61, 598 Morey v. Lockhart, 123 U.S. 56 29 Morgan v. N.Y. National Bldg. & Loan Assn., 73 Conn. 151 119 Morley v. Lake Shore & M. S. Ry. Co., 146 U.S. 162 432 Morrison v. California, 291 U.S. 82 614 Moses v. Lawrence County Bank, 149 U.S. 298 493 Mueller v. Illinois, 289 U.S. 711 609 Mugler v. Kansas, 123 U.S. 623 614 Muir, Ex parte, 254 U.S. 522 323 Murchison Nat. Bank v. Grissom, 50 F. (2d) 1056 184 Murdock v. Memphis, 20 Wall. 590 16 Murhard Estate Co. v. Portland & Seattle Ry. Co., 163 Fed. 194 259 Murray v. Southern Pacific Co., 177 Cal. 1 103 Murray (D.J.) Mfg. Co. v. Sumner Iron Works, 300 Fed. 911 80 Mutual Life Ins. Co. v. Hurni Packing Co., 263 U.S. 167 85 Mutual Life Ins. Co. v. Lane, 151 Fed. 276 494 Mutual Life Ins. Co. v. Mc- Grew, 188 U.S. 291 614 Nann v. Raimist, 255 N.Y. 307 289‘ Napier v.. Atlantic Coast Line, 272 U.S. 605 60 Page. Nashville, C. & St. L. Ry. Co. v. Tennessee, 262 U.S. 318 286 Nashville, C. & St. L. Ry. Co. v. Wallace, 288 U.S. 249 93 National Bank v. Commonwealth, 9 Wall. 353 566 National Bank v. Jefferson, 51 S.D. 477 496 National Bank & Loan Co. v. Petrie, 189 U.S. 423 228 National Bank of America v. Indiana Banking Co., 114 Ill. 483 203 National Council v. Hill, 208 Ala. 63 232 National Fire Ins. Co. v. Chambers, 53 N.J.Eq. 468 205 National Fire Ins. Co. v. Hanberg, 215 Ill. 378 551 National Fire Ins. Co. v. Sanders, 33 F. (2d) 157; 38 id. 213 198 National Fire Ins. Co. v. Thompson, 281 U.S. 331 605, 607 National Life Ins. Co. v. United States, 277 U.S. 508 381 National Surety Co. v. Cobb, 66 F. (2d) 323 119 Natural Gas Co. v. Public Service Comm’n, 95 W Va. 557 299, 407 Neighbors v. Life & Casualty Ins. Co., 182 Ark. 356 85 Neilson v. Lagow, 12 How. 98 462 Newell v. Byram, 26 F. (2d) 200 28 New England Divisions Case, 261 U.S. 184 530 New England Mortgage Co. v. Gay, 145 U.S. 123 267 New Hampshire v. Louisiana, 108 U.S. 76 327 New Orleans Water Works v. Louisiana Sugar Co., 125 U.S. 18 610 Newton v. Consolidated Gas Co., 264 U.S. 571 601 New York, No. 1, Ex parte State of, 256 U.S. 490 322, 329, 330 XL TABLE OF CASES CITED. Page. New York v. Sage, 239 U.S. 57 256 New York v. United States, 257 U.S. 591 531 New York & Balto. Coffee Co. v. N.Y. Polishing Co., 9 Fed. 578; 11 Fed. 813 347 New York Central R. Co. v. Müler, 202 U.S. 584 553 New York Central R. Co. v. Winfield, 244 U.S. 147 60 New York Central Securities Corp. v. United States, 287 U.S. 12 531, 608 New York ex rei. N.Y. & A. Lighterage Co. v. Lynch, 288 U.S. 590 558 New York Life Ins. Co. v. Cravens, 178 U.S. 389 149 New York Life Ins. Co. v. Dunlevy, 241 U.S. 518- 194, 209 New York Life Ins. Co. v. Head, 234 U.S. 149 149 New York Telephone Co. v. Maltbie, 291 U.S. 645 176 Niagara Fire Ins. Co. v. Raleigh Hardware Co., 62 F. (2d) 705 494 Nichols v. Coolidge, 274 U.S. 531 44 Nielsen v. Johnson, 279 U.S. 47 360 Norfolk Turnpike Co. v. Virginia, 225 U.S. 264 133 Norfolk & W. Ry. v. Holbrook, 27 F. (2d) 326 101 North Carolina v. Gosnell, 74 Fed. 734 37 Northern Pacific Ry. Co. v. North American Tel. Co., 230 Fed. 347 259 North Shore R. Co. v. Pennsylvania Co., 251 Pa. 445 259 North Star Boot Co. v. Ladd, 32 Minn. 381 208 Oakey v. Bennett, 11 How. 33 121 Ocean Spray, The, 117 Fed. 971 23 Ockerman v. Cross, 54 N.Y. 29 122 Page. Ogden & Moffett Co. v. Public Utilities Comm’n, 286 U.S. 525 605, 607 O’Gorman & Young, Inc. v. Hartford Fire Ins. Co., 282 U.S. 251 558 Ohio v. Chattanooga Boiler Co., 289 U.S. 439 206 Ohio Mining Co. v. Public Utilities Comm’n, 106 Oh. St. 138 297, 414 Ohio Oil Co. v. Conway, 281 U.S. 146 553, 554 Ohio River Contract Co. v. Gordon, 244 U.S. 68 599 Ohio Utilities Co. v. Public Utilities Comm’n, 267 U.S. 359 310 Oklahoma v. Texas, 258 U.S. 574 329 Oklahoma Gas & Elec. Co. v. Wilson & Co., 54 F. (2d) 596 388 Oklahoma Natural Gas Co. v. Oklahoma, 273 U.S. 257 120 Old Colony R. Co. v. Commissioner, 284 U.S. 552 469 Old Dominion S.S. Co., Re, 115 Fed. 845 23 Oliver Iron Co. v. Lord, 262 U.S. 172 553 01 verson v. 01 verson, 54 App. D.C. 48 229 Orient Insurance Co. v. Daggs, 172 U.S. 557 149 Orr v. Comar Oü Co., 46 F. (2d) 59 281 O. S. Stapley Co. v. Rogers, 25 Ariz. 308 54 Ozawa v. United States, 260 U.S. 178 464 Packard v. Banton, 264 U.S. 140 268, 603 Pacific Elec. Ry. Co. v. Los Angeles, 194 U.S. 112 391 Pacific Express Co. v. Seibert, 142 U.S. 339 553, 558 Paine v. Central Vermont R. Co., 118 U.S. 152 493 Palmer v. Willamette Valley So. Ry. Co., 88 Ore. 322 83 TABLE OF CASES CITED. XLI Page. Parker v. Farr, 2 Browne 331 208 Parks v. Booth, 102 U.S. 96 79 Parsons v. Charter Oak Life Ins. Co., 31 Fed. 305 122 Parsons v. Syracuse, B. & N.Y. R. Co., 205 N.Y. 226 101 Patch v. White, 117 U.S. 210 466 Patsone v. Pennsylvania, 232 U.S. 138 606 Patterson v. Bark Eudora, 190 U.S. 169 594 Peabody v. Eisner, 247 U.S. 347 441 Pelham Petroleum Corp. v. North, 78 Okla. 39 281 Pell v. McCabe, 256 Fed. 512 240 Pennoyer v. Neff, 95 U.S. 714 209 Pennsylvania Co., In re, 137 U.S. 451 29 Pennsylvania R. Co. v. Yingling, 148 Md. 169 103 People v. Barrett, 309 Ill. 53 551 People v. Concordia Fire Ins. Co., 350 Ill. 365 548 People v. Cosmopolitan Fire Ins. Co., 246 Ill. 442 543, 551 People v. Franklin Nat. Ins. Co., 343 Ill. 336 544, 551 People v. Granite State Provident Assn., 161 N.Y. 492 129 People v. Kent, 300 Ill. 324 551 People v. Utica Ins. Co., 15 Johns. 358 465 People ex rel. Hatch v. Reardon, 110 App. Div. 821 424 People’s Bank v. Goodwin, 162 Fed. 937 33 Peterson v. Metropolitan Life Ins. Co., 19 F. (2d) 74 494 Petterson v. Berry, 125 Fed. 902 571 Philadelphia & R. Ry. Co. v. Eisenhart, 280 Fed. 271 595 Phillips v. Hamilton, 17 Wyo. 41 279, 280 Phipps v. Harding, 70 Fed. 468 493 Pickering v. McCullough, 104 .U.S. 310 80 Pickwick-Greyhound Lines v. Shattuck, 61 F. (2d) 485 29 Page. Piedmont & Northern Ry. Co. v. United States, 280 U.S. 469 18 Pierce v. Somerset Ry. Co., 171 U.S. 641 112 Pioneer Pole & Shaft Co. v. Commissioner, 55 F. (2d) 861 442 Pioneer Tel. & Tel. Co. v. State, 40 Okla. 417 389 Pittsburgh & West Ya. Ry. Co. v. United States, 281 U.S. 479 390 Planters’ Bank v. Union Bank, 16 Wall. 483 228 Planters Cotton Oil Co. v. Hopkins, 286 U.S. 332 440 Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429; 158 U.S. 601 378 Poresky, Ex parte, 290 U.S. 30 391 Porter v. Investors Syndicate, 286 U.S. 461 110 Pottorff v. El Paso-Hudspeth Road Dist., 62 F. (2d) 498 563 Potts, In re, 54 F. (2d) 144 243 Power Mfg. Co. v. Saunders, 274 U.S. 490 549 Preferred Accident Ins. Co. v. Muir, 126 Fed. 926 82 Prentice v. Zane, 19 Fed. Cas. 1270 493 Price v. Illinois, 238 U.S. 446 603 Prigg v. Pennsylvania, 16 Pet. 539 61 Prince v. Standard Oil Co., 147 La. 283 280 Principality of Monaco v. Mississippi, 292 U.S. 313 580 Providence & N. Y. S. S. Co. v. Hill Mfg. Co., 109 U.S. 578 24 Prudential Securities Co. v. Three Forks H. & M. V. Ry. Co., 49 Mont. 567 126 Public Finance Co. v. Rowe, 123 Oh. St. 206 242 Public Nat. Bank, Ex parte, 278 U.S. 101 390 Puget Sound Power & L. Co. v. Seattle, 291 U.S. 619 558 XLII TABLE OF CASES CITED. Page. Pullman Car Co. v. Missouri Pac. Ry. Co., 115 U.S. 587 442 Pullman Palace Car Co. v. Harrison, 122 Ala. 149 231 Putnam v. Putnam, 8 Pick. 433 227 Quaker City Cab Co. v. Pennsylvania, 277 U.S. 389 549, 558 Queensboro Nat. Bank v. Kelly, 48 F. (2d) 574 493, 495 Quong Ham Wah Co. v. Industrial Comm’n, 255 U.S. 445 600 Quong Wing v. Kirkendall, 223 U.S. 59 558 Radice v. New York, 264 U.S. 292 603 Railroad Comm’n v. Chicago, B. & Q. R. Co., 257 U.S. 563 5, 12, 530 Railroad Comm’n v. MacMillan, 287 U.S. 576 609 Railroad Co. v. Alabama, 101 U.S. 832 582 Railroad Co. v. Tennessee, 101 U.S. 337 582 Rains v. Oshkosh, 14 Wis. 372 371 Rankin v. Woodworth, 2 Watts" 134 491 Ransford, In re, 194 Fed. 658 208 Reading Steel Casting Co. v. United States, 268 U.S. 186 579 Reagan v. Farmers’ Loan & Trust Co., 154 U.S. 362 255 Real Estate-Land Title & Trust Co. v. Springfield, 287 U.S. 577 610 Receivers Middlesex Banking Co. v. Realty Investment Co., 104 Conn. 206 129 Reife v. Rundle, 103 U.S. 222 114, 121 Remington Rand, Inc. v. Commissioner, 33 F. (2d) 77 68 Remington & Sons v. Samana Bay Co., 140 Mass. 494 119 Reynolds v. Adden, 136 U.S. 348 121 Page. Reynolds v. Richards, 14 Pa. 205 492 Rhode Island v. Massachusetts, 12 Pet. 657 329, 331 Rice & Adams Corp. v. Lath- rop, 278 U.S. 509 391 Richmond v. Bird, 249 U.S. 174 569 Richter v. Jerome, 25 Fed. 679 347 Richter v. Union Trust Co., 115 U.S. 55 347 Riddell v. Rochester German Ins. Co., 35 R.I. 45 119 Riggi Bros., In re, 42 F. (2d) 174 569 Rippe v. Becker, 56 Minn. 100 369 Riverdale Mills v. Manufacturing Co., 198 U.S. 188 239 Riverside & A. Ry. Co. v. Riverside, 118 Fed. 736 271 Roberts v. Richland Irriga- tion District, 289 U.S. 71 111 Robertson v. Pickrell, 109 U.S. 608 206 Rochford, In re, 124 Fed. 182 240 Rockefeller v. United States, 257 U.S. 176 439 Rock Island & Peoria Ry. Co. v. Leisy Brewing Co., 174 Ill. 547 259 Roe v. Kansas, 278 U.S. 191 599 Rogers, In re, 132 Fed. 560 569 Rohr v. Stanton Trust & Savings Bank, 76 Mont. 248 125 127 Root v. Woolworth, 150 U.S. 401 239 Rosenberg v. Wisconsin, 290 U.S. 600 609 Rosenplanter v. Provident Savings Society, 96 Fed. 721 571 Ross v. Prentiss, 3 How. 771 268 Rouss v. Bowers, 30 F. (2d) 628 185 Royster Guano Co. v. Virginia, 253 U.S. 412 549 TABLE OF CASES CITED. XLIII Page. Russell v. St. Paul, M. & M. Ry. Co., 33 Minn. 210 259 Russell v. United States, 278 U.S. 181 187 Russell Motor Car Co. v. United States, 261 U.S. 514 595 St. Louis Compress Co. v. Arkansas, 260 U.S. 346 550,551 St. Louis, I. M. & S. Ry. Co. v. Bellamy, 211 Fed. 172 239 St. Louis, I. M. & S. Ry. Co. v. Taylor, 210 U.S. 281 16,596 St. Louis & S. F. R. Co. v. Conarty, 238 U.S. 243 595 St. Louis & S. F. R. Co. v. Summers, 173 Fed. 358 597 St. Louis & S. W. Ry. Co. v. Nattin, 277 U.S. 157 111 St. Louis Southwestern Ry. Co. v. United States, 245 U.S. 136 486 St. Louis Southwestern Ry. Co. v. Vanderberg, 91 Ark. 252 429 Salem & L. Co. v. Boston & L. Co., Fed. Cas. No. 12249 33 Saltonstall v. Saltonstall, 276 U.S. 260 394 S. A. McCaulley, The, 99 Fed. 302 23 Sammons v. Sammons, 46 W.L.R. 39 226 Sands v. E. S. Greeley Co., 88 Fed. 130 129 Sanford Ross, Inc., Re, 196 Fed. 921 23 Santa Ana v. Harlin, 99 Cal. 538 259 Sapphire, The, 11 Wall. 164 323 Saranac Automatic Machine Corp. v. Wirebounds Patents Co., 282 U.S. 704 80 Savannah v. Jesup, 106 U.S. 563 118 Savings Bank of Richmond v. Goldsboro Nat. Bank, 3 F. (2d) 970 494 Sawyer v. United States, 10 F. (2d) 416 341 Page. Schepers v. Union Depot R. Co., 126 Mo. 665 83 Schillinger v. United States, 155 U.S. 163 582 Schlemmer v. Buffalo, R. & P. Ry. Co., 205 U.S. 1; 220 U.S. 590 598 Schlesinger v. Wisconsin, 270 U.S. 230 44 Schloss v. Surety Co., 149 la. 382 122 Schlosser v. Hemphill, 198 U.S. 173 133,134 Schoenberg v. Commissioner, 60 App.D.C. 381 463 Scholefield v. Merrill Mortuaries, 93 Mont. 192 126 Schrader v. N. Y. C. & St. L. R. Co., 254 N.Y. 148 106 Schwab Printing Co., In re, 59 F. (2d) 726 50,51 Scott v. Armstrong, 146 U.S. 499 568 Scott v. Donald, 165 U.S. 107 269 Scottish Union & Nat. Ins. Co. v. Bowland, 196 U.S. 611 396,397 Seaboard Air Line Ry. v. United States, 261 U.S. 299 255 Seaboard Rice Milling Co. v. Chicago, R. I. & P. Ry. Co., 270 U.S. 363 519 Seaboard Small Loan Corp. v. Ottinger, 50 F. (2d) 856 240,242,243 Seattle & Renton Ry. v. Lin-hoff, 231 U.S. 568 610,611 Seay v. Bank of Rome, 66 Ga. 609 562 Second Employers’ Liability Cases, 223 U.S. 1 60 Security Trust Co. v. Dodd, Mead & Co., 173 U.S. 624 121,123 Shaw v. Quincy Mining Co., 145 U.S. 444 519 Shawnee Sewerage Co. v. Stearns, 220 U.S. 462 18 Shearman v. Commissioner, 66 F. (2d) 256 215 XLIV TABLE OF CASES CITED. Page. Sherman & Bryan, Inc. v. Commissioner, 35 F. (2d) 713 184,188 Shoemaker v. United States, 147 U.S. 282 256 Shreveport Case, 234 U.S. 342 12 Shumpka, Application of, 268 Fed. 686 33 Shwab v. Doyle, 258 U.S. 529 187 Siegel-Hillman Dry Goods Co., In re, 111 Fed. 980 240 Silberschein v. United States, 266 U.S. 221 446,587 Silver v. Silver, 280 U.S. 117 603,606 Simmons v. Simmons, 57 App.D.C. 216 226,229 Simpson v. Mathis, 79 Ga. 159 562 Sims v. Jamison, 67 F. (2d) 409 240 Sinclair Refining Co. v. Jenkins Petroleum Process Co., 289 U.S. 689 299 Sinking-Fund Cases, 99 U.S. 700 580 Sinnott v. Hanan, 214 N.Y. 454 119 Skorcz, In re, 67 F. (2d) 187 238 Smith v. Adams, 130 U.S. 167 267 Smith v. Butler, 72 Ark. 350 429 Smith v. Commonwealth, 210 Mass. 259 259 Smith v. Gibson, 83 Ala. 284 231 Smith v. Illinois Bell Tel. Co., 282 U.S. 133 154,167,257,295 Smith v. Nichols, 21 Wall. 112 80 Smith v. Norfolk & Southern R. Co., 114 N.C. 728 597 Smith v. Reeves, 178 U.S. 436 322,327,330 Smith v. Taggart, 87 Fed. 94 122 Smith v. United States, 57 F. (2d) 998 587 Smith v. Wilson, 273 U.S. 388 18, 264,391,392 Smoot’s Case, 15 Wall. 36 579 Snider v. Sand Springs Ry., 62 F. (2d) 635 28 Page. Sonneborn Bros. v. Cureton, 262 U.S. 506 93 South Carolina v. Georgia, 93 U.S. 4 331 South Carolina v. United States, 199 U.S. 437 368 South Carolina Power Co. v. Tax Comm’n, 286 U.S. 525 605,607 South Dakota v. North Carolina, 192 U.S. 286 327,328 Southern Bldg. & Loan Assn. v. Miller, 118 Fed. 369 122 Southern Pacific Co. v. Lowe, 247 U.S. 330 441,442 Southern Ry. Co. v. Jordan, 192 Ala. 528 232 Southern Ry. Co. v. Railroad Comm’n, 236 U.S. 439 61 Southern Ry. Co. v. United States, 222 U.S. 20 60 Southwestern Bell Tel. Co. v. Public Service Comm’n, 262 U.S. 276 167,310 Southwestern Oil Co. v. Texas, 217 U.S. 114 553 Sowell v. Federal Reserve Bank, 268 U.S. 449 493 Spiller v. Atchison, T. & S. F. Ry. Co., 253 U.S. 117 30,286 Sproles v. Binford, 286 U.S. 374 603,606,609 Sprunt & Son, Inc. v. United States, 281 U.S. 249 289 Standard Accident Ins. Co. v. Luther Wilhams B. & T. Co., 45 Ga. App. 831 562 Standard Oil Co. v. Brodie, 153 Ark. 114 93,94 Standard Oil Co. v. Jones, 48 S.D. 482 94 Stanley v. Schwalby, 147 U.S. 508 ... 370 Stanton v. Baltic Mining Co., 240 U.S. 103 381 Stapley (O. S.) Co. v. Rogers, 25 Äriz. 308 54 Starin, Re, 124 Fed. 101 23 State v. Brobston, 94 Ga. 95 562 State v. District Court, 50 Mont. 259 125 State v. Herold, 9 Kan. 194 370 TABLE OF CASES CITED. xlv Page. State v. Johnson, 25 Miss. 625 319 State v. Northern Iowa Oil Co., 209 Iowa 980 96 State Board of Tax Comm’rs v. Jackson, 283 U.S. 527 554,558 State ex rel. Atty. Gen. v. Fidelity Loan & T. Co., 113 Iowa 439 120 State ex rel. Packard v. Cook, 108 Fla. 157 425 State ex rel. Rogers v. Sweat, 112 Fla. 797 425 State I. & I. Co. v. San Francisco, 101 Cal. 135 125 Stebbins v. Riley, 268 U.S. 137 553,554 Steen v. Swadley, 126 Ala. 616 231 Steinert & Sons Co. v. Tagen, 207 Mass. 394 289 Stellwagen v. Clum, 245 U.S. 605 244 Sterrett v. Second Nat. Bank, 248 U.S. 73 120,121 Stewart v. North American Accident Ins. Co., 33 S.W. (2d) 1005 86 Stipcich v. Metropolitan Life Ins. Co., 277 U.S. 311 85 Stratton v. St. Louis S. W. Ry. Co., 282 U.S. 10 18 Stratton’s Independence v. Howbert, 231 U.S. 399 379,405 Sturges v. Crowninshield, 4 Wheat. 122 432 Swarts v. Fourth Nat. Bank, 117 Fed. 1 244 Swarts v. Siegel, 117 Fed. 13 240 Sweetser v. Matson, 153 Ill. 568 51 Swift v. Tyson, 16 Pet. 1 495 Swofford Bros. Dry Goods Co., In re., 180 Fed. 549 240 Synthetic Patents Co. v. Sutherland, 22 F. (2d) 491 582 Taft v. BoWers, 278 U.S. 470 379,462 Taylor v. American Nat. Bank, 63 Fla. 631 495 Page. Taylor v. Life Assn., 13 Fed. 493 122 Tennessee v. Davis, 100 U.S. 257 32 Terrace v. Thompson, 263 U.S. 197 360 Texas Co. v. Ramsower, 7 S.W. (2d) 872 280 Texas & Pacific Ry. Co. v. Gulf, C. & S. F. Ry. Co., 270 U.S. 266 530,608 Texas & Pacific Ry. Co. v. Pottorff, 291 U.S. 245 564 Texas & Pacific Ry. Co. v. Rigsby, 241 U.S. 33 61 Texas & Pacific Ry. Co. v. United States, 289 U.S. 627 487 Thompson v. Fairbanks, 196 U.S. 516 568 Thompson v. Pennsylvania R. Co., 215 Pa. 113 103 Thompson v. Salt Lake Rapid Transit Co., 16 Utah 281 598 Thompson v. United States, 246 U.S. 547 469 ThreeFriends, The, 166 U.S. 1 30 Tidal Oil Co. v. Flanagan, 263 U.S. 444 600,611 Tiffany, Ex parte, 252 U.S. 32 118 Tilden v. Blair, 21 Wall. 241 493 Todd Engineering Co. v. United States, 32 F. (2d) 734 347 Tompkins v. Portland Ry. Co., 77 Ore. 174 83 Torgeson v. Missouri-K.-T. R. Co., 124 Kan. 798 104,106 Townes v. Krumpen, 184 Ark. 910 430 Toyota v. Hawaii, 226 U.S. 184 603 Tracy v. Commissioner, 53 F. (2d) 575 299 Transit Commission v. United States, 289 U.S. 121 531 Transit Commission v. United States, 284 U.S. 360 531 Transportation Co. v. Chicago, 99 U.S. 635 20 XLVI TABLE OF CASES CITED. Page. Trapnell v. Hines, 268 Fed. 504 83 Travelers Ins. Co. v. Austin, 116 Ga. 264 85 Travers v. Reinhardt, 205 U.S. 423 223 Trinityfarm Construction Co. v. Grosjean, 291 U.S. 466 368 Tupper v. Massachusetts Bonding & Ins. Co., 156 Minn. 65 85 Turner v. Minneapolis, St. P. & S. S. M. R. Co., 164 Minn. 335 101,103 Turner-Farber-Love Co. v. Helvering, 68 F. (2d) 416 442 Tutun v. United States, 270 U.S. 568 582 Tyler v. Andrews, 40 App. D.C. 100 226 Uncasville Mfg. Co. v. Commissioner, 55 F. (2d) 893 299 Unger v. United States, 65 F. (2d) 946 341 Union Bank v. Phelps, 288 U.S. 181 553 Union Electric L. & P. Co. v. Snyder Estate Co., 65 F. (2d) 297 256 Union & Planters’ Bank v. Memphis, 189 U.S. 71 18 Union Solvents Corp. v. Bu-tacet Corp., 2 F. Supp. 375 347 United Divers Supply Co. v. Commercial Credit Co., 289 Fed.^316 494,496 United Drug Co. v. Washburn, 284 U.S. 593 605,607 United Fuel Gas Co. v. Public Service Comm’n, 14 F. (2d) 209 301,407 United Fuel Gas Co. v. Railroad Comm’n, 278 U.S. 300 295,300,303,607 United Fuel Gas Co. v. Railroad Comm’n, 13 F. (2d) 510 410 United Publishers Corp. v. Anderson, 42 F. (2d) 781 68 United Railways v. West, 280 U.S. 234 167,176 Page. United Shoe Machinery Corp. v. United States, 258 U.S. 451 25 United States v. Alaska S.S. Co., 253 U.S. 113 391,609 United States v. Anchor Coal Co., 279 U.S. 812 392 United States v. Anderson, 269 U.S. 422 185 United States v. Babcock, 250 U.S. 328 582 United States v. Bank of the Metropolis, 15 Pet. 377 579 United States v. Barry, 67 F. (2d) 763 341 United States v. Boston, C. C. & N. Y. Canal Co., 271 Fed. 877 259 United States v. Central Pac. R. Co., 118 U.S. 235 579 United States v. Chandler- Dunbar Co., 229 U.S. 53 256,259 United States v. Chemical Foundation, 272 U.S. 1 454 United States v. Cook, 257 U.S. 523 577 United States v. Delaware, L. & W. R. Co, 238 U.S. 516 442 United States v. Great Northern Ry. Co, 229 Fed. 927 593 United States v. Hamburg-American Co, 239 U.S. 466 609 United States v. Hammond, 104 Fed. 862 244 United States v. Hartwell, 6 Wall. 385 464 United States v. Illinois Central R. Co, 263 U.S. 515 486 United States v. Illinois Central R. Co, 291 U.S. 457 288 United States v. Lehigh Valley R. Co, 220 U.S. 257 442 United States v. Lewis, 200 U.S. 1 . 38 United States v. Louisiana, 290 U.S. 70 5, 479, 483, 484, 485, 501 United States v. Louisville & N. R. Co, 235 U.S. 314 12 United States v. Ludey, 274 U.S. 295 68 TABLE OF CASES CITED. xLvn Page. United States v. Meadows, 281 U.S. 271 587 United States v. Michigan, 190 U.S. 379 329 United States v. Minnesota, 270 U.S. 181 329 United States v. Missouri Pac. R. Co., 278 U.S. 269 55 United States v. Moser, 266 U.S. 236 25 United States v. National Ex- change Bank, 270 U.S. 527 579 United States v. New River Collieries, 262 U.S. 341 257,259 United States v. North Carolina, 136 U.S. 211 329 United States v. Northern Pacific Ry. Co.,256 U.S. 51 579 United States v. Northern Pacific Ry. Co., 288 U.S. 490 289 United States v. Phellis, 256 U.S. 156 439 United States v. River Rouge Co., 269 U.S. 411 118,119 United States v. St. Paul, M. & M. Ry., 247 U.S. 310 31 United States v. Smith, 94 U.S. 214 579 United States v. Teller, 107 U.S. 64 577 United States v. Texas, 143 U.S. 621 329 United States v. Texas, 162 U.S. 1 360 United States v. Williams 278 U.S. 255 446,587 United States Bank v. Planters’ Bank, 9 Wheat. 904 369 U.S. Casualty Co. v. Ellison, 65 Colo. 252 85 U.S. Truck Co. v. Pennsylvania Surety Co, 259 Mich. 422 122 Vaca v. Southern Pacific Co., 91 Cal. App. 470 106 Van Allen v. Assessors, 3 Wall. 573 565 Vance v. Vandercook Co., 170 U.S. 468 272 Veazie Bank v. Fermo,. 8 Wall. 533 45 61745°—34-------IV Page. Vennilye & Co. v. Adams Ex- press Co., 21 Wall. 138 579 Vicksburg, S. & P. R. Co. v. Smith, 135 U.S. 195 267 Vicksburg, S. & P. Ry. Co. v. Nattin, 58 F. (2d) 979 271 Virginia v. Paul, 148 U.S. 107 34 Virginia v. West Virginia, 246 U.S. 565 329 Virginian Ry. Co. v. United States, 272 U.S. 658 12, 286, 486, 608 Vogelstein & Co. v. United States, 262 U.S. 337 255,259 Voorhees, In re, 41 F. (2d) 81 243 Wabash R. Co. v. Defiance, 167 U.S. 88 20 Wabash R. Co. v. Flannigan, 192 U.S. 29 599 Wabash, St. L. & P. R. Co. v. Rector, 104 Ill. 296 84 Wabash Valley Electric Co. v. Young, 287 U.S. 488 310, 410,496 Wald Transfer & Storage Co. v. Smith, 290 U.S. 602 426 Walker v. Collins, 167 U.S. 57 34 Walker v. Lea, 47 Fed. 645 38 Wall v. Chesapeake & Ohio Ry. Co., 256 U.S. 125 394 Wallace v. McConnell, 13 Pet. 136 208 Ward v. Connecticut Pipe Mfg. Co., 71 Conn. 345 121 Ward v. North American Accident Ins. Co., 182 Ill. App. 317 85 Warner v. Baltimore & Ohio R. Co., 168 U.S. 339 83,84 Warner v. Jaffray, 96 N.Y. 248 122 Washington v. Superior Court, 289 U.S. 361 119 Washington & G. R. Co. v. District of Columbia, 146 U.S. 227 269,271 Watson v. Tarpley, 18 How. 517 495 Weaver v. Palmer Bros. Co., 270 U.S. 402 558 Webster v. Fargo, 181 U.S 394 ill XLVIII TABLE OF CASES CITED. Page. Weisberg, In re, 253 Fed. 833 240 Weiser Valley Land & Water Co. v. Ryan, 190 Fed. 417 259 Weiss v. Steam, 265 U.S. 242 439 Wells, Fargo & Co. v. Ne- vada, 248 U.S. 165 109,396 West, In re, 128 Fed. 205 242 West v. Lord Sackville, L.R. [1903] 2 Ch. Div. 378 347 Western & Atlantic R. Co. v. Railroad Comm’n, 261 U.S. 264 271 Western Chemical Co. v. United States, 271 U.S. 268 12 Western Distributing Co. v. Public Service Comm’n, 285 U.S. 119 295,308 Western Implement Co., In re, 166 Fed. 576 370 Western Paper Makers Chemical Co. v. United States, 271 U.S. 268 286 Western Union v. Pleasants, 46 Ala. 641 232 Western Union v. Union Pacific Ry. Co., 3 Fed. 423 229 Westinghouse Machinery Co. v. Electric Storage Bat- tery Co., 170 Fed. 430 347 Westinghouse Electric Co. v. Pittsburgh Transformer Co., 10 F. (2d) 593 80 West Ira, The, 24 F. (2d) 858 347 West Side Belt R. Co. v. Pittsburgh Construction Co., 219 U.S. 92 571 Wharton v. New York Life Ins. Co., 178 N.C. 135 84 White v. Island Transp. Co., 233 U.S. 346 23 White v. United States, 270 U.S. 175 576,577 White River Co. v. Arkansas, 279 U.S. 692 614 Whitney v. California, 274 U.S. 357 20 Whitney v. State, 52 Miss. 732 319 Whitten v. Tomlinson, 160 U.S. 231 38 Page. Wichita Gas Co. v. Public Service Comm’n, 2 F. Supp. 792 301 Wilderman v. Roth, 17 F. (2d) 486 391 Willcuts v. Bunn, 282 U.S. 216 379 Williams, Ex parte, 277 U.S. 267 18 Williams v. Iola Electric R. Co., 102 Kan. 268 103 Williams v. Mayor, 289 U.S. 36 558 Williams v. Morgan, 111 U.S. 684 118 Williams v. United States, 289 U.S. 553 321,325,328 Williams v. U.S. Fidelity & G. Co., 236 U.S. 549 244 Wilmington & W. R. Co. v. Alsbrook, 146 U.S. 279 431 Wilson v. Illinois Southern Ry. Co., 263 U.S. 574 421 Winona & St. Peter Land Co. v. Minnesota, 159 U.S. 526 109 Wisconsin v. Illinois, 278 U.S. 367 331 Wisconsin & Arkansas Lumber Co. v. Brady, 157 Ark. 449 103 Wood v. General Accident Ins. Co., 160 Fed. 926 85 Wood v. U.S. Fidelity & G. Co.. 143 Fed. 424 569 Woolford Realty Co. v. Rose, 286 U.S. 319 66,440 Worthen Co. v. Thomas, 292 U.S. 426 580 Wright, The Francis, 105 U.S. 381 16 Wright v. Mutual Ins. Co., 19 F. (2d) 117 271 Wright v. St. Louis S.F. Ry. Co., 327 Mo. 557 102 Yankaus v. Feltenstein, 244 U.S. 127 29 York v. Texas, 137 U.S. 15 397 Young, Ex parte, 209 U.S. 123 390 Young v. Bradley, 101 U.S. 782 462 Zacher v. Fidelity Trust Co., 106 Fed. 593 121 Zeis, In re, 245 Fed. 737 50,51 TABLE OF STATUTES Cited in Opinions (A) Statutes of the United States. Page. 1789, Sept. 24, c. 20, § 11, 1 Stat. 73....................... 270 1789, Sept. 24, c. 20, § 12, 1 Stat. 73........................ 36 1789, Sept. 24, c. 20, § 34, 1 Stat. 73 .............. 244,493,495 1833, Mar. 2, c. 57, § 3, 4 Stat. 632....................... 32 1864, June 3, c. 106, § 41, 13 Stat. 99....................... 565 1864, June 3, c. 106, § 45, 13 Stat. «9........................567 1864, June 3, c. 106, § 50, 13 Stat. 99....................... 568 1864, June 30, c. 173, § 50, 13 Stat. 241....................... 32 1866, July 13, c. 184, § 68, 14 Stat. 98........................ 32 1868, Feb. 10, c. 7, 15 Stat. 34 ............................ 565 1871, Feb. 28, c. 99, § 16, 16 Stat. 433...................... 32 1873, Mar. 3, c. 269, § 2, 17 Stat. 603...................... 567 1875, Mar. 3, c. 130, § 8, 18 Stat. 371................. 32 1875, Mar. 3, c. 137, § 5, 18 Stat. 470....................... 28 1882, July 12, c. 290, § 4, 22 Stat. 162....................... 35 1887, Feb. 4, c. 104, § 1, 24 Stat. 379...................... 504 1887, Feb. 4, c. 104, § 3, 24 Stat. 379...................... 487 1887, Feb. 4, c. 104, § 13, 24 Stat. 379...................... 511 1887, Feb. 4, c. 104, § 13 (3), 24 Stat. 379 .............. 476,501 Page. 1887, Feb. 4, c. 104, § 13 (4), 24 Stat. 379.................. 476, 479, 487, 501 1887, Feb. 4, c. 104, § 15 (7), 24 Stat. 379................... 285 1887, Mar. 3, c. 373, 24 Stat. 559 970 1887, Mar.’ 3, c. 373,’ ’§’ 1, 24 Stat. 552.................... 30,36 1887, Mar. 3, c. 373, § 2, 24 Stat. 552.................... 29,30 1887, Mar. 3, c. 373, §§ 3, 4, 24 Stat. 552................. 30,35 1887, Mar. 3, c. 373, §§ 6, 7, 24 Stat. 552..................... 30 1888, Aug. 1, c. 728, 25 Stat. 357 9R9. 1888, Aug. 13, c. 866’ § 1,’ 25 Stat. 433........................ 36 1888, Aug. 13, c. 866, § 2, 25 Stat. 433........................ 29 1888, Aug. 13, c. 866, §§ 3, 4, 25 Stat. 433 .................... 35 1888, Aug. 13, c. 866, § 25, 25 Stat. 433........................ 36 1891, Mar. 3, c. 517, § 5, 26 1891, Mar. 3, c. 517, § 6, 26 Stat. 826....................... 30 1893, Mar. 2, c. 196, § 2, 27 Stat. 531....................... 58 1894, Feb. 8, c. 25, 28 Stat. 36 ............................. 33 1898, July 1, c. 541, §§ 1, 2, 30 Stat. 544 .................. 240 1898, July 1, c. 541, § 64 (b) (5), 30 Stat. 544 ....... 53 1898, July 1, c. 541, § 67 (d), 30 Stat. 544 ........... 242 XLIX L TABLE OF STATUTES CITED. Page* 1900, Mar. 14, c. 41, § 12, 31 Stat. 45...................... 567 1903, Mar. 2, c. 976, § 1, 32 Stat. 943 ..................... 58 1908, Apr. 22, c. 149, 35 Stat. 65...................230-233 1908, Apr. 22, c. 149, § 6, 35 Stat. 65....................... 36 1910, Apr. 5, c. 143, § 1, 36 Stat. 291...................... 36 1911, Mar. 3, c. 231, 36 Stat. 1087.................... 270 1911, Mar. 3, c. 231, § 24 (1), 36 Stat. 1087............. 36 1913, Oct. 22, c. 32, 38 Stat. 208................. 285,476 1913, Dec. 23, c. 6, § 11 (k), 38 Stat. 251.................. 565 1913, Dec. 23, c. 6, § 24, 38 Stat. 251..................... 565 1914, Jan. 20, c. 11, 38 Stat. 278...................... 37 1915, Jan. 28, c: 22, § 5, 38 Stat. 803...................... 35 1916, July 17, c. 245, §§ 12, 13, 39 Stat. 360............... 56 1916, July 17, c. 245, § 31, 39 Stat. 360...................... 54 1916, Aug. 23, c. 399, 39 Stat. 532 ............. 27 1916, Sept. 7, c. 461, 39 Stat. 752............. 565 1916, Sept. 8, c.463, § 12 (a), 39 Stat. 756............. 384 1917, Feb. 27, c. 113, 39 Stat. 929............. 194 1917, Oct. 6, c. 105, 40 Stat. 398............. 339 1917, Oct. 6, c. 105, Art. IV, §§ 400-405, 40 Stat. 398 .......................... 574 1917, Oct. 6, c. 105, § 405, 40 Stat. 398.................. 581 1917, Oct. 6, c. 106, § 9 (b) (10), (b)(16), (h), (m), 40 Stat. 411.... 452 1917, Oct. 6, c. 106, § 12, 40 Stat. 411......................453 1917, Oct. 6, c. 106, § 23, 40 Stat. 411......................452 1917, Oct. 6, c. 106, § 24, 40 Stat. 411......................451 Page. 1918, Mar. 21, c. 25, § 10, 40 Stat. 451..................... 36 1918, June 25, c. 104, § 2, 40 Stat. 609................ 577,578 1918, Sept. 26, c. 177, § 2, 40 Stat. 967.................... 565 1919, Feb. 24, c. 18, 40 Stat. 1057 ........................ 213 1919, Feb. 24, c. 18, § 234 (a)(4), 40 Stat. 1057 .................... 183,189 1919, Feb. 24, c. 18, § 234 (a)(5), 40 Stat. 1057 ................ 183,185,187 1919, Feb. 24, c. 18, § 234 (a)(7), 40 Stat. 1057 ........................ 384 1919, Oct. 28, c. 85, Title II, § 28, 41 Stat. 316...... 33 1919, Dec. 24, c. 16, §§ 2, 3, 4, 5, 41 Stat. 371.... 577 1919, Dec. 24, c. 16, § 12, 41 Stat. 371.............. 578 1919, Dec. 24, c. 16, §§ 13, 15, 16, 41 Stat. 371............. 577 1920, Feb. 28, c. 91, 41 Stat. 456 ................... 530 1920, Feb. 28, c. 91, § 5 (8), 41 Stat. 456................. 534 1920, Feb. 28, c. 91, § 13 (3), 41 Stat. 456................... 4 1920, Feb 28, c. 91, § 13 (4), 41 Stat. 456................... 5 1920, Feb. 28, c. 91, § 15a, 41 Stat. 456...................... 6 1920, Feb. 28, c. 91, § 206a, 41 Stat. 456.................. 36 1920, Feb. 28, c. 91, § 418, 41 Stat. 456..................... 287 1920, Feb. 28, c. 91, § 500, 41 Stat. 456............. 287,290 1920, June 20, c. 250, § 33, 41 Stat. 988.................. 36 1921, Aug. 9, c. 57, § 15, 42 Stat. 147.................... 578 1921, Aug. 9, c. 57, § 23, 42 Stat. 147.................... 577 1921, Aug. 9, c. 57, § 24, 42 Stat. 147 ................... 578 1921, Aug. 9, c. 57, § 26, 42 Stat. 147 ................... 577 1921, Aug. 9, c. 57, §§ 28, 30, 42 Stat. 147................. 578 TABLE OF STATUTES CITED. li Page. Page. 1921, Aug. 19, c. 72, 42 1924, June 2, c. 234, § 1Q01, Stat. 171 .................... 345 43 Stat. 253 .......... 213 1921, Nov. 23, c. 136, 42 1924, June 7, c. 320, § 19, 43 Stat. 227..................... 384 Stat. 607.............. 581 1921, Nov. 23, c. 136, § 201 1924, June 7, e. 320, § 26, 43 (e), 42 Stat. 227............. 213 Stat. 607.............. 577 1921, Nov. 23, c. 136, § 202 1924, June 7, c. 320, § 202 (a), 42 Stat. 227. 462,463 (10), 43 Stat. 607... 445 1921, Nov. 23, c. 136, § 202 1924, June 7, c. 320, § 304, (a)(2), 42 Stat. 227. 461, 43 Stat. 607........... 578 467,469,471 1925, Feb. 13, c. 229, 43 1921, Nov. 23, c. 136, § 202 Stat. 936 ........... 599,' (a) (6), 42 Stat. 227.. 467 600, 602,608,610 1921, Nov. 23, c. 136, § 203 1925, Feb. 13, c. 229, § 1, 43 (a) (5), (a) (7), (b), 42 Stat. 936............ 15,31 Stat. 227..................... 385 1925, Feb. 13, c. 229, § 12, 1921, Nov. 23, c. 136, § 204 43 Stat. 936............ 36 (b), 42 Stat. 227.... 437, 1925, Feb. 13, e. 229, § 13, 439,440 43 Stat. 936........... 603 1921, Nov. 23, c. 136, § 206, 1925, Feb. 25, c. 317, 43 42 Stat. 227 ..............469,470 Stat. 976.............. 195 1921, Nov. 23, c. 136, § 206 1925, Mar. 4, c. 553, § 3, 43 (a)(2), 42 Stat. 227.. 471 Stat. 1302............................ 578 1921, Nov. 23, c. 136, § 206 1926, Feb. 26, c. 27, § 208 ■ (a)(6), 42 Stat. 227 (a)(2), 44 Stat. 9..... 472 461 472 1926, Feb. 26, c. 27, § 208 1921, Nov. 23, c. 136, § 206 (a) (8), 44 Stat. 9.... 464, (b), 42 Stat. 227.... 471 468,472,473 1921, Nov. 23, c. 136, § 219, 1926, Feb. 26, c. 27 § 208 42 Stat. 227.............. 469,470 (c), 44 Stat. 9... 471,472 1921, Nov. 23, c. 136, § 219 1926, Feb- 26> c- 27> § 800 (a), 42 Stat. 227............. 461 (a)(3), 44 Stat. 9.... 424 1921, Nov. 23, c. 136, S 244 l926» Feb- 26> c- 27> § 1005, (a), 42 Stat. 227.... 376 44 Stat. 9............. 612 1921, Nov. 23, c. 136, § 245 1926, Mar. 25, c. 88, 44 (a), 42 Stat. 227.... 377 Stat. 223.............. 565 1921, Nov. 23, c. 136, § 245 I926, May 8, c. 273, 44 (b), 42 Stat. 227....377, Stat. 416.............. 195 379 381 1926, May 22, c. 364, 44 1923, Mar. 2, c. 173, § 1, 42’ Stat. 617............. 250 Stat. 1374.................... 577 1926> May 22, c. 364, § 1, 44 1923, Mar. 4, c. 285, 42 Stat. Stat. 617..............262 1511.................... 451,452 1926„ May 27, c. 406, § 15, 44 1923, Mar. 4, c. 291, §§ 1, 7, Stat. 666 ............. 370 8, 42 Stat. 1521.............. 578 1926> June 2> c- 449, 44 1924, June 2, c. 234, § 208 Stat. 686.............. 578 (a)(8), 43 Stat. 253. 1926, July 2, c. 723, § 4, 44 464,472 Stat. 790.............. 577 1924, June 2, c. 234, §§ 212, 1926, July 2, c. 723, § 9, 44 213, 43 Stat. 253..... 213 Stat. 790 ............. 445 1924, June 2, c. 234, §§ 244, 1926, July 2, c. 723, §§ 15, 17, 245, 43 Stat. 253..... 377 44 Stat. 790........... 578 LU TABLE OF STATUTES CITED. Page. 1927, Feb. 25, c. 191, §§ 4, 7, 16, 44 Stat. 1228.... 565 1928, Mar. 10, c. 167, §§ 11, 14, 17, 45 Stat. 254... 452 1928, Apr. 18, c. 379, 45 Stat. 431.......... 250 1928, May 16, c. 580, 45 Stat. 573 .......... 452 1928, May 29, c. 852, 45 Stat. 791.......... 424 1928, May 29, c. 852, §§ 41, 42, 62, 45 Stat. 791... 213 1928, May 29, c. 852, § 101 (a)(8), 45 Stat. 791.. 472 1928, May 29, c. 852, § 141 (a), (b), 45 Stat. 791. 65 1928, May 29, c. 852, § 202, 45 Stat. 791.................. 382 1928, May 29, c. 852, § 203 (a), 45 Stat. 791. 383,384 1928, May 29, c. 852, § 203 (b), 45 Stat. 791.... 383 1928, May 29, c. 875, § 13, 45 Stat. 964..................... 577 1928; May 29, c. 875, § 14, 45 Stat. 964.................. 578 1928, May 29, c. 891, § 2, 45 Stat. 978..................... 288 1928, Dec. 21, c. 42, 45 Stat. 1057................. 345,351,352 1928, Dec. 21, c. 42, § 4 (a), 45 Stat. 1057............... 348, 349, 352, 354, 355 1930, June 25, c. 604, 46 Stat. 809 ............... 564,570 1930, July 3, c. 849, 46 Stat. 991.................... 581 1930, July 3, c. 849, §§ 22, 24, 46 Stat. 991.............. 578 1932, June 6, c. 209, 47 Stat. 169 ................... 424 1932, June 24, c. 276, 47 Stat. 334................. 578 1933, Mar. 20, c. 3, 48 Stat. 9. 575 1933, Mar. 20, c. 3, § 17, 48 Stat. 9...........575-589 1933, May 27, c. 38, § 22 (a), 48 Stat. 74............... 36 1933, June 16, c. 89, §§ 11 (b), 23, 24 (a), (b), 48 Stat. 162......... 565 1933, June 16, c. 91, 48 Stat. 211............................. 4 Page. 1933, June 16, c. 91, § 11, 48 Stat. 211.......... 533 1933, June 16, c. 91, Title II, 48 Stat. 211...............534 1933, June 16, c. 91, Title II, §§ 201, 202, 48 Stat. 211..............529 1933, June 16, c. 101, § 20, 48 Stat. 309 ............. 588 1934, Mar. 28, c. 102, § 24, 48 Stat. 509.............. 453 1934, Mar. 28, c. 102, § 35, 48 Stat. 509.............. 588 Constitution. See Index at end of volume. Judicial Code. § 28 ................... 28,29,33 §§ 31, 32............... 29 §33.................. 27,29,31,32 § 66.................... 35 § 210.................. 286 § 237.............. 117,394 § 237 (a)............ 294, 599,600,602,608 § 237 (c)............ 599, 600,602,608,610 § 238................... 14 § 265............... 97,239 155, 387,’390, 392, 417 Revised Statutes. §§ 641, 642 ............ 29 § 643 .............. 29,32 §§ 649, 700 ........... 336 § 720 ................ 239 § 721................. 493 § 866................. 347 § 905................. 206 § 941................. 142 § 3140................ 368 § 3244................ 367 § 5219................ 565 § 5236 ............... 568 § 5242 ........... 566,567 U. S. Code. Title 11, §§ 1, 11...........240 § 22b......... 123 § 104 (b)(5). 370 § 107 (d).... 242 Title 12, § 636.............. 54 §§ 771, 781 (9) 56 §§ 971,972.... 55 § 983......... 54,56 TABLE OF STATUTES CITED. liii U. S. Code—Continued. Page- U. S. Code—Continued. Page- Title 26, § 11......... 366,370 Title 28, §§ 773, 875... 336 § 205.................. 367,370 Title 45, § 1 ...... 592,595 § 901 (3).. 418,419,424 § 2 ... 58,60,595 Title 28, § 41 (1)......... 270 § 8.......... 58 § 41 (26)... 195, 209 § 9....\ 592,595 § 47....................... 285 §55.......... 61 § 47a...................... 286 Title 49, § 13 (3), (4) 501 § 48 285 §§ 15, 15 (1), § 344.................. 117,294 15 (4), 142 . 287 § 379 97,239 § 153 (e)... 288 § 380................... 42,417 Appendix, Title 38, § 687...................... 206 § 484 .................. 445 § 724 492 Supplement VII, Title § 725 ....... 244,493 11, § 104 (b)(7).........370 § 754..................... 142 (B) Statutes of the States and Territories. Arizona. Page- Illinois—Continued. Page. Revised Code (1928), § 1874 Laws, p. 179 ............ 538 3840 ......................... 54 1879 Laws, Act of May Arkansas. 31.................. 555 1917 Laws, Act No. 462 . 431 1885 Laws, Act of June 1931 Laws, Act No. 76 30 555 and Act No. 141........... 430 1898 Laws, Act of Feb. 1933 Laws, Act No. 102 . 429 25, §§ 17, 18, p. 32... 542 Crawford & Moses Di- 1899 Laws, Act of Apr. gest (1921), § 5579... 430 21 ................ 556 California. 1905 Laws, Act of May Act of Mar. 4, 1929, c. 16........................ 555 16 .......................... 345 1912 Laws, Act of June District of Columbia. H............................ 555 Code, § 966............ 221-229 1919 Laws, Act of Jan. §§ 983a, 1283.... 224 30 556 8 1287................... 223,224 Act of June 30, p. Title 14, § 30 .............. 226 727 ................. 538, 543 Florida. 1921 Laws, Act of June 1923 Acts, c. 9914, §§ 2, 28 ........................... 555 13 17........................ 108 1925 Laws, Act of June 1929’ Acts, c. 14392.... 108 30 ................ 555 1931 Acts, c. 15511.... 108 1927 Laws, Act of July c. 15787..417-426 7, p. 745.................. 539 Compiled General Laws, Cahill’s Revised Stat- §§ 6761, 6762 ............... 493 utes (1933), c. 73, Georgia. § 159 ..................... 538 Code (1910), § 218..............561 c. 114, par. 84.101 § 224 .. 566,567 c. 120, §§ 328, 329.. 539 §§ 1252,1256 561 Iowa. Illinois. Laws 41st General As- 1869 Laws, Act of Mar. sembly, c. 6, § 1.............. 89 11 .......................... 555 Laws 42d General As- Act of Mar. 11, sembly, c. 103, § 1... 89 § 30, pp. 209, 228 . 538 c. 248, § 1.......................... 89 Liv TABLE OF STATUTES CITED. Iowa—Continued. Page. Montana—Continued. Page. Code (1931), c. 241-B1, § 6212........... 119 § 4755-b38.... 89, 90 § 6659.......... 115 c. 251-Al.................... 90 § 9303........ 124,126 c. 251-Al, § 5093- New Hampshire, al.......................... 89 1931 Laws, c. 102..... 264 §§ 8402, 8613- New York. cl, 8964................... 114 Tax Law, § 270.. 418,419,423 Minnesota. Ohio. Constitution, Art. II, HO Ohio Laws 366...... 293 § 2;................AiA”” 1933 Laws, Act of Dec. c- 218, p. 22d (Liquor Control . 274 ....................... 517 Act).................. 366 Mississippi. General Code, §§ 499-9 Constitution (1890), § to 499_i3 494 258 ....................... 319 § 614—20 293 1833 Laws, Act of Feb. s 1465—98 59 15 319 Oklahoma 1873 Laws, Act of Apr. Constitution, Art. 9, § 20. 389 19 , c. 26..........319 Pennsylvania. 1922 T^’ n 179.......... 17 Act °f July 9’ 1919’ PJL 1926 Laws, c. 172............. 17 21 J ’ 9n 1928 Laws, c. 214............. 17 Tennessee.................. 1932 Laws, c. 291............. 17 8Kfi81 021 Hutchinson’s Code m 00(16 °923)’ § 5681....... 231 (1798-1848), c. 54, Art. lexas- , U 8 1 319 1885 Laws, c. 68...... 532 Codé (1871),* *§ ' 1573* ’ ’ 319 1889 Laws, c. 106..... 532 Code (1880).................. 319 Revised Statutes (1879), Code (1930), § 2294.... Art. 4115............. 532 146 148 Revised Civil Statutes 8 3122 ......................’395 (1925), Art. 1358.... 532 8 3226 ....................... 17 Art. 2029 533 8 5131 ...................... 148 Art. 6260......... 525 §6992 17 Art. 6275..... 525,532 Code Supplement (1933), Art. 6278.......... 525 §§ 3204, 3208............... 17 Art. 6281.... 532 Montan^.. Art. 6286......... 525 Constitution, Art. XV, Wisconsin. § 11 ............115 Constitution, Art. IX, Civil Codé, § 561............ 124 § 1................... 520 Revised Codes (1921), Washington. § 6011................. 124, 126 1931 Laws, c. 23, §§ 10, § 6013..................... 115 13................ 42 (C) Treaties. Page. Page. 1909, Jan. 11, 36 Stat. 1925, Feb. 24, 44 Stat. 2448 (Great Britain). 249 2108 (Great Britain) 249, 250 CASES ADJUDGED IN THE SUPREME COURT OF THE UNITED STATES AT OCTOBER TERM, 1933. FLORIDA et al. v. UNITED STATES et al. APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF GEORGIA. No. 342. Argued February 13, 1934.—Decided April 2, 1934. 1. By § 13 (4) of the Interstate Commerce Act, the Interstate Commerce Commission is empowered to increase intrastate rates under which the intrastate traffic fails to contribute its fair share to the revenue of the interstate carrier, and which thus cause an unjust discrimination against interstate commerce. P. 4. 2. This power was not withdrawn or diminished by the changes made in § 15a of that Act by the Emergency Railroad Transportation Act of 1933. P 5. 3. Findings of the Commission preliminary to an order increasing intrastate rates on legs in Florida to remove unjust discrimination against interstate commerce with respect to the carrier’s revenue, held sufficient and in conformity with the principles laid down in Florida v. United States, 282 U.S. 194. P. 8. 4. The evidence supported the findings. P. 13. 5. The authority of the Commission with respect to the removal of discrimination against interstate commerce caused by inadequacy of the intrastate rates of an interstate carrier, rests upon the constitutional power of Congress, extending to such carriers as instruments of interstate commerce, to require that these agencies shall not be used in such manner as to cripple, retard, or destroy that commerce, and provide for the execution of that power through a subordinate body. P. 12. 6. In relation to such discrimination, as in other matters, when the Commission exercises its authority upon due hearing, as pre-61745°—34-------1 I 2 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. scribed, and without error in the application of rules of law, its findings of fact supported by substantial evidence are not subject to review. It is not the province of the courts to substitute their judgment for that of the Commission, P. 12. 4 F.Supp. 477, affirmed. Appeals from a decree of the District Court, of three judges, sustaining an order of the Interstate Commerce Commission. There were originally three suits, against the United States and the Interstate Commerce Commission, viz., a bill by the State of Florida and the Florida Railroad Commission, another by Wilson Cypress Co. and Wilson Lumber Co., and the third by F. S. Buffum & Co., Inc. The Atlantic Coast Line R. Co. intervened as a defendant. The several suits were consolidated below and were heard and decided as one case. Messrs. Theodore T. Turnbull, Henry P. Adair, and J. V. Norman, with whom Mr. Cary D. Landis, Attorney General of Florida, and Messrs. C. G. Ashby, August G. Gutheim, and F. C. Hillyer were on the brief, for appellants. Mr. J. Stanley Payne, with whom Solicitor General Biggs and Messrs. Elmer B. Collins, Harold M. Stephens, and Daniel W. Knowlton were on the brief, for the United States and Interstate Commerce Commission, appellees. Mr. Robert C. Alston, with whom Messrs. Carl H. Davis, W. E. Kay, Wm. Hart Sibley, and Alfred P. Thom were on the briefs, for the Atlantic Coast Line R. Co., appellee. Mr. Chief Justice Hughes delivered the opinion of the Court. This appeal presents the question of the validity of an order made by the Interstate Commerce Commission on July 5, 1932, requiring the Atlantic Coast Line Railroad Company to desist from an unjust discrimination 1 FLORIDA v. UNITED STATES. Opinion of the Court. 3 found to exist in the relation of intrastate and interstate rates and to maintain certain rates for the intrastate transportation of logs, as described, within and throughout the State of Florida for distances of 170 miles or less. 186 I.C.C. 157; 190 I.C.C. 588. The order was sustained by the District Court, three judges sitting. 4 F.Supp. 477. By an order of August 2, 1928, the Commission prescribed interstate rates on logs on the lines of the Atlantic Coast Line Railroad Company from points in northern Florida to destinations in Georgia for distances not exceeding 170 miles. Finding that the Florida intrastate rates on similar logs for similar hauls, generally described as the Cummer scale, resulted in unjust discrimination, the Commission also established rates for intrastate application within Florida which would correspond with the rates fixed for interstate transportation. 146 I.C.C. 717. The order in the latter respect was assailed and the decree of the District Court sustaining it was reversed by this Court. Florida v. United States, 282 U.S. 194. We decided that the order could not be upheld on the ground of undue prejudice against persons and localities in interstate commerce, and that it could not be sustained on the ground of unjust discrimination against interstate commerce from the standpoint of revenue losses due to intrastate rates as the order in that aspect was not supported by appropriate findings. Meanwhile, in February, 1929, both the interstate rates and intrastate rates, as prescribed, had been put into effect. After the mandate of this Court, the Cummer scale of intrastate rates was restored and became effective on April 10, 1931. The Interstate Commerce Commission reopened the proceedings and, after hearing, found that the Cummer scale of intrastate rates caused unjust discrimination against interstate commerce from a revenue standpoint. The Commission made no finding with respect to undue prejudice against persons and localities 4 OCTOBER TERM, 1933. Opinion of the Court. 292U.S. in interstate commerce. The Commission accordingly entered the order of July 5, 1932, now under review. While bills were pending in the District Court to enjoin this order, the Commission granted a further hearing in view of the representation that a number of southern railroads had reduced their log rates, and on January 9, 1933, the Commission made an additional report which affirmed the findings previously made and restored the order of July 5, 1932, to be effective February 25, 1933. 190 I.C.C. p. 600. Supplemental bills were filed in the District Court, and on February 24, 1933, the decree was entered upholding the Commission’s action. The order of the Commission is attacked upon the grounds (1) that under Emergency Railroad Transportation Act, 1933 (c. 91, 48 Stat. 211), the Commission was without power to make the order; (2) that the findings of the Commission are inadequate to sustain the order; and (3) that if the findings can be deemed to be adequate, they are not supported by the evidence. First. The power of the Commission. By Transportation Act, 1920 (41 Stat. 484), the Congress granted specific authority to the Commission to remove discriminations against interstate commerce caused by intrastate rates. The Congress amended § 13 of the Act to Regulate Commerce so as to empower the Commission to confer with state authorities “ with respect to the relationship between rate structures and practices of carriers Subject to the jurisdiction of such State bodies and of the Commission.” § 13 (3). And, whenever in the course of its authorized investigations, the Commission, after full hearing, finds that any rate, regulation, or practice “ made or imposed by authority of any State ” causes “ any undue or unreasonable advantage, preference, or prejudice as between persons or localities in intrastate commerce on the one hand and interstate or foreign commerce on the other hand, or any undue, unreasonable, or unjust discrim- 1 FLORIDA v. UNITED STATES. Opinion of the Court. 5 ination against interstate or foreign commerce,” the Commission is required to prescribe the rate thereafter to be charged, or the regulation or practice thereafter to be observed, in such manner as in its judgment will remove the discrimination. The order of the Commission is to bind the carriers, parties to the proceeding, “ the law of any State or the decision or order of any State authority to the contrary notwithstanding.” § 13 (4). In Railroad Commission of Wisconsin v. Chicago, B. & Q. R. Co., 257 U.S. 563, 585-587, we reached the conclusion that the provision of § 13 (4) for the removal of “ any undue, unreasonable, or unjust discrimination against interstate commerce ” was not to be regarded as referring only to discrimination as between persons and localities. We held that Transportation Act, 1920, imposed an affirmative duty on the Commission “ to fix rates and to take other important steps to maintain an adequate railway service for the people of the United States.” Intrastate rates, we said, must play a most important part in maintaining such an adequate system. If there was interference with the achievement of that purpose because of a disparity of intrastate rates as compared with interstate rates, the Commission was authorized to end that disparity. It was to be ended because it constituted an “ unjust discrimination against interstate commerce.” We concluded that these words in § 13 (4) were not tautological, but had the necessary effect of conferring authority upon the Commission to raise intrastate rates so that the intrastate traffic may produce its fair share of the earnings required to meet maintenance and operating costs and to yield a fair return on the value of property devoted to the transportation service, both interstate and intrastate. United States v. Louisiana, 290 U.S. 70, 75. Appellants insist that this result was reached because of what was described as the 11 dovetail relation ” between OCTOBER TERM, 1933. Opinion of the Court. 6 292 U.S. § 13 (4) and § 15a, and that the amendment of the latter section by Emergency Railroad Transportation Act, 1933, has effected a radical change. They contend that the Commission no longer has authority to remove an unjust discrimination against interstate commerce caused by a disparity of intrastate rates viewed from a revenue standpoint. We are unable to accept that view. Section 13 (4) was not amended by Emergency Railroad Transportation Act, 1933. The authority conferred by § 13 (4) to prescribe intrastate rates for the purpose of removing an unjust discrimination against interstate commerce was not withdrawn. The Congress had knowledge of the construction given to § 13 (4) by this Court and of the important effect of that construction in relation to intrastate rates found to be inadequate. The conclusion is not lightly to be reached that the Congress would have undertaken to change a policy of such great importance without explicit language indicating that purpose. The purpose of the changes in § 15a is not left in doubt. They were made with the manifest object of eliminating the provisions for the recapture of excess income of carriers and of revising the rule as to rate making.1 The requirement imposed by Transportation Act, 1920, for the adjustment of rates according to rate groups was abolished and in substitution the Commission was directed to give due consideration to the factors which are specified in the section as amended.2 Thus the Commission is to consider, 1 See report of the Committee on Interstate and Foreign Commerce of the House of Representatives, H.R. No. 193, 73d Cong., 1st sess., pp. 28-30. 2 Section 15a in its amended form is as follows: “Section 15a. (1) When used in this section, the term ‘rates’ means rates, fares, and charges, and all classifications, regulations, and practices relating thereto. “(2) In the exercise of its power to prescribe just and reasonable rates the Commission shall give due consideration, among other factors, to the effect of rates on the movement of traffic; to the need, 1 FLORIDA v. UNITED STATES Opinion of the Court. 7 among other factors, “ the effect of rates on the movement of traffic”; “ the need, in the public interest, of adequate and efficient railway transportation service at the lowest cost consistent with the furnishing of such service ”; and “ the need of revenues sufficient to enable the carriers, under honest, economical, and efficient management, to provide such service.” 3 Neither the elimination of the group method of rate making, nor the substituted rule, suggests an intention to impair the Commission’s authority over intrastate rates for the appropriate protection of interstate commerce: On the contrary, the substituted rule of rate making by in the public interest, of adequate and efficient railway transportation service at the lowest cost consistent with the furnishing of such service; and to the need of revenues sufficient to enable the carriers, under honest, economical, and efficient management, to provide such service.” 8 As to the substituted rule of rate making, the House Committee said in its report: “ The rule of rate making as rewritten in the proposed paragraph (2), found in section 205 of the bill, directed the Commission to give due consideration, among other factors, to the effect of rates on the movement of traffic; to the need, in the public interest, of adequate and efficient railway transportation service at the lowest cost consistent with the furnishing of such service; and to the need of revenues sufficient to enable the carriers, under honest, economical, and efficient management, to provide such service. It is difficult to conceive of a reasonable rate which would ignore any one of these considerations. The Commission as a fair and impartial body acting for the Congress will continue to give consideration to these factors. In the case of the power given to the Commission to prescribe just and reasonable rates the committee does not believe that it is necessary to encumber the statutes with further language which might be mandatory in terms, but which could add nothing further to the plain duty of the Commission under the law, and which might be interpreted to imply a distrust of the Commission in prescribing just and reasonable rates. The Commission will and must give consideration to all facts developed on the record and see to it that the record is enlightening as to such factors as are mentioned in the first section of this bill.” H.R. No. 193, 73d Cong., 1st sess., p. 30. 8 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. its express terms emphasizes the carriers’ need of adequate revenues. The Congress had provided authority to meet that need where inadequate intrastate rates caused unjust discrimination against interstate commerce. The Commission had exercised that authority. The Commission had not proposed the diminution of that authority. The new Act discloses no intention to weaken national control for essential national purposes over the railway system of the country. It was rather designed to aid that control in the light of the depressed economic condition of the railways. We conclude that the new rule of rate making left the power of the Commission under § 13 (4) intact. Second. The Commission’s findings. On the former appeal we pointed out that if the action of the Commission was not simply for the removal of undue prejudice against interstate commerce as between persons or localities, and the Commission undertook to prescribe a statewide level of intrastate rates in order to avoid an undue burden, from a revenue standpoint, upon the interstate carrier, there should be appropriate findings upon evidence to support an order directed to that end. We observed that in dealing with unjust discrimination as between persons and localities the question was one of the relation of rates to each other; but that in considering the authority of the Commission to enter the state field and to change a scale of intrastate rates in the interest of the carrier’s revenue, the question was that of the relation of rates to income. But to support the order then under review, the Commission had made no findings as to the revenue which had been derived by the carrier from the traffic in question, or which could reasonably be expected under the increased rates, or that the alteration of the intrastate rates would produce, or was likely to produce, additional income necessary to prevent an undue burden upon the carrier’s interstate revenues and to maintain an 1 FLORIDA V. UNITED STATES. Opinion of the Court. 9 adequate transportation service. Florida v. United States, supra, pp. 212, 214, 215. On the new hearing, the Commission made comprehensive findings to supply what had thus been found to be lacking. The findings set forth at length transportation conditions, traffic and revenues. 186 I.C.C., pp. 160-189. Appellants’ criticisms proceed upon an unwarranted assumption. The requirement of essential findings as to revenues did not demand an impracticable exactness. Losses through inadequate rates could be shown satisfactorily even though proof of the precise extent of such losses was not available. Reasonable determinations were required and these were made. Reviewing the history of the Cummer scale of intrastate rates on logs, and considering comparable interstate and intrastate rates, the Commission found that the Cummer scale was abnormally low and less than reasonably compensatory; that the defendants’ revenue under the Cummer scale was “ insufficient under all the circumstances and conditions to cover the full cost of the service.” Id., pp. 165, 187. The Commission was able to go further. In considering the effect of the Cummer scale upon interstate commerce, the Commission was aided by evidence of actual operations during the period from February 8, 1929, to January 31, 1931, when the increased intrastate rates prescribed by the former order were in effect. The Commission, in its summary, found (id., pp. 188, 189): “ The record shows that during the period of approximately two years following the increase in the rates the total movement amounted to 18,602 cars. This total included 3,740 cars transported to Eastport, Lacoochee and Otter Creek in trainload movements that have ceased and will not be resumed. Under normal economic conditions it seems probable that the annual volume of the Florida log movement under rates the same as those previously 10 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. prescribed will not be less than the average of this 2-year period minus thé number of cars included in the discontinued trainload movements. This average is 7,431 cars. That the movement will not be less than this under normal conditions is confirmed by the fact during the five months immediately preceding the last hearing in this case, February to June, 1931, when conditions were abnormal, there were shipped over defendant’s lines in Florida a total of 2,765 cars of logs. This movement was at the rate of 6,636 cars a year. We believe that the movement of logs intrastate in Florida over defendant’s lines will not be materially curtailed under the rates which we here prescribe, which are the same or substantially the same as the rates generally in effect and under which logs freely move throughout the South. “ The freight charges collected on the 18,602 cars above referred to aggregated $571,508.94, and if the Cummer scale had applied the charges would have been $281,-225.75. The freight charges collected on the 3,740 cars referred to were $100,439.06, and if the Cummer scale had applied they would have been $48,286.75. On the 14,862 cars remaining after deducting the 3,740 cars from the total movement of 18,602, the freight charges collected were $471,069.88 ($571,508.94 minus $100,439.06) and if the Cummer scale had been applicable they would have been $232,939 ($281,225.75 minus $48,286.75) or $238,-130.88 less than those actually collected. Accordingly, on the basis of an average of 7,431 cars a year under normal economic conditions, which basis we believe conservative, the gross revenues under the rates prescribed by the previous order herein would be more than $100,000 a year greater than under the Cummer scale, now in effect. The application of the Cummer scale, therefore, places a substantial burden upon defendant’s interstate revenues. If the revenues yielded by the Cummer scale are not sufficient to cover the cost of the service, as the cost evidence 1 FLORIDA v. UNITED STATES. Opinion of the Court. 11 indicates, it y^uld follow that part of the above-stated amount would constitute a dead loss in net revenue. “We find that the circumstances and conditions surrounding the transportation of these logs intrastate in Florida are not on the whole as favorable as the circumstances and conditions surrounding the interstate move- -ment of logs over defendant’s lines. . . . “We further find that the intrastate rates on logs over 6 feet in length, except walnut, cherry, and cedar, applicable between points on the Atlantic Coast Line in Florida for distances of 170 miles and less are, and for the future will be, unjustly discriminatory against interstate commerce, and that such unjust discrimination can be and should be removed by the establishment between all points on the Atlantic Coast Line in Florida for distances of 170 miles or less of rates not less than the rates shown for such distances in Appendix F hereto, which are the rates found reasonable for interstate application from northern Florida to Georgia.” On the second rehearing, with respect to changes made by southern rail carriers in their log rates—which appeared to have been made largely for the purpose of meeting truck competition—the Commission found that in Florida the movement of logs had “ not been shown to have gone to the trucks to any substantial extent where the hauls are over 25 miles ”; that “ truck-competitive rates for distances under 25 miles would regain little, if any/traffic”; and that the maintenance of the Cummer scale to meet what little truck competition could be met in that way would greatly decrease the revenues’of the Atlantic Coast Line Railroad Company and would not be warranted. 190 I.C.C. p. 599. We perceive no ground for the contention that the Commission has failed to make the basic findings necessary to support its ultimate conclusion. 12 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. Third. The evidence before the Commission. The question of the weight of the evidence was for the Commission and not for the court. The authority conferred upon the Commission by § 13 (4) of the Interstate Commerce Act, with respect to intrastate rates, is not different in its quality or effect from that given to the Commission to prevent other sorts of unjust discrimination against interstate commerce. That authority rests upon the constitutional power of the Congress, extending to interstate carriers as instruments of interstate commerce, to require that these agencies shall not be used in such manner as to cripple, retard, or destroy that commerce, and to provide for the execution of that power through a subordinate body. Shreveport Case, 234 U.S. 342, 351, 354, 355; Railroad Commission of Wisconsin v. Chicago, B. & Q. R. Co., supra. The purpose for which the Commission was created was to bring into existence a body which, from its special character, would be best fitted to determine, among other things, whether upon the facts in a given case there is an unjust discrimination against interstate commerce. United States v. Louisville & Nashville R. Co., 235 U.S. 314, 320. That purpose unquestionably extended to the prohibited discrimination produced by intrastate rates. In relation to such a discrimination, as in other matters, when the Commission exercises its authority upon due hearing, as prescribed, and without error in the application of rules of law, its findings of fact supported by substantial evidence are not subject to review. It is not the province of the courts to substitute their judgment for that of the Commission. Interstate Commerce Comm’n v. Louisville & Nashville R. Co., 227 U.S. 88, 100; Western Chemical Co. v. United States, 271 U.S. 268, 271; Virginian Railway Co. v. United States, 272 U.S. 658, 663; Assigned Car Cases, 274 U.S. 564, 580; Merchants Warehouse Co. v. United States, 283 U.S. 501, 508; Crowell v. Benson, 285 U.S. 22, 50, 51. 1 MISSOURI v. MISSOURI PAC. RY. CO. 13 Statement of the Case. We agree with the conclusion of the District Court that there was no lack of substantial evidence to support the Commission’s findings. The Commission’s determinations were “ without prejudice to the right of the authorities of the State of Florida or of any other interested party to apply in the proper manner for a modification of its (our) findings and order as to any specified intrastate rate on the ground that it is not related to interstate rates in such a way as to contravene the provisions of the Interstate Commerce Act.” 190 I.C.C. p. 600. Decree affirmed. MISSOURI v. MISSOURI PACIFIC RAILWAY CO. ET AL. APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF MISSOURI. No. 824. Jurisdictional statement submitted February 28, 1934.— Decided April 2, 1934. 1. Under the Act of February 13, 1925, this Court can not entertain a direct appeal from a decree of the District Court denying preference to a money claim of a State against a railway company in a receivership proceeding. P. 15. 2. The provision of the Judiciary Act of 1891, § 5, for direct appeal to this Court from the Circuit (later District) Court in cases involving the Constitution was deleted by the Act of 1925; and direct appeal in the cases of that class covered by Jud. Code, § 266, as amended, lies only where hearing in the District Court was before three judges, as provided in that section. P. 15. Appeal dismissed. The State in this case sought to support the appeal upon the ground that enforcement of its claim was supplementary to a decree in an earlier case, directed by this Court in the exercise of the jurisdiction by direct appeal then allowed by the Act of 1891. 14 OCTOBER TERM, 1933. Per Curiam. 292 U.S. Messrs. C. B. Allen and Lee B. Ewing filed the jurisdictional statement for appellant. No appearance for appellees. Per Curiam. This is a direct appeal to this Court from a decree of the District Court of the United States for the Eastern District of Missouri, entered May 6, 1933, in receivership proceedings, and allowing a claim of the State of Missouri for $7,000, as an unsecured obligation. The preference sought by the State was denied. The claim is founded upon alleged overcharges in railway passenger fares, exacted of the State of Missouri by the Missouri Pacific Railway Company during the years 1907 to 1913 inclusive, contrary to the provisions of the Missouri statute of 1907. In a suit to enjoin the enforcement of that statute, an interlocutory injunction was granted by the Circuit Court of the United States for the Western District of Missouri, and later a final decree made the injunction permanent. 168 Fed. 317. In 1913, on a direct appeal to this Court under authority of § 5 of the Judiciary Act of March 3, 1891 (c. 517, 26 Stat. 826, 827, 828; Jud. Code, 1911, § 238), the constitutional validity of the Missouri statute was sustained and the parties to the suit which embraced the Missouri Pacific Railway Company were directed to apply to the court below for the entry of an appropriate decree. Missouri Rate Cases, 230 U.S. 474; Knott N. Missouri Pacific Ry. Co., 230 U.S. 509, 511. Thereafter, the District Court of the United States for the Western District of Missouri entered a decree dissolving the injunction and dismissing the bill, and appointing a master to hear claims for ad interim overcharges. No such claim appears to have been filed in that court by this appellant. In 1915, in a suit in the District Court of the United States for the Eastern District of Missouri, a receiver was MISSOURI v. MISSOURI PAC. RY. CO. 15 13 Per Curiam. appointed for the Missouri Pacific Railway Company, and, in 1916, the State of Missouri intervened in that suit and presented the claim which resulted in the decree from which the present appeal is taken. Appellant contends that the decree should be treated as supplementary to that directed by this Court in Knott v. Missouri Pacific Ry. Co., supra, and as appealable directly to this Court because the decree in the Knott case was so appealable. Arkadelphia Milling Co. v. St. Louis S. W. Ry. Co., 249 U.S. 134, 142. The Court is of the opinion that it lacks statutory authority to entertain the appeal. The appeals in the Missouri Rate Cases and Knott v. Missouri Pacific Ry. Co., supra, were taken from decrees of the United States Circuit Court entered in 1909 and were authorized by those provisions of § 5 of the Judiciary Act of 1891, supra, providing for a direct appeal to this Court from the circuit (later, district) courts “ in any case that involves the construction or application of the Constitution of the United States . . . and in any case in which the constitution or law of a State is claimed to be in contravention of the Constitution of the United States.” By the Act of February 13, 1925 (c. 229, § 1, 43 Stat. 938), the provision for a direct appeal to this Court from the decree of a District Court in cases involving the construction or application of the Constitution of the United States, was deleted. While provision was retained for a direct review in this Court in cases involving an application for interlocutory injunction to prevent state officers from enforcing a state statute in violation of the Federal Constitution, this provision obtained only where the hearing in the District Court was before three judges, as provided by § 266 of the Judicial Code. The appeal is dismissed for the want of jurisdiction. Durousseau v. United States, 6 Cranch 307, 314; Ex parte McCardle, 7 Wall. 506, 513; Murdock v. Memphis, 20 16 OCTOBER TERM, 1933. Counsel for Parties. 292 U.S. Wall. 590, 620; The Francis Wright, 105 U.S. 381, 384-386; St. Louis, I. M. & S. Ry. Co. v. Taylor, 210 U.S. 281, 292; Luckenbach S.S. Co. v United States, 272 U.S. 533, 536, 537. Dismissed. GULLY, STATE TAX COLLECTOR, et al. v. INTERSTATE NATURAL GAS CO. APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF MISSISSIPPI. No. 651. Argued March 15, 1934.—Decided April 2, 1934. 1. A contract of tax exemption is not impaired by a later statute authorizing assessments of back taxes on taxable property and not specifying the property in question. P. 18. 2. A mere assessment for taxation is not a statute or an order of an administrative board or commission within the meaning of § 266, Judicial Code. P. 18. 3. A decree rendered by a District Court erroneously constituted of three judges in a case not covered by § 266, Jud. Code, is not reviewable on the merits by direct appeal to this Court; but such appeal having been taken, this Court has jurisdiction to enforce the limitations of that section; and, the time for appeal to the Circuit Court of Appeals having expired, this Court will reverse the decree and remand to the District Court for further proceedings to be taken independently of § 266. P. 19. 4 F.Supp. 697, reversed. Appeal by the State Tax Collector and State Tax Commission of Mississippi from a final decree of the District Court, constituted of three judges. The decree made permanent a preliminary injunction enjoining the appellants from making assessments of taxes. Mr. Edward W. Smith, with whom Mr. Greek L. Rice, Attorney General of Mississippi, and Mr. J. A. Lauderdale, Assistant Attorney General, were on the brief, for the Tax Collector, appellant. 16 GULLY v. INTERSTATE NAT. GAS CO. 17 Per Curiam. Mr. Weaver E. Gore filed a brief on behalf of the Tax Commission of Mississippi, appellant. Messrs. David Clay Brarrdette and Gamer W. Green, with whom Messrs. William A. Dougherty, Marcellus Green, Walter P. Armstrong, and Thomas A. McEachern were on the brief, for appellee. Per Curiam. Appellee brought this suit in the District Court of the United States for the Southern District of Mississippi seeking to enjoin state officers from proceedings to assess its property for the years 1927 to 1931, inclusive, upon the ground that the proposed assessments would impair the obligation of a contract by which the Company had secured an exemption from taxation. Chapter 138, Laws of Mississippi of 1922, and Chapter 172, Laws of 1926. The challenged proceedings were taken pursuant to a statute which authorized assessments in cases where it was ascertained that in past years property had escaped taxation. See Chapter 214, Laws of 1928; Chapter 291, Laws of 1932; Mississippi Code of 1930, §§ 3226 and 6992; Code Supp., 1933, §§ 3204, 3208. It appeared that on April 14, 1933, at the instance of the State Tax Collector, the State Tax Commission had made assessments of appellee’s property for prior years, subject, however, to objections to be made and filed with the Commission on or before May 23, 1933. Appellee, instead of availing itself of that opportunity, filed its bill in this suit on May 16, 1933. The District Judge, on an application for an interlocutory injunction, considering § 266 of the Judicial Code to be applicable, called to his assistance two other judges; and the District Court, as thus composed, granted an injunction restraining defendants from approving and enforcing the proposed assessments. Motions to dismiss 61745°—34-----2 18 OCTOBER TERM, 1933. Per Curiam. 292U.S. the bill for want of equity were denied. An agreed statement of facts was filed and on final hearing the District Court of three judges made the injunction permanent. The court stated in its findings that it had been agreed that the assessment order would certainly be made final. No substantial question was presented as to the validity of the statute authorizing assessments of property which had escaped taxation. The statute did not specify the property of appellee and it authorized assessments only of property that was taxable. A mere assessment is not a statute or an order of an administrative board or commission within the meaning of § 266 of the Judicial Code. Ex parte Williams, 277 U.S. 267, 272. The decision in City Bank Farmers’ Trust Co. v. Schnader, 291 U.S. 24, is not to the contrary. Hence, there was no occasion for constituting a court of three judges. As the case was not one within § 266, the merits cannot be brought to this Court by a direct appeal. Compare Smith v. Wilson, 273 U.S. 388, 389, 391; Healy v. Ratta, 289 U.S. 701. But, although the merits cannot be reviewed here in such a case, this Court by virtue of its appellate jurisdiction in cases of decrees purporting to be entered pursuant to § 266, necessarily has jurisdiction to determine whether the court below has acted within the authority conferred by that section and to make such corrective order as may be appropriate to the enforcement of the limitations which that section imposes. The case is analogous to those in which this Court, finding that the court below has acted without jurisdiction, exercises its appellate jurisdiction to correct the improper action. Assessors v. Osborne, 9 Wall. 567, 575; Mansfield, C. & L. M. Ry. Co. v. Swan, 111 U.S. 379, 387-389; Union & Planters’ Bank v. Memphis, 189 U.S. 71, 73, 74; Shawnee Sewerage Co. N. Steams, 220 U.S. 462, 471, 472; Piedmont & Northern Ry. Co. v. United States, 280 U.S. 469, 477, 478; Stratton n. St. Louis S. W. Ry. Co., 282 U.S. 10, 18. McGarrity v. bridge comm’n. 19 16 Per Curiam. In this instance, relief cannot be afforded by treating the decree of the District Court as appealable to the Circuit Court of Appeals, notwithstanding the participation of three judges (cf. Healy n. Ratta, 67 F. (2d) 554, 556), as the time for appeal to that Court has expired. In these circumstances, without passing upon the merits, the appropriate action is to reverse the decree below and to remand the cause to the District Court for further proceedings to be taken independently of § 266 of the Judicial Code. Reversed. McGarrity, administrator, v. Delaware RIVER BRIDGE COMMISSION et al. APPEAL FROM THE COURT OF COMMON PLEAS, NO. 1, PHILADELPHIA COUNTY, PENNSYLVANIA. No. 635. Argued March 13, 1934.—Decided April 2, 1934. Appeal dismissed for want of a substantial federal question properly presented to the state court, in a suit for damage caused by a change of street grade to a lessee of abutting property. The appeal was from a judgment of the Supreme Court of Pennsylvania, 311 Pa. 436, affirming a judgment of the Court of Common Pleas, to which latter court the record had been remitted when the appeal to this Court was taken. Mr. John Robert Jones for appellant. Mr. Harold D. Saylor, Deputy Attorney General of Pennsylvania, with whom Mr. Wm. A. Schnader, Attorney General, was on the brief, for appellees. Per Curiam.- This action was brought to recover damages alleged to have been caused by a change in the grade of a street which prevented access to appellant’s leasehold. The au 20 OCTOBER TERM, 1933. Syllabus. 292 U.S. thority of the State Commission which directed the change of grade was conferred by the state statute of July 9, 1919, P.L. 814. The state court held that the damage in question was merely consequential, that the allowance of recovery therefor was a matter of legislative grace and not of right, and that the statute as invoked by appellant was invalid as it did not conform to the requirements of the state constitution. 311 Pa. 436; 166 Atl. 895. No federal question was raised prior to a petition for rehearing in the Supreme Court of the State, which was denied without more. Appellant insists that questions under the Fourteenth Amendment were thus raised at the first opportunity. The petition for rehearing does not appear in the record. Nor does the record contain the pleadings, the evidence, or any findings by the state court upon the questions of fact involved. Appellant relies upon statements in the opinion of the state court but these fail to support appellant’s contentions. The appeal is dismissed for the want of a properly presented substantial federal question. Whitney v. California, 274 U.S. 357, 360, 362, 363; Dewey n. Des Moines, 173 U.S. 193, 199, 200; Transportation Co. v. Chicago, 99 U.S. 635, 641-643; Wabash R. Co. v. Defiance, 167 U.S. 88, 101. Dismissed. LARSEN v. NORTHLAND TRANSPORTATION CO. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE NINTH CIRCUIT. No. 614. Argued March 14, 1934.—Decided April 2, 1934. 1. When sued for damages in a state court, a shipowner is not obliged to submit to that court his claim for limitation of liability even when there is only one owner and one claim against him. P. 23. 2. The right to limit liability is not waived by failing to set it up in a state court, Id. LARSEN v. NORTHLAND TRANS. CO. 21 20 Opinion of the Court. 3. Statutory provisions for limitation of liability should be construed liberally to effectuate their purpose. P. 24. 4. A judgment is not conclusive of those matters as to which a party had the option to litigate but did not in fact do so. P. 25. 66 F. (2d) 651, affirmed. Certiorari, 290 U.S. 624, to review the reversal of a decree dismissing a petition to limit liability. Mr. Samuel B. Bassett for petitioner. Mr. Edward G. Dobrin, with whom Messrs. Cassius E. Gates and Claude E. Wakefield were on the brief, for respondent. Mr. Justice McReynolds delivered the opinion of the Court. For personal injuries, negligently inflicted, petitioner Larsen sought judgment in the Superior Court, King County, Washington, against respondent Transportation Company, alleged owner and operator of motor ship Norco. The complaint contained no reference to other claimants or creditors. The company made general denial; also set up contributory negligence and assumption of risk. It said nothing concerning any other creditor or claimant or desire to limit liability. After verdict, September 22,1932, judgment for $12,500 against the Company followed, October 1. It then petitioned the United States District Court for limitation of liability. The petition recited the circumstances leading to the judgment, prayed for an appraisement of the Company’s interest as charterer and the pending freight, monition against all persons claiming damages, and appropriate decree. Larsen moved to dismiss this petition because:—The facts alleged are not sufficient. “ There is only one possible claimant and one charterer of the motor vessel Norco and, therefore, the petitioner might have claimed and ob 22 OCTOBER TERM, 1933. Opinion of the Court. 292U.S. tained the advantage and benefit of the limitation of liability statute by proper pleading in the action which has been determined in the Superior Court of the State of Washington for King County.” “ The petitioner failed and refused to claim the advantage and benefit of the limitation of liability statute, in said Superior Court of the State of Washington, and thereby waived its right to claim and obtain the advantage and benefit of said statute.” The trial court sustained this motion and dismissed the petition; the Circuit Court of Appeals reversed. The cause is here by certiorari granted upon Larsen’s application, which set out the following specifications of error:— Langnes v. Green, 282 U.S. 531, and Ex parte Green, 286 U.S. 437, were misconstrued; it was wrongly held that the District Court sitting in admiralty has exclusive jurisdiction to determine all questions involved in a proceeding for the limitation of liability where there is only one claimant and only one owner, and where the owner’s right to limit liability is not disputed. It was wrongly held that the state court had no jurisdiction to entertain the claim of the shipowner for limitation of liability where there is only one claimant and only one owner, and where the owner’s right to limit liability was not disputed. Also, that in such cases, the shipowner was under no obligation to submit his claim to limited liability to the state court, and the judgment of the state court was not res judicata as to all issues which might have been submitted for its decision. In substance the argument here presented for petitioner is this: Prior to Langnes v. Green and Ex parte Green, decisions by inferior federal courts undoubtedly sustained the view that, while the state court might have determined the value of respondent’s interest in vessel and pending freight and limited liability thereto, it was not LARSEN v. NORTHLAND TRANS. CO. 23 20 Opinion of the Court. obligatory upon it to claim such limitation there, and after judgment for damages the right remained to institute limitation proceedings in the federal court. But, those opinions have affirmed another view, and clearly establish that the state court had jurisdiction and was competent finally to consider all necessary facts and limit the liability. Consequently, after the adverse judgment respondent could not seek limitation elsewhere—it was bound to present the whole matter to the state court. We think it true to say that before Langnes v. Green and Ex parte Green the commonly approved doctrine permitted a shipowner, even when there was only one claimant, to seek limitation of liability in a federal court after judgment against him for damages by a state court. And, unless those cases are to the contrary, that rule must apply here. White v. Island Transp. Co., 233 U.S. 346; In re East River Co., 266 U.S. 355; The S. A. McCaulley, 99 Fed. 302; Re Old Dominion S.S. Co., 115 Fed. 845; Gleason v. Dufiy, 116 Fed. 298; The Ocean Spray, 117 Fed. 971; Re Starin, 124 Fed. 101; The City of Boston, 159 Fed. 257; The Hoffmans, 171 Fed. 455; Re P. Sanford Ross, Inc., 196 Fed. 921; Monongahela River Consol. Co. v. Hurst, 200 Fed. 711; Hughes on Admiralty, § 172; Benedict on Admiralty (4th ed.) § 520. In Langnes v. Green the injured employe brought an action for damages in the state court. Pending that, the employer instituted proceedings in the federal court to limit liability. The injured man was the only claimant and cause existed for regarding the limitation proceeding as intended to defeat trial by jury. This Court held, in the circumstances, the federal court should not have enjoined the state court proceeding; but that it should have retained jurisdiction. When thereafter it appeared—Ex parte Green—that in the state court the injured party insisted on denying the owner’s right to limitation, we said 24 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. the federal court properly enjoined further proceedings. Neither of these causes supports the suggestion that when sued for damages in a state court a shipowner must at his peril claim limitation of liability in that suit. Carlisle Packing Co. v. Sandanger, 259 U.S. 255, replying to alleged error because the trial court refused to charge as requested, said— “ Petitioner asked an instruction that § 4283 of the Revised Statutes applied, and that under it the verdict could not exceed the value of the vessel. In a state court, when there is only one possible claimant and one owner, the advantage of this section may be obtained by proper pleading. The Lotta, 150 Fed. 219, 222; Delaware River Ferry Co. v. Amos, 179 Fed. 756. Here the privilege was not set up or claimed in the answer, and it could not be first presented upon request for a charge to the jury.” [p. 260.] This lends no support to the view that, sued in a state court for damages, the shipowner must set up his claim for limitation; otherwise, it is waived. Statutory provisions for limitation of liability should be construed liberally in order to effectuate their beneficent purposes. Providence & N. Y. S.S. Co. v. Hill Mfg. Co., 109 U.S. 578, 588; Butler v. Boston & Savannah S.S. Co., 130 U.S. 527, 549, 550; LaBourgogne, 210 U.S. 95, 121; Capitol Transportation Co. v. Cambria Steel Co., 249 U.S. 334; Evansville & B. G. Packet Co. v. Chero Cola Bottling Co., 271 U.S. 19, 21; Hartford Accident & Ind. Co. v. Southern Pacific Co., 273 U.S. 207, 214; Flink v. Paladini, 279 U.S. 59. This view does not harmonize with the suggestion that to obtain limitation a shipowner must initiate steps to that end before any liability has been made to appear. The Benefactor, 103 U.S. 239. While in certain circumstances the shipowner may ask limitation in the state court, he is not compelled so to do. 20 GAY v. RUFF. Syllabus. 25 Here the shipowner recognized the judgment; said nothing against its validity. The proceedings in the two courts looked towards entirely different ends. The established rule in this Court is that if, in a second action between the same parties, a claim or demand different from the one sued upon in the prior action is presented, then the judgment in the former cause is an estoppel “ only as to those matters in issue or points controverted, upon the determination of which the finding or verdict was rendered.” Bates v. Bodie, 245 U.S. 520, 526; United States v. Moser, 266 U.S. 236, 241; United Shoe Machinery Corp. v. United States, 258 U.S. 451, 458. “ While a defendant must bring forward all purely defensive matter, he is not barred by a former judgment against him as to any matter which he was not bound to present and which was not in fact litigated. A judgment is not conclusive of those matters as to which a party had the option to but did not in fact put in litigation in the action.” Freeman on Judgments, 5th ed., § 786. The judgment of the Circuit Court of Appeals is Affirmed. GAY, RECEIVER, v. RUFF. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE FIFTH CIRCUIT. No. 663. Argued February 12, 13, 1934.—Decided April 2, 1934. 1. A judgment of the Circuit Court of Appeals directing that a case be remanded by the District Court to a state court from which it was removed, is reviewable in this Court by certiorari. P. 28. 2. When a reading of a statutory amendment with the old context and with other statutes bearing on the subject raises a doubt as to whether its literal meaning was intended, resort may be had to the legislative history. P. 31. 3. Section 33 of the Judicial Code, providing for removal before trial or final hearing from state to federal courts of civil and crimi- 26 OCTOBER TERM, 1933. Counsel for Parties. 292 U.S. nal actions commenced against revenue officers on account of acts done by them under color of their office or under any revenue law, etc., or commenced against any person for or on account of anything done by him while an officer of either House of Congress in the discharge of his official duty in executing any order of such House, was amended in 1916 to include any civil or criminal action against “any officer of the courts of the United States for or on account of any act done under color of his office or in the performance of his duties as such officer.”—Held: That the amendment does not embrace an action against the receiver of a railroad appointed by a federal court, where the purpose of the action is merely to recover damages for personal injuries resulting from negligence of the defendant’s employees in operating a train. Barnette v. Wells Fargo Bank, 270 U.S. 438, distinguished. Pp. 32-39. 4. Prior to 1916, § 33 was applicable only when the person defending caused it to appear that his defense was that in doing the acts charged he was doing no more than his duty under the revenue laws or the orders of Congress. The amendment of 1916 is to be construed in pari materia. Pp. 33, 35. 5. If the amendment were construed as authorizing removal in the case at bar it would introduce into § 33 a wholly different ground of jurisdiction; would in effect repeal by implication legislation which deals expressly with suits against receivers; and depart from the established trend of legislation limiting the jurisdiction of the federal courts. P. 35. 67 F. (2d) 684, affirmed. Certiorari, 291 U.S. 654, to review a judgment reversing a judgment recovered in the District Court, 3 F.Supp. 264, against the receiver of a railroad in an action for personal injuries, and directing that the cause be remanded to a state court from which the receiver had removed it. Mr. Archibald B. Lovett, with whom Mr. Robert M. Hitch was on the brief, for petitioner. Mr. Thomas W. Hardwick for respondent. By leave of Court, Messrs. W. R. C. Cocke and James F. Wright filed a brief on behalf of the Receivers of the Seaboard Air Line Railway Company, as amici curiae. GAY v. RUFF. 27 25 Opinion of the Court. Mr. Justice Brandeis delivered the opinion of the Court. Ruff brought in a state court of Georgia this suit against Gay, as receiver of the Savannah & Atlanta Railway, appointed by the federal court for southern Georgia sitting in equity. The cause of action alleged is the homicide of plaintiff’s minor son as a result of the negligent operation of a train by employees of the receiver. Before trial in the state court, the receiver duly filed in the appropriate federal court a petition for removal and certiorari, under the amendment made by Act of August 23, 1916, c. 399, 39 Stat. 532 to Judicial Code § 33, which inserted therein the clause: 11 or against any officer of the courts of the United States for or on account of any act done under color of his office or in the performance of his duties as such officer.” 1 The federal court denied a motion to remand, 3 F. Supp. 264; and thereafter dismissed the suit, entering a xThe section as so amended reads: “When any civil suit or criminal prosecution is commenced in any court of a State against any officer appointed under or acting by authority of any revenue law of the United States now or hereafter enacted, or against any person acting under or by authority of any such officer, on account of any act done under color of his office or of any such law, or on account of any right, title, or authority claimed by such officer or other person under any such law, or is commenced against any person holding property or estate by title derived from any such officer and affects the validity of any such revenue law, or against any officer of the courts of the United States for or on account of, any act done under color of his office or in the performance of his duties as such officer, or when any civil suit or criminal prosecution is commenced against any person for or on account of anything done by him while an officer of either House of Congress in the discharge of his official duty in executing any order of such House, the said suit or prosecution may at any time before the trial or final hearing thereof be removed for trial into the district court next to be holden in the district where the same is pending upon the petition of such defendant to said district court in the following manner: ” [The amendment of 1916 is indicated by the italics.] 28 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. final judgment for want of prosecution. The Circuit Court of Appeals for the Fifth Circuit reversed that judgment, with direction to set aside the dismissal and remand the cause to the state court. 67 F. (2d) 684. Because of conflict of decisions,2 certiorari was granted to determine whether the amendment to Judicial Code § 33 authorizes a receiver of a railroad appointed by a federal court sitting in equity to remove from a state court an action brought against him as receiver for damages resulting from the negligent operation of a train by his employees. First. The respondent raises the preliminary question whether this Court has jurisdiction to review the action of the Circuit Court of Appeals. The contention is that this Court lacks jurisdiction to review a judgment directing the remand to a state court, because Judicial Code § 28, declares: “ Whenever any cause shall be removed from any State court into any district court of the United States, and the district court shall decide that the cause was improperly removed, and order the same to be remanded to the State court from whence it came, such remand shall be immediately carried into execution, and no appeal or writ of error from the decision of the district court so remanding such cause shall be allowed: ...” 3 2 Newell v. Byram, 26 F. (2d) 200, 202 (C.CA. 8th); and following cases in district courts: Matarazzo n. Hustis, 256 Fed. 882, 887 (N.D.N.Y.); American Locomotive Co. v. Histed, 18 F. (2d) 656 (W.D.Mo.); Berens v. Byram, 26 F. (2d) 953 (D.So.Dak.); Elliott V. Wheelock, 34 F. (2d) 213. Compare Jones v. McGill, 46 F. (2d) 334 (D.N.H.); Snider v. Sand Springs Ry., 62 F. (2d) 635, 636 (C.CA. 10th); Knapp n. Byram, 21 F. (2d) 226 (D.Minn.). See also Barnette v. Wells Fargo Bank, 270 U.S. 438, 441. 3 Prior to the Act of March 3, 1875, c. 137, § 5, 18 Stat. 470, 472, an order of the circuit court remanding a cause to the state court could not be reviewed by this court on appeal or writ of error because it was not a final judgment; but it could be reviewed by mandamus. Chicago & Alton R. Co. v. Wiswatl, 23 Wall. 507. By the Act of 25 GAY v. RUFF. Opinion of the Court. 29 This provision, enacted in 1887, was broadly construed by this Court as prohibiting review of an order of remand, directly or indirectly, by any proceeding. The prohibition was applied to appeals from, and writs of error to, the federal circuit [and later district] court; to writs of error to a state court after final judgment there; and to mandamus in this Court.4 In German National Bank v. Speckert, 181 U.S. 405, 409, where the trial court had Ke-fused to remand the case to the state court and the Circuit Court of Appeals had reversed that judgment and ordered a remand, this Court held that it was without jurisdiction to review the latter’s action. While adverting in support of its conclusion to the broad construction which had been given to the above-quoted prohibition, the Court ruled there that the fact that an order of remand is not a final judgment precluded its review by writ of error.® 1875, express provision was made to review the remand by appeal or writ of error. That provision was repealed by Act of March 3, 1887, c. 373, § 2, 24 Stat. 552, 553 (corrected by Act of August 13, 1888, c. 866, § 2, 25 Stat. 433, 435), which enacted the provision embodied in Judicial Code § 28. * Morey v. Lockhart, 123 U.S. 56, 58; In re Pennsylvania Co., 137 U.S. 451; McLaughlin Bros. v. Hallowell, 228 U.S. 278; Yankaus v. Feltenstein, 244 U.S. 127; Ex parte Matthew Addy S.S. Corp», 256 U.S. 417. Compare Pickwick-Greyhound Lines, Inc. v. Shattuck, 61 F. (2d) 485. s The contention made that the prohibition in § 28 does not extend to cases under § 33, because of the saving clause in § 5 of the Acts of 1887 and 1888, appears to be unfounded. See Cole v. Garland, 107 Fed. 759; dismissed on appeal, 183 U.S. 693. Compare Kentucky v. Powers, 139 Fed. 452. Moreover, the saving clause of § 5 of the Acts of 1887 and 1888 was in terms applicable to Revised Statutes §§ 641, 642, 643; and those sections were repealed expressly by the Judicial Code. Their substance was carried into §§ 31, 32, 33, respectively, of the Judicial Code; but § 5, though not expressly repealed, was nowhere carried into the Judicial Code. See, also, Index of Federal Statutes (1934), p. 1297, Footnote 44, which states 30 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. But by reason of the extensive power to issue writs of certiorari which the Circuit Court of Appeals Act of 18916 thereafter gave to this Court, it may now review the action of the circuit court of appeals in directing the remand of a cause to the state court. That Act provided that in any case in which the judgment of the circuit court of appeals is made final, “it shall be competent for the Supreme Court to require, by certiorari or otherwise, any such case to be certified to the Supreme Court for its review and determination with the same power and authority in the case as if it had been carried by appeal or writ of error to the Supreme Court.” In Forsyth v. Hammond, 166 U.S. 506, 512, it was held that the power given was unaffected by the condition of the case as it exists in the circuit court of appeals; that the power may be exercised before, as well as after, any decision by that court and irrespective of any ruling or determination therein; and that the sole essential of this Court’s jurisdiction to review is that there be a case pending in the circuit court of appeals. The jurisdiction to review interlocutory orders was exercised in American Construction Co. v. Jacksonville, T. & K. W. Ry. Co., 148 U.S. 372; Denver v. New York Trust Co., 229 U.S. 123, 133; Spiller v. Atchison, T. & S. F. Ry. Co., 253 U^. 117, 121; and Du Pont Powder Co. v. Masland, 244 U.S. 100. And in The Three Friends, 166 U.S. 1, 49, it was held that this Court could review a case pending in, and not yet decided by, the circuit court of appeals, with the same power and authority as if it had been carried here by appeal or writ of error “ that is, as if it had been brought directly from the District or Circuit Court.” In Chicago, B. & Q. Ry. Co. n. Willard, 220 U.S. 413, decided under the that by reason of the express repeal of §§ 1-4, 6, 7, of the Act of 1887 by the Judicial Code, “ Sec. 5 can have no force independent of the remainder of the act.” 8 March 3, 1891, c. 517, § 6, 26 Stat. 826, 828. 25 GAY v. RUFF. Opinion of the Court. 31 Act of 1891, this Court, without questioning its power, reviewed the judgment of the circuit court of appeals reversing a judgment of dismissal and ordering a remand. Nor has the existence of the power been questioned by the Court since.7 Second. The contention that thé removal is authorized rests upon the amendment made by the Act of 1916 to Judicial Code § 33. The argument for removal is that, since the receiver is an “ officer ” of the federal court and an action for damages resulting from the negligent operation of a train by his employees is a suit 11 for or on account of” an “act done in the performance of his duties as such officer,” the removal here in question is directed in such plain words that there is no room for any other construction of the statute. But the amendment may not be isolated from its context. It must be read in the light of the then existing provisions of § 33 ; of the then existing statute conferring the right to bring in a state court suits against receivers; of the statute denying removal from state to federal courts of a large class of cases similar in character to that before us; and of other legislation restricting the jurisdiction of federal trial courts. When the clause is so read, there arises at least a doubt whether Congress intended to give to the words inserted in § 33 the comprehensive meaning attributed to them. That doubt makes it appropriate to examine the history of the amendment, Binns v. United States, 194 U.S. 486, 495; United States v. St. Paul, M. Æ M. Ry., 247 U.S. 310, 318. And such examination makes it clear that Congress did not authorize the removal of this case. ’ The Act of February 13, 1925, c. 229, § 1, 43 Stat. 938, amending § 240 (a) of the Judicial Code, gives in terms the power to review by writ of certiorari “ either before or after a judgment or decree ” of the lower court, “ with the same power and authority and with like effect, as if the cause had been brought there by unrestricted writ of error or appeal.” 32 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. Judicial Code § 33 enables a defendant in a state court to remove the case before trial or final hearing there, and thus secure an adjudication by a federal court of first instance of the issues of fact as well as law involved in his justification under the federal statutes. Tennessee v. Davis, 100 U.S. 257, 263. The origin of that section is § 3 of the 11 Force Act,” March 2, 1833, c. 57, 4 Stat. 632, 633—the nation’s reply to South Carolina’s threat of “ nullification.” The purpose of the Force Act was to prevent paralysis of operations of the federal government. The special aim of § 3 was to protect those engaged in the enforcement of the federal revenue law from attack by means of prosecutions and suits in a state court for violation of state law. This removal provision was extended by Act of March 3, 1875, c. 130, § 8, 18 Stat. 371, 401, to suits against “ any person for or on account of anything done by him while an officer of either House of Congress in the discharge of his official duty in executing any order of such House.” These provisions only are embodied in Judicial Code § 33.8 The scope of the section was thus 8 There had been several other acts amending § 3 of the Force Act and § 643 of the Revised Statutes which embodied it. While § 3 of the Act of 1833 provided in terms for removal where the suit is against “ any officer of the United States, or other person, for or on account of any act done under the revenue laws of the United States, or under color thereof,” the title of the Act referred only to collection of duties on imports. Doubtless for this reason, it was deemed desirable in the Internal Revenue Act of June 30, 1864, c. 173, § 50, 13 Stat. 241, to extend the operation of the 1833 Act in terms to internal revenue officers and those acting under the internal revenue laws. Compare Horntkall v. Collector, 9 Wall. 560, 561. By Act of July 13, 1866, c. 184, § 68, 14 Stat. 98, 171, that provision was repealed; and by § 67 of the same Act this removal provision was made available to any officer acting under the internal revenue laws or “ against any person acting under or by authority of such officer.” By Act of February 28, 1871, c. 99, § 16, 16 Stat. 433, 438, the provision was extended to those engaged in enforcing laws for the protection of the elective franchise. In Revised Statutes § 643 this 25 GAY v. RUFF. Opinion of the Court. 33 limited to cases arising out of the enforcement of the revenue laws or of some order of either House of Congress. And it applied in those cases only when the person defending caused it to appear that his defense was that in doing the acts charged he was doing no more than his duty under those laws or orders.9 To appreciate the exceptional character of the removal privilege conferred by § 33, that section should be compared with § 28. Of the two, § 33 alone provides for removal of a criminal case. Removal of civil causes is provided for in both § 33 and § 28 of the Judicial Code. But the civil cases to which § 33 is applicable are few, while § 28 applies to many. Under the latter, any officer of a federal court can remove a suit brought against him on account of any act done under color of his office or in the performance of his duties as such officer, because § 28 applies to “ any suit of a civil nature, at law or in equity, arising under the Constitution or laws of the United States, ... of which the district courts of the United States are given original jurisdiction.” But in order to avail of the removal privilege conferred by § 28 in respect of a suit arising under the Constitution or laws of the United States, the facts showing that the suit is of provision appears; but by Act of February 8, 1894, c. 25, 28 Stat. 36, most of Title XXVI of the Revised Statutes relating to elective franchises was repealed and with it that part of § 643 relating to the elective franchise. It was held in Maryland n. Soper (No. 1), 270 U.S. 9, that by the National Prohibition Act, October 28, 1919, c. 85, Title II, § 28, 41 Stat. 316, this removal provision was extended to prohibition officers or agents engaged in the enforcement of that act. See also Colorado v. Symes, 286 U.S. 510, 517. 9 Maryland v. Soper (No. 1), 270 U.S. 9, 34; Maryland v. Soper (No. 2), 270 U.S. 36; Salem & L. Co. v. Boston & L. Co., Fed. Cas. No. 12249; People’s Bank v. Goodwin, 162 Fed. 937; Application of Shumpka, 268 Fed. 686; Florida v. Huston, 283 Fed. 687; Ford Motor Co. v. Automobile Ins. Co., 13 F. (2d) 415. 61745°—34-------3 34 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. that class must appear by the complaint in the state court;10 the amount in controversy must exceed $3000, except in those cases where jurisdiction is conferred regardless of amount;11 the petition for removal must be filed in the state court before the time fixed for answer there; and it must be accompanied by a bond. On the other hand, where § 33 is applicable, the conditions for removal are much more liberal. Removal may be had of the civil suit, at any time before trial or final hearing12 in the state court, regardless of the amount involved and without giving any bond, by filing the appropriate papers in the federal court.13 And the facts showing that the suit is of a removable class need not appear by the complaint in the state court. Third. The case here sought to be removed has none of the characteristics of those which were removable under Judicial Code § 33 before the 1916 amendment. This suit is under the law of Georgia; and was brought as of right in the state court. Erb v. Morasch, 177 U.S. 584. It does not relate to any operation of the federal government. The defendant receiver does not justify under any judgment or order of a federal court. Nor does the suit present otherwise any federal question. Its only relation to the federal law is that the receiver sued was appointed by a federal court, in the exercise of its diversity of citizenship jurisdiction. The fact that the defendant is a federal receiver does not make the cause removable “ upon the ground that it was a case arising under the Constitution and laws of the United States.” Gableman v. Peoria, D. & E. Ry., 179 U.S. 335. 19 Walker v. Collins, 167 U.S. 57; Mayo v. Dockery, 108 Fed. 897. 11 Compare Bock v. Perkins, 139 U.S. 628; Feibelman v. Packard, 109 U.S. 421; Lawrence v. Norton, 13 Fed. 1; Eighmy n. Poucher, 83 Fed. 855. 12 In re Duane, 261 Fed. 242. 18 Virginia v. Paul, 148 U.S. 107, 115. 25 GAY v. RUFF. Opinion of the Court. 35 If the amendment of 1916 is construed as merely affording the protection of removal to officers of the court engaged in executing its judgments or orders, it is strictly in pari materia with the other removal provisions of § 33. If it is construed so as to authorize removal of the case at bar, it introduces a wholly different ground of jurisdiction; in effect, repeals by implication legislation which deals expressly with suits against receivers; and departs from the established trend of legislation limiting the jurisdiction of the federal trial courts. I . Congress provided in 1887 that the fact that the defendant was a federal receiver should not preclude the maintenance of an action against him in a state court.14 That provision had recently been embodied in § 66 of the Judicial Code which declares: “ Every receiver or manager of any property appointed by any court of the United States may be sued in respect of any act or transaction of his in carrying on the business connected with such property, without the previous leave of the court in which such receiver or manager was appointed; . . In the thirty-nine years since its enactment there had not been, so far as appears, any attempt to repeal that law. It is in harmony with the trend of legislation providing that the federal character of the litigant should not alone confer jurisdiction upon a federal court—a policy acted upon in case of national banks as early as 188215 and which had been extended in 1915 to railroads having federal charters.16 14 Act of March 3, 1887, c. 373, § 3, 24 Stat. 552, as corrected by Act of August 13, 1888, c. 866, § 3, 25 Stat. 433, 436. “Act of July 12, 1882, c. 290, § 4, 22 Stat. 162, 163; Act of March 3,1887, c. 373, § 4, 24 Stat. 552, 554; Act of August 13, 1888, c. 866, § 4, 25 Stat. 433, 436. 18 Act of January 28, 1915, c. 22, § 5, 38 Stat. 803, 804. This policy has persisted since. By Act of February 13, 1925, c. 229, § 12, 43 36 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. II. Congress had by the Federal Employers' Liability Act17 provided that suits for injuries resulting from negligence in the operation of a railroad, although arising under a federal statute, could be brought in a state court, and if so brought, could not be removed to the federal court. III. Congress had by recent legislation manifested its adherence to the policy, inaugurated in 1887, of restricting the jurisdiction of the federal trial court. Thus, the prescribed jurisdictional amount, which, after standing for nearly a century at $500 had been raised to $2,000 in 1887,18 and was increased to $3,000 in 1911.19 Moreover, in 1914 the requirement of this jurisdictional amount was Stat. 936, 941, federal incorporation as a ground of federal jurisdiction is abolished except where the United States holds more than one-half of the stock. ’’Act of April 22, 1908, c. 149, § 6, 35 Stat. 65, 66, as amended by Act of April 5, 1910, c. 143, § 1, 36 Stat. 291. The policy of abridging the jurisdictions has persisted since. Actions against the Director General of Railroads under § 10 of the Federal Control Act, March 21, 1918, c. 25, 40 Stat. 451, 456, or against the Agent designated by the President pursuant to § 206a of Transportation Act, 1920, February 28, 1920, c. 91, 41 Stat. 456, 461, for injuries, whether the cause of action is based on the Federal Employers Liability Act, or a state statute or the common law, may not be removed even if there is diversity of citizenship. Davis v. Slocomb, 263 U.S. 158, 160. The lower courts have divided on whether the 1916 amendment repeals this provision by the Employers Liability Act pro tanto. That it has: Elliott v. Wheelock, 34 F. (2d) 213; contra, Knapp v. Byram, 21 F. (2d) 226. Likewise, removal is prohibited of actions by seamen under § 33 of the Merchant Marine Act of June 20, 1920, c. 250, 41 Stat. 988, Engel v, Davenport, 271 U.S. .33, 38; Herrera n. Pan-American Petroleum & Transport Co., 300 Fed. 563. And by Act of May 27, 1933, c. 38, § 22 (a), 48 Stat. 74, 86, suits brought in a state court under the Securities Act may not be removed. 18 Compare Judiciary Act of September 24, 1789, c. 20, § 12, 1 Stat. 79; Act of March 3, 1887, c. 373, § 1, 24 Stat. 552; Act of August 13, 1888, c. 866, § 1, 25 Stat. 433. 19 Act of March 3, 1911, c. 231, § 24 (1), 36 Stat. 1087, 1091. 25 GAY v. RUFF. Opinion of the Court. 37 applied to the removal of actions under the Interstate Commerce Act against railroads for injury to or loss of property, although theretofore federal courts had jurisdiction regardless of the amount in controversy.20 Fourth. There is no expression in the Act of 1916, or in the proceedings which led to its enactment, of an intention to repeal any existing law or to depart from the long-existing policy of restricting the federal jurisdiction. Whether there was any special occasion for the amendment does not appear. The bill was passed in each House as introduced, without amendment, without debate and without a record vote.21 The legislation was not required in order to assure to officers of the federal courts when engaged in enforcing the laws or orders to which § 33 related the same protection which it then afforded to other persons. Marshals executing revenue laws had, for more than fifty-eight years, repeatedly availed themselves of this removal provision.22 But an extension of the removal 80 Act of January 20, 1914, c. 11, 38 Stat. 278, amending § 28 of the Judicial Code. “The amendment was introduced in the House on April 6, 1916, as HR. No. 14299. It was referred to the House Committee on the Judiciary, which in turn referred it to a subcommittee. The latter reported it favorably to the full Committee, which in turn reported it favorably to the House. (64th Cong., 1st Sess., H.Rept. No. 776.) As far as appears there were no hearings before the subcommittee or the committee. It was placed on the Calendar For Unanimous Consent and passed without debate or record vote. 53 Cong.R. 9442. In the Senate it went through substantially the same course. The calendar of the Judiciary Committee of the Senate shows no record of a hearing. It was reported out favorably without a printed report; was considered in the Senate sitting as a Committee of the Whole; was reported by it without amendment; and was passed without debate or record vote. 53 Cong.R. 12167-12168. No reference to the legislation, either as proposed or as enacted, appears in the Annual Reports of the Attorney General. “See Davis v. South Carolina, 107 U.S. 597; Georgia v. O’Grady, 3 Woods 496;1 Georgia v. Bolton, 11 Fed. 217; North Carolina v. Gosnell, 74 Fed. 734; Carico v. Wilmore, 51 Fed. 196; Delaware v. Emerson, 8 Fed. 411. 38 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. provision might have been desired so as to make it apply to those engaged in executing any judgment or order of a federal court. For any order of the court might arouse opposition to those engaged in enforcing it and result in retaliation by means of proceedings instituted in a state court. The only method of securing in such other cases an adjudication in the federal court before trial in the state court was then by habeas corpus; and that remedy was not always adequate.23 The report of the Judiciary Committee of the House which recommended the adoption of the 1916 amendment establishes that such was the sole purpose of Congress. It states:24 11 The purpose of the proposed amendment is to extend the provisions of section 33 uniformly to officers of the courts of the United States, not only in cases arising under the revenue laws, but in all cases, giving to them the same protection in all cases now given to officers acting under the revenue laws, and to officers of Congress. The omission of such a provision from the original act gives rise to certain incongruities and creates a want of uniformity in the application of the law; for example: a United States 28Among other reasons, because the relief on habeas corpus is to some extent discretionary. Since the officer if successful upon habeas corpus may be released unconditionally without a jury trial, the federal court may be unwilling to give relief unless the justification is clear upon the preliminary showing. Compare United States n. Lewis, 200 U.S. 1; Whitten v. Tomlinson, 160 U.S. 231, 240; In re Miller, 42 Fed. 307; Walker v. Lea, 47 Fed. 645; In re Marsh, 51 Fed. 277; In re Matthews, 122 Fed. 248. 24 H.R. No. 776, 64th Cong., 1st Session. The rest of the report is devoted to an elaboration of these propositions. As indicating a lack of intention to extend broadly the right of removal in civil suits against an officer of the court, it states: “In a civil suit against a Federal marshal on account of acts done by him as such marshal, such suit is now removable to the federal courts though no revenue law is involved (Bock n. Perkins, 139 U.S. 628 (1891) and Wood v. Drake, 70 Fed. 881 (1895)).” 25 GAY v. RUFF. Opinion of the Court. 39 marshal engaged in the execution of a warrant or other process of the United States court, in a case which involves the prosecution of a violation of the revenue laws, is entitled to the right of removal, now conferred by this statute. Davis v. South Carolina, 107 U.S. 597 (1882). The same marshal engaged in executing process of the same court in which the revenue law is not involved is not entitled to the right of removal. This creates an anomalous condition which cannot be justified upon any line of reasoning. “ The statute, with the proposed amendment, does not extend in any degree the jurisdiction or the powers of the courts of the United States. It merely provides a more orderly method of procedure, which enures as much, in fact more, to the benefit of the States than to the benefit of the United States, because it substitutes for the writ of habeas corpus the right of removal, so that instead of a summary discharge under the habeas corpus proceedings the amendment provides for trial before a court and jury.” The action of the Circuit Court of Appeals in reversing the judgment of the District Court and directing that the cause be remanded to the state court was proper. A suit for damages for an injury resulting from negligent operation of a train is not, within the meaning of Judicial Code § 33 as amended, a suit “ for or on account of any act done under color of his [the receiver’s] office.” The receiver here sued, although an officer of the court operating the railroad pursuant to the order appointing him, is not an officer engaged in enforcing an order of a court. The operation of trains through his employees is a duty imposed upon the receiver; but he is not entrusted in his capacity as receiver with the service or execution of any process of the court. Nor is there reason to assume that he will in this case rest his defense on his duty to cause the train to be operated. 40 OCTOBER TERM, 1933. Syllabus. 292 U.S. In Barnette v. Wells Fargo Bank, 270 U.S. 438, 441, the record does not disclose on what ground removal was sought and allowed in the District Court or the jurisdiction was sustained by the Circuit Court of Appeals. Enough appears, however, to show that the case was wholly unlike that now before us. Affirmed. A. MAGNANO CO. v. HAMILTON, ATTORNEY GENERAL OF WASHINGTON, et al. APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE WESTERN DISTRICT OF WASHINGTON. No. 589. Argued March 7, 1934.—Decided April 2, 1934. A statute of the State of Washington lays a tax of fifteen cents per pound on all butter substitutes, including oleomargarine, sold within the State. Held: 1. In respect of the equal protection clause it is obvious that the differences between butter and oleomargarine are sufficient to justify their separate classification for purposes of taxation. P. 43, 2. The requirement that a tax shall be for a public purpose has regard to the use to be made of the revenue derived from the tax. Its purpose may be public, although the motive behind it may have been to benefit one industry (dairying) by burdening another (oleomargarine). P. 43. 3. The statute in question imposes no burden on interstate commerce. P. 43. 4. The effect on an individual of an interference with federal taxing power, caused by destruction of a potential source of federal taxes through excessive state taxation, is too speculative, indirect and remote to afford the individual any equitable standing in a suit to enjoin the state tax on the ground of such interference. P. 43. 5. In general, the due process clause of the Fourteenth Amendment, applied to the States, like the due process clause of the Fifth Amendment, applied to Congress, is not a limitation upon the taxing power. P. 44. 6. The due process clause applies if the Act be so arbitrary as to compel the conclusion that it does not involve an exertion of 40 MAGNANO CO. v. HAMILTON. Opinion of the Court. 41 the taxing power, but constitutes, in substance and effect, the direct exertion of a different and forbidden power, as, for example, the confiscation of property. P. 44. 7. Collateral purposes or motives of a legislature in levying a tax of a kind within the reach of its lawful power are matters beyond the scope of judicial inquiry. P. 44. 8. A tax otherwise within the lawful power of a State can not be adjudged contrary to due process merely because its enforcement may or will result in restricting or even destroying particular occupations or businesses. P. 44. 2 F. Supp. 414, 417, affirmed. Appeal from a decree dismissing the bill in a suit to enjoin collection of an excise tax on the business of selling oleomargarine within the State. Mr. Otto B. Rupp, with whom Messrs. Alfred J. Schweppe, A. M. Davis, and W. R. Brown were on the brief, for appellant. Mr. E. P. Donnelly, Assistant Attorney General of Washington, and Mr. Philip D. Macbride, with whom Mr. G. W. Hamilton, Attorney General, was on the brief, for appellees. Mr. Justice Sutherland delivered the opinion of the Court. Appellant assails as invalid a statute of the State of Washington which levies an excise tax of fifteen cents per pound on all butter substitutes sold within the state. Every distributor of such butter substitutes is required to file a duly acknowledged certificate with the Director of Agriculture, containing the name under which the distributor is transacting business within the state and other specified information. Sale of any butter substitute is forbidden until such certificate is furnished. The distributor must render to the Director of Agriculture, on the fifteenth day of each month, a sworn statement of the 42 OCTOBER TERM, 1933. Opinion of the Court. 292U.S. number of pounds of butter substitutes sold during the preceding calendar month. Section 10 of the act provides that the tax shall not be imposed on butter substitutes when sold for exportation to any other state, territory, or nation; and any payment or the doing of any act which would constitute an unlawful burden upon the sale or distribution of butter substitutes in violation of the Constitution or laws of the United States is by § 13 excluded from the operation of the act. Violation of any provision of the act is denounced as a gross misdemeanor. Appellant is a Washington corporation, and has for many years been engaged in importing and selling 11 Nucoa,” a form of oleomargarine. Prior to the passage of the act, it had derived a large annual net profit from sales made within the state. Since then, claiming the tax to be prohibitive, it has made no intrastate sales and no effort to do so. “ Nucoa ” is a nutritious and pure article of food, with a well established place in the dietary. Suit was brought to enjoin the enforcement of the act, on the ground that it violates the Federal Constitution in the following particulars: (1) that the imposition of the tax has the effect of depriving complainant of its property without due process of law and of denying to it the equal protection of the laws, in violation of the Fourteenth Amendment; (2) that the tax is not levied for a public purpose, but for the sole purpose of burdening or prohibiting the manufacture, importation and sale of oleomargarine, in aid of the dairy industry; (3) that the act imposes an unjust and discriminatory burden upon interstate commerce; and (4) that it interferes with the power of Congress to levy and collect taxes, imposts and excises, in violation of Art. I, § 8. The case came before a statutory court of three judges, under § 266 of the Judicial Code, as amended, 28 U.S.C., § 380, first upon an application for an interlocutory injunction, which was denied, 2 F.Supp. 414, and subse- 40 MAGNANO CO. v. HAMILTON. Opinion of the Court. 43 quently for final hearing, at the conclusion of which that court made written findings of fact and conclusions of law, as required by Equity Rule 70^, and entered a final decree dismissing the bill. 2 F.Supp. 417. First. We put aside at once all of the foregoing contentions, except the one relating to due process of law, as being plainly without merit. 1. In respect of the equal protection clause it is obvious that the differences between butter and oleomargarine are sufficient to justify their separate classification for purposes of taxation. 2. That the tax is for a public purpose is equally clear, since that requirement has regard to the use which is to be made of the revenue derived from the tax, and not to any ulterior motive or purpose which may have influenced the legislature in passing the act. And a tax designed to be expended for a public purpose does not cease to be one levied for that purpose because it has the effect of imposing a burden upon one class of business enterprises in such a way as to benefit another class. 3. The act, considered as a whole, clearly negatives the idea that a burden is imposed upon interstate commerce, as the court below held. The tax is confined to sales within the state, and (§§10 and 13, supra) has no application to sales of oleomargarine to be either imported or exported in interstate commerce. 4. The contention, that the act interferes with the taxing power of the United States seems to be based upon the supposition that the state tax is so great that it will put an end to the sale of oleomargarine within the State of Washington, and thereby destroy a potential subject of federal taxation. Assuming such a consequence and putting other questions aside, the effect of it upon appellant would be so remote, speculative and indirect as to afford appellant no basis for invoking the powers of a court of equity. Compare Massachusetts v. Mellon, 262 U.S. 447, 487; Florida v. Mellon, 273 U.S. 12, 17-18. 44 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. Second. Except in rare and special instances,* the due process of law clause contained in the Fifth Amendment is not a limitation upon the taxing power conferred upon Congress by the Constitution. Brushaber v. Union Pac. R. Co., 240 U.S. 1, 24. And no reason exists for applying a different rule against a state in the case of the Fourteenth Amendment. French v. Barber Asphalt Paving Co., 181 U.S. 324, 329; Heiner v. Donnan, 285 U.S. 312, 326. That clause is applicable to a taxing statute such as the one here assailed only if the act be so arbitrary as to compel the conclusion that it does not involve an exertion of the taxing power, but constitutes, in substance and effect, the direct exertion of a different and forbidden power, as, for example, the confiscation of property. Compare McCulloch v. Maryland, 4 Wheat. 316, 423; Child Labor Tax Case, 259 U.S. 20, 37 etseq.; McCray v. United States, 195 U.S. 27, 60; Brushaber v. Union Pac. R. Co., supra, 24-25; Henderson Bridge Co. v. Henderson City, 173 U.S. 592, 614-615; Nichols v. Coolidge, 274 U.S. 531, 542. Collateral purposes or motives of a legislature in levying a tax of a kind within the reach of its lawful power are matters beyond the scope of judicial inquiry. McCray v. United States, supra, 56-59. Nor may a tax within the lawful power of a state be judicially stricken down under the due process clause simply because its enforcement may or will result in restricting or even destroying particular occupations or businesses (Loan Association v. Topeka, 20 Wall. 655, 663-664; McCray v. United States, supra, 56-58, and authorities cited; Alaska Fish Co. N. Smith, 255 U.S. 44, 48-49; Child Labor Tax Case, supra, 38, 40-43), unless, indeed, as already indicated, its neces- *See Brushaber v. Union Pacific R. Co. Co., 240 U.S. 1, 24-25; Nichols v. Coolidge, 274 U.S. 531, 542-543; Heiner v. Donnan, 285 U.S. 312, 325-328. Compare Schlesinger v. Wisconsin, 270 U.S. 230, 239-240. 40 MAGNANO CO. v. HAMILTON. Opinion of the Court. 45 sary interpretation and effect be such as plainly to demonstrate that the form of taxation was adopted as a mere disguise, under which there was exercised, in reality, another and different power denied by the Federal Constitution to the state. The present case does not furnish such a demonstration. The point may be conceded that the tax is so excessive that it may or will result in destroying the intrastate business of appellant; but that is precisely the point which was made in the attack upon the validity of the ten per cent, tax imposed upon the notes of state banks involved in Veazie Bank v. Fenno, 8 Wall. 533, 548. This court there disposed of it by saying that the courts are without authority to prescribe limitations upon the exercise of the acknowledged powers of the legislative departments. “ The power to tax may be exercised oppressively upon persons, but the responsibility of the legislature is not to the courts, but to the people by whom its members are elected.” Again, in the McCray case, supra, answering a like contention, this court said (p. 59) that the argument rested upon the proposition “ that, although the tax be within the power, as enforcing it will destroy or restrict the manufacture of artificially colored oleomargarine, therefore the power to levy the tax did not obtain. This, however, is but to say that the question of power depends, not upon the authority conferred by the Constitution, but upon what may be the consequence arising from the exercise of the lawful authority.” And it was held that if a tax be within the lawful power of the legislature, the exertion of the power may not be restrained because of the results to arise from its exercise. In Alaska Fish Co. v. Smith, supra, 48-49, a statute of Alaska levying a heavy license tax upon persons manufacturing fish oil, etc., was upheld as constitutional against the contention that it would prohibit and confiscate plain- 46 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. tiff’s business. “ Even if the tax,” the court said, “ should destroy a business it would not be made invalid or require compensation upon that ground alone. Those who enter upon a business take that risk. . . . The acts must be judged by their contents not by the allegations as to their purpose in the complaint. We know of no objection to exacting a discouraging rate as the alternative to giving up a business, when the legislature has the full power of taxation.” In the Child Labor Tax Case, supra, this court, in holding unconstitutional the provisions of the Revenue Act of February 24,1919, imposing a tax upon the employment of child labor, fully recognized the foregoing limitations upon the judicial authority; but declared that the act constituted an attempt to regulate a matter exclusively within the control of the state, and that, although the exaction was called a tax, it was, in fact, not a tax but a penalty exacted for the violation of the regulation. “ Taxes are occasionally imposed,” it was said (p. 38), “in the discretion of the legislature on proper subjects with the primary motive of obtaining revenue from them and with the incidental motive of discouraging them by making their continuance onerous. They do not lose their character as taxes because of the incidental motive. But there comes a time in the extension of the penalizing features of the so-called tax when it loses its character as such and becomes a mere penalty with the characteristics of regulation and punishment. Such is the case in the law before us.” The statute here under review is in form plainly a taxing act, with nothing in its terms to suggest that it was intended to be anything else. It must be construed, and the intent and meaning of the legislature ascertained, from the language of the act, and the words used therein 40 MAGNANO CO. v. HAMILTON. Opinion of the Court. 47 are to be given their ordinary meaning unless the context shows that they are differently used. Child Labor Tax Case, supra, 36. If the tax imposed had been five cents instead of fifteen cents per pound, no one, probably, would have thought of challenging its constitutionality or of suggesting that under the guise of imposing a tax another and different power had in fact been exercised. If a contrary conclusion were reached in the present case, it could rest upon nothing more than the single premise that the amount of the tax is so excessive that it will bring about the destruction of appellant’s business, a premise which, standing alone, this court heretofore has uniformly rejected as furnishing no juridical ground for striking down a taxing act. As we have already seen, it was definitely rejected in the Veazie Bank case, where it was urged that the tax was “ so excessive as to indicate a purpose on the part of Congress to destroy the franchise of the bank ”; in the McCray case, where it was said that the discretion of Congress could not be controlled or limited by the courts because the latter might deem the incidence of the tax oppressive or even destructive; in the Alaska Fish case, from which we have just quoted; and in the Child Labor Tax Case, where it was held that the intent of Congress must be derived from the language of the act, and that a prohibition instead of a tax was intended might not be inferred solely from its heavy burden. From the beginning of our government, the courts have sustained taxes although imposed with the collateral intent of effecting ulterior ends which, considered apart, were beyond the constitutional power of the lawmakers to realize by legislation directly addressed to their accomplishment. Those decisions, as the foregoing discussion discloses, rule the present case. Decree affirmed. 48 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. MINNICH v. GARDNER et al. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE THIRD CIRCUIT. No. 669. Argued March 15, 16, 1934.—Decided April 2, 1934. 1. If the object of a judgment creditor in having an execution levied on goods of the debtor is merely to obtain a lien, the lien will be postponed in favor of subsequent purchasers and execution creditors; but, a subsequent direction to the sheriff to proceed with the the sale has the effect of reviving the priority of the lien as against all other liens or rights acquired after such direction. P. 50. 2. This is the general rule and the rule in Pennsylvania. P. 51. 3. Petition in involuntary bankruptcy was filed seventeen months after levy of execution on personal property of the bankrupt, and nine days after the execution creditor had directed the sheriff to sell. Held, that the lien of the creditor was good. P. 52. 66 F. (2d) 561, reversed. Certiorari, 291 U.S. 654, to review the affirmance of an order denying preference to an execution creditor’s lien on a fund resulting from a sale of the goods by the debtor’s trustee in bankruptcy. The order overruled an allowance of the priority by the referee. Mr. John A. Minnich, pro se. Mr. A. E. Kountz, with whom Messrs. Clarence A. Fry and J. Colvin Wright were on the brief, for respondents. Mr. Justice Sutherland delivered the opinion of the Court. Petitioner, on March 21, 1929, recovered two judgments in a Pennsylvania state court against the King Motor Company, the larger one being for something over $6,000. March 26 following, execution was issued thereon, and on March 27 the sheriff levied under the execution upon the personal property of the motor company, endorsing his 48 MINNICH v. GARDNER. Opinion of the Court. 49 levy upon the writ. On April 15 the sheriff returned 11 goods on hand not sold.” Subsequently, on various dates, a writ, an alias writ, and pluries writs of venditioni exponas were issued, upon each of which the sheriff made return to the effect that goods on hand were not sold or writ not executed for want of time. On August 21, 1930, nearly seventeen months after the levy of execution, petitioner directed the sheriff in writing that he must advertise all the goods taken under the original levy and sell them immediately. On the same day the sheriff advertised the goods for sale to be held August 29 following. August 25 a Pennsylvania state court of equity appointed a receiver for the King Motor Company and ordered a stay of the execution until final determination of the matter. August 30 an involuntary petition in bankruptcy was filed against the motor company, upon which an adjudication of bankruptcy was made on September 19. All the personal property of the motor company having been sold by the trustee, it was agreed that $1,776.17, being fifty per cent, of the proceeds of such sale, represented the value of the goods levied upon in behalf of petitioner on March 27, 1929, and included in the trustee’s sale. The referee in bankruptcy, after deducting for the costs which would have been incurred if the goods had been sold by the sheriff, awarded that sum to petitioner. The referee found, among other things, that petitioner had issued the writ of execution with an intention to collect his money, which he never relinquished or interrupted; that he had no intention to refrain from exacting payment or helping the debtor to hinder other creditors; that the indulgence was good business policy when it is considered that petitioner realized less than one-third of the amount called for by the execution. The referee concluded that petitioner had acted in good faith. On review the federal district court, sitting in bankruptcy, held that petitioner had no valid lien against the 61745°—34____4 50 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. fund and was not entitled to any distribution ahead of certain priority wage claims. The circuit court of appeals affirmed, holding that petitioner had made his levy solely for the purpose of acquiring a lien without a genuine intention of proceeding promptly for the collection of his debt, that he had not met the test of good faith, and, therefore, had failed to establish his lien upon the fund. 66 F. (2d) 561. Conceding that petitioner intended not to proceed promptly for the collection of his debt, and that his levy was made solely for the purpose of acquiring a lien, we think the conclusion drawn therefrom by the lower court—that he had failed to establish his lien upon the fund—does not follow, since it fails to give effect to the positive order of the petitioner, made nine days before the bankruptcy proceedings were begun, directing the sheriff to proceed at once under the original levy to advertise for sale and sell the goods. The effect of the intention and purpose ascribed to petitioner would be to destroy the priority of the lien obtained by his levy and thereby expose him to the risk of having his execution postponed in favor of purchasers and subsequent execution creditors. It, nevertheless, would continue good against the judgment debtor and all others not acquiring rights or liens. This, undoubtedly, is the general rule (e.g., In re Zeis, 245 Fed. 737, 739; In re Schwab Printing Co., 59 F. (2d) 726, 728; Keel v. Larkin, 72 Ala. 493, 502-503), and is fully recognized by the Pennsylvania decisions. Kent, Santee & Co.’s Appeal, 87 Pa. 165, .167; McLaughlin n. McLaughlin, 85 Pa. 317, 322; Mentz v. Hamman, 5 Whart. (Pa.) 150, 153; Fletcher’s Appeal, 17 Leg. Int. (Phila. 1860) 300. In Eberle v. Mayer, 1 Rawle (Pa.) 366, it was held that an order given by an execution creditor to stay proceedings on his execution until further directions was a waiver of his priority in favor of a second execution received by the sheriff during the pendency of the stay. By 48 MINNICH v. GARDNER. Opinion of the Court. 51 such order, it was said (p. 369), “ the plaintiff’s execution must be considered as dormant, and constructively fraudulent, as against the subsequent execution.” The general rule is equally well established that in the absence of any intervening rights or liens a direction to the sheriff to proceed with the sale has the effect of reviving the rights obtained by the original levy, that is to say, of reviving not the lien, but the priority of the lien as against all other liens and rights acquired after such direction. In re Zeis, supra; In re Schwab Printing Co., supra; Miller v. Kosch, 74 Hun (N.Y.) 50, 52; 26 N.Y.S. 183; Sweetser v. Matson, 153 Ill. 568, 584; 39 N.E. 1086. We are of opinion that this general rule obtains in Pennsylvania. It was recognized as applicable to a Pennsylvania judgment as early as 1811 in Berry v. Smith, 3 Wash.C.C. 60, Fed. Cas. No. 1359. The judgment considered in that case had been rendered by the Supreme Court of Pennsylvania, and a fieri facias had issued with direction to the sheriff not to levy it until further instructions. A few days later the sheriff was directed to proceed with the levy. It was held that a second execution levied in the meantime, if pursued, would take preference, but otherwise if the second execution were issued after the countermand. Mr. Justice Washington, delivering the opinion, said: “ The order of suspension deprives the act of the officer, in pursuance of it, of all its force and effect, until it is restored by a countermand; and if, in the meantime, a second execution is taken out and levied, the former must be postponed;—not so, if the second execution issues subsequent to such countermand; and upon this distinction, the decision of the case of Huber v. Schnell, [1 Browne, 16] in the common pleas of this state, seems to be entirely correct.” In Freeburger’s Appeal, 40 Pa. 244, it was held that an execution issued only for the purpose of a lien will be postponed to a subsequent execution issued in good faith. It 52 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. appeared there that the sheriff had been instructed, when the execution was planed in his hands, not to proceed until further orders, and thereafter to make a levy but not sell. Subsequently the sheriff was told to go on and sell; but the evidence did not make clear that the last order was given prior to the issue of the second execution. The court, therefore, sustained the lien of the second execution, saying, “ All this,” referring to the evidence, “ leaves it quite uncertain whether the orders to sell under the first execution were prior or subsequent to the issue of the second. But as it is clearly established that the first was used merely as a security until those orders were given, it is incumbent upon Cameron & Billmeyer [first judgment creditors] to prove affirmatively that they were given before the sheriff received the second writ. This they failed to do, and their execution, therefore, has lost its priority.” This decision clearly imports the converse of the proposition, namely, that if it had been shown that the orders to sell were given before the receipt of the second execution, the first execution would not have lost its priority. See 2 Freeman on Executions, § 206, p. 1043, n. 138. Our attention has been called to no Pennsylvania decision, and our examination discloses none, which conflicts with that conclusion. In the present case, the proof establishes and the court below concedes that an order to sell, which antedated by nine days the filing of the involuntary petition in bankruptcy, was in fact given. Since the effect of that order was to revive the priority of the Hen, not to create a new one, and since that lien had attached long prior to the beginning of the four months’ period preceding the filing of the petition in bankruptcy, it was not affected by the provisions of § 67 (f) of the Bankruptcy Act, which declare all liens obtained, etc., within such period null and void. In re Zeis, supra, 740-741; In re Schwab Printing Co., supra, 728, and cases cited. 48 FED. LAND BANK v. WARNER. Counsel for Parties. 53 Respondents suggest that, in any event, the case involves the further question whether, as wage claimants, each of them is entitled under a designated Pennsylvania statute to priority to the extent of $200 over the execution creditor. So far as the record discloses, that question is raised here for the first time. The report of the referee recites that a preference for the claims, not to exceed $600 to each claimant, was sought under § 64 (b) (5) of the Bankruptcy Act. That subdivision has no relation to claims arising under state law, and no mention of any such claims is made in the referee’s report or in the decision of either of the courts below or in the record. In no view of the matter is the question properly before us for consideration. , Decree reversed. FEDERAL LAND BANK OF BERKELEY v. WARNER et ux. CERTIORARI TO THE SUPREME COURT OF ARIZONA. No. 498. Argued February 16, 1934.—Decided April 2, 1934. 1. A stipulation in a Farm Loan Mortgage that, in case of suit to foreclose, the mortgagor shall pay a reasonable attorney’s fee to be fixed by the court, is valid under the Federal Farm Loan Act if valid under the state law. P. 54. 2. The purpose of the Farm Loan Act is to enable farmers, by mortgaging their lands, to obtain loans at low cost; and this purpose is to be observed in determining what is a reasonable attorney’s fee, in a foreclosure proceeding. P. 57. 42 Ariz. —; 23 P. (2d) 563, reversed. Certiorari, 290 U.S. 620, to review the affirmance of a decree foreclosing a farm loan mortgage in which the trial court had refused to enforce a stipulation for an attorney’s fee. Mr. Peyton R. Evans, with whom Messrs. Richard W. Young and Scott W. Hovey, and Miss May T. Bigelow were on the brief, for petitioner. 54 OCTOBER TERM, 1933. Opinion of the Court, 292U.S. No appearance for respondents. By leave of Court, Mr. Irving P. Whitehead filed a brief on behalf of numerous Federal Land Banks, as amicus curiae. Mr. Justice Buteer delivered the opinion of the Court. Respondents gave petitioner a mortgage on their farm lands in Arizona to secure a loan of $7,200 made in accordance with the Farm Loan Act.1 The mortgage provides that in case of suit to foreclose the mortgagors shall pay a reasonable attorney’s fee to be fixed by the court. And that clause is valid under Arizona law? The borrowers having failed to pay according to their promise, petitioner brought this suit to foreclose the mortgage and prayed that an attorney’s fee of $125 be included in the judgment. Respondents objected to the allowance of any amount on account of that item, the trial court sustained their contention, and the supreme court upheld that part of the decree upon the ground that the collection of such a fee is forbidden by the following part of § 31: “No land bank . . . shall charge or receive any fee, commission, bonus, gift, or other consideration not herein specifically authorized.” 12 U.S.C., § 983. That construction cannot be sustained. The Act establishes cooperation between borrowers on farm mortgages and investors in the bonds secured by them. The requirement, by means of the mortgage provision, that a mortgagor shall bear the expense put upon the bank by his default is reasonable and in harmony with that principle. "Federal Farm Loan Act of July 17, 1916, 39 Stat. 360, as amended. 12 U.S.C., § 636, et seq. ’This case, 42 Ariz. —. McClintock v. Bolton (1899) 6 Ariz. 370, 377; 57 Pac. 611. See Estate of Amirault (1921) 22 Ariz. 122; 194 Pac. 1099. Maxey v. Somerton State Bank (1921) 22 Ariz. 371; 197 Pac. 894. O. S. Stapley Co. v. Rogers (1923) 25 Ariz. 308; 216 Pac. 1072. § 3840, R.C., 1928. 53 FED. LAND BANK v. WARNER. Opinion of the Court. 55 In the absence of a plain expression to that effect, it may not be held that Congress intended to put upon nondefaulting borrowers any part of the expense of foreclosure of mortgages made by others. The Act does not prescribe proceedings for foreclosure but indicates that state laws are to govern. Section 30 directs the land bank commissioner to examine the laws of each State and to report, among other things, whether in his opinion they are such as to safeguard against loss in case of default. Code, § 971. It provides that, if examination shall show that the laws of any do not afford sufficient protection, the Farm Credit Administration may declare mortgages on land in that State ineligible. Code, § 972. And the petition for this writ indicates that, except in a few States where local law prohibits such contracts, all the mortgages taken by the Federal land banks contain stipulations for attorney’s fees for foreclosure.3 From this it appears that officers charged by law with the administration of the banks have always construed the Act to permit state laws to control. Our attention has not been called to any case in which that construction has been questioned. It is entitled to great weight. United States v. Mo. Pac. R. Co., 278 U.S. 269,280. And we are of opinion that the decision of the Arizona supreme court in this case is not supported by the language it quotes from § 31 or by any other part of the Act. The paragraph containing this language4 defines 8The petition indicates: Federal land banks hold mortgages amounting to approximately $1,120,000,000. Joint stock land banks hold mortgages amounting approximately to $500,000,000. Under the Emergency Farm Mortgage Act of May 12, 1933, Federal land banks are authorized immediately to expand their activities to the extent of $2,000,000,000 in additional farm mortgage financing operations. Mortgages taken under that Act will contain stipulations for attorney’s fees for foreclosures. “ Other than the usual salary or director’s fee paid to any officer, director, or employee of a national farm loan association, a Federal 56 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. criminal offenses and prescribes punishments. The first sentence holds officers, directors and employees to their usual salaries and directors’ fees, and limits each of them, and as well every attorney for a bank, to “ a reasonable fee ... for services rendered.” The second sentence contains the provision relied on. Its sole purpose is to limit banks to the charges, fees, etc., that are specifically authorized. Then, after restricting disclosure of names of borrowers, the paragraph makes violations of its provisions punishable by fine or imprisonment or both. Other than the counsel fee in question, the judgment below does not exclude any expense of foreclosure that is permitted by Arizona law. But plainly the compensation of attorneys engaged to foreclose a mortgage is as necessary as the payment of charges for advertisement, the service of process or the sale of the property. The items last mentioned are generally, if not indeed everywhere, chargeable to defaulting mortgagors. There is nothing in the Act to suggest purpose to denounce the one and permit the others. Moreover, the quoted clause is in harmony with the restrictions put upon loans by § 12, Code, § 771, and is undoubtedly intended to emphasize and strictly to enforce limitations set by § 13, Code, § 781 (9), upon fees for appraisal and examination of title, legal fees, land bank, or a joint-stock land bank, and other than a reasonable fee paid by such association or bank to any officer, director, attorney, or employee for services rendered, no officer, director, attorney, or employee of an association or bank organized under this Act shall be a beneficiary of or receive, directly or indirectly, any fee, commission, gift, or other consideration for or in connection with any transaction or business of such association or bank. No land bank or national farm loan association organized under this Act shall charge or receive any fee, commission, bonus, gift, or other consideration not herein specifically authorized. . . . Any person violating any provision of this paragraph shall be punished by a fine of not exceeding $5,000 or by imprisonment not exceeding one year, or both.” 12 U.S.C., § 983. GILVARY v. CUYAHOGA VALLEY RY. 57 53 Syllabus. recording charges and the like that are included in the preliminary costs of negotiating and carrying the mortgage loans. Undoubtedly Congress intended that state laws are to govern in respect of counsel fees for foreclosure of mortgages given under the Act. But what is said above is not to be taken to approve the collection of a substantial attorney’s fee for foreclosure in every case where stipulations such as the one before us are valid under state law. Uncontested foreclosures generally follow established routine and undoubtedly many of them may be made, without much if any cost to the banks, by their regularly employed salaried lawyers. In any such case the employment of another attorney or the exaction of any substantial charge for legal services cannot be justified as reasonable. In all cases—whether foreclosure is obtained by default or after contest—the mortgagor’s promise to pay the mortgagee a reasonable attorney’s fee is to be construed having regard to the purpose of Congress to enable farmers, by means of mortgages on their lands, to obtain loans at low cost. Reversed. GILVARY v. CUYAHOGA VALLEY RAILWAY CO. CERTIORARI TO THE SUPREME COURT OF OHIO. No. 575. Argued March 8, 1934.—Decided April 2, 1934. 1. Although the duty to supply all of its cars with automatic couplers laid upon an interstate railroad by the Federal Safety Appliance Acts extends to vehicles used exclusively in such carrier’s intrastate commerce, nevertheless where a breach of this duty results in injuries to the carrier’s employee while he is engaged exclusively in intrastate commerce, his right to collect damages from the carrier does not spring from these federal acts, but from the law of the State. P. 61. 2. Where a carrier and employee had elected, in case of any injury to the employee while engaged in intrastate commerce, to have 58 OCTOBER TERM, 1933. Opinion of the Court. their respective rights and liabilities governed by the provisions of the Ohio elective workmen’s compensation law, held that the agreement was applicable, and consistent with the Federal Safety Appliance Acts, in a case of injury alleged to have been caused by the carrier’s failure to equip cars with automatic couplers as those acts required. P. 59. 127 Ohio St. 402, affirmed. Certiorari, 290 U.S. 622, to review the affirmance (by equal division) of a judgment of the Court of Appeals of Ohio, which had reversed a recovery of damages from the Railway Company in an action based on personal injuries. Mr. M. L. Bemsteen, with whom Mr. Glen A. Boone was on the brief, for petitioner. Mr. W. T. Kinder for respondent. Mr. Justice Butler delivered the opinion of the Court. This is an action brought by petitioner to recover for personal injuries sustained by him in April, 1929, while employed by respondent as a switchman at Cleveland, Ohio. Respondent is a common carrier by railroad wholly within that State engaged in intrastate and interstate commerce. And the Safety Appliance Acts make it unlawful for it to haul or permit to be hauled or used on its line any car not equipped with couplers coupling automatically by impact? In accordance with the Ohio workmen’s compensation act,2 petitioner and respondent had 1 § 2, Act of March 2, 1893, 27 Stat. 531, 45 U.S.C., § 2. § 1, Act of March 2, 1903, 32 Stat. 943, 45 U.S.C., § 8. * “ The provisions of this act shall apply to employers and their employes engaged in intrastate and also in interstate and foreign commerce, for whom a rule of liability or method of compensation has been or may be established by the congress of the United States, only to the extent that their mutual connection with intrastate work may and shall be clearly separable and distinguishable from interstate or foreign commerce, and then only when such employer and any 292 U.S. GILVARY v. CUYAHOGA VALLEY RY. 59 57 Opinion of the Court. theretofore notified the industrial commission that they elected, in case of any injury sustained by petitioner while engaged in intrastate commerce, to have their respective rights and liabilities governed by the provisions of that Act. The commission had approved the agreement, respondent paid the premiums necessary to keep it in force and in all respects complied with the law. Petitioner was injured while he and respondent were engaged in intrastate commerce. The complaint alleges that his injuries were caused by respondent’s failure to comply with the Safety Appliance Acts in that cars which he, with other members of his crew, was attempting to couple were not equipped with couplers that would couple automatically by impact, thereby making it necessary for him to go between the ends of the cars where he was caught and injured. In addition to a denial of the violation of the statutes, respondent’s answer sets up the election to be bound by the state compensation act. The court held that the agreement was not sufficient to constitute a defense and struck out that part of the answer. The trial resulted in a verdict and judgment for petitioner. The court of appeals reversed and gave final judgment in favor of the respondent “ for the reason that the acceptance and notice of election by the employee contract approved by the Industrial Commission of Ohio is a complete bar to a right of his workmen working only in this state, with the approval of the state liability board of awards, and so far as not forbidden by any act of congress, voluntarily accept the provisions of this act by filing written acceptances, which, when filed with and approved by the board, shall subject the acceptors irrevocably to the provisions of this act to all intents and purposes as if they had been originally included in its terms, during the period or periods for which the premiums herein provided have been paid. Payment of premium shall be on the basis of the payroll of the workmen who accept as aforesaid” G.C., § 1465-98, 60 OCTOBER TERM, 1933. Opinion of the Court. 292U.S. of recovery in this action.” In the state supreme court, the judges being equally divided in opinion, the judgment of the court of appeals was affirmed. As the petitioner when injured was not engaged in interstate commerce, the Federal Employers Liability Act does not apply, and the question is whether the agreement of the parties, in pursuance of the Ohio statute, is repugnant to the Federal Safety Appliance Acts. Unless excluded by congressional enactment under the commerce clause, state law governs the respective liabilities and rights of railroad carriers and their employees growing out of injuries suffered by the latter whether in interstate or intrastate commerce. Second Employers’ Liability Cases, 223 U.S. 1, 54. The power conferred upon the Congress is such that wh'en exerted it excludes and supersedes state legislation in respect of the same matter. But Congress may so circumscribe its regulation as to leave a part of the subject open to state action. Atlantic Coast Line v. Georgia, 234 U.S. 280, 290. Cf. Napier v. Atlantic Coast Line, 272 U.S. 605. The purpose exclusively to regulate need not be specifically declared. New York Central R. Co. v. Winfield, 244 U.S. 147. But, ordinarily such intention will not be implied unless, when fairly interpreted, the federal measure is plainly inconsistent with state regulation of the same matter. Illinois Cent. R. Co. v. Public Utilities Comm’n, 245 U.S. 493, 510. The Safety Appliance Acts govern common carriers by railroad engaged in interstate commerce. The Act of 1893 applied only to vehicles used by them in moving interstate traffic. 45 U.S.C., § 2. Its requirements were by the Act of 1903 extended to all their vehicles. Id., § 8. Southern Ry. Co. v. United States, 222 U.S. 20, 26. Moore v. Chesapeake & Ohio Ry. Co., 291 U.S. 205, 213. So far as the safety equipment of such vehicles is concerned, these Acts operate to exclude state regulation whether consistent, GILVARY v. CUYAHOGA VALLEY RY. 61 57 Opinion of the Court. complementary, additional or otherwise. Prigg v. Pennsylvania, 16 Pet. 539, 617. Southern Ry. Co. v. Railroad Comm’n, 236 U.S. 439, 446. Internal. Shoe Co. v. Pinkus, 278 U.S. 261, 265. The imposition of penalties (id., § 6) and abrogation of assumption of risk (id., § 7) are measures for enforcement. A violation of the Acts is a breach of duty owed to an employee, whether he is at the time engaged in interstate or in intrastate commerce. And by abolishing assumption of risk the Acts impliedly recognize the right to recover for injuries resulting therefrom. But the absence of a declaration similar to that in the Federal Employers Liability Act, which denounces contracts and other arrangements made for the purpose of exempting carriers from liability created by that Act (45 U.S.C., § 55), strongly suggests a lack of legislative purpose to create any cause of action therefor. Moreover, if there had been such purpose, Congress probably would have included provisions in respect of venue, jurisdiction of courts, limitations, measure of damages, and beneficiaries in case of death. Petitioner cites language in Texas & Pacific Ry. Co. v. Rigsby, 241 U.S. 33, 41. But that case is not in point on the question under consideration in this case. There we were called upon to decide whether a railroad employee engaged in intrastate commerce upon the line of an interstate carrier was within the protection of the Safety Appliance Acts. We held that he was. The opinion supports our recent construction of these Acts that, while they prescribe the duty, the right to recover damages sustained by the injured employee through the breach “ sprang from the principle of the common law ” and was left to be enforced accordingly, or in case of death “ according to the applicable statute.” Moore v. Chesapeake & Ohio Ry. Co., supra, 215. Minneapolis, St. P. & S. S. M. Ry. Co. v. Popplar, 237 U.S. 369, 372. These Acts do not create, 62 OCTOBER TERM, 1933. Syllabus. 292 U.S. prescribe the measure or govern the enforcement of, the liability arising from the breach. They do not extend to the field occupied by the state compensation Act. There is nothing in the agreement repugnant to them. Affirmed. Mr. Justice Stone and Mr. Justice Cardozo concur in the result. CHARLES ILFELD CO. v. HERNANDEZ, COLLECTOR OF INTERNAL REVENUE. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE TENTH CIRCUIT. No. 579. Argued March 8, 1934.—Decided April 2, 1934. Section 141 (a) of the Revenue Act of 1928 gives groups of affiliated corporations the privilege of making consolidated returns, in lieu of separate ones, for 1929 and subsequent years, upon condition that all members consent to the regulations prescribed prior to the return. Section 141 (b) authorizes the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, to make regulations for determining the tax liability of an affiliated group and of each member in such manner as clearly to reflect the income and prevent avoidance of tax liability. Held: 1. The making of a consolidated return of income on the part of affiliated corporations, was a “consent” to the regulations prescribed prior to the return. P. 65. 2. Deduction of a loss, in an income tax return, is not allowable unless the relevant act and regulations fairly may be read to authorize it. P. 66. 3. Where a parent company during a consolidated return period caused the property of two affiliates, of which it held all the stock, to be sold to outsiders, received a distribution of the net proceeds after payment of their outside debts, and then dissolved the affiliated corporations, the losses represented by the difference between the amount of the distribution and what it had lent the affiliates and paid for their stock in prior years were losses upon a distribution within the consolidated return period and arising from intercompany transactions, and not from a sale of stock, within 62 ILFELD CO. v. HERNANDEZ. Opinion of the Court. 63 the meaning of Regulations 75, adopted pursuant to the above cited Act, and, under those Regulations they were not deductible in the consolidated return. Pp. 66-67. 4. The Act and Regulations are not to be construed as permitting double deduction of the same losses, first as subsidiary company losses in consolidated returns for earlier years, and again in stating the eventual loss to the parent company from its investment in the subsidiaries. P. 68. 66 F. (2d) 236 ; 67 id. 236, affirmed. Certiorari, 290 U.S. 624, to review the reversal of a judgment awarded the plaintiff by the district court, sitting without a jury, in an action on a claim of excessive payment of taxes. Mr. A. T. Hannett for petitioner. Mr. Erwin N. Griswold, with whom Solicitor General Biggs, Assistant Attorney General Wideman, and Messrs. Sewall Key and Norman D. Keller were on the brief, for respondent. By leave of Court, briefs of amid curiae were filed as follows: by Messrs. Robert H. Montgomery, Thomas G. Haight, and J. Marvin Haynes on behalf of the American Tobacco Co.; and by Messrs. Theodore Benson, Oscar W. Underwood, Jr., H. C. Kilpatrick, John G. Buchanan, and Walter C. Mylander, on behalf of The Apartment Corporation. Mr. Justice Butler delivered the opinion of the Court. In 1917 petitioner purchased all the capital stock of the Springer Trading Company for $40,000 and in 1920 all that of the Roy Trading Company for $50,000. It held these shares until late in 1929 when both companies were dissolved. In that period it advanced the Springer Company sums amounting to $69,030.27, and the Roy Company $9,782.22. Nothing having been paid it on account of these advances, petitioner had an investment in the 64 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. former of $109,030.27 and in the latter of $59,782.22. It made consolidated returns which took into account the gains and losses of each subsidiary. Operations of the Springer Company resulted in losses in all but two of the years and those of the Roy Company in all but four. The losses of the former exceeded its gains by $118,510.53, and those of the latter by $57,127.85. In 1929, before the end of November, the subsidiaries sold all their property to outside interests. After paying debts to others, each had a balance—the Springer Company, $22,914.22, and the Roy Company, $15,106.16—which it paid petitioner on December 23. Both subsidiaries were dissolved December 30 in that year. Petitioner made a consolidated return for 1929 based on the results of operation and the liquidation of each subsidiary but made no deduction of losses resulting to itself from the liquidations. The return showed a tax of $20,836.20 which was duly paid. In May, 1931, petitioner filed an amended return and claimed a refund of $14,406.43. This return does not take into account profits or losses of subsidiaries in that year but deducts the losses above shown to have resulted to petitioner from its investments in them.* The commissioner rejected the claim. Petitioner brought this action in the federal district court for New Mexico against the collector to recover the amount of its claim. A jury was waived, the court made special findings of fact, stated its conclusions of law * Operating losses claimed and deducted prior to Springer Co. Roy Co. Combined 1929.................. $131,424.41 $59,007.25 $190,431.66 Investment loss claimed for 1929 ................. 86,116.05 44,676.06 130,792.11 Total losses claimed...... 217,540.46 103,683.31 321,223.77 Investment (stock plus advances).................. 109,030.27 59,782.22 168,812.49 62 ILFELD CO. v. HERNANDEZ. Opinion of the Court. 65 and gave petitioner judgment as prayed. The Circuit Court of Appeals reversed. 66 F. (2d) 236. 67 F. (2d) 236. The question is whether petitioner is entitled to deduct from its 1929 income any part of the losses resulting from its investments in the subsidiaries. The Revenue Act of 1928 and Regulations 75 made under § 141 (b) govern. Section 141 (a) gives to groups of affiliated corporations the privilege of making consolidated returns, in lieu of separate ones, for 1929 or in subsequent years upon condition that all members consent to the regulations prescribed prior to the return. And, in view of the many difficult problems arising in the administration of earlier provisions authorizing consolidated returns, the Congress deemed it desirable to delegate by § 141 (b) the power “ to prescribe regulations legislative in character.” Senate Report No. 960, 70th Cong., 1st Sess., p. 15. That subsection authorizes the Commissioner, with the approval of the Secretary, to make such regulations as he may deem necessary in order that the tax liability of an affiliated group and of each member 11 may be determined, computed, assessed, collected, and adjusted in such manner as clearly to reflect the income and to prevent avoidance of tax liability.” The making of the consolidated return constituted acceptance by petitioner and its subsidiaries of the regulations that had been prescribed. No question as to validity is raised. The brief substance of the regulations here in-volved follows: Article 37 (a) provides: Gains or losses shall not be recognized upon a distribution during a consolidated return period by one member to another in cancellation or redemption of its stock; “ and any such distribution shall be considered an intercompany transaction.” And subdivision (b) requires that any such distribution after a 61745°—34-----5 66 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. consolidated return period shall be treated as a sale, and directs adjustments to be made in accordance with articles 34,35 and 36. Article 34 (a) prescribes the basis for determination of gain or loss upon a sale by a member of stock issued by another member and “during any part of the consolidated return period ” held by the seller. Subdivision (c) applies to sales which break affiliation and which are made during the period that the selling corporation is a member of the affiliated group. Article 40 (a) directs that intercompany accounts receivable or other obligations which are the result of intercompany transactions during a consolidated return period shall not “ during a consolidated return period ” be deducted as bad debts. Subdivision (c) governs deductions after the consolidated return period on account of such transactions during the period. 1. In the absence of a provision in the Act or regulations that fairly may be read to authorize it, the deduction claimed is not allowable. Brown v. Helvering, 291 U.S. 193, 199, 205. Burnet v. Houston, 283 U.S. 223, 227. Cf. Woolford Realty Co. v. Rose, 286 U.S. 319, 326. Petitioner contends that Articles 37 (b) and 34 (c) cover the case. We are unable so to construe them. Article 37 relates to dissolutions. Subdivision (b) deals with distributions made after a consolidated return period. The record conclusively shows that each subsidiary handed over the balance before the dissolution was consummated and during the consolidated return period. Article 34 relates exclusively to the sale of stock. No sale of stock was involved. The parent and subsidiary corporations were the only parties. Neither subsidiary acquired stock of the other or that issued by itself. The petitioner retained all the shares of each and at the end voted dissolutions that operated to cancel them. 62 ILFELD CO. v. HERNANDEZ. Opinion of the Court. 67 2. Respondent, relying on Articles 37 (a) and 40 (a), maintains that the losses petitioner seeks to deduct arose from intercompany transactions during the consolidated return period and therefore may not be allowed. Article 37 (a) forbids the recognition of losses upon distribution during the consolidated return period and declares that such distributions shall be considered intercompany transactions. Article 40 (a) forbids during that period the deduction as bad debts of obligations which are the result of intercompany transactions. The payment of the liquidating dividends was made during the return period and was the last step leading up to the action of directors and stockholders for the dissolution of the subsidiaries. The amount handed over by the Springer Company was less than petitioner’s advances to it, but the amount paid by the Roy Company was greater than the advances to it. Undoubtedly the obligation of the subsidiaries in respect of the advances would be held to be intercompany accounts receivable quite independently of the regulations. But a word is necessary as to the subsidiaries’ obligations to the petitioner as stockholder. The record does not disclose whether the latter obtained the stock directly from the issuing corporations or purchased from others. Without regard to the manner of acquisition, the amount paid constituted investment in the subsidiaries. And, as it was the owner of all the shares of the subsidiaries, petitioner will be deemed to have directed all their activities in the unitary business and as well the steps taken for their liquidation and dissolution. They were liable to it alone for the balances remaining after payment of the amounts owed others, and it was equally entitled whether claiming as lender or shareholder. Under the circumstances, it reasonably may be held that their obligation in respect of petitioner’s stock ownership resulted 68 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. from intercompany transactions within the meaning of Article 40 (a). Petitioner rightly says, as does respondent, that the amounts paid for the stock and the advances later made to the subsidiaries stand on the same footing. But its contention that the transactions out of which the claimed losses arose did not occur during the consolidated return period cannot be sustained. Petitioner is therefore not entitled to deduct them from its 1929 income. 3. The allowance claimed would permit petitioner twice to use the subsidiaries’ losses for the reduction of its taxable income. By means of the consolidated returns in earlier years it was enabled to deduct them. And now it claims for 1929 deductions for diminution of assets resulting from the same losses. If allowed, this would be the practical equivalent of double deduction. In the absence of a provision of the Act definitely requiring it, a purpose so opposed to precedent and equality of treatment of taxpayers will not be attributed to lawmakers. Cf. Burnet v. Aluminum Goods Co., 287 U.S. 544, 551. United States v. Ludey, 274 U.S. 295, 301. There is nothing in the Act that purports to authorize double deduction of losses or in the regulations to suggest that the commissioner construed any of its provisions to empower him to prescribe a regulation that would permit consolidated returns to be made on the basis now claimed by petitioner. In Remington Rand, Inc. n. Commissioner, 33 F. (2d) 77, the Circuit Court of Appeals for the Second Circuit held a subsidiary company’s accumulated earnings on stock sold to a parent company could not be added to the cost of the stock in determining taxable gain arising on the latter’s sale to outsiders. In United Publishers’ Corp, v. Anderson, 42 F. (2d) 781, a district court in the same circuit, deeming the Remington Rand case applicable, held that a parent corporation filing consolidated returns showing losses of a subsidiary during earlier years could nevertheless deduct loss on the sale of the subsidiary’s stock. ELECTRIC CABLE CO. v. EDISON CO. 69 62 Syllabus. Petitioner insists that same principle governs both decisions and that therefore the deduction should be allowed. But the analogy is not good. Where all the members gain, total taxable income is the same on a consolidated return as upon separate ones. But where as in the case before us the subsidiaries lose and the parent gains, the losses of the former go in reduction of the taxable income of the latter. Considerations that justify inclusion of the profits made by all the members do not support the double deduction claimed. The weight of authority is against petitioner’s contention. Burnet v. Riggs Nat. Bank, 57 F. (2d) 980. Commissioner v. Apartment Corp., 67 F. (2d) 3. Summerfield Co. v. Commissioner, 29 B.T.A. 77. National Casket Co. v. Commissioner, 29 B.T.A. 139. No decision other than that of the district court in United Publishers' Corp. n. Anderson, supra, gives any support to its claim. Cf. Burnet n. Imperial Elevator Co., 66 F. (2d) 643. McLaughlin v. Pacific Lumber Co., 66 F. (2d) 895. Affirmed. ELECTRIC CABLE JOINT CO. v. BROOKLYN EDISON CO., INC. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SECOND CIRCUIT. No. 611. Argued March 15, 1934.—Decided April 2, 1934. 1. Claim 4 of Patent No. 1,172,322, to Torchio, February 23, 1916, for an improvement in protective devices for electric cable joints, held invalid because of the prior art and for want of invention. 2. The claim is for a device, in combination, for improving insulation at joints of high-tension metal-sheathed cables. The conductors in such cables are insulated from the sheath and from the metal sleeves by which the sheathing is continued at their junctions, by wrappings of pervious material saturated with an insulating oily substance. Migration and loss of this substance, caused by cutting 70 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. a cable and, more especially, by its contractions and expansions, or “ breathing,” when in operation at high voltages, result in air spaces within the insulation through which damaging leakages of current take place. The elements in the combination claimed to be new are: (1) the use of an insulating liquid (oil) which is fluid at ordinary working temperatures of such cables, in lieu of compounds of higher melting point; and (2) a reservoir holding a supply of such liquid and communicating with the interior of the joint. The Court finds (1) That use in the combination of the more fluid insulating permeant was anticipated in the prior art and fully disclosed in publications; (2) that the addition of the reservoir was also anticipated, besides being a mere mechanical adaptation. Pp. 72-79. 3. Invention may consist in adding a new element to an old combination; but the addition must be the result of invention, not the mere exercise of the skill of the calling, and not one plainly indicated by the prior art. P. 79. 66 F. (2d) 739, affirmed. Certiorari, 290 U.S. 624, to review the affirmance of a decree denying the validity of a patent in a suit by an assignee claiming infringement. Messrs. Melville Church and D. Anthony Usina for petitioner. Mr. Charles Neave, with whom Mr. John D. Monroe was on the brief, for respondent. Mr. Justice Stone delivered the opinion of the Court. Certiorari was granted to review a decree of the Court of Appeals for the Second Circuit, affirming a decree of a district court holding invalid, for want of invention, the Torchio patent, No. 1,172,322, of February 23, 1916, applied for March 15, 1915, for “ an improvement in protective devices for electric cable joints.” 66 F. (2d) 739. The Court of Appeals for the Sixth Circuit had previously held the patent valid and infringed. Metropolitan Devices Corp. v. Cleveland Electric Illuminating Co., 36 F. (2d) 477. ELECTRIC CABLE CO. v. EDISON CO. 71 69 Opinion of the Court. Correct appreciation of the contentions made requires at the outset some discussion of the structure of electric cables for the transmission of high tension (voltage) electric currents and, more particularly, the causes of leakage or wastage of current at the joints of such cables, for the prevention of which the patented device is said to be useful. Cables for the transmission of high tension currents comprise a plurality of copper conductors, usually three in number, each covered with an insulating tape of paper or fabric, enclosed in an outer insulating wrapping, and all in turn surrounded by pervious insulating material filling the interstices between the conductors and saturated with oil. The whole is enclosed in a lead tube or sheath, which constitutes the outer surface or cover of the cable. In practice the cables are spliced or connected by forming a joint at the connecting ends. This is accomplished by cutting back the lead sheath for a suitable distance, bringing the ends of the conductors together and joining them, usually by a connecting copper sleeve, and covering or surrounding them with successive wrappings or layers of insulating material, impregnated with an insulating compound such as an oil, long recognized as a desirable insulating material. A cylindrical lead sleeve is then placed over the joint and soldered at its ends to the lead sheath of the cable so as to surround and hermetically enclose the joint. Through openings made in the sleeve insulating compounds may be introduced. Leakage of current at the joint results from imperfect insulation. Deterioration in the insulation may result from the drying out of the insulating material, particularly through loss or “ bleeding ” of the insulating fluid at the ends, or when the cable is cut. Also, high tension currents, ranging upwards from 15,000 volts, develop heat in the conductors and adjacent material, with consequent expansion and corresponding contraction when cooling, known as “ breathing.” This causes migration of the in- 72 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. sulating compound within the cable and to some extent its extrusion, and produces cracks and voids in it, with resulting ionization of the interstitial air at high tensions, and the lowering of the dielectric strength or resistance of the cable at the joint. The patent claimed is for a device, in combination, to prevent current leakage by improving the insulation. Claim 4, upon which alone the petitioner relies, reads: “ 4. An electric cable, comprising a sheath, a line conductor having a joint, a body of pervious insulating material inclosing said joint, the said sheath being removed for a distance sufficient to expose said pervious body, a sleeve of impervious material of greater diameter than said body, inclosing the same and hermetically united at its ends to said cable sheath, a receptacle communicating with the interior of said sleeve, and an insulating fluid adapted to permeate said pervious body contained in said receptacle and the space between said body and said sleeve.” On February 11, 1927, before either the present suit or that in the Sixth Circuit was begun, an assignee of the patent and petitioner’s predecessor in interest filed a disclaimer of the improvement, “ except for electric cables which comprise a line conductor, insulating wrapping permeated with insulating compound and a sheath of flexible, inelastic metal constituting a unitary product of manufacture and commerce which is portable and capable of being drawn through conduits; and except as to an insulating liquid which is fluid at ordinary working temperatures of such cables and in quantity sufficient to supply at all times the demands made by the cable in use, and by the joint.” Petitioner’s expert testified at the trial, as the prior art shows, that Torchio was not the first to discover that oil is an insulating material; that he was not the first to provide a cable with conductors enclosed in insulating ma- ELECTRIC CABLE CO. v. EDISON CO. 73 69 Opinion of the Court. terial permeated with oil, or the first to make joints in a cable or to use pervious insulated wrappings of joints, or to show a sleeve enclosing the joint larger than the sheath of the cable, hermetically closed and connected to the metal sheath of the cable. The only elements enumerated in the claim, asserted to be new, are the receptacle communicating with the interior of the sleeve, and the insulating oil or liquid, fluid at low temperatures, contained in the receptacle and in the space between the sleeve and the pervious insulating material surrounding the joint. The issue for decision is whether the addition of these elements, in combination with the others enumerated in the claim, involve invention. In the earlier case the Court of Appeals for the Sixth Circuit held Claims 3 and 4 valid. Claim 3 embraces all the elements of Claim 4, except the communicating reservoir containing the described insulating fluid. That court did not discuss the reservoir or pass upon its effect as adding anything patentable to the combination. It concluded on the evidence before it that Torchio had substituted, in a combination which was old, a liquid insulating compound for a compound not soft enough to flow; that this was new and was enough “beyond the skill of an expert ” to amount to invention, and that the patent was there infringed by the use in the combination of a jointinsulating compound “normally of the consistency of vaseline or jelly.” In the present case both courts below found that the use of oil or an insulating liquid, fluid at ordinary working temperatures, within the sleeve enclosing the joint, had been disclosed in printed publications before the alleged invention by Torchio, and they held that the addition of the reservoir or receptacle containing the fluid and communicating with the interior of the sleeve did not involve invention and was known before Torchio. 74 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. Brief reference will be made to the prior art, shown by the present record, which was not before the Court of Appeals for the Sixth Circuit in the earlier case. The British patent of Geipel, No. 11,280, of Decembers, 1894, disclosed an electric cable joint box “ filled with a suitable insulating material, as for example oil, wax, bitumen, or any combination of any of these according to the nature of the insulation used for the conductor . . . with paper or jute insulated conductors oil may be used.” The patent states “with paper, jute, hemp, flax, cotton or other suitable insulating material the joints . . . are best surrounded by oil.” The Lemp patent, No. 534,802, of February 26, 1895, speaks of the use of oil in electric transformers in which the conductors forming the primary are insulated with asbestos “ loosely wound to allow the asbestos to take up the oil.” The space containing the primary “ is filled with oil connected with a reservoir or supply pipe being maintained to allow for expansion under increase of temperature.” In 1907 de Gelder published at The Hague a description of the electric cable system of the city of Amsterdam. He described “high tension cables for 3,000 volts” having paper insulation impregnated “ with a rather thin liquid, oily and not too resinous mass ” with cable joints bound with linen tape first boiled in oil so that it is completely saturated, with the wrapped joint enclosed in a lead sleeve, soldered to the lead sheath of the cable. Through a hole cut in the top of the sleeve or socket “ hot insulating mass is poured into the socket. For this purpose the same mass or rather the same oil is used as for impregnating the cable. It is a kind of resin oil.” The paper also points out that the impregnating mass used with the high tension, paper insulated cables supplied by a British firm is thinner than that used in other types, that in the British cables being ELECTRIC CABLE CO. v. EDISON CO. 75 69 Opinion of the Court. “ a rather thin resinous oil at 15° Centigrade, 59° Fahrenheit.” Since 1911 the Consolidated Gas Electric Light & Power Company in Baltimore has used oil in insulating its cables carrying a current of 13,000 volts or more, the cables consisting of three paper-wrapped conductors, insulated with oil impregnated jute, enclosed in a lead sheath. To avoid the draining out of the cables and the consequent defective insulation in sections extending vertically from the subterranean conduits to the power houses, the cables were passed into enlarged containers or potheads containing oil, which, flowing downward in the cables, replenished the oil in the jute insulation for distances as great as 1200 feet. Paraffin, solid at ordinary temperatures, which had originally been placed in the potheads, was found unsatisfactory. Defective insulation resulted from drying out of the cables, and in 1911 paraffin was replaced by an oil which was fluid at ordinary temperature. Vernier, in an article on “ The Laying and Maintenance of High Tension Cables,” published in the journal of the Institution of Electrical Engineers in 1911 and in summarized form in “The Electrician” of March 10, 1911, discussed in detail the insulation of joints in electric cables carrying currents up to 20,000 volts. He described a cable consisting of three paper insulated conductors enclosed in a lead sheath or tube. He pointed out the dangers of voids in joint insulating material and ensuing gas ionization which result in reduced “ breakdown pressure ” or dielectric strength and described a method of insulating the joint by wrapping the conductors with oil impregnated tape surrounded with insulating material, all enclosed in a lead sleeve, soldered to the lead sheath of the cable. This sleeve, he stated, was then filled with an insulating compound of either “ an oil or a viscous joint box compound, preferably the latter, which can run into the tubes 76 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. and all parts of the joint box.” Again “ Such a compound must be viscous of about the consistency of thick cream at ordinary temperatures. When heated it should run as freely as heated oil so as to penetrate all crevices and it must retain these features through its life . . .” The tendency of solid compounds to form air voids was pointed out and the author’s preference for a joint filled with oil or a compound viscous at ordinary temperatures was stated. Vernier’s teaching of “ a viscous compound which never sets” is referred to in connection with his name in Pender’s American Handbook of Electrical Engineers, 1914, a standard work of authority. Torchio himself, in a written report to his employers, in 1914, on the Berlin cable system, transmitting currents of 30,000 volts, described the cables as having joints enclosed in a lead sleeve soldered to the lead sheathing of the cable by means of “ wiped joints,” and as being insulated with a compound which “ at normal temperature is semi-liquid and is similar to the compound used for saturation of cables.” In August, 1914, an associate, in reporting to him in writing upon the underground cable system in Boston carrying from 13,000 to 25,000 volts, described cables in use there as consisting of three conductors, paper wrapped and sheathed in lead. He described a joint box in use enclosing the insulated conductors and filled with an insulating compound which “at ordinary temperature is about the viscosity of molasses.” The prior art thus briefly outlined shows that an insulating fluid, described in Torchio’s fourth claim as “ adapted to permeate the pervious material surrounding the conductors,” used with the other elements of the joint sleeve combination embraced in his third claim, was not new and was fully described in publications before Torchio. Its advantages in such use over non-fluid compounds had been recognized and pointed out. Hence, petitioner’s claim to patentable invention must rest on the ELECTRIC CABLE CO. v. EDISON CO. 77 69 Opinion of the Court. addition of the other elements enumerated in Claim 4, the receptacle containing the described insulating fluid and communicating with the sleeve. The combination thus effected, it is said, is especially adapted to insulating the joint and is useful in replacing the loss of insulating oil, in connection with the “ breathing ” which takes place in the cable, particularly at the joints when in use. The expansion of the interior cable parts and insulating material, accompanying the rise in temperature, forces the oil from the joints along the cable and also causes it to exude at the joints. As the cable cools, the fluid insulation, particularly at the joint, may not be sufficient to fill it and voids result. This occurs the more readily if the insulating compound tends to solidify at cooling temperatures. These consequences are avoided by the use, in conjunction with the reservoir, of oil which is sufficiently fluid to flow freely at ordinary cable temperatures. The breathing accompanying the alternate expansion and contraction of the cable through the creation of partial vacua within the insulating material facilitates the migration of the oil within the cable. The reservoir provides for sufficient excess of reserve oil to restore the losses of oil from the joint and thus to prevent formation of the voids or to fill them. Breathing is a natural phenomenon. The expansion and contraction of materials used in cables under the influence of changing temperatures are within the range of ordinary scientific knowledge. Breathing is readily observable and known by those having the skill of the art. Torchio did not invent it, nor was he the first to observe it. Publications before Torchio did not make use of the term, but they disclosed knowledge of the effect of temperature changes upon the cable and the insulating fluid. In 1907, de Gelder, in recommending the use of oil in joint boxes, mentioned the fact that the heating of the cable would cause the insulating mass to flow from the 78 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. joints, and called attention to the probability that if the oil was pressed out by overheating “when contraction takes place water will be sucked in even though the junction box may be well sealed.” He also spoke of the downward shifting or draining out of the oil in cables if elevated at or near their terminals, as had been observed in the lines of the Baltimore light and power system. The potheads used as oil reservoirs in the Baltimore installation, when full of a free flowing oil, were observed to overflow when the cables were heated, and the migration of the oil along the cables for considerable distances was also noted. Vernier noted the shrinkage of joint box insulating compounds on cooling and their tendency in the process to form vacua, and “ if of a solid nature, to form blow holes or air pockets.” In recommending that the joint sleeve be filled with oil he pointed out the tendency of the insulating oil to run out of the cable when cut and recommended the construction of the joint by the use of insulating tape “ so as to allow the greatest possible freedom of access to the oil which will keep the insulating tapes constantly impregnated.” The oil or joint box compound used, he said, “ must be viscous and of about the consistency of thick cream at ordinary temperatures,” and he stated that impregnation “ will be greatly assisted by the constant temperature changes which the cable undergoes under changes of load.” This was a clear recognition of the phenomenon of breathing and the adaptability to it of an oil which, with the heat developed in high tension cables, would flow freely “ so as to penetrate all crevices.” Thus the use in cable joints of an oil, free flowing at prevailing cable temperatures, by introducing it into the joint sleeve combination of petitioner’s third claim, was not only old, but before Torchio the special adaptability of that combination to the need because of the expansion and contraction of the cable structure in use had been recognized and described by publication. ELECTRIC CABLE CO. v. EDISON CO. 79 69 Opinion of the Court. To this the petitioner added the oil reservoir. The fact that the combination, without it, was old does not preclude invention by the addition of a new and useful element. Parks v. Booth, 102 U.S. 96, 104. But the addition must be the result of invention, not the mere exercise of the skill of the calling and not one plainly indicated by the prior art. Figure 1 of the patent shows the receptacle claimed, a reservoir connecting with the lead sleeve. Figure 6 shows the sleeve without the connecting reservoir, protruding upward above the wrapped joint so as to form a dome affording an increased interior oil space. The patent states “ Instead of making the reservoir 10 in the form of a separate chamber communicating with the sleeve as shown in Figure 1, I may dispose the sleeve eccentrically on the joint so that the greatest clearance will be uppermost as shown at 12 in Figure 6. In this way I produce an additional holding space for the oil within the sleeve itself.” This additional holding space is thus described as the equivalent of the reservoir in the form of a separate chamber or receptacle, enumerated in Claim 4. Vernier showed a like enlargement in the sleeve in sketches in his published article. He does not refer to this protuberance or dome as a reservoir, but examined in the light of the text its function is unmistakable. See In re Bag er, 47 F. (2d) 951, 953. The prior art had also foreshadowed the enlargement in the form of a receptacle or reservoir. Such were the potheads used by the Baltimore Power and Light Company for oil impregnation of cable insulation. Lemp showed and described an additional holding space in the form of a connecting receptacle for the oil insulation of transformers. But in any case enlargement of the oil space in the sleeve in an existing combination, so as to increase the oil supply, would clearly not involve any special skill, to say nothing of invention. It was not invention to bring into the combination its equivalent, a further enlargement 80 OCTOBER TERM, 1933. Syllabus. 292 U.S. and extension of the holding space in the form of the familiar device of a connecting oil cup or reservoir, so as to increase the oil supply. No more than the skill of the calling was involved. Concrete Appliances Co. n. Gomery, 269 U.S. 177; Saranac Automatic Machine Corp. n. Wirebounds Patents Co., 282 U.S. 704, 713; DeForest Radio Co. v. General Electric Co., 283 U.S. 664, 685. Neither the means employed nor the result obtained was novel. See Hailes n. Van Wormer, 20 Wall. 353; Smith n. Nichols, 21 Wall. 112; Machine Co. v. Murphy, 97 U.S. 120; Pickering v. McCullough, 104 U.S. 310; Westinghouse Electric & Mjg. Co. v. Pittsburgh Transformer Co., 10 F. (2d) 593; D. J. Murray Mjg. Co. n. Sumner Iron Works, 300 Fed. 911, 912; compare R. Herschel Mjg. Co. v. Great States Corp., 26 F. (2d) 362, 363. We conclude that Claim 4 is invalid, and that the decree below must be Affirmed. ASCHENBRENNER v. UNITED STATES FIDELITY & GUARANTY CO. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE NINTH CIRCUIT. No. 578. Argued March 8, 1934.—Decided April 2, 1934. 1. If the language of an accident insurance policy is open to two constructions, that more favorable to the insured will be adopted. P. 84. 2. Words in an accident insurance policy, when not obviously intended to be used in their technical connotation, will be given the meaning that common speech imports. P. 85. 3. An accident policy provided for double indemnity if injury were sustained by insured “ while a passenger in or on a public conveyance (including the platform, steps or running-board thereof) provided by a common carrier for passenger service.” Insured, at a proper station, had boarded the steps of a moving train and ASCHENBRENNER v. U. S. F. & G. CO. 81 80 Opinion of the Court. was standing there, holding on, when his body, projecting out, struck some obstacle and he was brushed off and killed. Held: (1) That the question whether he was a “passenger” at the time did not depend upon the meaning of that word in the terminology applied in negligence suits against common carriers. P. 83. (2) The insured was a “ passenger ” within the meaning of the policy, construing it liberally in his favor and giving its words their common meaning. P. 85. (3) The fact that the stipulation construed was one for double indemnity was not a reason for construing it more strictly than other provisions of the policy. P. 85. 65 F. (2d) 976, reversed. Certiorari, 290 U.S. 622, to review a judgment directing that a recovery of double indemnity on a policy of accident insurance be reduced one-half. Mr. Randell Larson, with whom Mr. Allen G. Wright was on the brief, for petitioner. Mr. George A. Work, with whom Mr. Edwin C. Brandenburg was on the brief, for respondent. Mr. Justice Stone delivered the opinion of the Court. Petitioner, a beneficiary of a policy of accident insurance issued to her husband by respondent, brought this suit in the District Court for Northern California to recover under the double indemnity provisions of the policy. At the trial liability was conceded for the single amount stipulated to be paid in the event of the insured’s death by accident, but double liability was contested on the ground that the insured, at the time of the accident, was not a passenger on a common carrier within the meaning of the double indemnity provisions of the policy. A judgment entered upon a verdict for the petitioner for the double liability was reversed by the Court of Appeals for the Ninth Circuit, which directed that judgment be reduced by one-half. 65 F. (2d) 976. Certiorari was 61745°—34-------6 82 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. granted to resolve an alleged conflict of the decision below with those in other circuits. See London Guarantee & Accident Co. v. Ladd; Preferred Accident Ins. Co. v. Ladd, 299 Fed. 562, 565 (C.C.A. 6th); Aetna Life Ins. Co. v. Davis, 191 Fed. 343 (C.C.A. 8th); Preferred Accident Ins. Co. v. Muir, 126 Fed. 926 (C.C.A. 3d); compare Fidelity & Casualty Co. v. Morrison, 129 Ill. App. 360. The policy provided for payment of a specified amount in case of loss of life of the insured resulting from accidental bodily injury and for payment of double that amount “if such injury is sustained by the insured (1) while a passenger in or on a public conveyance (including the platform, steps or running board thereof) provided by a common carrier for passenger service.” The insured, who had in his possession a ticket entitling him to transportation, arrived at the railroad station platform just as the train started to move out of the station. There was testimony from which the jury might have found that, while the train was moving at a speed of seven to ten miles an hour but was still within the station and opposite the platform, with vestibule doors open, the insured jumped onto the lower step of a car, his hand grasping the handrail, and that he continued for a brief time, while the train moved about twenty feet, to stand with both feet upon the step but with a small part of his body or clothing projecting beyond or outside the vestibule until it brushed against a bystander on the platform in a manner causing the insured to lose his hold and fall to his death. The trial judge instructed the jury that if the insured held a ticket entitling him to ride as a passenger, and in attempting to board the train while in motion he stood with both feet upon the step, he was a passenger and entitled to recover under the double indemnity clause. The only question which it is necessary to decide here is whether the insured was a “ passenger ” at the time of the accident within the meaning of the policy. The Court of ASCHENBRENNER v. U. S. F. & G. CO. 83 80 Opinion of the Court. Appeals ruled that he was not; it reached this conclusion by applying the term as it was said to be defined in the law of common carriers. In personal injury suits against common carriers, brought by persons who, intending to be passengers, were injured while endeavoring to mount the steps of a moving train, courts have sometimes said that the implied invitation to board the train is withdrawn when it begins to move and that the duty of the carrier to exercise a high degree of care toward its passengers does not attach in such circumstances because one seeking to board a moving train does not become a passenger until he reaches a place of safety. Trapnell v. Hines, 268 Fed. 504, 506; Illinois Central R. Co. v. Cotter, 31 Ky. Law Rep. 679; 103 S.W. 279; Kentucky Highlands R. Co. v. Creal, 166 Ky. 469; 179 S.W. 417; Mathews v. Metropolitan Street Ry. Co., 156 Mo. App. 715; 137 S.W. 1003; Schepers v. Union Depot R.-Co., 126 Mo. 665, 675; 29 S.W. 712; Tompkins v. Portland Ry. Co., 77 Ore. 174, 179; 150 Pac. 758; Palmer v. Willamette Valley Southern Ry. Co., 88 Ore. 322, 330; 171 Pac. 1169. The Court of Appeals thought that the evidence here would have made no case for the jury in a suit against the carrier, and therefore concluded that the trial judge should have directed a verdict for the insurer on the issue of double indemnity. No doubt intending passengers who are injured in attempting to board a moving train, unless they were invited to do so, are not usually entitled to recover from the carrier. But it is not clear that such cases turn on the existence or non-existence of the passenger-carrier relationship. See Atchison, T. & S. F. Ry. Co. v. Holloway, 71 Kan. 1; 80 Pac. 31. It has often been recognized that the relationship of carrier and passenger may arise and the duty of the carrier to the passenger attach when the latter comes upon the station platform and before boarding the train. See Warner v. Baltimore & Ohio R. Co., 84 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. 168 U.S. 339; Atchison, T. & S. F. Ry. Co. v. Holloway, supra; Wabash, St. L. & P. R. Co. v. Rector, 104 Ill. 296; Chicago & E. I. R. Co. v. Jennings, 190 Ill. 478, 483; 60 N.E. 818; Michie, Carriers (1915), §§ 2126, et seq. Yet the negligence of a passenger in going into a known place of danger without the inducement or invitation of the carrier may bar his recovery for the resulting injury, even though the passenger-carrier relationship has begun and continues. See Warner v. Baltimore & Ohio R. Co., supra; Daley v. Boston, R. B. & L. R. Co., 241 Mass. 78; 134 N.E. 376. And in the case of the insured, who had come upon the station platform intending to be a passenger, it may be that negligence in jumping uninvited onto the moving train would bar his recovery from the carrier without resort to the artificial assumption of a hiatus in that relationship during the brief interval required for boarding the train. The notion of such a suspension of the passenger-carrier relationship has been rejected in allowing recovery upon policies insuring against injury while travelling as a “ passenger ” on a railway train, both where the passenger alighted from the train at an intermediate stop and was injured in attempting to return to the train after it started to move again, Wharton v. New York Life Ins. Co., 178 N.C. 135, 138; 100 S.E. 266, and where the insured, in beginning his journey, was injured in attempting to board a moving train. Fidelity & Casualty Co. v. Morrison, 129 Ill. App. 360. But it is unnecessary here to follow the niceties of legal reasoning and terminology applied in negligence suits against common carriers, for we are interpreting a contract and are concerned only with the sense in which its words were used. Farber v. Mutual Life Ins. Co., 250 Mass. 250, 254; 145 N.E. 535; Boyd v. Royal Indemnity Co., 120 Oh. St. 515, 517; 166 N.E. 580. The phraseology of contracts of insurance is that chosen by the insurer and the contract in fixed form is tendered to the prospective policy holder who is often without technical training, and ASCHENBRENNER v. U. S. F. & G. CO. 85 80 Opinion of the Court. who rarely accepts it with a lawyer at his elbow. So if its language is reasonably open to two constructions, that more favorable to the insured will be adopted, Stipdch v. Metropolitan Life Ins. Co., 277 U.S. 311, 322; Mutual-Life Ins. Co. v. Hurni Packing Co., 263 U.S. 167, 174; and unless it is obvious that the words are intended to be used in their technical connotation they will be given the meaning that common speech imports. Neighbors v. Life & Casualty Ins. Co., 182 Ark. 356; 31 S.W. (2d) 418; Tupper v. Massachusetts Bonding & Ins. Co., 156 Minn. 65; 194 N.W. 99; Anderson v. Fidelity & Casualty Co., 228 N.Y. 475, 483; 127 N.E. 584. We think the word “ passenger ” can not be restricted to the technical meaning which may be assigned to it by the law of common carriers, for it also has a common or popular meaning which would at least include the insured who, with a ticket in his possession, was riding on the steps of the train. In its usual popular significance the term, when applied to one riding a train, indicates a traveller, intending to be transported for hire or upon contract with the carrier, and distinguishes him from those employed to render service in connection with the journey. See Wood n. General Accident Ins. Co., 160 Fed. 926; Travelers Ins. Co. v. Austin, 116 Ga. 264; 42 S.E. 522; Ward v. North American Accident Ins. Co., 182 Ill. App. 317; compare Continental Life Ins. Co. v. Newman, 219 Ala. 311; 123 So. 93; U.S. Casualty Co. v. Ellison, 65 Colo. 252; 176 Pac. 279. None of the standard dictionaries defines the term in a fashion suggesting that its meaning is to be limited in terms of the legal liability of the carrier. While for the purposes of judicial decision dictionary definitions often are not controlling, they are at least persuasive that meanings which they do not embrace are not common. That the stipulation to be construed is one for double indemnity calls for no different conclusion. It has been 86 OCTOBER TERM, 1933. Syllabus. 292 U.S. argued that such a provision contemplates a risk which is comparatively slight and that therefore it should be strictly construed. It may be that the insurer assumes little additional risk; but the terms of the clause disclose an inducement to insure set forth in attractive detail.1 The policy contains no exceptions exempting the insurer from liability if the injury is caused by negligence of the insured, or restricting the liability to accidents occurring only after a point of safety has been reached, and the steps of a car are specifically included in the place where injury insured against may occur. Nothing in the policy gives any hint that words in this clause are used more narrowly than those in any other. The insurer has chosen the terms, and it must be held to their full measure in this clause, as in any other, whether its promise be for more or less. London Guarantee & Accident Co. v. Ladd, 299 Fed. 562, 564; Cedergren n. Massachusetts Bonding & Ins. Co., 292 Fed. 5, 8; Dolge v. Commercial Casualty Ins. Co., 211 App. Div. 112; 207 N.Y.S. 42; Stewart v. North American Acc. Ins. Co., 33 S.W. (2d) 1005 (Mo. ¿P^’ Reversed. M0NAM0T0R OIL CO. v. JOHNSON, TREASURER OF IOWA, ET AL. APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF IOWA. No. 555. Argued March 7, 8, 1934.—Decided April 2, 1934. 1. Laws of Iowa, 42 General Assembly, *c. 103, § 1, imposing an additional tax per gallon on motor vehicle fuel imported and used 1 Discussion of the double indemnity provisions from the standpoint of risk and sales value may be found in Sommer, Manual of Accident and Health Insurance, 16, 84 et seq.; Hutcheson, Note on Double Indemnity Clauses, 19 Transactions, Actuarial Society of America, 332. MONAMOTOR OIL CO. v. JOHNSON.. 87 86 Syllabus. within the State, held consistent with provisions of the Iowa constitution respecting title and substance of taxing laws. P. 93. 2. A State may impose a tax on the local use of gasoline imported from without and collect it by requiring the importing distributor to report the amounts of his importations, account to the State for the corresponding taxes, as collecting agent of the State, and pass on the tax burden to consumers by adding it to the selling price. P. 93. 3. No unlawful burden on interstate commerce results from the circumstance that, in the application of this method of collection, the distributor may make preliminary payments in respect of imported gasoline which he intends at the time to export, or which he may afterwards in fact export, from the State, where, as in this case, he is entitled to a refund of such payments. P. 94. 4. The Iowa statute here involved obviously was not intended to reach transactions in interstate commerce, but to tax the use of motor fuel after it had come to rest in Iowa; and the requirement that the distributor as the shipper into Iowa shall, as agent of the State, report and pay the tax on the gasoline thus coming into the State for use by others on whom the tax falls, imposes no unconstitutional burden either upon interstate commerce or upon the distributor. P. 95. 5. A distributor of gasoline, in being required to prepay to the State the taxes that are ultimately to be passed on to and paid by those who buy the gasoline for local consumption as motor vehicle fuel, is not himself taxed but is merely made a collecting agency, and has no ground for alleging that he is deprived of equal protection of the laws by a statutory provision under which the tax, when paid on gasoline consumed for .other uses, not taxed, is refunded to the consumer by the State. P. 95. 6. Code of Iowa, c. 241-B1, § 4755-b38, laying an additional tax on all motor fuel imported and used within the State, applies to gasoline manufactured within the State as well as to that which is imported. P. 96. 7. One who has not sustained and is not threatened with injury from a statute can not complain of an alleged discrimination arising from it. P. 96. 8. Revocation without notice or hearing qf a license to distribute gasoline, required by the Iowa law, held not a taking of property, in the absence of any penalty for doing business unlicensed, and of any threat of other injury to the licensee. P. 97. 88 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. 9. In a suit to restrain state officers from enforcing a taxing statute, a federal court has no jurisdiction to enjoin the prosecution of a prior action in a state court, for collection of taxes under such statute. Jud. Code, § 265. P. 97. 3 F.Supp. 189, affirmed. Appeal from a decree of the District Court, of three judges, dismissing a bill seeking to restrain the Treasurer. Attorney General, and other officials of the State of Iowa. Questions under the State and Federal Constitutions were involved and diverse citizenship was alleged. Messrs. Paul E. Roadijer and M. D. Kirk, with whom Messrs. George S. IT right and Addison G. Kistle were on the brief, for appellant. Mr. L. W. Powers, Special Assistant Attorney General of Iowa, for appellees. Mr. Justice Roberts delivered the opinion of the Court. The appellant filed a bill in the District Court for Southern Iowa, seeking a declaration that the laws of Iowa laying a tax on motor vehicle fuel violate state and federal constitutional provisions, and an injunction against their enforcement by state officers. A temporary injunction issued, but a court of three judges, upon final hearing, dismissed the suit.1. The case is here on direct appeal. The general assembly of the State, in order to raise revenue for the improvement of highways, imposed a license fee of two cents per gallon on all motor vehicle fuel “ used or otherwise disposed of in this state for any purpose whatsoever”; and directed that “Any person using motor vehicle fuel within the state shall be liable for the fee herein provided for unless the same shall have 13 F.Supp. 189. 86 MONAMOTOR OIL CO. v. JOHNSON. Opinion of the Court. 89 been previously paid.” 2 By a later statute an additional license fee of one cent per gallon was imposed.3 The law defines “ distributor ” as “ any person who brings into the state or who produces, refines, manufactures or compounds within the state any motor vehicle fuel to be used within the state or sold or otherwise disposed of by him within the state for use in the state.” “ Person ” is defined to include partnerships, corporations and associations. One who sells at retail is required to keep posted in a public place a placard showing the total sale price per gallon, including license fee, and to have printed on the placard the words “ state license fee included.” It is declared unlawful to conduct the business of a distributor unless a certificate giving certain information is filed with the state treasurer and a license is procured permitting the conduct of that business. Every distributor is required on or before the twentieth day of each calendar month to file with the state treasurer a report showing the total number of gallons imported by him during the preceding calendar month, with details as to each shipment, and at the same time to remit to the treasurer the amount of the license fee for such preceding month; he may, however, deduct three per cent, of the gallonage for evaporation and loss. If after the fee is remitted the fuel is destroyed by casualty not due to the fault of the distributor, before being sold or used, a refund of the tax paid 2 Laws of the 41st General Assembly, Chapter 6, § 1, as amended by laws of 42d General Assembly, Chapter 248, § 1; Code of Iowa of 1931, Chapter 251-Al, § 5093-al. 3 “ There is hereby levied on all motor vehicle fuel imported and used within this state a license fee of one cent per gallon, which shall be in addition to the license fee levied by chapter 251-Al. AU of the provisions and conditions of said chapter 251-Al relating to the levy, coUection or payment of the license fee on motor vehicle fuel shaU apply with equal force to the license fee levied herein. . . .” Laws of the 42d General Assembly, Ch. 103, § 1; Code of Iowa, 1931, Chapter 241-B1, § 4755-b38. 90 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. thereon is to be made by the state treasurer. The act declares that its provisions are not to apply to foreign or interstate commerce. As distributors import gasoline into Iowa for reshipment to other states, the state treasurer has, in the administration of the acts, permitted a deduction in the monthly reports of any gasoline so sold and reshipped to points outside the state. There is provision that one using fuel purchased for a purpose other than for a motor vehicle may, upon making claim upon the state treasurer in proper form and in due time, obtain a refund of the amount of the tax paid in respect of it. A penalty of ten per cent, of the amount of the tax is imposed upon a distributor who fails to remit on or before the twentieth of the month following the importation. The attorney general is empowered to bring action on behalf of the state against any distributor who is in default for thirty days in payment of tax. The state treasurer is authorized to revoke the license of a distributor who fails to render the prescribed reports, or renders a false report, or fails to pay the license fee when due, and he need not renew the license until satisfied that the applicant will in future comply with the law. Distributors are required to permit inspection of their books, records, papers, invoices and equipment. It is made a misdemeanor for a distributor or any principal officer to refuse to submit the prescribed reports and certificates to the treasurer, or to refuse an examination of books, records and equipment by the treasurer or his representatives, or to violate other provisions.4 The appellant is an Arizona corporation whose business is the buying, manufacturing, blending and selling of gasoline and kindred products, including the importation into Iowa of gasoline by tank cars, trucks and other con- 4 Code of Iowa, 1931, Chapter 251-Al. See also § 4755-b38. 86 MONAMOTOR OIL CO. v. JOHNSON. Opinion of the Court. 91 tainers, for resale to consumers and to dealers who sell to consumers, and the exportation of gasoline to other states; the maintenance of storage facilities in Iowa, from which deliveries are made in that and other states, and the maintenance of a refinery at Carter Lake, Iowa, where gasoline is blended and compounded and shipped to points in Iowa and other states. Prior to April, 1932, gasoline was refined at this plant. The corporation maintains numerous service stations in Iowa which sell to consumers. Upon the filing of a certificate with the state treasurer the company received a distributor’s license; and between May, 1927, and May, 1932, paid to the state treasurer monthly, in accordance with the reports rendered, many thousands of dollars as license fees. There was included in the amount so reported and paid a tax at the rate of three cents per gallon on gasoline imported into Iowa and gasoline refined and manufactured at the refinery at Carter Lake. No question seems to have been raised as to the applicability and validity of the statute until about May, 1932. At that time a controversy arose out of the following facts: Carter Lake, Iowa, where the appellant’s refinery is located, now lies on the west shore of the Missouri River, not far from Omaha, Nebraska. It was originally on the east side of the river, the interstate boundary. By an avulsion the stream changed its course to the east of Carter Lake, but the old bed remained the interstate boundary. The refinery ships large quantities of gasoline to points in Nebraska and also to points in Iowa. The question arising whether the appellant should report gasoline which was ultimately distributed in Iowa upon its arrival at Carter Lake, or its manufacture there, or when it was shipped from Carter Lake to other points in Iowa, the state treasurer and the appellant agreed that importations into Carter Lake need not be treated as im- 92 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. portations into Iowa, but when gasoline arriving at Carter Lake or there manufactured should be shipped to other points in Iowa, it should be treated as then imported into the state for the purpose of report and payment of the tax by the appellant. This arrangement was made for the convenience of the parties. Prior to May, 1932, the appellant shipped forty tank cars of gasoline from the refinery at Carter Lake to destinations in Iowa, for sale and use there. Its employees and agents altered the invoices and waybills on these shipments so as to show “ gas-oil ” instead of gasoline and omitted to report them to the state treasurer, or to pay tax upon them, as should have been done in accordance with the arrangement mentioned. When the state treasurer called appellant’s attention to the falsification of its reports the representatives of the company for the first time asserted that as gasoline moving from Carter Lake to other points in Iowa had to pass through Nebraska the shipments were interstate, and a tax on them would be a burden upon interstate commerce. The state treasurer, having confirmed the facts by an audit of the company’s books, caused the appellant and certain of its officers to be indicted for making a false return, procured the attorney general to bring a civil action against the appellant by attachment to recover the unpaid tax on gasoline imported and used within the state, and notified the appellant that he had revoked its license as a distributor. The individual defendants pleaded guilty and were fined, and the indictment was dismissed, as to the company. The civil suit was pending when the present bill was filed, asserting the invalidity of the law, and praying that the state treasurer and other officials be enjoined from interfering with the conduct of appellant’s business as a distributor, from collecting the taxes imposed by the statutes, and from prosecuting the civil action in the state court. MONAMOTOR OIL CO. v. JOHNSON. 93 86 Opinion of the Court. The district court, whose jurisdiction was invoked by reason of diversity of citizenship as well as the alleged conflict of the state statutes and the federal constitution, dismissed the bill. The decision is challenged for several reasons, but we are of opinion that it was proper. 1. The amendatory act by which an additional tax of one cent per gallon was imposed is said to violate provisions of the Iowa constitution respecting the title and the substance of taxing laws. The district court examined these contentions and found them without merit. We concur in its conclusions. 2. There is no substance in the claim that the statutes impose a burden upon interstate commerce, contrary to the prohibition of Article I, § 8 of the Federal Constitution. The appellant insists that the tax is a direct tax on motor vehicle fuel imported. The court below concluded that the law laid an excise upon the use of fuel for the propulsion of vehicles on the highways of the state. The state officials have administered the tax on this theory. We think this the correct view. The levy is not on property but upon a specified use of property. Altitude Oil Co. v. People, 70 Colo. 452; 202 Pac. 180; Standard Oil Co. n. Brodie, 153 Ark. 114; 293 S.W. 753. It is not laid upon the importer for the privilege of importing (compare Brown N. Maryland, 12 Wheat. 419; Bowman v. Continental Oil Co., 256 U.S. 642, 647), but falls on the local use after interstate commerce has ended. Compare Sonneborn Bros. v. Cureton, 262 U.S. 506; Nashville, C. & St. L. Ry. Co. v. Wallace, 288 U.S. 249; Edelman v. Boeing Air Transport, Inc., 289 U.S. 249. The statute in terms imposes the tax on motor vehicle fuel used or otherwise disposed of in the state. Instead of collecting the tax from the user through its own officers, the state makes the distributor its agent for that purpose. This is a common and entirely lawful arrangement. Cit- 94 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. izens National Bank n. Kentucky, 217 U.S. 443, 454; Pierce Oil Corp. v. Hopkins, 264 U.S. 137; Standard Oil Co. v. Brodie, supra; Standard Oil Co. v. Jones, 48 S.D. 482; 205 N.W. 72. The distributor who reports the gasoline and pays the tax is required to pass the burden on to the consumer, who is advised that in addition to the price of the gasoline he is paying a license fee to the state. To prevent evasion the distributor must pay and pass on the tax on all gasoline imported or distributed, irrespective of its ultimate use; but as some purchasers employ the gasoline for a purpose other than the propulsion of a motor vehicle, and as the burden of the tax has been passed on to them as well as those who desire a motor fuel, provision is made for a refund to the former. Since the law declares that the levy is only upon use of motor vehicle fuel in the state, and the intent is not to affect interstate commerce, the state treasurer properly permits distributors to deduct as a credit from the gasoline returned as imported into the state in any calendar month, that which has been exported from the state by the distributor. Thus gasoline passing through the state to reach its ultimate destination is exempt. It is of course true that as the report is required on the twentieth of the calendar month for transactions of the preceding month, there may at times be gasoline received in the month covered by the report which has not been exported by the twentieth of the succeeding month; but the distributor is entitled to a credit for such exportation in his report made in the next month, and the mere fact that he cannot claim an anticipatory credit for gasoline not yet exported, but intended so to be, seems to us to be too slight a burden to be of any moment, or to raise a substantial constitutional question. The appellant, however, says that the state officials have required it to report and to pay tax on shipments made from Oklahoma direct to dealers in Iowa who are 86 MONAMOTOR OIL CO. v. JOHNSON. Opinion of the Court. 95 appellant’s customers, and that in respect of such transactions the burden on interstate commerce is obvious. But if the gasoline so imported is intended to be used in Iowa for motor vehicle fuel it is subject to the tax. If it is not so used by the appellant’s customer, or by the purchaser at retail, either may obtain a refund of the tax collected by the appellant and remitted to the state. The statute obviously was not intended to reach transactions in interstate commerce, but to tax the use of motor fuel after it had come to rest in Iowa, and the requirement that the appellant as the shipper into Iowa shall, as agent of the state, report and pay the tax on the gasoline thus coming into the state for use by others on whom the tax falls imposes no unconstitutional burden either upon interstate commerce or upon the appellant. 3. The method of imposition and collection of the tax does not deny the equal protection of the laws guaranteed by the XIV Amendment. Complaint is made of several features of the law which are said to create arbitrary discriminations. Appellant first says that as it must pay to the state a tax of three cents on every gallon of gasoline imported, whereas the user who employs the gasoline purchased for some other purpose than motor fuel may obtain a refund of the tax paid in respect of the fluid so used, the law attempts to impose a tax on the distributor for the benefit of persons who buy or use gasoline for some purpose other than the operation of a motor vehicle on the highways, and that the result is the imposition on the distributor of a tax for the benefit of this other class of persons. The short answer to the contention is that the statutes properly construed lay no tax whatever upon distributors, but make of them mere collectors from users of motor vehicle fuel, and refund the tax only to that class of users upon whom no excise is intended to be laid. The distribu- 96 OCTOBER TERM, 1933. Opinion of the Court. 292 Ü.S. tor does not pay the tax; the user does. It cannot therefore be said that any tax is laid upon the appellant in ease of another class of taxpayers. The amendatory act, levying an additional cent per gallon, is said to discriminate against the appellant because if gasoline were distilled or manufactured in Iowa it would escape taxation, since the amendatory statute refers only to gasoline “ imported and used ” within the state. This statute is, however, an amendment or supplement to the earlier act taxing use and disposition of gasoline for motor fuel (see State v. Northern Iowa Oil Co., 209 Iowa 980; 229 N.W. 214), embodies by reference provisions of the earlier law (see Note 3, supra) and, as the District Court held, is, therefore, to be construed to cover gasoline whether imported or manufactured within the state. It appears, moreover, that no gasoline is or has been distilled or manufactured in Iowa except that which was distilled or manufactured by appellant prior to April 1, 1932. Since that date the appellant has not distilled or manufactured gasoline within the state. The appellant is not in a position to complain of any alleged discrimination arising from the terms of the statute, since it has not sustained injury and none is threatened which can affect it. It is asserted that naphtha imported into Iowa and blended may escape the tax on the ground that it is not motor vehicle fuel imported into Iowa. The evidence, however, discloses that the officers charged with the administration of the law are insisting that the tax should be paid on naphtha so imported and blended and in fact are now prosecuting a suit against another defendant on this theory. No reason appears why, even if such naphtha were held free of tax, this would constitute an unfair discrimination against appellant, which is required to collect from users the tax on gasoline. 86 MONAMOTOR OIL CO. v. JOHNSON. Opinion of the Court. 97 4. The revocation of the appellant’s license by the state treasurer without notice and hearing did not deprive it of property without due process in violation of the XIV Amendment. Whether in other circumstances the license contemplated by the statutes under consideration might be considered property within the protection of the due process clause we need not determine. It is sufficient in this case to advert to the undisputed facts disclosed by the record. The law imposes no penalty for conducting the business of a distributor without a license; the only penalties mentioned are for failure to report gasoline intended for use in the state, and to pay the tax. The state officers have not sought to prevent the appellant from continuing its business as a distributor, and have in this proceeding, both by answer and by evidence, avowed their purpose to take no further action against the appellant, either criminal or civil, until the conclusion of the civil suit now pending in a state court to recover the tax, the failure to pay which was the ground of revocation of the appellant’s license. The State’s officials are prosecuting the action as a test suit. There is therefore no threat of immediate harm as a result of the revocation of the license, and the action of the state treasurer in revoking it cannot affect the pending civil suit or any other action civil or criminal which may hereafter be brought. 5. By its bill the appellant asked an injunction against the further prosecution of the action at law in the state court for the failure to report and to pay tax on certain gasoline. The court below pointed out that § 265 of the Judicial Code (U.S.C. Tit. 28, § 379) forbids the granting of this prayer, and the appellant admitted at the bar that it could not have such relief and did not insist upon it. We find no error in the decision of the district court, and its judgment must be 61745°—34----J Affirmed, 98 OCTOBER TERM, 1933. Syllabus. 292 U.S. POKORA v. WABASH RAILWAY CO. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SEVENTH CIRCUIT. No. 585. Argued March 8, 9, 1934.—Decided April 2, 1934. 1. The burden of establishing the defense of contributory negligence in a personal injuries case is on the defendant. P. 100. 2. Upon a motion by the defendant for a directed verdict, made at the close of the plaintiff’s case in chief, and based upon the ground of contributory negligence, the evidence must be viewed in the light most favorable to the plaintiff and all inferences from it which the jury might reasonably draw in his favor are to be assumed. P. 100. 3. The preposition that a driver of an automobile, before crossing a railroad of which his view is obstructed, must get out of his vehicle and inspect the track if he can not otherwise be sure that a train is not dangerously near, can not be accepted as a general rule of law. Baltimore & Ohio R. Co. v. Goodman, 275 U.S. 66, limited. Pp, 102, 106. 4. The driver of an automobile truck, pursuing his way in a line of auto traffic along a busy city thoroughfare in the day time, attempted to cross another street traversed by a railroad switch track and, beyond that and close to it, by a main line for passenger trains. Before entering the street intersection, he had stopped his vehicle, and, before proceeding, he looked for trains, but a string of box cars on the switch cut off his view. He listened, but heard neither bell nor whistle. Still listening, he drove across the switch and, reaching the main line, was struck by a train coming at the unlawful speed of 25 or 30 miles per hour. The evidence would support a finding that, owing to the presence of the box cars and the proximity of the two tracks, the train was not visible from his seat while there was still time to stop. In an action for resulting injuries, held: (1) That the question whether, in the circumstances, it was negligence to go forward in reliance on the sense of hearing unaided by sight, was a question for the jury. P. 101. (2) The driver was not bound as a matter of law to leave his truck either on the switch track or at the curb, in order to make visual observations which might turn out worthless by the time he had returned to the vehicle and driven it forward. Pp. 104 et seq. 98 POKORA v. WABASH RY. CO. Opinion of the Court. 99 5. A standard of prudent conduct declared by courts as a rule of law must be taken over from the facts of life and must be such that a failure to conform to it is negligence so obvious and certain that rational and candid minds could not deem it otherwise. P. 104. 66 F. (2d) 166, reversed. Certiorari, 290 U.S. 624, to review the affirmance of a judgment for the Railway Company, entered on a directed verdict in Pokora’s action for personal injuries. Mr. W. St. John Wines for petitioner. Mr. Homer Hall, with whom Mr. Walter M. Allen was on the brief, for respondent. Mr. Justice Cardozo delivered the opinion of the Court. John Pokora, driving his truck across a railway grade crossing in the city of Springfield, Illinois, was struck by a train and injured. Upon the trial of his suit for damages, the District Court held that he had been guilty of contributory negligence, and directed a verdict for the defendant. The Circuit Court of Appeals (one judge dissenting) affirmed, 66 F. (2d) 166, resting its judgment on the opinion of this court in B. & 0. R. Co. v. Goodman, 275 U.S. 66. A writ of certiorari brings the case here. Pokora was an ice dealer, and had come to the crossing to load his truck with ice. The tracks of the Wabash Railway are laid along Tenth Street, which runs north and south. There is a crossing at Edwards Street running east and west. Two ice depots are on opposite comers of Tenth and Edward Streets, one at the northeast corner, the other at the southwest. Pokora, driving west along Edwards Street, stopped at the first of these corners to get his load of ice, but found so many trucks ahead of him that he decided to try the depot on the other side of the way. In this crossing of the railway, the accident occurred. 100 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. The defendant has four tracks on Tenth Street, a switch track on the east, then the main track, and then two switches. Pokora, as he left the northeast corner where his truck had been stopped, looked to the north for approaching trains. He did this at a point about ten or fifteen feet east of the switch ahead of him. A string of box cars standing on the switch, about five to ten feet from the north line of Edwards Street, cut off his view of the tracks beyond him to the north. At the same time he listened. There was neither bell nor whistle. Still listening, he crossed the switch, and reaching the main track was struck by a passenger train coming from the north at a speed of twenty-five to thirty miles an hour. The burden of proof was on the defendant to make out the defense of contributory negligence. Miller v. Union Pacific R. Co., 290 U.S. 227, 232. The record does not show in any conclusive way that the train was visible to Pokora while there was still time to stop. A space of eight feet lay between the west rail of the switch and the east rail of the main track, but there was an overhang of the locomotive (perhaps two and a half or three feet), as well as an overhang of the box cars, which brought the zone of danger even nearer. When the front of the truck had come within this zone, Pokora was on his seat, and so was farther back (perhaps five feet or even more), just how far we do not know, for the defendant has omitted to make proof of the dimensions. Nice calculations are submitted in an effort to make out that there was a glimpse of the main track before the switch was fully cleared. Two feet farther back the track was visible, it is said, for about 130 or 140 feet. But the view from that position does not tell us anything of significance unless we know also the position of the train. Pokora was not protected by his glimpse of 130 feet if the train at the same moment was 150 feet away or farther. For all that appears he had no view of the main track northward, or none for POKÔRA v. WABASH RY. CO. 101 98 Opinion of the Court. a substantial distance, till the train was so near that escape had been cut off. Cf. Dobson v. St. Louis S. F. Ry. Co., 223 Mo. App. 812, 822; 10 S.W. (2d) 528; Turner v. Minneapolis, St. P. & S. S. M. R. Co., 164 Minn. 335, 341 ; 205 N.W. 213. In such circumstances the question, we think, was for the jury whether reasonable caution forbade his going forward in reliance on the sense of hearing, unaided by that of sight. No doubt it was his duty to look along the track from his seat, if looking would avail to warn him of the danger. This does not mean, however, that if vision was cut off by obstacles, there was negligence in going on, any more than there would have been in trusting to his ears if vision had been cut off by the darkness of the night. Cf. Norfolk & W. Ry. v. Holbrook, 27 F. (2d) 326. Pdkora made his crossing in the day time, but like the traveler by night he used the faculties available to one in his position. Johnson v. Seaboard Air Line R. Co., 163 N.C. 431; 79 S.E. 690; Parsons v. Syracuse, B. & N. Y. R. Co., 205 N.Y. 226, 228; 98 N.E. 331. A jury, but not the court, might say that with faculties thus limited, he should have found some other means of assuring himself of safety before venturing to cross The crossing was a frequented highway in a populous city. Behind him was a line of other cars, making ready to follow him. To some extent, at least, there was assurance in the thought that the defendant would not run its train at such a time and place without sounding bell or whistle. L. & N. R. Co. v. Summers, 125 Fed. 719, 721 ; Illinois Revised Statutes, (1933 ed.), c. 114, fl 84.1 Indeed, the "The Illinois Act provides: “Every railroad corporation shall cause a bell of at least thirty pounds weight, and a steam whistle placed and kept on each locomotive engine, and shall cause the same to be rung or whistled by the engineer or fireman, at the distance of at least eighty rods from the place where the railroad crosses or intersects any public highway, and shall be kept ringing or whistling until such highway is reached.” 102 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. statutory signals did not exhaust the defendant’s duty when to its knowledge there was special danger to the traveler through obstructions on the roadbed narrowing the field of vision. Wright v. St. Louis S. F. Ry. Co., 327 Mo. 557, 566; 37 S.W. (2d) 591; Hires v. Atlantic City R. Co., 66 N.J.L. 30; 48 Atl. 1002; Cordell v. N. Y. C. & H. R. R. Co., 70 N.Y. 119. All this the plaintiff, like any other reasonable traveler, might fairly take into account. All this must be taken into account by us in comparing what he did with the conduct reasonably to be expected of reasonable men. Grand Trunk R. Co. v. Ives, 144 U.S. 408, 417; Flannelly v. Delaware & Hudson Co., 225 U.S. 597. The argument is made, however, that our decision in B. & O. R. Co. v. Goodman, supra, is a barrier in the plaintiff’s path, irrespective of the conclusion that might commend itself if the question were at large. There is no doubt that the opinion in that case is correct in its result. Goodman, the driver, traveling only five or six miles an hour, had, before reaching the track, a clear space of eighteen feet within which the train was plainly visible.2 With that opportunity, he fell short of the legal standard of duty established for a traveler when he failed to look and see. This was decisive of the case. But the court did not stop there. It added a remark, unnecessary upon the facts before it, which has been a fertile source of controversy. “ In such circumstances it seems to us that if a driver cannot be sure otherwise whether a train is dangerously near he must stop and get out of his vehicle, although obviously he will not often be required to do more than to stop and look.” There is need at this stage to clear the ground of brushwood that may obscure the point at issue. We do ’For a full statement of the facts, see the opinion of the Circuit Court of Appeals, 10 F. (2d) 58, 59. 98 POKORA v. WABASH RY. CO. Opinion of the Court. 103 not now inquire into the existence of a duty to stop, disconnected from a duty to get out and reconnoitre. The inquiry, if pursued, would lead us into the thickets of conflicting judgments.3 Some courts apply what is often spoken of as the Pennsylvania rule, and impose an unyielding duty to stop, as well as to look and listen, no matter how clear the crossing or the tracks on either side. See, e.g., Benner v. Philadelphia & Reading R. Co., 262 Pa. 307; 105 Atl. 283; Thompson n. Pennsylvania R. Co., 215 Pa. 113; 64 Atl. 323; Hines v. Cooper, 205 Ala. 70; 88 So. 133; cf. Pennsylvania R. Co. v. Yingling, 148 Md. 169; 129 Atl. 36. Other courts, the majority, adopt the rule that the traveler must look and listen, but that the existence of a duty to stop depends upon the circumstances, and hence generally, even if not invariably, upon the judgment of the jury. See, e.g., Judson v. Central Vermont R. Co., 158 N.Y. 597, 605, 606; 53 N.E. 514, and cases cited; Love v. Fort Dodge R. Co., 207 Iowa 1278, 1286; 224 N.W. 815; Turner v. Minneapolis R. Co., supra; Wisconsin & Arkansas Lumber Co. n. Brady, 157 Ark. 449, 454 ; 248 S.W. 278; cf. Metcalf v. Central Vermont R. Co., 78 Conn. 614; 63 Atl. 633; Gills v. N. Y. C. & St. L. R. Co., 342 Ill. 455; 174 N.E. 523. The subject has been less considered in this court, but in none of its opinions is there a suggestion that at any and every crossing the duty to stop is absolute, irrespective of the danger. Not even in B. Ac O. R. Co. v. Goodman, supra, which goes farther than the earlier cases, is there support for such a rule. To the contrary, the opinion makes it clear that the duty is conditioned upon the presence of impediments whereby sight and hearing become inadequate for the traveler’s protection. Cf. Murray v. So. Pacific Co., 177 Cal. 1, 10; 169 Pac. 675 Williams v. Iola Electric R. Co., 102 Kan. 268, 271; 170 Pac. 397. The cases are collected in 1 A.L.R. 203 and 41 A.L.R. 405. 104 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. Choice between these diversities of doctrine is unnecessary for the decision of the case at hand. Here the fact is not disputed that the plaintiff did stop before he started to cross the tracks. If we assume that by reason of the box cars, there was a duty to stop again when the obstructions had been cleared, that duty did not arise unless a stop could be made safely after the point of clearance had been reached. See, e.g., Dobson v. St. Louis S. F. Ry. Co., supra. For reasons already stated, the testimony permits the inference that the truck was in the zone of danger by the time the field of vision was enlarged. No stop would then have helped the plaintiff if he remained seated on his truck, or so the triers of the facts might find. His case was for the jury unless as a matter of law he was subject to a duty to get out of the vehicle before it crossed the switch, walk forward to the front, and then, afoot, survey the scene. We must say whether his failure to do this was negligence so obvious and certain that one conclusion and one only is permissible for rational and candid minds. Grand Trunk Ry. Co. v. Ives, supra. Standards of prudent conduct are declared at times by courts, but they are taken over from the facts of life. To get out of a vehicle and reconnoitre is an uncommon precaution, as everyday experience informs us. Besides being uncommon, it is very likely to be futile, and sometimes even dangerous. If the driver leaves his vehicle when he nears a cut or curve, he will learn nothing by getting out about the perils that lurk beyond. By the time he regains his seat and sets his car in motion, the hidden train may be upon him. See, e.g., Torgeson v. Missouri-K.-T. R. Co., 124 Kan. 798, 800, 801; 262 Pac. 564; Dobson v. St. Louis S. F. R. Co., supra; Key v. Carolina de N. W. R. Co., 150 S.C. 29, 35; 147 S.E. 625; Georgia Railroad de Banking Co. v. Stanley, 38 Ga. App. 773, 778; 145 S.E. 530. Often the added safeguard will be dubious though the track happens to be straight, as POKORA v. WABASH RY. CO. 105 98 Opinion of the Court. it seems that this one was, at all events as far as the station, about five blocks to the north. A train traveling at a speed of thirty miles an hour will cover a quarter of a mile in the space of thirty seconds. It may thus emerge out of obscurity as the driver turns his back to regain the waiting car, and may then descend upon him suddenly when his car is on the track. Instead of helping himself by getting out, he might do better to press forward with all his faculties alert. So a train at a neighboring station, apparently at rest and harmless, may be transformed in a few seconds into an instrument of destruction. At times the course of safety may be different. One can figure to oneself a roadbed so level and unbroken that getting out will be a gain. Even then the balance of advantage depends on many circumstances and can be easily disturbed. Where was Pokora to leave his truck after getting out to reconnoitre? If he was to leave it on the switch, there was the possibility that the box cars would be shunted down upon him before he could regain his seat. The defendant did not show whether there was a locomotive at the forward end, or whether the cars were so few that a locomotive could be seen. If he was to leave his vehicle near the curb, there was even stronger reason to believe that the space to be covered in going back and forth would make his observations worthless. One must remember that while the traveler turns his eyes in one direction, a train or a loose engine may be approaching from the other. Illustrations such as these bear witness to the need for caution in framing standards of behavior that amount to rules of law. The need is the more urgent when there is no background of experience out of which the standards have emerged. They are then, not the natural flowerings of behavior in its customary forms, but rules artificially developed, and imposed from without. Extraordinary situations may not wisely or fairly be subjected to 106 OCTOBER TERM, 1933. Syllabus. 292 U.S. tests or regulations that are fitting for the common-place or normal. In default of the guide of customary conduct, what is suitable for the traveler caught in a mesh where the ordinary safeguards fail him is for the judgment of a jury. Dolan v. D. & H. C. Co., 71 N.Y. 285, 288, 289; Davis v. N. Y. C. & H. R. R. Co., 47 N.Y. 400, 402. The opinion in Goodman’s case has been a source of confusion in the federal courts to the extent that it imposes a standard for application by the judge, and has had only wavering support in the courts of the states.4 We limit it accordingly. The judgment should be reversed and the cause remanded for further proceedings in accordance with this opinion. „ , Reversed. UTLEY ET AL. v. ST. PETERSBURG. APPEAL FROM THE SUPREME COURT OF FLORIDA. No. 627. Argued March 12, 1934.—Decided April 2, 1934. 1. A lot owner has no constitutional privilege to be heard in opposition to the adoption of a project of street improvement which may end in an assessment of his lot. It is enough that a hearing is permitted before the imposition of the assessment as a charge upon the land, or in proceedings for collection afterwards. P. 109. 4 Many cases are collected in 43 Harvard Law Review 926, 929, 930, and in 56 A.L.R. 647. See also: Dobson v. St. Louis S. F. R. Co., supra; Key v. Carolina & N. W. R. Co., supra; GUIs v. N. Y. C. & St. L. R. Co., supra; Georgia Railroad & Banking Co. v. Stanley, supra; Miller v. N. Y. C. R. Co., 226 App. Div. 205, 208, 234 N.Y.S. 560; 252 N.Y. 546, 170 N.E. 137; Schrader v. N. Y. C. & St. L. R. Co., 254 N.Y. 148, 151; 172 N.Ey 272; Dolan v. D. & H. C. Co., supra; Huckshold N. St. L., I. M. & S. R. Co., 90 Mo. 548; 2 S.W. 794. Contra: Koster v. Southern Pacific Co., 207 Cal. 753, 762 ; 279 Pac. 788; Vaca v. Southern Pacific Co., 91 Cal. App. 470, 475; 267 Pac. 346; Davis v. Pere Marquette R. Co., 241 Mich. 166, 169; 216 N.W. 424; cf. Torgeson v. Missouri-K.-T. R. Co., supra. 106 UTLEY v. ST. PETERSBURG. Opinion of the Court. 107 2. Objection that a special assessment was laid in an arbitrary manner will not be heard when an administrative remedy for correction of defects or inequalities was given by state statute and ignored by the objector. P. 109. 3. Upon appeal from a judgment of a state court sustaining a special assessment in a suit to set it aside as arbitrary, the contention that statutory means provided for correcting such assessments were unavailable because in conflict with the state constitution is concluded by the judgment if the point was made or passed upon below, and if not raised in the suit or the tax proceedings, it was waived. P. 110. 4. A general tax to make up a deficiency in a fund raised by special assessments of abutting land to pay special improvement bonds, is not invalid under the Fourteenth Amendment because the bonds were issued without notice to taxpayers. P. 111. 5. An appeal from a state court must be dismissed for want of jurisdiction if no substantial federal question is presented and the judgment rests upon an independent basis of state law adequate to support it—in this case laches and estoppel. P. 111. Appeal from 111 Fla. 844; 149 So. 806, dismissed. Appeal from the affirmance of a decree dismissing a suit to set aside a special assessment and the lien of a general tax. Mr. Lloyd D. Martin for appellants. Mr. Wm. F. Way, with whom Messrs. F. P. Fleming, E. J. L’Engle, and J. W. Shands were on the brief, for appellee. Mr. Justice Cardozo delivered the opinion of the Court. The appellants complain that assessments have been so laid upon their lands as to constitute a denial of due process of law. United States Constitution, Amendment XIV. On April 20, 1925, the City Commission of St. Petersburg, Florida, adopted a resolution for the grading and paving of certain streets and alleys, including First Ave- 108 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. nue north from 46th Street to Dusston, the abutting property to be assessed for the expense of the improvement “ in accordance with the benefits derived therefrom.” On August 16, 1926, the city accepted the work on First Avenue, which had been completed by the contractor, and directed that the cost ($40,937.46) be spread over the abutting parcels in proportion to the frontage. On September 6, 1926, the Commission, pursuant to notice duly published, met for the purpose of receiving complaints in respect of the assessments, and no complaints being received, the assessments were confirmed. The applicable statute provides that“all persons who fail to object to the proposed assessments in the manner herein provided, shall be deemed to have consented to and approved the same.” Chap. 9914, Acts of 1923, § 13. The Commission before confirming the assessments had voted an issue of bonds, which were general obligations of the city, the proceeds to be used to make payments to contractors during the progress of the work. Chap. 9914, Acts of 1923, § 17. The amount of the issue was seventy per cent of the estimated cost of the improvement of all the streets, First Avenue and others. The bonds were to be met at their maturity out of the proceeds of the special assessments, which were set apart as a separate fund. §§ 2, 17. If the fund turned out to be inadequate, the deficiency due upon the bonds was to be collected through general taxes like other city obligations. § 2. On August 11, 1930, the city authorities levied an ad valorem tax on all the taxable property in the city to make good a deficiency which had then been ascertained, the tax being at the rate of 14^ mills on each dollar of assessed valuation of property of every kind. In 1929 and again in 1931, statutes were enacted confirming the assessments and curing any irregularities in the process of laying them. Chap. 14392, Acts of 1929; c. 15511, Acts of 1931. 106 UTLEY v. ST. PETERSBURG. Opinion of the Court. 109 The appellants, who are property owners on First Avenue within the area of the improvement, brought this suit in or about April, 1931, to set aside the special assessment and also the lien of the general tax. A demurrer to the complaint was sustained, and the suit dismissed. The Supreme Court of Florida affirmed the decree, holding in its opinion that the applicable statutes did not infringe the immunities secured by the Fourteenth Amendment, and further that through laches and acquiescence as well as through a failure to take advantage of other statutory remedies, the appellants were “ estopped ” from maintaining the suit. Ill Fla. 844; 149 So. 806. Upon an appeal to this court the question of jurisdiction was postponed to the hearing on the merits. 1. The appellants contend that the special assessment is invalid under the Constitution of the United States for the reason that the resolution voting the improvement was adopted without an opportunity to landowners to be heard in opposition. This does not present a substantial federal question. Cf. Levering & Garrigues Co. v. Morrin, 289 U.S. 103, 108; Minneapolis, St. P. & S. S. M. Ry. Co. v. C. L. Merrick Co., 254 U.S. 376. There is no constitutional privilege to be heard in opposition at the launching of a project which may end in an assessment. It is enough that a hearing is permitted before the imposition of the assessment as a charge upon the land (Chicago, M., St. P. & P. Ry. Co. v. Risty, 276 U.S. 567; Londoner n. Denver, 210 U.S. 373, 378; Goodrich v. Detroit, 184 U. S. 432, 437), or in proceedings for collection afterwards. Hagar v. Reclamation District No. 108, 111 U.S. 701; Winona & St. Peter Land Co. v. Minnesota, 159 U.S. 526, 537; Wells, Fargo & Co. v. Nevada, 248 U.S. 165. This court will not listen to an objection that the charge has been laid in an arbitrary manner when an administrative remedy for the correction of defects or inequalities has been given by the statute and ignored by the objector. 110 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. Milheim n. Moffat Tunnel District, 262 U.S. 710, 723; Famcomb v. Denver, 252 U.S. 7; Porter v. Investors Syndicate, 286 U.S. 461. 2. On the assumption that a hearing was unnecessary in advance of the improvement, the appellants, none the less, contend that the later hearing provided for in advance of the assessment is so restricted in its scope as to be an illusory protection. There would be difficulty in framing a remedy more comprehensive than that given by the statute if it is to be taken at its face value. The owner “ may appear at the time and place fixed for the said hearing and object to the proposed assessment against the property or to the amount thereof.” § 13. “ The Governing Authority of the Municipality shall hear and determine all objections and protests to the proposed assessments under such reasonable rules and regulations as it may adopt.” § 13. If the protest is overruled, the owner within thirty days thereafter may contest “the legality ” of the assessment by action in the courts. § 15. On its face, the remedy thus supplied is plenary and adequate. What the appellants really claim is this, that the remedy, though adequate on its face, is made inadequate by provisions of the Florida constitution, which are said to condemn it. We do not elaborate the argument, for the conflict, if there is any, between the statute regulating this improvement and the local constitution must be adjudged, not by us, but by the courts of the locality. The landowners have had abundant opportunity to bring the conflict to a test. They have let the hour go by. They did not appear before the Commission and either affirm or deny its jurisdiction. They stayed out of the proceeding altogether. When the assessment had been laid and they were suing to set it aside, they did not challenge the validity of the administrative remedy by the allegations of their bill. So far as the record shows, they did not even challenge it in argument when the case was heard 106 UTLEY v. ST. PETERSBURG. Opinion of the Court. Ill upon appeal. If the point was made, it was not accepted. If omitted, it was waived. The supposed defects in the scope of the administrative .remedy do not present a substantial question within the federal jurisdiction. 3. The appellants do not confine themselves to a challenge of the special assessment in their assault upon the statute: they urge the objection also that the levy of a general tax to make up the deficiency in the fund for the payment of the bonds is invalid under the Fourteenth Amendment because the bonds were issued without notice to the taxpayers. But notice was unnecessary. The argument to the contrary goes counter to so many decisions that it must be condemned as unsubstantial. The distinction is fundamental between the incurring of the indebtedness and the imposition of the lien. Roberts v. Richland Irrigation District, 289 U.S. 71; St. L. & S. W. Ry. Co. v. Nat tin, 277 U.S. 157, 159; French v. Barber Asphalt Paving Co., 181 U.S. 324; Webster v. Fargo, 181 U.S. 394; Chicago, M., St. P. & P. Ry. Co. v. Risty, supra. 4. Finally, the appellants are barred, or so the Supreme Court of Florida has held, by laches and estoppel. They stood by without opposition while the property was improved. They refrained from making use of remedies, both administrative and judicial, that were ready to their call. For nearly five years they held aloof without word or act of protest, and then invoked the aid of equity. Following Abell v. Boynton, 95 Fla. 984; 117 So. 507, and other state decisions, the Supreme Court of Florida withheld an equitable remedy from suitors who had slept upon their rights. By force of that ruling, the decree of the state court rests upon a non-federal ground broad enough to support it. Enterprise Irrigation District v. Farmers Mutual Canal Co., 243 U.S. 157, 164. Our jurisdiction therefore fails. Enterprise Irrigation District v. Farmers Mutual Canal Co., supra; Pierce n. Somerset Ry. Co., 112 OCTOBER TERM, 1933. Syllabus. 292 U.S. 171 U.S. 641; Leonard n. Vicksburg, S. & P. R. Co., 198 U.S. 416; McCoy v. Shaw, 277 U.S. 302. The federal questions are unsubstantial; the non-fed-eral question is genuine and adequate. Lawrence v. State Tax Comm’n, 286 U.S. 276, 282; Abie State Bank v. Bryan, 282 U.S. 765, 773. The appeal is Dismissed. CLARK, RECEIVER, v. WILLIARD et al., TRUSTEES, et al. CERTIORARI TO THE SUPREME COURT OF MONTANA. No. 449. Argued February 15, 1934.—Decided April 2, 1934. 1. Where a judgment reverses the cause and remands it for further proceedings in accordance with the court’s opinion, the opinion is incorporated in the judgment and may be considered in determining whether the judgment is final. P. 118. 2. A judgment of a state supreme court in a liquidation proceeding which sustains the validity and priority of an execution levied by an intervening creditor on property of the insolvent, leaving no discretion to the trial court with respect to the matter and fully disposing of the intervention, is a final judgment for the purposes of appeal to this Court. P. 117. 3. Under the laws of Iowa, the official liquidator appointed by statute upon the dissolution of an insolvent Iowa insurance company in a suit by the State, is the statutory successor of the corporation. P. 120. 4. In holding that such a liquidator was not the successor to the corporate personality with title derived from the statutes of the domicile but a chancery receiver with title (if any) created by the Iowa decree in the dissolution proceeding, the Supreme Court of Montana denied full faith and credit to the statutes and judicial proceedings of Iowa. P. 121. 5. Whether there is any law or policy prevailing in Montana whereby the local creditors of an insolvent foreign insurance company are entitled to enforce their full claims, by executions upon its property in Montana, not merely as against a chancery receiver but as against the domiciliary successor of the corporation seeking to 112 CLARK v. WILLIARD. Opinion of the Court. 113 devote all of its assets to pro rata distribution among all of its creditors, is a question for determination by the Supreme Court of that State. P. 123. 6. When the decision of a state supreme court, due to an error in applying the Federal Constitution, leaves unanswered a question of state law that may be determinative of the case, this Court will vacate the judgment and remand for further proceedings.» P. 128. 94 Mont. 508; 23 P. (2d) 959, reversed. The District Court of Montana entered a final decree adjudging that Clark, the Iowa liquidator of a dissolved Iowa insurance company, was the successor to the personality and title of the corporation; that the assets should be liquidated and ratably distributed subject only to liens existing at the date of dissolution; that a local ancillary receiver should be retained to assist the foreign liquidator; that assets in Montana should be retained in that State until local creditors had received their ratable proportion of the assets there and elsewhere, and that an execution upon a judgment which had been recovered against the corporation by the present respondents should be set aside and canceled. Upon appeal by the judgment creditors to the Supreme Court of Montana, the decree was reversed and their execution reinstated. Messrs. Reuel B. Cook and Edmond M. Cook, with whom Mr. M. S. Gunn was on the brief, for petitioner. Mr. H. Leonard DeKalb, with whom Mr. Louis P. Donovan was on the brief, for respondents. By leave of Court, Mr. Louis H. Pink filed a brief on behalf of Mr. George S. Van Schaick, Superintendent of Insurance of the State of New York, as amicus curiae. Mr. Justice Cardozo delivered the opinion of the Court. The question is whether full faith and credit has been given by the courts of Montana to the statutes and judi-61745°—34-------8 114 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. cial proceedings of the State of Iowa. United States Constitution, Art. IV, § 1. The petitioner, the official liquidator of an Iowa insurance company, declares himself the universal successor of the corporation {Keatley n. Furey, 226 U.S. 399, 403, 404), the representative of its personality and powers after its life has been extinguished. Relfe v. Rundle, 103 U.S. 222; Martyne v. American Union Fire Ins. Co., 216 N.Y. 183; 110 N.E. 502; Deschenes n. Tallman, 248 N.Y. 33, 37; 161 N.E. 321. The Supreme Court of Montana has held that his title to the assets, if he has any, is derived, not from any statute, but from an involuntary assignment under a judgment of a foreign court. A title traced to such a source is subject in Montana to attachment and execution at the suit of local creditors. The question has been left unanswered whether attachments and executions are enforcible to the same extent in derogation of the title of a statutory successor. Federal Surety Company was organized as an insurance corporation under the laws of Iowa, and thereafter received authority to do business in Montana. In September, 1931, the State of Iowa sued it, alleging its insolvency and praying for a decree of dissolution and the distribution of the assets. A statute of Iowa provides that 11 the commissioner of insurance henceforth shall be the receiver and/or liquidating officer for any insurance company, association or insurance carrier, and shall serve without compensation other than his stated compensation as commissioner of insurance, but he shall be allowed clerical and other expenses necessary for the conduct of such receivership.” Code of Iowa, 1931, § 8613-cl. See also Code of Iowa, 1931, §§ 8402, 8964. On September 25, 1931, a decree in favor of the state was entered by default, and an amended decree on December 22 of the same year. By these decrees the corporation was adjudged to have been dissolved on September 25, 1931; 112 CLARK v. WILLIARD. Opinion of the Court. 115 the Commissioner of Insurance, E. W. Clark, was adjudged to be “ the successor to said corporation,” and as such to hold 11 title to all property owned by Federal Surety Company at the time it so ceased to exist ” ; and liquidation was decreed in accordance with the statute. We have said that the corporation had authority to do business in Montana. The grant was subject to conditions. A statute of Montana provides that the dissolution of a corporation does not “ take away or impair any remedy given against any such corporation, its stockholders or officers, for any liability which has been previously incurred.” § 6013, Montana Revised Codes of 1921. The preservation of existing remedies is not confined to domestic corporations. It applies to foreign corporations also. This results, in the view of the Montana court, from a provision of the state constitution as well as from a supplementary statute. By Article XV, § 11, of the Montana constitution, “ no company or corporation formed under the laws of any other country, state or territory, shall have, or be allowed to exercise, or enjoy within this state any greater rights or privileges than those possessed or enjoyed by corporations of the same or similar character created under the law of the state.” And by a supplementary statute (§ 6659, Revised Codes, 1921) : “All foreign corporations licensed to do business in the state of Montana shall be subject to all the liabilities, restrictions, and duties which are or may be imposed upon corporations of like character organized under the laws of this state, and shall have no other or greater powers.” Construing that statute, the Supreme Court of Montana has written in the case now under review : “ Suits against domestic corporations do not abate upon the entry of a decree of dissolution, and the same rule, by virtue of this statutory provision, must apply to a foreign corporation.” Long before the dissolution of the Federal Surety Company the respondents Williard and Wheaton, as trustees 116 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. of a syndicate, brought suit in a Montana court to recover from the surety company the damages due upon a bond. The first trial resulted in a nonsuit, which was reversed upon appeal. 91 Mont. 465; 8 P. (2d) 633. After the decree of dissolution the case came on for a second trial, and on May 10, 1932, judgment in favor of the plaintiffs was entered by default. The Supreme Court of Montana has held that the dissolution of the surety company did not abate the suit. There was thus a final judgment, valid under the Montana practice and effective according to that practice to liquidate the claim. To say that there was such a judgment is not to dispose of the whole case. A judgment existing, the remedies available to enforce it are still to be determined. Before the respondents were in a position to issue execution, the situation had been complicated by a suit for the appointment of a receiver begun in a Montana District Court. On March 25, 1932, Mieyr, a simple contract creditor, brought suit against the surety company and Clark, the foreign liquidator, praying an ancillary receivership to preserve the local assets. A temporary receiver (Crichton) was appointed the same day. While that suit was pending, the respondents filed a petition on May 24, 1932, for leave to issue an execution against securities and moneys which had been discovered in Montana, the levy to have the same effect as if no receiver had been appointed. An order to that effect was granted, subject, however, to a later motion to vacate it. Within due time thereafter, Clark filed a cross petition and an answer, asserting his title as successor to the dissolved corporation, opposing the demands of the judgment creditors, and setting up his rights and privileges under Art. IV, § 1, of the Federal Constitution. On August 25, 1932, the District Court of Montana entered a final decree adjudging that Clark was the successor to the personality and title of the Iowa corporation, that the assets should be liqui- CLARK v. WILLIARD. 117 112 Opinion of the Court. dated and ratably distributed subject only to the liens existing at the date of dissolution, that Crichton should be continued as an ancillary receiver to assist the foreign liquidator, that the assets in Montana should be retained in that state until local creditors had received their ratable proportion of assets there and elsewhere, and that the execution upon the respondents’ judgment and any preference thereby created, as well as the earlier order sanctioning the levy, should be set aside and cancelled. From that decree, and from an order denying a motion to vacate or modify it, the judgment creditors, who are the respondents in this court, appealed to the Supreme Court of Montana. After argument and reargument, the decree and order were there reversed, two members of the court dissenting. Mieyr v. Federal Surety Co., 94 Mont. 508; 23 P. (2d) 959. The court held that the respondents’ judgment had been lawfully recovered though the defendant was dissolved; that the ancillary receivership was void for the reason that a simple contract creditor (Mieyr) was without standing to maintain the suit; that Clark, the foreign liquidator, was not the successor to the corporate personality with a title derived from the statutes of the domicile, but was a chancery receiver with a title (if any) created by the Iowa decree; that as against such a receiver, creditors in Montana were at liberty to levy attachments and executions, irrespective of their right to enforce such a levy against a statutory successor; and hence that the respondents’ execution should be reinstated, and the cause remanded for further proceedings in accord with the opinion. A writ of certiorari brings the case here. Our jurisdiction to issue the writ is challenged on the ground that the decree to be reviewed is without the requisite finality. Judicial Code, § 237; 28 U.S.C., § 344. The challenge should not prevail. The decree of the Montana court is final to the extent that it confirms the respondents’ 118 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. execution and permits a levy that will override the liquidator’s title. A final order results where a court denies a petition by an intervening creditor to establish a prior lien (Gumbel v. Pitkin, 113 U.S. 545, 548), or a petition by a municipal corporation intervening in a foreclosure suit to enforce a lien for taxes superior to the mortgage (Savannah v. Jesup, 106 U.S. 563, 564, 565), or one by a chancery receiver appointed by a state court for the delivery of property in the possession of another court. Ex parte Tiffany, 252 U.S. 32, 36. Cf. Hovey v. McDonald, 109 U.S. 150, 155; Williams v. Morgan, 111 U.S. 684, 689; United States v. River Rouge Co., 269 U.S. 411, 414; Dexter Horton National Bank v. Hawkins, 190 Fed. 924, 927. The doctrine of those cases is applicable here. Further judicial proceedings may be necessary between the liquidator and others not before us. As between the liquidator and the respondents claiming as judgment creditors the suit is at an end. They came into court pro interesse suo with a petition to establish the priority of their judgment. The petition has been granted and priority decreed. Not only that, but an order vacating the execution has been reversed, and the levy reinstated. So far as these respondents are concerned, there is nothing more to be decided. “ The property of the Federal Surety Company within the state of Montana at the time of the levy of the execution by Williard et al., not being in possession of the Iowa receiver, was subject to levy, and the levy made under the execution in May, 1932, is good and valid.” By that opinion, which by reference was incorporated in the judgment (Metropolitan Water Co. v. Kaw Valley District, 223 U.S. 519, 523; Gulf Refining Co. v. United States, 269 U.S. 125, 135), nothing was left to the discretion of the trial court in respect of the priority of the execution or of the respondents’ rights thereunder. The intervening petition has been finally disposed of, and no longer is a pending proceeding, whatever may be said CLARK v. WILLIARD. 119 112 Opinion of the Court. of the suit in which the claimants intervened. Cf. For gay y, Conrad, 6 How. 201, 202, 203; United States v. River Rouge Co., supra. Jurisdiction being here, the case will be considered on the merits. We assume in accordance with the decision of the Montana court that the respondents’ action against the surety company did not abate on dissolution, but was lawfully pursued to judgment. McGoon v. Scales, 9 Wall. 23; cf. Sinnott v. Hanan, 214 N.Y. 454, 458, 459; 108 N.E. 858; Marstaller v. Mills, 143 N.Y. 398, 400; 38 N.E. 370. Cases such as Remington de Sons v. Samana Bay Co., 140 Mass. 494 ; 5 N.E. 292, and others cited in the margin1 are not at war with this conclusion. They ex-' press the rule to be applied when there is no statute or public policy to the contrary in the state where the foreign corporation has been licensed to do business. They do not delimit the capacity of a state, when granting such a license, to subject it to conditions. Complications might exist if there had been no one within the state upon whom process could be served. Here the action was begun, and the company had appeared and answered, before the date of dissolution. Moreover, a power of attorney was on file, pursuant to the Montana law (Revised Codes, 1921, § 6212), whereby process might be served on the Insurance Commissioner of the state, the power to remain in force so long as any policy or liability of the company was outstanding in Montana. Cf. American Railway Express Co. n. Kentucky, 273 U.S. 269, 274; Washington v. Superior Court, 289 U.S. 361, 364, 365. Complications also might exist if there were no one 1 National Surety Co. v. Cobb, 66 F. (2d) 323; Marion Phosphate Co. v. Perry, 74 Fed. 425; Fitts v. National Life Assn., 130 Ala. 413; 30 So. 374; Riddell v. Rochester German Ins. Co., 35 RI. 45; 85 Atl. 273; Morgan v. New York National Building & Loan Assn., 73 Conn. 151; 46 Atl. 877. 120 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. in being with authority to continue the defense. Here there had been the designation of a liquidator who was competent to represent the corporation if he had chosen to intervene. Cf. Oklahoma Natural Gas Co. v. Oklahoma, 273 U.S. 257. We are not to be understood as intimating that such complications would be fatal if they existed, but merely to exclude them. In such circumstances the judgment is at least effectual to liquidate the claim as a charge upon the local assets. But this, as we have seen, is only a partial statement of the problem. To ascertain the procedure by which the charge is to be enforced, whether by the levy of execution or by a ratable division, other considerations must be weighed. In particular it must be known whether superior interests or titles have developed between the summons and the judgment, and whether the quality or operation of those interests affects the method of distribution. Something did intervene here, the appointment of a liquidator under the statutes of the domicile. That much is undisputed. Did the Supreme Court of Montana misjudge the quality and operation of this intervening interest, and in so doing did it deny to the statutes and decrees of Iowa the faith and credit owing to them under the Constitution of the United States? In our judgment the statutes of Iowa have made the official liquidator the successor to tha corporation, and not a mere receiver. State ex rel. Attorney-G eneral v. Fidelity Loan & Trust Co., 113 Iowa 439; 85 N.W. 638. His title is not the consequence of a decree of a court whereby a corporation still in being has made a compulsory assignment of its assets with a view to liquidation. Sterrett v. Second National Bank, 248 U.S. 73;2 Lion Bonding Co. n. 2 The insolvent corporation in Sterrett v. Second National Bank, supra, was not to be dissolved until there had been a final settlement of the business. Pp. 74, 75. 112 CLARK v. WILLIARD. Opinion of the Court. 121 Karatz, 262 U.S. 77, 88; Great Western Mining Co. v. Harris, 198 U.S. 561, 575; Booth n. Clark, 17 How. 322. His title is the consequence of a succession established for the corporation by the law of its creation. Relfe v. Rundle, supra; Keatley v. Furey, supra; Sterrett v. Second National Bank, supra, p. 77; cf. Bockover v. Life Assn, of America, 77 Va. 85; Converse v. Hamilton, 224 U.S. 243, 257; Bernheimer n. Converse, 206 U.S. 516, 534. So the lawmakers have plainly said. So the Iowa court adjudged in decreeing dissolution. We think the Supreme Court of Montana denied full faith and credit to the statutes and judicial proceedings of Iowa in holding, as it did, that the petitioner was a receiver deriving title through a judicial proceeding, and not through the charter of its being and the succession there prescribed. “When the transfer of a debtor’s property,” said the court, “ is the result of a judicial proceeding there is no provision of the constitution which requires the courts of another state to carry it into effect and as a general rule no state court will do this to the prejudice of the citizens of its own state,” citing Reynolds v. Adden, 136 U.S. 348, a case of insolvency proceedings in invitum against a natural person, and Zacher v. Fidelity Trust Co., 106 Fed. 593, an enforced assignment to the receiver of a corporation which retained its corporate life. Bankruptcy or insolvency proceedings, whether the debtor is a natural or a juristic person, confer upon the receiver or assignee a title which, generally speaking, is without recognition outside of the state of his appointment except in subordination to the claims of local creditors. Security Trust Co. v. Dodd, Mead de Co., 173 U.S. 624; Cole v. Cunningham, 133 U.S. 107; Oakey v. Bennett, 11 How. 33, 44; Barth v. Backus, 140 N.Y. 230; 35 N.E. 425; Ward v. Connecticut Pipe Mfg. Co., 71 Conn. 345; 41 Atl. 1057; Gilbert v. Hewetson, 79 Minn. 326; 82 N.W. 122 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. 655. Upon the strength of these and like decisions the Montana court has refused recognition to a receiver or liquidator who in truth is a statutory successor. Whether it would have favored that conclusion if it had correctly interpreted his standing, its opinion does not tell us. The case should go back to the end that the priority of the execution may be determined with understanding of the title displaced and overridden. In thus holding we do not say that there is an invariable rule by which the title of a statutory liquidator must prevail over executions and attachments outside of the state of his appointment. The subject is involved in confusion, with decisions pro and con. There are cases which lay down the rule that the title of such a liquidator will have recognition and enforcement everywhere without affirming or denying the possibility of exceptions. Kinsler v. Casualty Co., 103 Neb. 382; 172 N.W. 33; U.S. Truck Co. v. Pennsylvania Surety Co., 259 Mich. 422; 243 N.W. 311; Bockover v. Life Assn., supra; Parsons v. Charter Oak Life Ins. Co., 31 Fed. 305; Fry v. Charter Oak Life Insurance Co. 31 Fed. 197; cf. Taylor v. Life Assn, of America, 13 Fed. 493; Smith v. Taggart, 87 Fed. 94; Southern Building Ac Loan Assn. n. Miller, 118 Fed. 369. Other cases add a dictum (Martyne v. American Union Fire Ins. Co., supra) that the state in which the title is assailed may declare a contrary policy by statute or decision. Cf. Disconto Gesellschaft v. Umbreit, 208 U.S. 570, 579, 580. Still others take the view that the claims of local creditors are entitled to precedence. Schloss v. Surety Co., 149 la. 382; 128 N.W. 384; Lackmann v. Supreme Council, 142 Cal. 22; 75 Pac. 583. The position of a claimant who has the standing of a statutory successor is more closely analogous to that of a trustee under a voluntary general assignment for the benefit of creditors (Ockerman v. Cross, 54 N.Y. 29; Warner v. Jaffray, 96 N.Y. 248, 255; Hervey v. R. I. Locomotive Works, 93 U.S. 112 CLARK v. WILLIARD. Opinion of the Court. 123 664) than to one deriving title under a decree in insolvency proceedings (Security Trust Co. v. Dodd, Mead <& Co., supra, p. 628), yet it is stronger than either in that for many purposes the corporation under which he claims has passed out of existence. Whether there is in Montana a local policy, expressed in statute or decision, whereby judgments and attachments have a preference over the title of a charter liquidator is a question as to which the Supreme Court of that state will speak with ultimate authority. It has not spoken yet. The tendency in most of the states is to give priority to the title unless a contrary policy is expressed with reasonable clarity. Martyne v. American Union Fire Ins. Co., supra; Kinsler v. Casualty Co., supra; Bockover v. Life Assn, of America, supra; cf. Cogliano v. Ferguson, 245 Mass. 364; 139 N.E. 527. No statute or decision brought to our notice from Montana removes the question from the field of doubt. True there are the statutes heretofore referred to whereby suit may be maintained against foreign corporations after dissolution on the same basis as against domestic ones. Nothing in those provisions declares the existence of a policy to allow the assets of an insolvent corporation to be tom to pieces at the suit of rival creditors when they could be distributed equally and without sacrifice at the hands of a receiver. At all events the policy, if it exists, is indicated too obscurely to permit us to accept it until so instructed by the Montana court. The drastic consequences of acceptance attest the need of caution. Partnerships and individuals, if hard pressed, may resort to a court of bankruptcy and thus conserve their assets. Business corporations may have their assets equally distributed through involuntary proceedings. But insurance corporations, like banks, are excluded from bankruptcy altogether (11 U.S.C. § 22b), and must submit to dismemberment, however great the waste or inequality, unless receivers are 124 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. appointed. The respondents would have us say that submission to such consequences is exacted by an unbending rule of law. We have no thought to impose our reading of the local statutes and decisions upon the courts of the locality. What we are about to say as to their meaning does no more than explain the grounds for our understanding that the courts of Montana have left the question open. If the law were clear beyond debate, as counsel for the respondents has contended that it is, our duty might be to dispose of the entire controversy now instead of remanding it to the state court for further action there. We are mindful of the practice whereby domestic corporations dissolved by the Montana law may be wound up by the directors as trustees in dissolution. Revised Codes, § 6011 ; formerly Civil Code, § 561. We understand also that while the assets are so held, claims may be reduced to judgment, and attachments and executions levied. This is doubtless the prevailing practice when the corporation is solvent, or when insolvency is not so gross as to lead to sacrifice or hardship. Inability to discharge liabilities as they mature, or even impairment of the capital prescribed by the articles of association, may not mean that the assets will be insufficient when put up at public sale. But administration by the directors, subject to attachment and execution, is not the only form of distribution that is known to the local law. In appropriate cases a dissolved corporation may be wound up by a receiver as an officer of the court. By § 9303 of the Revised Codes of 1921, a creditor of a dissolved corporation (presumably a judgment creditor) may apply for a receiver to liquidate the assets,8 and after 8 § 9303. “ Upon the dissolution of any corporation the district court of the county in which the corporation carries on its business or has its principal place of business, on application of any creditor of the corporation, or of any stockholder or member thereof may appoint one or more persons to be receivers or trustees of the corpo- 112 CLARK v. WILLIARD. Opinion of the Court. 125 such appointment executions are forbidden. Gardner v Caldwell, 16 Mont. 221; 40 Pac. 590; cf. Barker v. Edwards, 259 Fed. 484, 488; Rohr v. Stanton Trust & Savings Bank, 76 Mont. 248, 251, 253; 245 Pac. 947; Berryman v. Billings Mutual Heating Co., 44 Mont. 517, 521; 121 Pac. 280. The decisions are obscure as to the circumstances in which that statute will be applied. The vast majority of the Montana cases on the subject of receivers are grounded on another section (9301), under which the tests are very different. There is hardly a word in any of them as to the meaning of § 9303 and the remedy there-ration, to take charge of the estate and effects thereof, and to collect the debts and property due and belonging to the corporation and to pay the outstanding debts thereof, and to divide the moneys and other property that shall remain over among the stockholders or members.” Another section dealing with the appointment of receivers is 9301, subd. 5. “A receiver may be appointed by the court in which an action is pending, or by the judge thereof: . . . “In cases when a corporation has been dissolved, or is insolvent, or in imminent danger of insolvency, or has forfeited its corporate rights.” By construction, that section has been limited to receivers appointed pendente lite. “ It is a well settled rule of law that there cannot be such a thing as an action brought distinctively and solely for the appointment of a receiver.” State v. District Court, 50 Mont. 259, 263; 146 Pac. 539. A receivership is a provisional remedy. “An action must be pending before a receiver can be appointed.” State v. District Court, supra. All this according to our understanding has no relation to an application under § 9303, where the appointment of a receiver is the end and aim of the proceeding. Compare the decisions in California under statutes identical in form: Henderson v. Palmer Union Oil Co., 29 Cal. App. 451; 156 Pac. 65; French Bank Case, 53 Cal. 495, 553; Havemeyer v. Superior Court, 84 Cal. 327, 365; 24 Pac. 121; State I. & I. Co. v. San Francisco, 101 Cal. 135, 147, 148; 35 Pac. 549; Elliott v. Superior Court, 168 Cal. 727; 145 Pac. 101. 126 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. under. Thus, in Forsell v. Pittsburgh & Montana Copper Co., 42 Mont. 412; 113 Pac. 479, a creditor obtained a judgment against a foreign corporation, not dissolved, and execution was issued and returned unsatisfied. The creditor then applied for a receiver, but without alleging that there was any property within the state. The court held that no case was made out by the allegations of the bill. In Berryman v. Billings Heating Co., 44 Mont. 517, 525; 121 Pac. 280, a temporary receiver was appointed in an action against a domestic corporation not dissolved. In aid of this appointment the plaintiff, a simple contract creditor, alleged that the defendant was insolvent. On appeal the court held that this without more did not make the appointment necessary, and vacated the receivership. In Prudential Securities Co. v. Three Forks H. & M. V. Ry. Co., 49 Mont. 567, 572; 144 Pac. 158, and again in Scholefield v. Merrill Mortuaries, Inc., 93 Mont. 192; 17 P. (2d) 1081, the situation was the same as in the suit by Berryman, supra, the applicants for the receiver being simple contract creditors suing to collect a debt. What was said as to the trust fund doctrine when invoked by a creditor so situated (49 Mont, at p. 572) is in full accord with the doctrine prevailing in this court. Hollins v. Brierfield Coal & Iron Co., 150 U.S. 371. The case at hand is barely grazed by Ferrell n. Evans, 25 Mont. 444,454; 65 Pac. 714. There the suit was for the appointment of a receiver to wind up a building and loan company whose charter had expired. The court held that there was no need of superseding the directors who were statutory trustees under § 6011 of the Revised Codes. The opinion states: “No exception is made in case of insolvency,” but this is supplemented by the statement that in fact “ the association was not insolvent.” The dictum quoted does not amount to a decision that a receiver will never be appointed under § 9303 in a case where a corporation has been dissolved and multiplying executions threaten a dispersion of the assets. No such question was involved. 112 CLARK v. WILLIARD. Opinion of the Court. 127 The situation was much the same in Merges v. Alten-brand, 45 Mont. 355; 123 Pac. 21. The charter of a solvent corporation had expired, and there was no sufficient ground for superseding the directors through the appointment of receivers.4 We do not read these decisions as holding in any clear or final way that the directors of a dissolved corporation will never be required to give place to a receiver, no matter how great the danger of inequality or waste. Indeed, it is uncertain whether such a holding would be possible without denying any function to § 9303 of the Montana Code. Inequality and waste are to be avoided in special measure when banks or insurance companies, unable, as we have seen, to have the protection of courts of bankruptcy, are in course of liquidation. The Supreme Court of Montana has been mindful of this need, at all events in respect of banks, and has stated it with force and clarity. Thus, in Rohr v. Stanton Trust & Savings Bank, supra, a creditor brought suit in the hope of gaining a preference for his deposit out of the assets of a bank in the hands of a receiver. The court said (p. 251), “ the general principle of equity that the assets of an insolvent are to be distributed ratably among general creditors applies with full force to the distribution of the assets of a bank,” and again (p. 253), “The available assets” are to be “so 4GUna v. Barker, 78 Mont. 357; 254 Pac. 174, it would seem, is even farther from the case at hand. A creditor brought suit against a domestic corporation for the liquidation of a debt. The trial court dismissed the complaint on the ground that suit was unnecessary after the corporation had been dissolved. That judgment was reversed. The court did not hold that there would be no occasion for a receivership thereafter. It left that question open. “ Counsel for defendants argue that plaintiff should have intervened in the case in which the court decreed a sale of the property of the defunct corporation and should have asked for a receiver. He may have been entitled to that privilege, but, if so, it did not deprive him of the right to institute the instant case, reduce his claim to judgment and take the chance of realizing on it.” P. 367. 128 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. conserved that each depositor or other creditor shall receive payment or dividend according to the amount of his debt, and that none of equal class shall receive any advantage or preference over another.” Cf. Aetna Accident & Liability Co. v. Miller, 54 Mont. 377, 389; 170 Pac. 760. It would seem that conservation of assets and equality of distribution are goods no less important in the winding up of insurance companies and of other moneyed corporations than in the winding up of banks. From this survey of the decisions in Montana there results this truth, if nothing more, that there has been no definitive pronouncement as to the circumstances justifying a receivership for an insolvent corporation, and that the question is left open whether receivers of such a corporation will be appointed after dissolution to prevent waste or inequality. If that is so, it results also that the question is still open whether executions may be subordinated to the title of a foreign liquidator without a forbidden discrimination between corporations organized in Montana and those from other states. A statute preserving remedies after a decree of dissolution does not mean that for every purpose a corporation, though dissolved, is still a juristic person, or that equity is indifferent as to the mode of marshalling the assets. All that it means is that suits shall not abate, but may be prosecuted to judgment as if the corporation were in being. What will be done afterwards in the enforcement of a judgment will vary with the circumstances. When a charter liquidator whose standing is recognized in Montana, is decreed to have an interest superior to the lien of later executions, as if his position were that of a receiver appointed by the local courts, there is no resulting inequality between foreign and domestic corporations, no favoring of the one class in hostility to the other. So, at least, the Montana court may not unreasonably decide. By hypothesis the domestic corporation after dissolution may be placed, 112 CLARK v. WILLIARD. McReynolds, J., dissenting. 129 upon a proper showing, in the hands of a receiver, and its assets ratably distributed. The foreign corporation, represented by a foreign liquidator, may be subjected to the same restraints. If supplementary directions are thought to be appropriate to the end that local assets may be kept within Montana till local creditors are paid their share of all the assets everywhere, there is power in a court of equity to assure the requisite equality. Sands v. E. S. Greeley Co., 88 Fed. 130; Receivers Middlesex Banking Co. v. Realty Investment Co., 104 Conn. 206; 132 Atl. 390; Buswell v. Supreme Sitting of Order of Iron Hall, 161 Mass. 224; 36 N.E. 1065; Fawcett v. Supreme Sitting of Order of Iron Hall, 64 Conn. 170; 29 Atl. 614; People v. Granite State Provident Assn., 161 N.Y. 492; 55 N.E. 1053. To resume: The Supreme Court of Montana will determine whether there is any local policy whereby an insolvent foreign corporation in the hands of a liquidator with title must submit to the sacrifice of its assets or to their unequal distribution by writs of execution. If such a policy exists and the foreign liquidator is thus displaced, other questions may remain.as to the power of the state which there is no occasion to consider in advance of the event. The decree should be vacated in so far as it adjudges the validity and priority of the respondents’ execution (cf. Dorchy v. Kansas, 264 U.S. 286, 291; Missouri v. Public Service Comm’n, 273 U.S. 126, 131), and the cause remanded to the Supreme Court of Montana for further proceedings not inconsistent with this opinion. Reversed. Separate opinion by Mr. Justice McReynolds. This cause has been much obscured by verbiage. The practical problems incident to administering the affairs of insolvent insurance companies are often complex; but 61745°—34----9 130 OCTOBER TERM, 1933. McReynolds, J., dissenting. 292 U.S. the issues presently presented for determination are narrow and ought to cabin our discussion. In 1931 an Iowa court, proceeding under local statutes, adjudged that the corporate existence of the Federal Surety Company organized in that State had terminated; that E. W. Clark, receiver and liquidating officer, is its successor and holds title to all corporate property for the purposes of liquidation, etc. January 31, 1928, the Surety Company being then authorized to transact business in Montana, respondents here—Williard, Wheaton and Hay—duly asked for judgment against it in the District Court of Fergus County. May 20, 1932, judgment went in their favor. Clark, the Iowa receiver, did not enter his appearance in the cause, made no effort to( prevent the judgment. Execution issued and was levied, May —, 1932, upon property of the Company found in Montana. In March, 1932, one John Mieyr brought suit against the Federal Surety Company in the District Court, Cascade County, Montana. He alleged indebtedness to himself upon an unliquidated^claim, also indebtedness to other citizens of Montana for considerable sums, and that the company had much property within the State. He described the Iowa court proceedings wherein the Corporation was declared dissolved and Clark designated as Receiver and averred that Clark was then attempting to obtain possession of the Company’s property within Montana with intent to remove it. He asked for judgment for the amount of his claim; and that a local receiver be appointed to take possession of the company’s assets in Montana and hold them subject to further order, &c. Thereupon, the court appointed D. A. Crichton receiver of the Montana assets, with powers as prayed: he duly qualified. Clark appeared specially and asked that Crichton’s appointment be annulled because the court lacked jurisdiction, This motion was denied May 24th. 112 CLARK v. WILLIARD. McReynolds, J., dissenting. 131 On the same day Williard, Wheaton and Hay appearing by petition asked and received approval of their action in procuring levy of the Fergus County execution upon the corporation’s property. July 25, 1932, Receiver Crichton moved to annul the order of May 24, 1932, which approved the levy of the Fergus County execution. August 3, 1932, Clark appeared and answered Mieyr’s complaint. He set out proceedings in the Iowa court and his designation as receiver; he asked an order confirming his title to the Company’s assets, also for confirmation of Crichton’s appointment as ancillary receiver. August 25th the court authorized an order reciting that the corporate existence of the Surety Company was terminated by the Iowa proceedings and that title to all of its property passed to Clark as receiver. This order also confirmed the appointment of Crichton as receiver of Montana assets; directed all creditors in that State to file their claims, and that corporate assets should be delivered to him. And further that the order of May 24th permitting the Fergus County execution be set aside. August 31, 1932, Williard, Wheaton and Hay asked the Cascade County District Court to vacate the order of August 25th upon the ground that the facts disclosed were not sufficient to justify appointment of the receiver; also because the court acted without jurisdiction. In the alternative, they asked that the order be so modified as to release all property seized under any Montana execution or attachment. This motion was denied the same day. On September 18,1932, Williard, Wheaton and Hay appealed from the judgment and order of August 25th confirming Crichton’s appointment as receiver, &c. and revoking the May 24th order which granted permission for levy of the Fergus County execution. Also, from the order of August 31st which denied their motion to vacate the one entered August 25th. The issues were thus lim- 132 OCTOBER TERM, 1933. McReynolds, J., dissenting. 292 U.S. ited. The opinion of the Supreme Court came down April 1, 1933. It said— “ The appeal presents the question whether appellants have the right to be paid the amount of their claim from the Montana property before any part of such property is transmitted to the Iowa receiver for administration through the Iowa receivership, when, as shown, their claim has been reduced to judgment and execution levied after the proceedings in the Iowa court designed to accomplish the dissolution of the corporation. Solution of the problem presented makes it necessary to determine the effect of the proceedings in the Iowa court upon the corporate life of the surety company.” [94 Mont. 508, 518; 23 P. (2d) 959, 961.] Upon review of the Montana statutes, the Court declared that the suit against the Surety Company in Fergus County did not abate upon entry of the Iowa decree and that the judgment of May 20th therein was valid. It then came to consider whether levy under the Fergus County execution was good and said this “ depends upon the effect of the order appointing Crichton receiver.” It ultimately and definitely declared: “ The petition of Mieyr for the appointment of a receiver was insufficient, in that he, being a general creditor, had no right to the appointment of a receiver and had an adequate remedy by which he could be fully protected, namely, the issuance and levy of a writ of attachment. The property of the Federal Surety Company within the state of Montana at the time of the levy of the execution by Williard, et al., not being in possession of the Iowa receiver, was subject to levy, and the levy made under the execution in May, 1932, is good and valid. The judgment and orders appealed from are reversed and the cause remanded for further proceedings in the district court in accordance with the views herein expressed.” 112 CLARK v. WILLIARD. McReynolds, J., dissenting. 133 The opinion definitely approved the claim of the appellants that the District Court of Cascade County was acting without authority and beyond its jurisdiction. Upon the sole petition of Clark, Receiver, a writ of certiorari issued from this Court. We have no jurisdiction unless the judgment of the state court was final; and only federal questions are open for our consideration. The formal judgment of the Supreme Court directed— “For reasons stated in the opinion the judgment and orders appealed from are reversed and the cause remanded for further proceedings in accordance with the views expressed in the opinion.” Upon its face this is not final within the meaning of the statute governing our jurisdiction. And “ in matters of this kind we may not disregard the face of the record and treat the judgment as something other than it appears to be. So to do probably would lead to much confusion and uncertainty.” Hartford Accident & Ind. Co. v. Bunn, 285 U.S. 169, 178. McComb v. Commissioners, 91 U.S. 1; Bostwick v. Brinkerhoff, 106 U.S. 3, 4; Haseltine v. Central Bank, 183 U.S. 130; Schlosser v. Hemphill, 198 U.S. 173, 175; Norfolk Turnpike Co. v. Virginia, 225 U.S. 264, 268; Louisiana Navigation Co. v. Oyster Comm’n, 226 U.S. 99, 101; Georgia Ry. Co. v. Decatur, 262 U.S. 432, 437; Gulf Refining Co. v. United States, 269 U.S. 125, 135, 136. Bostwick v. Brinkerhoff. “ The rule is well settled and of long standing that a judgment or decree to be final, within the meaning of that term as used in the acts of Congress giving this court jurisdiction on appeals and writs of error, must terminate the litigation between the parties on the merits of the case, so that if there should be an affirmance here, the court below would have nothing to do but to execute the judgment or decree it had already rendered. ... If the judgment is not one which disposes of the whole case on its merits, it is not final. Con- 134 OCTOBER TERM, 1933. McReynolds, J., dissenting. 292 U.S. sequently it has been uniformly held that a judgment of reversal with leave for further proceedings in the court below cannot be brought here on writ of error.” Haseltine v. Central Bank. “ We have frequently held that a judgment reversing that of the court below, and remanding the case for further proceedings, is not one to which a writ of error will lie. . . . While the judgment may dispose of the case as presented, it is impossible to anticipate its ultimate disposition. It may be voluntarily discontinued, or it may happen that the defeated party may amend his pleading by supplying some discovered defect, and go to trial upon new evidence. To determine whether, in a particular case, this may or may not be done, might involve an examination, not only of the record, but even of the evidence in the court of original jurisdiction, and lead to inquiries with regard to the actual final disposition of the case by the Supreme Court, which it might be difficult to answer. We have, therefore, always made the face of the judgment the test of its finality, and refused to inquire whether, in case of a new trial, the defeated party would stand in a position to make a better case. The plaintiffs in the case under consideration could have secured an immediate review by this court, if the court as a part of its judgment of reversal had ordered the Circuit Court to dismiss their petition, when, under Mower v. Fletcher [114 U.S. 127] they might have sued out a writ of error at once. ” Schlosser v. Hemphill—an action in equity to quiet title. “ By its judgment the Supreme Court of Iowa reversed the decree of the trial court and remanded the cause ‘ for further proceedings in harmony with the opinion of the court.’ We have heretofore held that a judgment couched in such terms is not final in such a sense as to sustain a writ of error from this court. . . . Doubtless the conclusions arrived at by the state Supreme Court, CLARK v. WILLIARD. 135 112 McReynolds, J., dissenting. and expressed in its opinion, furnish the grounds on which the court below must proceed, when the case goes to a decree there, if no change in pleadings or proof takes place, but we cannot say what action might nevertheless be taken, and as no decree was entered in the Supreme Court, and no specific instruction was given to the court below, we think the writ of error cannot be maintained. Assuming, without deciding, that a Federal question was so raised as otherwise to have justified the exercise of our jurisdiction, we can but repeat what we said in Haseltine’s case: ‘ The plaintiffs in the case under consideration could have secured an immediate review by this court, if the court as a part of its judgment of reversal had ordered the Circuit Court to dismiss their petition, when, under Mower v. Fletcher, they might have sued out a writ of error at once.’ ” Louisiana Navigation Co. v. Oyster Comm’n. Writ of error to Louisiana Supreme Court dismissed, judgment not final. “The contention, however, is that the judgment below is final for the purpose of review by this court, because when the opinion of the Supreme Court of Louisiana is carefully weighed it will be found that that court practically finally disposed adversely to the title of the plaintiff of the substantial part of the lands involved in the suit and hence that the court in remanding the cause for further proceedings did so only as to other lands. But conceding this to be true, it does not justify the claim based on it. In the first place it is settled that this court may not be called upon to review by piecemeal the action of a state court which otherwise would be within its jurisdiction, and in the second place the rule established by the authorities to which we have referred is that on the question of finality the form of the judgment is controlling, and hence that this court cannot for the purpose of determining whether its reviewing 136 OCTOBER TERM, 1933. McReynolds, J., dissenting. 292 U.S. power exists be called upon to disregard the form of the judgment in order to ascertain whether a judgment which is in form not final might by applying the state law be treated as final in character. Indeed it has been pointed out that the confusion and contradiction which inevitably arose from resorting to the state law for the purpose of converting a judgment not on its face final into one final in character was the dominating reason leading to the establishment of the principle that the form of the judgment was controlling for the purpose of ascertaining its finality.” Georgia Ry. Co. v. Decatur—error to Georgia Supreme Court, in proceeding for injunction. “ The rule is established that in order to give this Court appellate jurisdiction the judgment or decree ‘ must terminate the litigation between the parties on the merits of the case, so that if there should be an affirmance here, the court below would have nothing to do but to execute the judgment or decree it had already rendered? ” Gulf Refining Co. v. United States—appeal from Circuit Court of Appeals. The challenged judgment was held final. “ The general rule established by many decisions, of which Haseltine v. Central Bank of Spring field (No. 1), 183 U.S. 130, is an example, is that the face of the judgment is the test of its finality and that by this test a judgment of reversal remanding the cause for further proceedings in conformity with the opinion of the court ordinarily is not final. But the direction to proceed consistently with the opinion of the court has the effect of making the opinion a part of the mandate, as though it had been therein set out at length. Metropolitan Co. V. Kaw Valley District, 223 U.S; 519, 523. Under the stipulations above recited, the trial court was bound to enter decrees for the government for the stated sums of money if that court found that the government was entitled to 112 CLARK v. WILLIARD. McReynolds, J., dissenting. 137 recover the net value of the oil produced. The trial court found that the government was not so entitled and the decrees went accordingly. Turning to the opinion, it will be seen that the circuit court of appeals decided that the trial court erred ‘ in entering the decrees denying the complainant the right to recover the net value of the oil, etc? The instruction for further proceedings not inconsistent with the opinion, therefore, was equivalent to a direction to render judgment for the net value—that is, for the exact sums set forth in the stipulations. See Moody v. Century Bank, 239 U.S. 374, 376; Chesapeake & Potomac Tel. Co. v. Manning, 186 U.S. 238, 241. There was no evidence to be taken or considered, and no change in the issue was possible; nothing remained but the ministerial duty of entering a decree for the precise sums which had been fixed beyond the power of alteration. It follows that the jurisdictional objection is without merit.” The judgment of the Supreme Court now before us is not final in form and I think inspection of the opinion does not definitely indicate the action which the District Court of Cascade County would have been bound to take. In his original petition against the Surety Company as sole defendant Mieyr prayed for judgment upon his claim, for appointment of a local receiver to take charge of Company assets, etc. And during the progress of the cause sundry questions were interposed by interveners. Others may appear and amendments may be offered. We have no jurisdiction. If, however, the judgment below be treated as final, then we must ascertain, if possible, what was actually determined. Our function is to review adjudications, not mere expressions of opinion or unnecessary statements. Apparently, the Supreme Court definitely adjudged that the trial court lacked power to appoint a receiver for the corporate assets within the State at the instance 138 OCTOBER TERM, 1933. McReynolds, J., dissenting. 292 U.S. of Mieyr, a mere general creditor. Consequently the particular orders complained of by Williard and others were invalid as they had claimed. Determination of that question of state law gave adequate basis for disposition of the cause. It is enough to support the judgment and is not reviewable here. Discussion of federal questions was unnecessary and views of the court in respect of them are not presently important. In any event, it seems reasonably clear that the only federal question before the Supreme Court of Montana which may be open for our consideration concerns the effect of the Iowa statutes and court decree under which Clark became Receiver. It accepted the view that his appointment or designation did not operate to vest him with adequate title to the property of the defunct Company wherever situated, that “such [an] involuntary assignment in aid of a statutory judicial proceeding will not be recognized outside of the jurisdiction of the appointment, where the rights of domestic creditors are involved, if the receiver has not obtained possession of the property and where the creditors have obtained rights or liens upon the property even after the appointment in the foreign jurisdiction.” Probably this conclusion was erroneous. It involved a federal question. At the most we should announce the correct rule with the reasons therefor and send the cause back to the Supreme Court of Montana for further proceedings not in conflict with our determination. But this Court is neither called upon nor can it, without impropriety, discuss mere questions of state law which may hereafter be presented for decision by the courts of Montana. It is not our function to suggest to state courts how they should interpret their own laws. Theirs is the duty of deciding such matters; ours requires forbearance from tendering advice in that regard. The writ of certiorari should be dismissed. ELLIOT v. LOMBARD. ' 139 Opinion of the Court. ELLIOT et al. v. LOMBARD. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE FIFTH CIRCUIT. No. 463. Argued March 6, 1934.—Decided April 9, 1934. Read in connection with 28 U.S.C. § 754, and Admiralty Rules 5, 6, 11 and 12, under which a stipulation with surety was given by a claimant to release and stand as substitute for an attached vessel, a decree which awards damages to the libelant against the claimant alone, grants execution against both the claimant and surety if the award is not satisfied or an appeal taken within a time specified, and dismisses a cross-libel filed by the claimant,—held not a joint decree against the claimant and surety within the spirit of the rule requiring that, to appeal from a decree that is joint on the face of the record, both parties must join in the appeal or there must be a summons and severance. Hartford Accident & Ind. Co. v. Bunn, 285 U.S. 169, distinguished. 66 F. (2d) 662, reversed. Certiorari, 290 U.S. 619, to review a decree dismissing an appeal in a suit in admiralty. The decree of the trial court was against claimant and surety. The court below had declined to permit the surety to join in the claimant’s appeal after the time for appeal had expired. Mr. Wm. H. McClendon, Jr., with whom Messrs. Wm. A. Van Siclen and J. Zach. Spearing were on the brief, for petitioners. Mr. Purnell M. Milner for respondent. Mr. Justice Van Devanter delivered the opinion of the Court. Respondent Lombard, owner of motor ship “ Lucky Girl ” and a sand barge, presented to the District Court, Canal Zone, a libel in rem against the “ Real ” and in personam against her owner, Elliot, to recover damages resulting from a collision between those vessels—July, 140 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. 1930. The “ Real” was seized under admiralty process; her owner claimed and secured her release under a stipulation, whereon the United States Fidelity & Guaranty Company was surety, which contained the following clause. “ Now, therefore, the condition of this stipulation is such that if the stipulators undersigned, shall at any time, upon the interlocutory or final order or decree of the said District Court, or of any Appellate Court to which the above named suit may proceed, and upon notice of such order or decree to Van Siclen and Boggs, Esquires, Proctors for the Claimant of the said Motorship Real, abide by and pay the money awarded by the final decree rendered by the Court or the Appellate Court if any appeal intervene, then this stipulation to be void otherwise to remain in full force and virtue.” The stipulation also contained the further clause— “ and the parties hereto hereby consenting and agreeing that in case of default or contumacy on the part of the claimant or their surety, execution for the above amount may issue against their goods, chattels and lands.” Elliot filed an answer, also a cross libel against the “ Lucky Girl.” After a hearing in open court, Lombard prevailed and had a decree—August 27, 1932, the presently important portions of which follow— 11 Ordered, adjudged and decreed, that the libelant herein do have and recover from the respondent herein the sum of $6,321.29, with interest thereon at the rate of 6% per annum from the 31st day of July, 1930, together with the libelant’s costs taxed in the sum of $117.20, with interest thereon until paid; and it is further “ Ordered, adjudged and decreed, that unless this decree be satisfied or an appeal taken within ten days after service of a copy of this decree with notice of entry upon the respondent or his proctor, execution issue against ELLIOT v. LOMBARD. 141 139 Opinion of the Court. Hans Elliot, respondent, and the United States Fidelity and Guaranty Co., his stipulators for costs and value, their goods, chattels and lands to satisfy this decree; and it is further “ Ordered, adjudged and decreed that the cross-libel herein be dismissed at cross-libelant’s cost.” Notice of the entry of this decree was duly served on the proctor August 31, 1932. September 10, 1932, Elliot alone, without notice to the surety or severance, secured an appeal to the Circuit Court of Appeals, Fifth Circuit. In April, 1933, Lombard moved to dismiss the appeal upon the grounds that the decree was against the claimant Elliot and the surety jointly, that the surety was a necessary party to the appeal but had not been made such, and that the period limited therefor had expired. By way of avoiding that motion the surety then asked to join with Elliot in the prosecution of the appeal and Elliot moved for leave to amend so as to include the surety as party appellant. The Circuit Court of Appeals regarded the matter thus presented as of uncertain solution but concluded, with some division in opinion, that the decree was joint and in that view regarded our decision in Hartford Accident & Indemnity Co. v. Bunn, 285 U.S. 169, as controlling, and accordingly dismissed the appeal. The case so relied upon was a suit in equity which was brought to this Court on appeal from the Supreme Court of Mississippi which had awarded a joint judgment for the payment of money against a litigant and his surety. We there said (pp. 178, 182): 11 The judgment is joint in form and no reason appears why either or both of the parties defendant therein might not have appealed to this Court and submitted claims of error for our determination. In matters of this kind we may not disregard the face of the record and treat the judgment as something other than it appears to be. So 142 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. to do probably would lead to much confusion and uncertainty.” “We cannot undertake to explore the record to ascertain what issues were relied upon in courts below. So to do would lead to uncertainty and unfortunate confusion. We must accept the terms of the judgment as entered. As pointed out above, this is the approved practice when it becomes necessary to determine whether a judgment is final or to what court a writ of error should run. Like reasons apply and control here.” If the decree in the present admiralty suit were joint, as the judgment in that equity suit was, we should regard the rule there announced and applied as controlling here. But we think the decree in the present suit is not joint within the spirit of that rule. The release stipulation was given by the claimant Elliot under 28 U.S.C. § 754 (Rev. Stat. § 941), and Admiralty Rules 5, 6,11 and 12 (254 U.S. Appendix), and its purpose was to secure the release to him of the vessel then held under admiralty process. Under the statute and the admiralty rules the stipulation was thereby substituted for the vessel and the latter was released. Had the vessel not been released execution on the decree subsequently rendered would have run against the vessel. By the terms of the stipulation the claimant and his surety consented and agreed that the execution might run against their goods, chattels and lands, instead of against the vessel. The decree which was rendered is in three parts. By the first the libelant is awarded a recovery of damages in a stated sum, with interest and costs, against the claimant, there called respondent; by the second, execution is awarded against the claimant and his surety “ unless this decree be satisfied or an appeal taken within ten days after service of a copy ”; and by the third the claimant’s cross-libel is dismissed. HARTFORD IND. CO. v. DELTA CO. 143 139 Syllabus. The decree is in a form long recognized as admissible in such an admiralty proceeding. The principal part—that which awards a recovery in damages for the collision—is directed only against the claimant Elliot, not against him and the surety. The only mention of the surety is in the dependent and contingent part relating to the issue of execution, and this part of the decree is based upon provisions in Admiralty Rules 5, 12 and 20, under which, where a release stipulation is given and the libelant obtains a decree for the payment of money, summary process of execution may be issued against the principal and sureties for the purpose of enforcing the decree. We think the decree is to be read in connection with the applicable statute and admiralty rules and that when so read it is not joint. That it might have been made joint is not of present importance. There was no requirement that it be so made, and in fact it was not so made. So, giving effect to the face of the record, as the rule in the Bunn case requires, we are of opinion that the Circuit Court of Appeals erred in holding that the claimant’s appeal, without the surety joining therein, could not be entertained. The decree of that court is accordingly reversed, and the cause is remanded to it for consideration and disposal on the merits. Decree reversed. HARTFORD ACCIDENT & INDEMNITY CO. et al. v. DELTA & PINE LAND CO. APPEAL FROM THE SUPREME COURT OF MISSISSIPPI. No. 650. Argued March 15, 1934.—Decided April 9, 1934. 1. A contract between a Connecticut and a Mississippi corporation, whereby the former insured the latter against loss through dishonesty of one of its employees “in any position anywhere,” was made in Tennessee, where both parties and the employee were 144 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. present, and contained a condition that any claim under the contract must be made within 15 months from the termination of the suretyship. In an action for defalcations committed in Mississippi, where also both corporations did business, the courts of Mississippi held that the condition was contrary to the policy and law of that State, and awarded judgment against the insurer—although the condition had not been complied with. Held that such extension of the Mississippi law was beyond the jurisdiction of the State and void under the due process clause of the Fourteenth Amendment. P. 149. 2. Obligations of a contract lawfully made in another jurisdiction may not be enlarged by a State to accord with all its own statutory policies upon the ground that one of the parties is its own citizen. P. 149. 3. A legislative policy which attempts to draw to the State of the forum control over the obligations of contracts elsewhere validly consummated and to convert them for all purposes into contracts of the forum, regardless of the relative importance of the interests of the forum as contrasted with those created at the place of the contract, conflicts with the guaranties of the Fourteenth Amendment. P. 150. 169 Miss. 196, reversed. Appeal from a judgment sustaining a recovery from the Indemnity Company in an action on an indemnity bond. Mr. Wm. M. Hall submitted for appellants. Mr. Garner W. Green, with whom Messrs. Oscar Johnston and Marcellus Green were on the brief, for appellee. Mr. Justice Roberts delivered the opinion of the Court. This was an action instituted in a circuit court of Mississippi by Delta & Pine Land Company, a corporation of that state with its principal place of business therein, against Hartford Accident & Indemnity Company, a corporation of Connecticut, having its principal place of business in Hartford in that state. The declaration alleges that on or about January 1, 1928, the plaintiff ap- HARTFORD IND. CO. v. DELTA CO. 145 143 Opinion of the Court. plied to the defendant for a fidelity bond and paid the agreed premiums therefor, and the defendant executed and delivered to the plaintiff such a bond, whereby it bound itself to pay the plaintiff, within sixty days after satisfactory proof, pecuniary loss sustained by the plaintiff through fraud or dishonesty or wilful misapplication by any employee “ in any position, anywhere,” from the time that the name of such employee should be placed upon a schedule attached to the bond to and including the termination of the suretyship for such employee by his dismissal, retirement from service, discovery of loss, or cancellation of the bond by the parties. It is alleged that the name of H. H. Harris, as treasurer of the plaintiff appears upon the schedule, and that the amount of coverage for him is $25,000. Sundry defalcations by Harris between May 9, 1929, and December 20, 1929, totaling $2703.79, are set forth, all of which and the resulting loss occurred in the first judicial district of Bolivar county, Mississippi. The further material matters charged are that the defendant throughout all the times mentioned in the declaration, and ever since, was and now is duly qualified and licensed to do business in Mississippi; that the dishonest acts of Harris were discovered on or about May 20, 1931, immediate notice given to the defendant at its home office, and affirmative proof of loss under oath, with full particulars, filed with the defendant at its home office within three months after the discovery. The declaration in conclusion asserts compliance by plaintiff with all the terms of the bond, and refusal of the defendant, though requested, to make payment of the sum demanded. Annexed to the declaration are copies of the bond and the supplementary schedules forming part of it. The defendant’s plea was, in substance: the plaintiff, before and at the date of the contract of suretyship, was doing business in Tennessee, with its principal office at Memphis in that state, and defendant also was then and 61745°—34-----10 146 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. is now doing business in Tennessee, having an agency at Memphis; plaintiff, through its office at Memphis, applied to defendant through its agency there for the bond, rider and schedules containing the name of the defaulting employee, Harris, constituting the contract of suretyship; defendant through its agency at Memphis executed and delivered the bond and schedules to plaintiff at its office in that city; the contract is a Tennessee contract and governed by the laws of Tennessee, and full faith and credit must be given to it in the courts of Mississippi in accordance with the- requirements of Article IV, § 1, Article I, § 10, and § 1 of the 14th Amendment of the Constitution of the United States; there was not at the time of delivery of the contract, and is not now, any statute in Tennessee prohibiting or invalidating the condition or limitation in the contract to the effect that any claim thereunder must be duly made upon the defendant as surety within fifteen months after the termination of the suretyship for the defaulting employee, and the plaintiff did not make claim upon the defendant for the loss within fifteen months after the termination of the suretyship for Harris, as the contract was cancelled and terminated December 31, 1929, and the plaintiff made no claim until June 22, 1931. To this plea the plaintiff demurred, assigning these causes of demurrer: (1) the construction and validity of the provision of the contract relied upon in the plea is to be determined by the laws of Mississippi, and not by the laws of Tennessee; (2) the statute of limitations of the state where suit is brought is the statute which governs the time for bringing this action, and the provision in the contract requiring that any claim thereunder must be made upon the defendant within fifteen months after the termination of the suretyship for the defaulting employee is in violation of § 2294 of the Mississippi Code of 1930, and in violation of the public policy of Mississippi, and HARTFORD IND. CO. v. DELTA CO. 147 143 ' Opinion of the Court. its courts are not required to give full faith and credit to this provision of the contract by Article IV, § 1, Article I, § 10, or § 1 of the 14th Amendment of the Constitution. The cause came on for hearing upon the pleadings, and the court sustained the demurrer. The defendant declined to plead further; whereupon judgment was entered by default in favor of the plaintiff, a jury was impaneled and assessed damages at the amount claimed, and final judgment was accordingly entered. Upon appeal by the defendant the Supreme Court of Mississippi affirmed the judgment. Conceding that under the decisions of the Supreme Court of Tennessee, the provision for notice within fifteen months of the termination of the suretyship is a valid limitation of liability and not a limitation of action, the court said the converse is true in Mississippi. Although the bond was executed and delivered and the agreement consummated in Tennessee, where the plaintiff and the defendant’s agent had their respective offices, and where, in the absence of proof of a contrary intent, the contract was to be performed, the court concluded that the statutes of Mississippi made the instrument a Mississippi contract, and annulled the contractual limitation of the time for giving of notice of claim. The Mississippi statutes relied upon were the following: “A contract of insurance is an agreement by which one party for a consideration promises to pay money or its equivalent, or to do some act of value to the assured, upon the destruction, loss or injury of something in which the assured or other party has an interest, as an indemnity therefor; and it shall be unlawful for any company to make any contract of insurance upon, or concerning any property or interest or lives in this state, or with any resident thereof; or for any person as insurance agent or insurance broker to make, negotiate, solicit, or in any manner aid in the transaction of such insurance unless and 148 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. except as authorized under the provisions of this chapter. All contracts of insurance on property, lives or interests in this state shall be deemed to be made therein.” (§ 5131, Mississippi Code, 1930.) “ The limitations prescribed in this chapter shall not be changed in any way whatsoever by contract between parties, and any change in such limitations made by any contract stipulation whatsoever shall be absolutely null and void; the object of this statute being to make the period of limitations for the various causes of action the same for all litigants.” (§ 2294, Mississippi Code, 1930.) The state Supreme Court said: “ But clearly under section 5131, Code 1930, defining insurance, this indemnity bond is a contract of insurance within the purview of that statute; and, further, it being expressly provided therein that all contracts of insurance on property, lives, or interests in this state shall be deemed to be made therein, in our judgment, makes the contract herein under review a Mississippi contract and solvable under the laws of this state. The contract here provided or stipulated that the appellee should be indemnified from loss by the defalcation of H. H. Harris in any position anywhere, and when he, the employee and the insured herein, removed to Mississippi and there defaulted, so far as the appellee is concerned its interest was insured or indemnified by the appellant in Mississippi, and, under the provision quoted from the above statute, became operative, and this state is obligated to enforce it, as a Mississippi contract, although it contained all the elements necessary to make it a Tennessee contract, but for the statute.” “ When the statute declares that such a contract shall be deemed to be made in this state, it means that the conflict of law between the two states is eliminated, and HARTFORD IND. CO. v. DELTA CO. 149 143 Opinion of the Court. thereby, . . . a contract for fifteen months’ notice was a limitation of the action unenforceable as such in this state.” The Mississippi statutes, so construed, deprive the appellant of due process of law. A state may limit or prohibit the making of certain contracts within its own territory (Hooper n. California, 155 U.S. 648; Orient Insurance Co. v. Doggs, 172 U.S. 557, 565-6; New York Life Ins. Co. v. Cravens, 178 U.S. 389, 398-9); but it cannot extend the effect of its laws beyond its borders so as to destroy or impair the right of citizens of other states to make a contract not operative within its jurisdiction, and lawful where made. New York Life Ins. Co. v. Head, 234 U.S. 149; Aetna Life Ins. Co. v. Dunken, 266 U.S. 389, 399. Nor may it in an action based upon such a contract enlarge the obligations of the parties to accord with every local statutory policy solely upon the ground that one of the parties is its own citizen. Home Insurance Co. n. Dick, 281 U.S. 397, 407-8. It is urged, however, that in this case the interest insured was in Mississippi when the obligation to indemnify the appellee matured, and it was appellant’s duty to make payment there; and these facts justify the state in enlarging the appellant’s obligation beyond that stipulated in the bond, to accord with local public policy. The liability was for the payment of money only, and was conditioned upon three events,—loss under the policy, notice to the appellant at its home office, and presentation of claim within fifteen months of the termination of the suretyship. All of these conditions were of substantial importance, all were lawful in Tennessee, and all go to the obligation of the contract. It is true the bond contemplated that the employee whose faithfulness was guaranteed might be in any state. He was in fact in Mississippi at the date of loss, as were both obligor and obligee. The contract be- 150 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. ing a Tennessee contract and lawful in that state, could Mississippi, without deprivation of due process, enlarge the appellant’s obligations by reason of the state’s alleged interest in the transaction? We think not. Conceding that ordinarily a state may prohibit performance within its borders even of a contract validly made elsewhere, if the performance would violate its laws {Home Insurance Co. v. Dick, supra, p. 408), it may not, on grounds of policy, ignore a right which has lawfully vested elsewhere, if, as here, the interest of the forum has but slight connection with the substance of the contract obligations. Here performance at most involved only the casual payment of money in Mississippi. In such a case the question ought to be regarded as a domestic one to be settled by the law of the state where the contract was made. A legislative policy which attempts to draw to the state of the forum control over the obligations of contracts elsewhere validly consummated and to convert them for all purposes into contracts of the forum regardless of the relative importance of the interests of the forum as contrasted with those created at the place of the contract, conflicts with the guaranties of the Fourteenth Amendment. Aetna Life Ins. Co. v. Dunken, supra; Home Insurance Co. n. Dick, supra. Cases may occur in which enforcement of a contract as made outside a state may be so repugnant to its vital interests as to justify enforcement in a different manner. Compare Bond v. Hume, 243 U.S. 15, 22. But clearly this is not such a case. Our conclusion renders unnecessary a consideration of the claims made under the full faith and credit and contract clauses of the federal constitution. The judgment is reversed and the cause is remanded for further proceedings not inconsistent with this opinion. Reversed. LINDHEIMER v. ILLINOIS TEL. CO. 151 Syllabus. LINDHEIMER et al. v. ILLINOIS BELL TELEPHONE CO.* APPEALS FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS. No. 440. Argued January 15, 16, 1934.—Decided April 30, 1934. 1. Findings of a District Court, purporting to show the value of the property of a telephone company in its intrastate business, its net income therefrom and the fair rate of return, for each of a long series of years during which the State sought to impose a decrease of rates, can not be accepted as a basis for deciding whether the decrease would result in confiscation, when, tested by the same findings, the existing rates, clearly adequate and under which the company operated with outstanding success throughout the same period and before, were themselves grossly inadequate. P. 160. 2. Elaborate calculations which are at war with realities revealed by the financial history of the business are of no avail in determining the adequacy of rates prescribed for a public utility corporation. P. 164. 3. To sustain its attack on a decrease of its rates as contrary to due process, a public utility must establish clearly and definitely that the decrease will bring about confiscation. P. 164. 4. Charges to operating expenses may be as important as valuations of its property in determining the adequacy of a public utility’s rate. P. 164. 5. In determining reasonable rates for supplying public service, it is proper to include in the operating expenses, that is, in the cost of producing the service, an allowance for consumption of capital, in order to maintain the integrity of the investment in the service rendered. P. 167. 6. Broadly speaking, the term depreciation, as applied to the property of a public utility company, means the loss, not restored by current maintenance, which is due to all the factors causing the ultimate retirement of the property; these factors include wear and tear, decay, inadequacy and obsolescence. Annual depreciation is the loss which takes place in a year. P. 167. * Together with No. 548, Illinois Bell Telephone Co. v. Lindheimer ct al. 152 OCTOBER TERM, 1933. Syllabus. 292 U.S. 7. While depreciation is defined as the expense occasioned by the using up of physical property employed as fixed capital, and current maintenance as the expense occasioned in keeping the physical property in the condition required for continued use during its service life, it is evident that the distinction is a difficult one to observe in practice with scientific precision, and that outlays charged to current expenses may involve many substitutions of new for old parts which tend to keep down the accrued depreciation. P. 173. 8. Where the amounts which a telephone company annually charges to operating expenses for depreciation and invests in plant and equipment are excessive, the telephone subscribers are, to the extent of such excess, required to provide capital contributions, not to make good losses incurred by the company in the service rendered and thus keep its investment unimpaired, but to secure additional plant and equipment upon which the company expects a return. P. 169. 9. Confiscation being the issue in this case, the telephone company has the burden of making a convincing showing that the amounts it has charged for depreciation to operating expenses have not been excessive; and that burden is not sustained by proof that its general accounting system has been correct, since, though the calculations are mathematical, the underlying predictions of life of plant and salvage are essentially matters of opinion, involving many perplexing problems and the examination of many variable elements, in which opportunities for excessive allowances for depreciation, even under a correct system of accounting, are always present; the predictions must be checked by and meet the test of experience. P. 169. 10. Giving full weight to the proposition that a reserve for depreciation built up by a telephone company according to the “straight line ” method does not represent in any given year the amount of actual depreciation at that time, especially in a rapidly growing plant, such considerations fail to explain the great excess of depreciation reserve over actual depreciation in each of the many years involved in this case. P. 171. 11. The evidence showed the amounts by which the reduction of rate in question would have diminished the company’s income in each of a long series of years; also, for each year, the amounts charged to operation for depreciation and for expenses of maintenance, and the amount of actual depreciation. The company had maintained its plant at a very high and constant level of LINDHEIMER v. ILLINOIS TEL. CO. 153 151 Counsel for Parties. efficiency by strict standards, replacements in anticipation of inadequacy or obsolescence, and expenditures for maintenance, including substitutions of parts, and yet in each year the depreciation reserve was greatly in excess of the depreciation actually accrued. Held: That the company has not established that the reserve merely represents consumption of capital in the service rendered; rather, it appears that the depreciation reserve to a large extent represents provision for capital additions, over and above the amount required to cover capital consumption; and the questionable amounts so annually charged to operating expenses for depreciation are large enough to destroy any basis for holding that it has been convincingly shown that the reduction in income through the rates in suit would produce confiscation. P. 174. 12. Where a public utility has had abundant opportunity to prove that a rate is confiscatory but adduces only elaborate estimates and computations which fail of their intended effect, and do not justify the decree of the court below in its favor, it is not the function of this Court to construct independent calculations out of a voluminous record to invalidate the rate, but the decree should be reversed with directions to dissolve the interlocutory injunction, provide for refunding under the injunction bonds of amounts charged pendente lite in excess of the rate in question, and to dismiss the bill. P. 175. 13. A party has no right to appeal from a decree in his favor to procure a review of the findings. P. 176. 3 F.Supp. 595, reversed. Appeal in No. 548 dismissed. Appeal and cross-appeal from a decree permanently enjoining the Illinois Commerce Commission from enforcing a reduction of the rates of the Telephone Company for intrastate service in the City of Chicago. The decree below also released the company from obligation to refund moneys collected by it during the suit. For other phases of this protracted litigation, see: 269 U.S. 531; 282 U.S. 133; 283 U.S. 794; 283 U.S. 808. Messrs. George I. Haight and Benjamin F. Goldstein, with whom Messrs. William H. Sexton and Edmund D. Adcock were on the brief, for Lindheimer et al. 154 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. Messrs. William H. Thompson and Charles M. Bracelen, with whom Messrs. Edward L. Blackman, Kenneth F. Burgess, Leslie N. Jones, John H. Ray, and John W. Davis were on the brief, for the Illinois Bell Telephone Co. By leave of Court, Mr. Patrick H. O'Brien, Attorney General of Michigan, and Mr. Harold Goodman filed a brief on behalf of the State of Michigan, as amicus curiae. Mr. Chief Justice Hughes delivered the opinion of the Court. This case comes here for the second time. It presents the question of the validity under the Fourteenth Amendment of rates prescribed by the Illinois Commerce Commission for telephone service in the City of Chicago. The Commission’s order, made on August 16, 1923, to be effective October 1, 1923, reduced rates applicable to a large part of the intrastate service of the appellee, Illinois Bell Telephone Company.1 In this suit, brought by that Company in September, 1923, an interlocutory injunction was granted upon the condition that if the injunction were dissolved the Company should refund the amounts charged in excess of the challenged rates. We affirmed that order. 269 U.S. 531. The final hearing was not had until April, 1929,—a delay found to be attributable to the City of Chicago. On that hearing, the District Court, composed of three judges, entered a final decree making the injunction permanent. 38 F. (2d) 77. We reversed that decree and remanded the case for further proceedings. Smith v. Illinois Bell Telephone Co., 282 U.S. 133. Further evidence was then taken and the District Court made ’The order reduced rates for four classes of coin box service. Otherwise it kept in force the rates which were fixed by an order of December 20, 1920. The coin boxes are in private residences and places of business and are not public pay stations. LINDHEIMER v. ILLINOIS TEL. CO. 155 151 Opinion of the Court. new findings and entered a final decree which permanently restrained the enforcement of the Commission’s order and released the Company from obligation to refund the moneys which had been collected pending the suit. 3 F.Supp. 595. The state authorities and the city bring this direct appeal. Jud. Code, § 266. The Company brings a cross-appeal to review the findings below, insisting that its property has been undervalued and that substantial amounts of its operating expenses have been disallowed. No. 4^0.—The appeal of the state officers and the City of Chicago. On the former appeal, it appeared that no distinction had been made by the Commission or by the District Court between the intrastate and the interstate property and business of the Company. We found that separation was essential to the appropriate recognition of the competent governmental authority in each field of regulation. Accordingly, we directed that as to the value of the property employed in the intrastate business in Chicago and as to the amounts of revenue and expenses incident to that business, separately considered, there should be specific findings. And as a rate order which is confiscatory when made may cease to be confiscatory, and one which is valid when made may become confiscatory at a later period, we held that there should be appropriate findings for each of the years since the date of the Commission’s order. 282 U.S. pp. 149, 162. On the further hearing, that difficult task was so well performed that no question is now raised as to the allocation of property to the intrastate and interstate services, respectively, in the Chicago area, the allocation being made on the basis of use.2 Nor is there dispute with respect to the “It appears that in 1923 there was used in the intrastate service approximately 95 per cent, of appellee’s total property in the Chicago area. This percentage progressively decreased in the succeeding years, and in 1931 was somewhat less than 91 per cent. 156 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. separation of expenses. Appellants object to the separation of revenues, insisting that certain revenues were improperly assigned to the interstate, instead of the intrastate, business.3 Considering the fact that ninety-nine per cent, of the stock of appellee is owned by the American Telephone & Telegraph Company, which also owns substantially the same proportion of the stock of the Western Electric Company, we directed that there should be further examination of the purchases made by appellee from the Western Electric Company and of the payments made by appellee to the American Company. As it appeared that the Western Electric Company, through the organization and control of the American Company, was virtually the manufacturing department for the Bell system, we directed specific findings to be made as to the net earnings of the Western Electric Company in that department and as to the extent to which, if at all, such profit figured in the estimates upon which the charge of confiscation was predicated. We also held that there should be specific findings with regard to the cost to the American Company of the services which it rendered to appellee and the reasonable amount which should be allocated in that respect to the operating expenses of appellee’s intrastate business. Id., pp. 153, 157. The District Court entered into an exhaustive examination of these questions and made detailed findings. The court found that the equipment and supplies furnished by the Western Electric Company had been sold to appellee at fair and reasonable prices, and that the earnings of the Western Electric Company on its investment allocated to the business done 8 The amounts of net revenue thus involved, which appellants contend should not have been allocated (under the rates in suit) to the interstate service for the respective years, are as follows: 1923, $245,042; 1924, $262,398; 1925, $309,505; 1926, $317,915; 1927, $354,372; 1928, $427,655; 1929, $486,875; 1930, $472,469; 1931, $431,580. LINDHEIMER v. ILLINOIS TEL. CO. 157 151 Opinion of the Court. with appellee, and its profits on sales, had been fair and reasonable, with the exception of an advance in prices of 10.2 per cent, effective on November 1, 1930. That advance the court disapproved, and, in determining the reasonable outlays to be allowed to appellee after that date, the court made a reduction of 10 per cent, from the prices charged by the Western Electric Company.4 Appellee contests this reduction, and appellants object to the amounts allowed. The District Court made specific findings as to the character of the services rendered by the American Company under its license contracts with appellee and the amounts of the cost of these services which should be allocated to the operating expenses of the latter’s intrastate business. In the years 1923 to 1928, inclusive, when the court found that the payments under the license contracts charged on appellee’s books exceeded the cost as thus determined and allocated, only the cost was held to be chargeable to operating expenses, but in the years 1929 to 1931, inclusive, when the license payments as so charged were less than the cost, only the amount of the license payments was allowed as an operating expense.5 Appellants raise many questions in opposition to these determinations of costs and allocations, while appellee contends that the costs as found were less than the true costs and that the full amounts paid under the license contracts should have been allowed. "Appellee states that this effected a reduction in the operating expenses of appellee of $67,167 for the last two months of 1930, $332,470 for 1931, and an equal amount for 1932. “The amounts of the license payments thus disallowed by the Court, as being in excess of the cost of the service, for the years 1923 to 1928, inclusive, are as follows: 1923, $573,819; 1924, $631,549; 1925, $531,233; 1926, $432,704; 1927, $558,011; 1928, $31,553. The amounts by which the cost to the American Company exceeded the license payments, for the years 1929 to 1931, are as follows: 1929, $206,253; 1930, $327,751; 1931, $234,104. 158 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. The evidence with respect to the value of appellee’s property employed in its intrastate business at Chicago is voluminous. The evidence shows the original or book cost of this property, the market value of land, and estimates of the cost of reproduction new of the other physical property constituting appellee’s telephone plant. There was also evidence of the condition of the property, together with estimates of accrued depreciation. Appellants submitted no valuations since one made by the Commission in 1923,6 but presented detailed criticisms of appellee’s estimates. The District Court found that the method adopted by appellee’s witness in ascertaining the cost of reproduction new was reliable and that appellee’s estimates were substantially correct. The court encountered difficulties in making its valuations for the years 1931 and 1932. It took notice of the general fall in values which had accompanied the depression in business. And for that reason, the court fixed values for 1931 and 1932 which in its opinion “ gave due consideration to the element of the present decline.” The court found that the fair rate of depreciation to be applied to reproduction cost new was 16 per cent, for the years 1923 to 1928, inclusive, and 15 per cent, for the succeeding years; and that the amount to be added to reproduction cost new on account of going value was 8 per cent, of that cost. The court also made findings as to the appellee’s working cash capital, the amounts invested in materials and supplies and in property in course of construction, and as to these three items there is no controversy. The court’s findings, for each year, of the fair value of appellee’s property, used and useful in its intrastate business in the Chicago area, including working cash capital, materials and supplies, construction work in progress and going value, taking the average amount for the year, and ’See 38 F. (2d) p. 86; 282 U.S. pp. 144, 145, LINDHEIMER v. ILLINOIS TEL. CO. 159 151 Opinion of the Court. the court’s findings as to the original or average book cost of the same property, but without going value, are as follows: Fair Value Book Cost 1923.............................. $124,200,000 $95,074,135 1924............................. 136,500,000 105,291,980 1925............................. 148,500,000 117,730,536 1926............................. 151,500,000 130,857,355 1927............................. 167,000,000 146,173,197 1928............................. 173,000,000 159,622,212 1929............................. 184,000,000 168,988,816 1930............................. 187,120,000 178,157,620 1931............................. 179,100,000 181,925,963 1932............................. 166,500,000 181,925,963 Appellants contend that the findings as to fair value are excessive. Appellee insists that they are too low. In particular, appellee says that the property was undervalued through excessive deductions for existing depreciation. Appellee maintains that the evidence shows a maximum depreciation of 9 per cent, for the years 1923 to 1928, and of 8 per cent, thereafter, instead of the 16 per cent, and 15 per cent, deducted by the court. In computing the net revenue from the intrastate business in Chicago, the court made adjustments in operating expenses with respect to the payments to the Western Electric Company and the American Company, as above stated, and also reduced to some extent the annual charges for depreciation. By these adjustments, the amount of the net revenue as found by the court largely exceeded that shown by appellee’s books. For example, the amount available for return in the year 1923 under the existing rates appears to have been $5,347,533 according to appellee’s books, while the amount found by the court to have been available for return in that year is $6,646,183. We shall presently refer to the comparison for the other years. The court found that, if the rates in suit had been effective, appellee’s net earnings on its intrastate business 160 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. would have thereby been reduced to the extent of $1,541,-668 for 1923, and by somewhat greater amounts in later years except in 1931 and 1932. As thus estimated, the net revenue available for return from the intrastate business in Chicago under the rates in suit would have been as follows: 1923, $5,104,515; 1924, $5,932,959; 1925, $6,297,-890; 1926, $6,402,128; 1927, $6,686,503; 1928, $6,914,459; 1929, $8,939,602; 1930, $8,492,385; 1931, $8,392,555; 1932, $6,750,000. The court found that the fair rate of return on the average fair value of the intrastate property was 7^ per cent, for each of the years 1923 to 1927, inclusive, 7 per cent, for each of the years 1928, 1929 and 1930, 6% per cent, for 1931, and 5^ per cent, for 1932. On the basis of these findings of fact, the court concluded that the rates in suit were confiscatory at all times from the date of the Commission’s order. 1. The experience of the Company under the existing rates. The effect of the decision below, and of the findings upon which it is based, strikingly appears if we put aside for the moment the rates in suit and consider that effect in relation to the existing rates under which the Illinois Company has conducted its business since 1920. That is, if we compare the amounts available for return— the net intrastate income in Chicago under existing rates— as shown (1) by appellee’s statement from its books and (2) by the court’s adjustments, with (3) the amount of the net income which, under the findings of fair value, income, expenses, and rate of return, would be necessary to avoid confiscation. The following table—with columns correspondingly designated—gives the comparison:7 7 Column (1) gives the net intrastate income in Chicago as shown by the Company from its books; column (2) the amount as adjusted by the District Court; and column (3) the amount required by the court’s findings. LINDHEIMER v. ILLINOIS TEL. CO. 161 151 Opinion of the Court. (1) (2) (3) 1923................. $5,347,533 $6,646,183 $9,315,000 1924 ................. 6,230,178 7,483,954 - 10,237,500 1925 ................. 6,650,718 7,880,451 11,137,500 1926 ................. 6,887,012 8,052,698 11,362,500 1927 ................. 6,877,089 8,363,580 12,525,000 1928.................. 7,601,567 8,627,760 12,110,000 1929 ................. 9,490,091 10,679,602 12,880,000 1930 ................. 9,152,490 10,138,263 13,098,400 1931 ................. 8,494,616 9,826,299 11,641,500 1932 ............................... 8,000,000 9,157,500 On this showing, the findings if accepted would compel the conclusion that when the Commission’s order was made in 1923, not only the new rates, but the existing rates as well were grossly confiscatory; that appellee was receiving under the existing rates, according to its books, a net return of $5,347,533 when it was entitled to nearly $4,000,000 more, or $9,315,000, to prevent its property from being confiscated. The table shows a similar situation in the succeeding years. Again, the inference would be irresistible that the existing rates were confiscatory when they were prescribed by the Public Utilities Commission of Illinois (the predecessor of the present Commission) in December, 1920, to be effective January 1, 1921. In the comprehensive disclosure of appellee’s financial condition there is nothing to permit an inference of any radical change which would have made rates, compensatory in 1921, confiscatory in 1923. But, instead of challenging the existing rates as constituting an invasion of constitutional right, appellee when summoned by the Commission, in September, 1921, in the proceeding which led to the order now under review, asserted that the existing rates were just and reasonable. In its answer to the Commission, appellee alleged “ that its rates and charges heretofore approved and authorized by the aforesaid order of the Public Utilities Commission 61745°—34-------11 162 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. of Illinois, entered on the 20th day of December, 1920, and now in full force and effect, are just and reasonable, and that the burden of proof is upon whomsoever avers, or seeks to show, that said rates and charges are unjust or unreasonable.” And when this suit was brought in September, 1923, to prevent the enforcement of the new rates, appellee did not seek to enjoin the existing rates. The financial history of the Illinois Company repels the suggestion that during all these years it was suffering from confiscatory rates. Its capital stock rose from $9,000,000 in 1901, to $70,000,000 in 1923, $80,000,000 in 1925, $110,000,000 in 1927, $130,000,000 in 1929, and $150,-000,000 in 1930. Its funded debt, which was somewhat less than $50,000,000 in 1923, continued at about the same amount until 1930. During this period appellee paid the interest on its debt and 8 per cent, dividends on its stock. Its “ fixed capital reserves,”8 which embraced the depreciation reserve presently to be mentioned, rose from $37,575,004 in 1923, to $63,966,748 in 1930, and to $69,242,667 in 1931. The Company’s surplus and undivided profits over and above these capital reserves increased from $5,600,326 in 1923, to $22,907,654 in 1930, and to $23,767,381 in 1931. Its “ fixed capital,” that is, the book cost of “ total plant and general equipment,” which was $145,984,084 at the end of 1923, increased to $288,381,090 at the end of 1930, and to $291,259,580 at the end of 1931.® We do not lose sight of the fact that this showing embraces the entire business of the Illinois Company, both interstate and intrastate. But it appears that the intrastate investment in the Chicago area ap- 8 The " fixed capital reserves ” are the depreciation reserve and the reserve for amortization of intangible capital. The latter reserve ranged from $182,041.50, in the year 1923, to $274,086.36 in 1930, and to $289,018.77 in 1931. 8 This is according to the Company’s “ Plant and General Equipment Accounts for the Chicago and State Areas.” LINDHEIMER v. ILLINOIS TEL. CO. 163 151 Opinion of the Court. proximated 60 per cent, of the entire investment of appellee in the State. The book cost of the plant in service and general equipment in intrastate business in Chicago increased from $95,582,266 at the end of 1923 to $174,-160,314 at the end of 1930, and to $177,384,652 at the end of 1931.10 “ The gross additions ” to the Company’s property in the Chicago area, the Company states, “ were spread fairly evenly over the period.”—“The business expanded with great rapidity. The number of telephones in Chicago increased from 690,000 at the end of 1923 to 940,000 at the end of 1931, and was 987,000 at the peak in 1929.” During the nine years “ a greater amount of plant was added new to the property than was in service at the beginning of the term.” The Company informs us that the property was kept “ at a high and even standard of maintenance throughout the years involved ” and “ was at all times capable of giving adequate telephone service abreast of the art.” The property has been efficiently and economically operated and the Company has enjoyed excellent credit. This actual experience of the Company is more convincing than tabulations of estimates. In the face of that experience, we are unable to conclude that the Company has been operating under confiscatory intrastate rates. Yet, as we have said, the conclusion that the existing rates have been confiscatory—and grossly confiscatory—would be inescapable if the findings below were accepted. In that event, the Company would not only be entitled to resist reduction through the rates in suit, but to demand, as a constitutional right, a large increase over the rates which have enabled it to operate with out- 10 The book cost of the “ Plant in Service and General Equipment ” for the Chicago area, including both interstate and intrastate business, rose from $100,040,051 at the end of 1923 to $191,286,165 at the end of 1930 and to $195,422,113 at the end of 1931. 164 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. standing success. Elaborate calculations which are at war with realities are of no avail. The glaring incongruity between the effect of the findings below, as to the amounts of return that must be available in order to avoid confiscation, and the actual results of the Company’s business, makes it impossible to accept those findings as a basis of decision. 2. The effect of the reduction through the rates in suit. The foregoing considerations limit our inquiry. It is not necessary to traverse the wide field of controversy to which we are invited and to review the host of contested points presented by counsel. In the view that the existing rates cannot be regarded as inadequate, the question is simply as to the effect of the reduction in net income by the rates in suit. The question is whether the Company has established, with the clarity and definiteness befitting the cause, that this reduction would bring about confiscation. Los Angeles Gas Co. v. Railroad Comm’n, 289 U.S. 287, 304, 305. The amounts of the reduction for the respective years are not in dispute.11 It would have been $1,541,668 for 1923, would have been greatest, at $1,740,000, for 1929, and least, at $1,270,000, for 1932. Operating expenses. In determining the effect of these reductions, and what amounts would still be available to the Company for net return, we come to the questions raised by the Company’s charges to operating expenses. Charges to operating expenses may be as important as valuations of property. Thus, excessive charges of $1,500,000 to operating expenses would be the equivalent of 6 per cent, on $25,000,000 in a rate base. In this in- 11 The amounts of the reduction in intrastate income in Chicago, if the rates in suit had been effective, as shown by the Company and found by the District Court, are as follows: 1923, $1,541,668; 1924, $1,550,995; 1925, $1,582,561; 1926, $1,650,570; 1927, $1,677,077; 1928, $1,713,301; 1929, $1,740,000; 1930, $1,645,878; 1931, $1,433,044; 1932, $1,270,000. LINDHEIMER v. ILLINOIS TEL. CO. 165 151 Opinion of the Court. stance, against the reductions which the rates in suit would have effected, are the considerable sums which would be added to the amounts available for return by the adjustments in operating expenses made by the District Court.12 These adjustments embraced overpayments found to have been made by the Illinois Company in its transactions with the American Telegraph and Telephone Company and the Western Electric Company. In 1923, the overpayment to the former Company, treating its outlay, or the cost of its service to its subsidiary, as the measure of the operating expense, was found to be $573,819; the average of the annual overpayments, as found for the years 1923 to 1927, inclusive, amounted to $545,443.13 It should be noted that on the same basis of adjustment there would have been an increase (averaging $256,036) in operating expenses for the years 1929 to 1931, when the cost of the service exceeded the license payments.14 The court below found overpayments to the Western Electric Company of $332,470 in 1931 and 1932, respectively.15 There are numerous contentions presented by each of the parties in relation to these adjustments—by appellants, to decrease, and by appellee, to increase, the amounts of expense allowed—but we shall not undertake to pass upon them in view of the determinative nature, for the present purpose, of the remaining question as to the sums which the Company has annually charged to operating expenses for depreciation. Annual allowances for depreciation. The Commission, in the order under review, concluded that the depreciation reserve (amounting, at the end of 1922, for the Chi- 12 See comparison of the amounts of net return as shown by the Company with the amounts as adjusted by the District Court, in table, supra, p. 161. 18 Supra, p. 157, Note 5. 14 Id. 15 Supra, p. 157, Note 4. 166 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. cago property, interstate and intrastate, to about $26,-000,000) had been built up by annual additions that were in excess of the amounts required. The Commission provided for “ a combined maintenance and replacement allowance ” which it considered sufficient to protect the investment in the property and to permit the Company “ to accrue a reserve in the anticipation of property retirements.” On the first hearing, the District Court considered that the effect of that ruling was to reduce the amount charged for depreciation to the operating expenses in 1923 to the extent of about $l,800,000.16 The Company did not comply with the Commission’s requirement but continued its own method of computing the annual allowances. We adverted to this question on the former appeal. We said that the recognition of the ownership of the property represented by the depreciation reserve did not justify the continuance of excessive charges to operating expenses. We thought that the experience of the Illinois Company, together with a careful analysis of the results shown under comparable conditions, by other companies which are part of the Bell system, should afford a sound basis for judgment as to the amount which in fairness both to public and private interest should be allowed as an annual charge. 282 U.S. pp. 157-159. The District Court in making its findings stated that it had considered the data to which we referred, but we are not advised as to the precise method of its calculations.17 The annual amounts allowed by the court for depreciation, as compared with those which appellee charged on its books to operating expenses,18 are as follows: 16 38 F. (2d) pp. 86, 87. 17 3 F. Supp. p. 605. 18 The Company’s charges on its books were based on original cost. The Company claims considerably larger amounts as the result of recomputations for each class of property according to its replacement value new. LINDHEIMER v. ILLINOIS TEL. CO. 167 151 Opinion of the Court. Court’s Allowances Book Charges 1923 ............................... $4,000,000 $4,222,000 1924 ................................. 4,250,000 4,470,000 1925 ................................. 4,750,000 5,048,000 1926 ................................. 5,400,000 5,767,000 1927 ................................. 6,000,000 6,335,000 1928 ............................... 6,650,000 7,009,000 1929.................................. 7,000,000 7,436,000 1930................................ 7,200,000 7,865,000 1931................................. 7,400,000 8,133,000 Broadly speaking, depreciation is the loss, not restored by current maintenance, which is due to all the factors causing the ultimate retirement of the property. These factors embrace wear and tear, decay, inadequacy, and obsolescence.10 Annual depreciation is the loss which takes place in a year. In determining reasonable rates for supplying public service, it is proper to include in the operating expenses, that is, in the cost of producing the service, an allowance for consumption of capital in order to maintain the integrity of the investment in the service rendered.20 The amount necessary to be provided annually for this purpose is the subject of estimate and computation. In this instance, the Company has used the “straight line” method of computation, a method ap- 19 Depreciation, as defined by the Interstate Commerce Commission, “ is the loss in service value not restored by current maintenance and incurred in connection with the consumption or prospective retirement of property in the course of service from causes against which the carrier is not protected by insurance, which are known to be in current operation, and whose effect can be forecast with a reasonable approach to accuracy.” 177 I.C.C. p. 422. 20 See Knoxville v. Knoxville Water Co., 212 U.S. 1, 13, 14; Kansas City Southern Ry. Co. v. United States, 231 U.S. 423, 448; Denver v. Denver Union Water Co., 246 U.S. 178, 191; Southwestern Bell Telephone Co. n. Public Service Comm’n, 262 U.S. 276, 278; Georgia Railway & Power Co. v. Railroad Comm’n, 262 U.S. 625, 633; United Railways v. West, 280 US. 234, 253, 260; Smith v. Illinois Bell Telephone Co., 282 U.S. 133, 158; Clark’s Ferry Bridge Co. v. Public Service Comm’n, 291 U.S. 227. 168 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. proved by the Interstate Commerce Commission. 177 I.C.C. pp. 408, 413. By this method the annual depreciation charge is obtained by dividing the estimated service value by the number of years of estimated service life. The method is designed to spread evenly over the service life of the property the loss which is realized when the property is ultimately retired from service. According to the principle of this accounting practice, the loss is computed upon the actual cost of the property as entered upon the books, less the expected salvage, and the amount charged each year is one year’s pro rata share of the total amount.21 Because of the many different classes of plant, some with long and some with short lives, some having large salvage and others little salvage or no salvage, and because of the large number of units of a class, the Company employs averages, that is, average service life, average salvage of poles, of telephones, etc. While property remains in the plant, the estimated depreciation rate is applied to the book cost and the resulting amounts are charged currently as expenses of operation. The same amounts are credited to the account for depreciation reserve, the “Reserve for Accrued Depreciation.” When property is retired, its cost is taken out of the capital accounts, and its cost, less salvage, is taken out of the depreciation reserve account. According to the practice of the Company, the depreciation reserve is not held as a separate fund but is invested in plant and equipment. As the allowances for depreciation, credited to the depreciation reserve account, are charged to operating expenses, the depreciation reserve invested in the property thus represents, at a given time, the amount of the investment which has been made out of the proceeds of telephone rates for the ostensible purpose of replacing capital consumed. If the predictions of service life were entirely accurate and retirements were made when and as these predictions were 21 See 177 I.C.C. pp. 431, et seq. LINDHEIMER v. ILLINOIS TEL. CO. 169 151 Opinion of the Court. precisely fulfilled, the depreciation reserve would represent the consumption of capital, on a cost basis, according to the method which spreads that loss over the respective service periods. But if the amounts charged to operating expenses and credited to the account for depreciation reserve are excessive, to that extent subscribers for the telephone service are required to provide, in effect, capital contributions, not to make good losses incurred by the utility in the service rendered and thus to keep its investment unimpaired, but to secure additional plant and equipment upon which the utility expects a return. Confiscation being the issue, the Company has the burden of making a convincing showing that the amounts it has charged to operating expenses for depreciation have not been excessive. That burden is not sustained by proof that its general accounting system has been correct. The calculations are mathematical but the predictions underlying them are essentially matters of opinion.22 They proceed from studies of the “behavior of large groups” of items. These studies are beset with a host of perplexing problems. Their determination involves the examination of many variable elements, and oppor- 22 In the exposition in evidence, to which the Company’s counsel refer in their argument, of the “Straight Line Depreciation Practice” of the companies in the Bell system, it is said: “The proper interpretation of the data regarding plant life and salvage obtainable from accounts, records and statistics is of equal importance with the integrity of the data themselves. It would seem that we should have first: investigations of past service life and salvage through sound accounting and statistical methods; second: investigations of the conditions surrounding the employment of such plant in the past and of the extent to which such conditions still prevail; third: the best possible forecast of conditions looming in the future which should exert a modifying influence upon either life or salvage. And then, the active judgment which fuses the experience of the past, so far as it is still pertinent, and the expectation for the future, so far as it is presently pertinent, into a just and reasonable determination of the current rate of depreciation for the time being.” 170 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. tunities for excessive allowances, even under a correct system of accounting, are always present. The necessity of checking the results is not questioned. The predictions must meet the controlling test of experience. In this instance, the evidence of expert computations of the amounts required for annual allowances does not stand alone. In striking contrast is the proof of the actual condition of the plant as maintained—proof which the Company strongly emphasizes as complete and indisputable in its sharp criticism of the amount of accrued depreciation found by the District Court in valuing the property. The Company insists that “the existing depreciation in the property, physical and functional, does not exceed 9 per cent, in the years 1923 to 1928 and 8 per cent, thereafter.” The existing depreciation as thus asserted by the Company, and the amounts it shows as the depreciation reserve allocated to the intrastate business in Chicago (taking in each case the average amounts per year) are as follows. Existing Depreciation Years. depreciation. reserved 1923 ............................ $11,992,000 $26,797,000 1924 ............................ 12,865, 000 29,316,000 1925 ............................... 13,775,000 32,155,000 1926 ............................ 14,621,000 35,572,000 1927 ............................ 15,360,000 39,352,000 1928 ............................ 1.6», 241,000 42,769,000 1929 ............................ 15,300, 000 44,515,000 1930 ............................ 15,863,000 45,829,000 1931 ............................ 15,828,000 48,362,000 In explanation of this large difference, the Company urges that the depreciation reserve in a given year does 23 The Company obtains these average amounts from the total Chicago depreciation reserve at the end of each year, multiplied by the percentage found to be applicable to the intrastate business, with a deduction of one-half of the increase during the year in order to obtain the average. The balance in the depreciation reserve for the entire Chicago property, interstate and intrastate, increased from $4,384,828 at the end of 1911 to $29,306,122 at the end of 1923. LINDHEIMER v. ILLINOIS TEL. CO. 171 151 Opinion of the Court. not purport to measure the actual depreciation at that time; that there is no regularity in the development of depreciation; that it does not proceed in accordance with any fixed rule; that as to a very large part of the property there is no way of predicting the extent to which there will be impairment in a particular year. Many different causes operating differently at different times with respect to different sorts of property produce the ultimate loss against which protection is sought. As the accruals to the depreciation reserve are the result of calculations which are designed evenly to distribute the loss over estimated service life, the accounting reserve will ordinarily be in excess of the actual depreciation. Further, there are the special conditions of a growing plant,— “there are new plant groups in operation on which depreciation is accruing but which are not yet represented, or are but slightly represented, in the retirement losses.” Where, as in this instance, there has been a rapid growth, retirements at one point of time will relate for the most part to the smaller preceding plant, while the depreciation reserve account is currently building up to meet the “increased eventual retirement liability” of the enlarged plant. Giving full weight to these considerations, we are not persuaded that they are adequate to explain the great disparity which the evidence reveals. As the Company’s counsel say: “ The reserve balance and the actual depreciation at any time can be compared only after examining the property to ascertain its condition; the depreciation, physical and functional, thus found can be measured in dollars and the amount compared with the reserve.” Here, we are dealing not simply with a particular year but with a period of many years—a fairly long range of experience—and with careful and detailed examinations made both at the beginning and near the end of that period. The showing of the condition of the property, and 172 OCTOBER TERM, 1933. Opinion of the Court. 292U.S. of the way in which it has been maintained, puts the matter in a strong light. In substance, the Company tells us: The property in Chicago is a modem Bell system plant. Through the process of current maintenance, worn, damaged oi otherwise defective parts were being constantly removed before their impairment affected the telephone service. The factors of “ inadequacy ” and “ obsolescence ” were continuously anticipated by the Company, so that the telephone service might not be impaired, “ and no depreciation of that character was ever present in the plant, except to the slight extent that obsolete items of plant were found ” as stated by the Company’s witnesses. One of these witnesses testified that, in his examination of the plant to determine existing depreciation, he understood “ that anything that was obsolete or inadequate was to be depreciated accordingly.” We are told by the Company that in that investigation— “ Condition new was assumed to be free from defects or impairment of any kind, that is, perfect or 100% condition, and the thing as it stood in actual use in the plant was compared with the same thing new.” “All existing depreciation, both physical and functional, was reduced to a percentage, and subtracted from 100 per cent.” The service measured up to the standards of the telephone art at all times. The plant capable of giving such service “was not functionally deficient, in any practical sense. This is not to say that parts of the plant did not from time to time become inadequate or obsolete, but that the Company continuously anticipates and forestalls inadequacy and obsolescence. Before a thing becomes inadequate or obsolete it is removed from the plant.” But little variation was found in the percentage of existing depreciation during the years 1923 to 1931.24 The Com- M Referring to the period 1923 to 1931, and to the Company’s exhibit, the Company’s counsel state—that “ the percentage of depreciation in the various classes of plant did not vary materially LINDHEIMER v. ILLINOIS TEL. CO. 173 151 Opinion of the Court. pany points out that the Commission found, in its order of 1923, that the property was then “ in at least 90 per cent, condition.” “ The weighted total or overall condition,” the Company shows, “ is 91 per cent, for the years 1923-1928 and 92 per cent, for subsequent years.” This condition, kept at a nearly constant level, directs attention to the amounts expended for current maintenance. In the process of current maintenance, “new parts” are “installed to replace old parts” in units of property not retired. Such “substitutions or 'repairs’ ” are separate from the amounts which figure in the depreciation reserve. The distinction between expenses for current maintenance and depreciation is theoretically clear. Depreciation is defined as the expense occasioned by the using up of physical property employed as fixed capital; current maintenance, as the expense occasioned in keeping the physical property in the condition required for continued use during its service life. But it is evident that the distinction is a difficult one to observe in practice with scientific precision, and that outlays for maintenance charged to current expenses may involve many substitutions of new for old parts which tend to keep down the during the period, with the exception of three classes, namely, central office equipment, private branch exchanges and booths and special fittings. In the case of central office equipment, there were large installations of new equipment in 1929 which had the effect of raising the per cent, condition for the entire class from 92 per cent, for prior years to 93 per cent, for 1929 and subsequent years. In the case of private branch exchanges, the percentage condition improved gradually from 88 per cent, in 1923 to 94 per cent, in 1930 due to the large proportion of new installations and correspondingly large retirements of the old. In the case of booths and special fittings, the percentage condition gradually improved from 78 per cent, in 1923 to 85 per cent, at the end of the period, in this case also because of abnormally large changes of booths at pay stations. These are the changes which in the main account for the fact that the overall condition of the plant rose from 91 per cent, for the years 1923-1928 to 92 per cent, thereafter.” 174 OCTOBER TERM, 1933. Opinion of the Court. 292U.S. accrued depreciation. The amounts charged by the Company to current maintenance year by year, the amounts credited to the depreciation reserve, and the total of the two sets of charges to operating expenses for the intrastate property in Chicago are as follows: Current maintenance. Depreciation. Total. 1923................... $5,643,623 $4,222,000 $9,865,623 1924 ................... 6,043,737 4,470,000 10,513,737 1925 ................... 6,563,193 5,048,000 11,611,193 1926’................... 7,714,364 5,767,000 13,481,364 1927 ................. 8,849, 550 6,335,000 15,184,550 1928 ................... 9,941,143 7,009,000 16,950,143 1929 ................... 10,671,576 7,436,000 18,107,576 1930.................... 11,372,858 7,865,000 19,237,858 1931 .................. 10,842,053 8,133,000 18,975,053 These aggregate amounts range from over 30 per cent, to nearly 40 per cent, of the total amounts charged by the Company to operating expenses.25 In the light of the evidence as to the expenditures for current maintenance and the proved condition of the property—in the face of the disparity between the actual extent of depreciation, as ascertained according to the comprehensive standards used by the Company’s witnesses, and the amount of the depreciation reserve—it cannot be said that the Company has established that the reserve merely represents the consumption of capital in the service rendered. Rather it appears that the depreciation reserve to a large extent represents provision for capital additions, over and above the amount required to cover capital consumption. This excess in the balance of the reserve account has been built up by excessive 25 The total amounts charged by the Company for operating expenses in the intrastate business at Chicago appear to be as follows: 1923, $31,550,286; 1924, $33,275,574; 1925, $35,649,160; 1926, $38,893,042; 1927, $42,142,649; 1928, $45,704,899; 1929, $48,489,647; 1930, $49,319,993; 1931, $47,904,196. LINDHEIMER v. ILLINOIS TEL. (30. 175 151 Opinion of the Court. annual allowances for depreciation charged to operating expenses. In answer to appellants’ criticism, the Company suggests that an adjustment might be made by giving credit in favor of the telephone users “ in an amount equal to 3^ per cent, upon the difference between the depreciation reserve and the amount deducted from the valuation for existing depreciation.” The suggestion is beside the point. The point is as to the necessity for the annual charges for depreciation, as made or claimed by the Company, in order to avoid confiscation through the rates in suit. On that point the Company has the burden of proof. We find that this burden has not been sustained. Nor is the result changed by figuring the allowances at the somewhat reduced amounts fixed by the court below.26 We find this point to be a critical one. The questionable amounts annually charged to operating expenses for depreciation are large enough to destroy any basis for holding that it has been convincingly shown that the reduction in income through the rates in suit would produce confiscation. The case has long been pending and should be brought to an end. The Company has had abundant opportunity to establish its contentions. In seeking to do so, the Company has submitted elaborate estimates and computations, but these have overshot the mark. Proving too much, they fail of the intended effect. It is not the function of the court to attempt to construct out of this voluminous record independent calculations to invalidate the challenged rates. It is enough that the rates have been established by competent authority and that their invalidity has not been satisfactorily proved. The decree below is reversed and the cause is remanded with direction to dissolve the interlocutory injunction, to 26 See, supra, p. 167. 176 OCTOBER TERM, 1933. Butler, J., concurring. 292 U.S. provide for the refunding, in accordance with the terms of that injunction and of the bonds given pursuant thereto, of the amounts charged by the Company in excess of the rates in suit, and to dismiss the bill of complaint. No. 548.—The appeal of the Company. The Company was successful in the District Court and has no right of appeal from the decree in its favor. The Company is not entitled to prosecute such an appeal for the purpose of procuring a review of the findings of the court below with respect to the value of the Company’s property or the other findings of which it complains. Its contentions in these respects have been considered in connection with the appeal of the state authorities and the city. The appeal of the Company is dismissed. New York Telephone Co. v. Maltbie, 291 U.S. 645. Decree in No. 440 reversed. Appeal in No. 548 dismissed. Mr. Justice Butler, concurring. The evidence does not show that the amounts taken by the company from revenue and charged to the depreciation reserve were required for the maintenance of the property or that the amounts allowed by the lower court for that purpose were needed. The ruling in condemnation of the charges to the depreciation reserve is so important that, even at the risk of duplication, emphasis should be laid upon some facts and reasons that may be cited in its support. The court’s opinion discloses the principle followed for the ascertainment of the amounts annually so charged. It is the straight line method calculated on cost less salvage.1 That method was prescribed by the Interstate 1 This is not in harmony with the principle of our decision in United Railways v. West, 280 U.S. 234, 253-254, which requires replacement cost to be taken as the basis of calculation. LINDHEIMER v. ILLINOIS TEL. CO. 177 151 Butler, J., concurring. Commerce Commission by an order effective January 1, 1913, establishing the uniform system of accounts for telephone companies.2 The evidence requires a finding that the company faithfully followed the prescribed system. The state commission continuously watched over the * The following is § 23, Uniform System of Accounts for Telephone Companies, promulgated by the Interstate Commerce Commission, effective January 1, 1913. It will serve to disclose the underlying principle on which the reserve charges are made. “Depreciation of Plant and Equipment.—Telephone companies should include in operating expenses depreciation charges for the purpose of creating proper and adequate reserves to cover the expenses of depreciation currently accruing in the tangible fixed capital. By expense of depreciation is meant— (a) The losses suffered through the current lessening in value of tangible property from wear and tear (not covered by current repairs). (b) Obsolescence or inadequacy resulting from age, physical change, or supersession by reason of new inventions and discoveries, changes in popular demand, or public requirements, and (c) Losses suffered through destruction of property by extraordinary casualties. The amount charged as expense of depreciation should be based upon rules determined by the accounting company. Such rules may be derived from a consideration of the company’s history and experience. Companies should be prepared to furnish the Commis-sion, upon demand, the rules and a sworn statement of the facts, expert opinions, and estimates upon which they are based. The estimate for depreciation of physical property should take into account— (a) The gradual deterioration and ultimate retirement of units of property which may be satisfactorily individualized, such as buildings, machines, valuable instruments, etc., to the end that by the time such units of property go out of service there shall have been accumulated a reserve equal to the original money cost of such property plus expenses incident to retirement less the value of any salvage. (b) The depreciation accruing in property which cannot be readily individualized, such as pole lines, wires, cables, or other continuous structures, where expenditures for repairs or replacements of individual parts ordinarily are not actually made until the 61745°—34-------12 178 OCTOBER TERM, 1933. Butler, J., concurring. 292 U.S. company’s handling of the depreciation reserve account. The table next below shows by years in column (1) the intrastate reserve balances, in (2) the intrastate book cost of the property and in (3) percentages that the balances are of the cost. TABLE I. (1) (2) (3) 1923 ................... $26,797,000 $95,074,135 28.1% 1924 ................... 29,316,000 105,291,980 27.8 1925 ................... 32,155,000 117,730,536 27.3 1926 ................... 35,572,000 130,857,355 27.1 1927 .................... 39,352,000 146,173,197 26.9 1928 ................... 42,769, 000 159,622,212 26.7 1929 ................... 44, 515, 000 168,988,816 26.2 1930 .................... 45,829,000 178,157,620 25.9 1931 ................... 48,362,000 181,925,963 26. The cost of the property includes from $2,000,000 to $3,000,000 paid for land which is not depreciable, and $13,000,000 to $18,000,000 paid for buildings having a long service life. There are other important and relatively permanent plant elements. These facts suggest that the percentages shown in the table are considerably lower than the actual relation of reserve balances to cost of depreciable parts of the property. While much of the plant is new, the reserve was piled up at about the rate that the cost of plant increased. The balances held in respect of all property, interstate and intrastate, increased from about $4,000,000 in 1911 to about $26,000,- later years of the life in service of such property, and when made may, therefore, be classed as extraordinary repairs. The rate of depreciation should be fixed so as to distribute, as nearly as may be, evenly throughout the life of the depreciating property the burden of repairs and the cost of capital consumed in operations during a given month or year, and should be based upon the average life of the units comprised in the respective classes of property. . . LINDHEIMER v. ILLINOIS TEL. CO. 179 151 Butler, J., concurring. 000 in 1922. The amounts attributable to the intrastate property alone show an average annual increase of more than $2,300,000. That amount is greatly in excess of the reduction of revenue that would have resulted if the rate order had been enforced. The table below shows by years in column (1) the amounts actually expended for current maintenance, in column (2) the amounts charged to depreciation reserve, in column (3) the total of both. TABLE II. (1) (2) (3) 1923................. $5,643,623 $4,222,000 $9,865,623 1924.................. 6,043,737 4,470,000 10,513,737 1925 ................. 6,563,193 5,048,000 11,611,193 1926 ................. 7,714,364 5,767,000 13,481,364 1927 ................. 8,849,550 6,335,000 15,184,550 1928 ................. 9,941,143 7,009,000 16,950,143 1929................. 10,671,526 7,436,000 18,107,526 1930................. 11,372,858 7,865,000 19,237,858 1931................. 10,842,053 8,133,000 18,975,053 The importance of the amounts involved is illustrated by the following table which shows by years (1) expenditures for current maintenance plus charges to depreciation reserve, in (2) revenues, in (3) the percentages that the former are of the latter. TABLE III. (1) (2) (3) 1923.................... $9,865,623 $37,146,181 26.5% 1924.................... 10,513,737 39,653,954 26.5 1925.................... 11,611,193 42,560,451 27.2 1926.................... 13,481,364 45,932,698 29.3 1927.................... 15,184,550 49,163,580 30.8 1928.................... 16,950,143 53,677,760 31.5 !929.................... 18,107,526 58,279,602 31 !930.................... 19,237,858 58,698,263 32.7 1931.................... 18,975,053 56,496,299 33.5 180 OCTOBER TERM, 1933. Butler, J., concurring. 292 U.S. The next table gives similar information. It shows by years in column (1) actual expenditures for maintenance plus charges to the reserve, in (2) the total of all operating expenses and in (3) the percentages that the former are of the latter. TABLE IV. (1) (2) (3) 1923..................... $9,865,623 $31,550,286 31.2% 1924................... 10,513,737 33,275,574 31.5 1925..................... 11,611,193 35,649,160 32.5 1926..................... 13,481,364 38,893,042 34.6 1927..................... 15,184,550 42,142,649 36 1928..................... 16,950,143 45,704,899 37 1929..................... 18,107,526 48,489,647 39.4 1930..........:.......... 19,237,858 49,319,993 39 1931..................... 18,975,053 47,904,196 39.5 . The actual annual expenditures to keep the plant in proper condition for service are made up of the amounts included in current maintenance and those taken from the depreciation reserve. The table next below is illustrative and is intended to show by years in column (1) that total, in column (2) the revenue, in (3) the percentage that the former is of the latter. TABLE V. (1) (2) (3) 1924...................... $7,994,737 $39,653,954 20.1% 1925...................... 8,772,193 42,560,451 20.6 1926...................... 10,064,364 45,163,580 21.8 1927...................... 11,404,550 49,163,580 23.1 1928...................... 13,533,143 53,677,760 25.2 1929...................... 16,361,526 58,279,602 28 1930...................... 17,923,858 58,698,263 30.5 1931...................... 16,442,053 56,496,299 29.1 The purpose of this table is to compare the percentage in each year with the percentage in each of the other years. It is to be observed that the lowest is 20.1% (1924) and the highest 30.5% (1930). This comparison LINDHEIMER v. ILLINOIS TEL. CO. 181 151 Butler, J., concurring. serves to test the claim that the depreciation reserve is needed in order to equalize annual cost of upkeep in relation to revenue. If the period covered is typical, the last statement strongly suggests that no reserve account is necessary for that purpose. And that impression is confirmed by a similar comparison of the percentages in Table IV. It shows the relation of current maintenance plus depreciation reserve charges to revenue. Comparing the percentage in each year (during the period covered by Table V) with the percentage in each of the other years, the lowest is 31.5% (1924), the highest is 39.5 (1931). From the foregoing it justly may be inferred that charges made according to the principle followed by the company create reserves much in excess of what is needed for maintenance. The balances carried by the company include large amounts that never can be used for the purposes for which the reserve was created. In the long run the amounts thus unnecessarily taken from revenue will reach about one-half the total cost of all depreciable parts of the plant. The only legitimate purpose of the reserve is to equalize expenditures for maintenance so as to take from the revenue earned in each year its fair share of the burden. To the extent that the annual charges include amounts that will not be required for that purpose, the account misrepresents the cost of the service. The company’s properties constitute a complex and highly developed instrumentality containing many classes of items that require renewal from time to time. But, taken as a whole, the plant must be deemed to be permanent. It never was intended to be new in all its parts. It would be impossible to make it so. Expenditures in an attempt to accomplish that would be wasteful. Amounts sufficient to create a reserve balance that is the same percentage of total cost of depreciable items as their age is of their total service life cannot be accepted as legitimate 182 OCTOBER TERM, 1933. Statement of the Case. 292 U.S. additions to operating expenses. In the absence of proof definitely establishing what annual deductions from revenues were necessary for adequate maintenance of the property, the company is not entitled to have the rate order set aside as confiscatory. SPRING CITY FOUNDRY CO. v. COMMISSIONER OF INTERNAL REVENUE. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SEVENTH CIRCUIT. Nos. 727 and 728. Argued April 3, 1934.—Decided April 30, 1934. 1. Where accounts and income tax returns are on the accrual basis, a debt owing the taxpayer for goods sold in the tax year is returnable as gross income of that year even though ascertained in that year to be partly worthless. Art. 35 of Regs. 45, under Revenue Act of 1918, construed. P. 184. 2. Section 234 (a)(5) of the Revenue Act of 1918 authorized the deduction of a debt ascertained to be worthless and charged off within the taxable year; it did not authorize the deduction of the whole or a part of a debt which was not then ascertained to be worthless but was recoverable in part, the amount that was recoverable being still uncertain. P. 185. 3. Section 234 (a)(4) of the Revenue Act of 1918, providing for deduction of “ losses sustained during the taxable year,” and subdivision (5) of the same section providing for deduction of debts ascertained to be worthless w’ithin the taxable year, are mutually exclusive; and a debt excluded from deduction under (5) can not be deducted as a loss under (4). P. 189. 4. If a statute is ambiguous, administrative construction followed since its enactment is of great weight. P. 189. 67 F. (2d) 385, 387, affirmed. Certiorari, 291 U.S. 656, to review judgments reversing an order of the Board of Tax Appeals, 25 B.T.A. 822, allowing deduction of part of a debt in an income tax assessment for the year 1920. Both the taxpayer and the Commissioner appealed to the court below. SPRING CITY CO. v. COMMISSIONER. 183 182 Opinion of the Court. Messrs. Richard H. Tyrrell and Edgar L. Wood for petitioner. Mr. Erwin N. Griswold, with whom Solicitor General Biggs, Assistant Attorney General Wideman, and Messrs. James W. Morris and Carlton Fox were on the brief, for respondent. Mr. Chief Justice Hughes delivered the opinion of the Court. Petitions for writs of certiorari were granted, “ limited to the question whether a debt ascertained to be partially worthless in 1920 was deductible in that year under either § 234 (a) (4) or § 234 (a) (5) [of the Revenue Act of 1918] and to the question whether the debt was returnable as taxable income in that year to the extent that it was then ascertained to be worthless.” 291 U.S. 656. Petitioner kept its books during the year 1920 and filed its income tax return for that year on the accrual basis. From March, 1920, to September, 1920, petitioner sold goods to the Cotta Transmission Company for which the latter became indebted in the amount of $39,983.27, represented by open account and unsecured notes. In the latter part of 1920 the Cotta Company found itself in financial straits. Efforts at settlement having failed, a petition in bankruptcy was filed against the Company on December 23, 1920, and a receiver was appointed. In the spring of 1922 the receiver paid to creditors, including petitioner, a dividend of 15 per cent, and, in 1923, a second and final dividend of 12% per cent. Petitioner charged off on its books the entire debt on December 28, 1920, and claimed this amount as a deduction in its income tax return for that year. It included as income in its returns for 1922 and 1923 the dividends received in those years. The Commissioner disallowed the amount claimed as a deduction in 1920 but allowed a 184 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. deduction in 1923 of $28,715.76, the difference between the full amount of the debt and the two dividends. On review of the deficiency assessed by the Commissioner for 1920, the Board of Tax Appeals found that the debt was not entirely worthless at the time it was charged off. An offer had been made in November, 1920, to purchase the assets of the debtor at 33% per cent, of the creditors’ claims and the offer had been declined. The Board concluded that in view of all the circumstances, including the probable expense of the receivership, the debt could be regarded as uncollectible, at the time of the charge-off, to the extent of $28,715.76, and allowed a deduction for 1920 of that amount. 25 B.T.A. 822. This ruling, contested by both the Commissioner and the taxpayer, was reversed by the Circuit Court of Appeals upon the ground that 11 there was in 1920 no authority for a debt deduction unless the debt were worthless.” 67 F. (2d) 385, 387. In view of the conflict of decisions upon this point,1 this Court granted writs of certiorari limited as above stated. 1. Petitioner first contends that the debt, to the extent that it was ascertained in 1920 to be worthless, was not returnable as gross income in that year, that is, apart from any question of deductions, it was not to be regarded as taxable income at all. We see no merit in this contention. Keeping accounts and making returns on the accrual basis, as distinguished from the cash basis, import that it is the right to receive and not the actual receipt that determines the inclusion of the amount in gross income. When the right to receive an amount becomes ’See Sherman & Bryan, Inc. v. Commissioner, C.CA. 2d, 35 F. (2d) 713, 716; Davidson Grocery Co. v. Lucas, 59 App.D.C. 176; 37 F. (2d) 806; Murchison National Bank v. Grissom, C.CA. 4th, 50 F. (2d) 1056. Compare Minnehaha National Bank v. Commissioner, C.CA. 8th, 28 F. (2d) 763; Collin County National Bank v. Commissioner, C.C.A. 5th, 48 F, (2d) 207, 208. SPRING CITY CO. v. COMMISSIONER. 185 182 Opinion of the Court. fixed, the right accrues. When a merchandising concern makes sales, its inventory is reduced and a claim for the purchase price arises. Article 35 of Regulations 45 under the Revenue Act of 1918 provided: “In the case of a manufacturing, merchandising, or mining business ‘ gross income ’ means the total sales, less the cost of goods sold, plus any income from investments and from incidental or outside operations or sources.”2 On an accrual basis, the “total sales,” to which the regulation refers, are manifestly the accounts receivable arising from the sales, and these accounts receivable, less the cost of the goods sold, figure in the statement of gross income. If such accounts receivable become uncollectible, in whole or part, the question is one of the deduction which may be taken according to the applicable statute. See United States v. Anderson, 269 U.S. 422, 440, 441; American National Co. v. United States, 274 U.S. 99, 102, 103; Brown v. Helvering, 291 U.S. 193, 199; Rouss v. Bowers, 30 F. (2d) 628, 629. That is the question here. It is not altered by the fact that the claim of loss relates to an item of gross income which had accrued in the same year. 2. Section 234 (a) (5) of the Revenue Act of 1918 provided for the deduction of worthless debts, in computing net income, as follows:—“ Debts ascertained to be worthless and charged off within the taxable year.” Under this provision, the taxpayer could not establish a right to the deduction simply by charging off the debt. It must be ascertained to be worthless within the taxable year. In this instance, in 1920, the debt was in suspense by reason of the bankruptcy of the debtor but it was not a total loss. What eventually might be recovered upon it was uncertain, but recovery to some extent was reasonably to be ’This provision has been carried forward in the regulations under the later revenue acts. See Regulations 77, Article 55. OCTOBER TERM, 1933. Opinion of the Court. 186 292 U.S. expected. The receiver continued the business and substantial amounts were subsequently realized for the creditors. In this view, the Board of Tax Appeals decided that the petitioner did not sustain a loss in 1920 “ equal to the total amount of the debt ” and hence that the entire debt was not deductible in that year. The question, then, is whether petitioner was entitled to a deduction in 1920 for the portion of the debt which ultimately—on the winding up in bankruptcy—proved to be uncollectible. Such a deduction of a part of the debt, the Government contends and the Circuit Court of Appeals held, the Act of 1918 did not authorize. The Government points to the literal meaning of the words of the statute, to the established administrative construction, and to the action of the Congress in recognition of that construction. “ Worthless,” says the Government, means destitute of worth, of no value or use. This was the interpretation of the statute by the Treasury Department. Article 151 of Regulations 45 (made applicable to corporations by Article 561) provided that “An account merely written down ” is not deductible.3 To the same effect was the corresponding provision of the regulations under the Revenue Act of 1916.4 8 Article 151 of Regulations 45 provided: “Bad debts.—An account merely written down or a debt recognized as worthless prior to the beginning of the taxable year is not deductible. Where all the surrounding and attendant circumstances indicate that a debt is worthless and uncollectible and that legal action to enforce payment would in all probability not result in the satisfaction of execution on a judgment, a showing of these facts will be sufficient evidence of the worthlessness of the debt for the purpose of deduction. Bankruptcy may or may not be an indication of the worthlessness of a debt, and actual determination of worthlessness in such a case is sometimes possible before and at other times only when a settlement in bankruptcy shall have been had. ...” See, also, Article 151 of Regulations 45 (Revised) promu1 gated January 28, 1921. 4Regulations 33 (Revised), Article 151. SPRING CITY CO. v. COMMISSIONER. 187 182 Opinion of the Court. The right to charge off and deduct a portion of a debt where during the taxable year the debt was found to be recoverable only in part, was granted by the Act of 1921. By that Act, § 234 (a) (5) was changed so as to read: “ Debts ascertained to be worthless and charged off within the taxable year (or in the discretion of the Commissioner, a reasonable addition to a reserve for bad debts); and when satisfied that a debt is recoverable only in part, the Commissioner may allow such debt to be charged off in part.” We think that the fair import of this provision, as contrasted with the earlier one, is that the Congress, recognizing the significance of the existing provision and its appropriate construction by the Treasury Department, deliberately intended a change in the law. Shwdb v. Doyle, 258 U.S. 529, 536; Russell v. United States, 278 US. 181, 188. This intent is shown clearly by the statement in the report of the Committee on Ways and Means of the House of Representatives in relation to the new provision. The Committee said explicitly—“ Under the present law worthless debts are deductible in full or not at all.” 5 While the change was struck out by the Finance Committee of the Senate, the provision was restored on the floor of the Senate and became a law as proposed by the House.6 Regulations 62 issued by the Treasury Depart- 8 H.Rep. No. 350, 67th Cong., 1st sess., p. 11. The statement of the Committee is: “ Under the present law worthless debts are deductible in full or not at all, but Section 214 would authorize the Commissioner to permit a deduction for debts recoverable only in part, or in his discretion to recognize a reserve for bad debts—a method of providing for bad debts much less subject to abuse than the method of writing off bad debts required by the present law.” Section 214 related to deductions by individuals and contained the same new provision as that inserted in § 234 (a) (5), quoted in the text, with respect to deductions by corporations. 8 S.Rep. No. 275, 67th Cong., 1st sess., p. 14; Cong. Rec., vol. 61, Pt. 6, pp. 5814, 5939-5941, 6109, 6110; pt. 7, p. 6727. 188 OCTOBER TERM, 1933. Opinion of the Court. 292U.S. ment under the Act of 1921 made a corresponding change in Article 151. The Treasury Department consistently adhered to the former rule in dealing with deductions sought under the Act of 1918.7 In numerous decisions the Board of Tax Appeals has taken the same view of the provision of the Act of 1918.8 See e.g., Appeal of Steele Cotton Mill Co., 1 B.T.A. 299, 302; Western Casket Co. v. Commissioner, 12 B.T.A. 792, 797; Toccoa Furniture Co. v. Commissioner, 12 B.T.A. 804, 805. The contrary result in the instant case was reached in deference to the opinions expressed by the Circuit Court of Appeals of the Second Circuit in Sherman & Bryan, Inc. v. Commissioner, 35 F. (2d) 713, 716, and by the Court of Appeals of the District of Columbia in Davidson Grocery Co. v. Lucas, 59 App.D.C. 176; 37 F. (2d) 806, 808,—views which are opposed to those of the Circuit Courts of Appeals of the Eighth Circuit in Minnehaha National Bank v. Commissioner, 28 F. (2d) 763, 764, and of the Fifth Circuit in Collin County National Bank v. Commissioner, 48 F. (2d) 207, 208. We are of opinion that § 234 (a) (5) of the Act of 1918 authorized only the deduction of a debt ascertained to be worthless and charged off within the taxable year; that it 7 In Treasury decision 3262, 1-1, Cumulative Bulletin, January-June, 1922, 152, 153, it was said: “ No deduction shall be allowed for the part of a debt ascertained to be worthless and charged off prior to January 1, 1921, unless and until the debt is ascertained to be totally worthless and is finally charged off or charged down to a nominal amount, or the loss is determined in some other manner by a closed and completed transaction.” See, also, A.R.R. 7895, III—2, Cumulative Bulletin, July-December, 1924, 114, 115; A.R.R. 8226, III-2, Cumulative Bulletin, 116, 119-121. 8 The members of the Board of Tax Appeals who dissented in the ' instant case pointed out that the Board had “ consistently held in at least twenty-three cases that under the Revenue Act of 1918 no deduction may be taken where a taxpayer ascertains that a debt is recoverable only in part.” 25 B.T.A., p, 834. SPRING CITY CO. v. COMMISSIONER. 189 182 Opinion of the Court. did not authorize the deduction of a debt which was not then ascertained to be worthless but was recoverable in part, the amount that was not recoverable being still uncertain. Here, in 1923, on the winding up, the debt that then remained unpaid, after deducting the dividends received, was ascertained to be worthless and the Commissioner allowed deduction accordingly in that year. 3. Petitioner also claims the right of deduction under § 234 (a) (4) of the Act of 1918 providing for the deduction of “ Losses sustained during the taxable year and not compensated for by insurance or otherwise.” We agree with the decision below that this subdivision and the following subdivision (5) relating to debts are mutually exclusive. We so assumed, without deciding the point, in Lewellyn v. Electric Reduction Co., 275 U.S. 243, 246. The making of the specific provision as to debts indicates that these were to be considered as a special class and that losses on debts were not to be regarded as falling under the preceding general provision. What was excluded from deduction under subdivision (5) cannot be regarded as allowed under subdivision (4). If subdivision (4) could be considered as ambiguous in this respect, the administrative construction which has been followed from the enactment of the statute—that subdivision (4) did not refer to debts—would be entitled to great weight.9 We see no reason for disturbing that construction. Petitioner insists that “ good business practice ” forbade the inclusion in the taxpayer’s assets of the account receivable in question or at least the part of it which was subsequently found to be uncollectible. But that is not the question here. Questions relating to allowable deductions under the income tax act are quite distinct from matters which pertain to an appropriate showing upon ’See Regulations 45, Articles 141 to 145; compare Articles 151 to 154, 190 OCTOBER TERM, 1933. Syllabus. 292 U.S. which credit is sought. It would have been proper for the taxpayer to carry the debt in question in a suspense account awaiting the ultimate determination of the amount that could be realized upon it, and thus to indicate the status of the debt in financial statements of the taxpayer’s condition. But that proper practice, in order to advise those from whom credit might be sought of uncertainties in the realization of assets, does not affect the construction of the statute, or make the debt deductible in 1920, when the entire debt was not worthless, when the amount which would prove uncollectible was not yet ascertained, rather than in 1923 when that amount was ascertained and its deduction allowed. We conclude that the ruling of the Circuit Court of Appeals was correct. Judgment affirmed. SANDERS v. ARMOUR FERTILIZER WORKS etal. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE FIFTH CIRCUIT. No. 106. Submitted February 5, 1934.—Decided April 30, 1934. 1. Two claimants of a fund due by a fire insurance company, one claiming it as insurance money due under a policy and the other claiming it as a creditor of the first who had attached the fund by garnishing the insurance company, are adverse claimants within the intendment of the Interpleader Act of May 8, 1926; 28 U.S.C., § 41 (26). P. 199. 2. The purpose of the Interpleader Act of May 8, 1926; 28 U.S.C., § 41 (26) is to protect the stakeholder, and to determine the claims according to equity, weighing the right or title of each claimant under the law of the State in which his claim arose. Full faith and credit must be given by the forum to judicial proceedings in other States upon which claims are founded. Pp. 199, 204. 3. Under this Act, the fund paid into court by the applicant for interpleader does not come under the domination of the law of the particular State in which the suit is brought, and the rights of 190 SANDERS V. FERTILIZER WORKS. 191 Argument for Petitioner. claimants can not be varied by the applicant’s choice of forum. Pp. 200, 205. 4. Under the law of Illinois a garnishment, with judgment by default against the debtor after service on him by publication, gives the plaintiff in the garnishment proceeding at least an inchoate lien upon the fund or debt attached, which may be perfected by a final judgment against the garnishee. P. 203. 5. An exemption from execution extended by statutes of Texas to proceeds of fire insurance on property appertaining to a homestead in that State is not recognized by the laws of Illinois when the insured is sued there on a debt and the insurance money is attached by garnishment served on the insurance company. P. 203. 6. A fire insurance company owing money to a resident of Texas on account of the burning of his homestead property in that State, was garnished in Illinois in an action on a debt against the insured in which he suffered judgment by default. The company then interpleaded the garnishor-plaintiff and the insured by a suit in the federal court in Texas, under 28 U.S.C., § 41 (26); paid the insurance money into the registry; and prosecution of the Illinois action was enjoined. Held that the Illinois claimant was entitled to the fund as against the insured, who claimed that it Was exempt under the Texas homestead exemption statutes. P. 204. 63 F. (2d) 902, affirmed. Certiorari, 290 U.S. 623, to review the reversal of a judgment recovered by Sanders in a case of interpleader in the federal court. See also 33 F. (2d) 157; 38 id. 212, on the question of the District Court’s jurisdiction. Mr. Thomas D. Gresham submitted for petitioner. The judicial proceeding instituted by Armour in Illinois, which under the laws and practice of that State merely gave rise to an inchoate and defeasible claim upon the debt sought to be garnished, in an indeterminate amount so far as a garnishing plaintiff was concerned, need not be honored in Texas as a definite and final judgment awarding the entire debt sought to be garnished to the satisfaction of Armour’s claim. The full faith and credit clause of the Federal Constitution, after prescribing in general terms that full faith 192 OCTOBER TERM, 1933. Argument for Petitioner. 292 U.S. and credit shall be given in each State to the public acts, records, and judicial proceedings of every other State, leaves the specific enforcement of the clause to statutory enactment by Congress. This power has been exercised by Congress, and the statute on this point (28 U.S.C., § 687) is clear. The judicial proceeding relied upon by Armour is to be given only such faith and credit as it would be entitled to by law or usage in the courts of Illinois. Lancashire Ins. Co. v. Corbetts, 165 Ill. 592; Becker v. Illinois Central R. Co., 250 Ill. 40; 28 C.J. 252; Bigelow v. Andress, 31 Ill. 322; McElwee v. Wilce, 80 Ill. App. 338; Robertson v. Pickrell, 109 U.S. 608; Union & Planters Bank v. Memphis, 189 U.S. 71; Covington v. First Nat. Bank, 198 U.S. 100; Free v. Western Union, 158 Wis. 36; Bruce v. Ackroyd, 95 Conn. 167; Aldrich n. Kinney, 4 Conn. 380; Chicago, R. I. & P. Ry. Co. v. Sturm, 174 U.S. 170; Harris v. Balk, 198 U.S. 215; Kline v. Burke Construction Co., 260 U.S. 226; Cole v. Cunningham, 133 U.S. 107; National Bank v. Indiana Banking Co., 114 Ill. 483; Reeve v. Smith, 113 Ill. 477; Martin v. Dryden, 6 Ill. 187; Corbin n. Graves, 27 Fed. 644; Walker v. Garland, 235 S.W. 1078; Lears n. Seaboard Air Line Ry., 3 Ga. App. 614; Rood on Garnishment, § 11; Black on Judgments, p. 1039; 34 C.J. 1105; 15 R.C.L. 900; 1 Lewis’s Sutherland on Statutory Construction, p. 283; State Bank of Chicago v. Thweatt, 111 Ill. App. 599; U.S. Constitution, Art. 4, § 1; Illinois Attachment Act, § 37. All matters of procedure, including the remedies of garnishment and exemption, in all kinds of actions, are to be governed wholly by the law of the forum. The idea that in interpleader suits the courts of the forum are free to disregard its procedural law and to follow such procedural law, domestic or foreign, as may appeal to them as reaching the most equitable result under the circumstances, is fallacious. Story, Conflict of Laws, Sth ed., §§ 556, 558; Wharton, Conflict of Laws, Vol. 2, p. 190 SANDERS v. FERTILIZER WORKS. Argument for Petitioner. 193 1433; Dicey, Conflict of Laws, 2d ed., p. 708; Scudder v. Union Nat. Bank, 91 U.S. 406; Lanahan n. Sears, 102 U.S. 318; Bronson v. Kinzie, 1 How. 311; Mason v. United States, 260 U.S. 545; Bank of U.S. v. Donnally, 8 Pet. 361; Pritchard v. Norton, 106 U.S. 134; Vogel v. Thiesing, 55 F. (2d) 205; Logan n. Goodwin, 104 Fed. 490; Thompson v. McConnell, 107 Fed. 33; Cameron v. Fay, 55 Tex. 58; Colev. Cunningham, 133 U.S. 107; Chase v. Swayne, 88 Tex. 218; Sorenson v. City Nat. Bank, 121 Tex. 478; 28 U.S.C., §§ 41 (26), 725, 726, 727; U.S. Equity Rule 23; Art. 16, § 50, Constitution of Texas; Art. 3832, Rev. Civ. Stats, of Texas. The court below erred in holding it the policy of the United States to aid a creditor to collect his claim against a debtor in violation of the exemption laws of the State of the debtor’s domicile, and especially so in a United States District Court sitting within the confines of the State whose exemption laws the creditor is seeking to evade. Holden v. Stratton, 198 U.S. 214; Chase v. Swayne, 88 Tex. 218; Ketcham v. Ketcham, 269 Ill. 584; Reames v. Morrow, 193 Ill. App. 155; Singer Mfg. Co. v. Fleming, 39 Neb. 679; Strawn Mercantile Co. n. First Nat. Bank, 279 S.W. 473; Jackson v. Republic, 141 Ill. App. 453; Baltimore de Ohio R. Co. v. McDonald, 112 Ill. App. 391; Steele v. Buel, 104 Fed. 972. We believe that the majority decision of the Circuit Court of Appeals is plainly in violation of the provisions of 28 U.S.C., § 687, in that the decision expressly gave to the incomplete garnishment proceeding in Illinois a greater effect than was given to it by the established law and usage of that State, on the plea that the Supreme Court of Illinois had incorrectly interpreted the law of that State, and that the court below had the right to place its own interpretation upon the law of Illinois in preference to accepting the interpretation of the Illinois Supreme Court. In its holding that the 61745°—34-----13 194 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. institution of a garnishment suit is the equivalent of a final judgment awarding to the garnishing plaintiff all the relief sought by him in such suit, and that it must be recognized and enforced as such in the courts of a sister State, even though it be in violation of the public policy and laws of such sister State, the decision is squarely in conflict with the prior decision of this Court in Cole v. Cunningham, 133 U.S. 107. In the right asserted by the majority of the Circuit Court of Appeals to disregard the sovereign laws of the State in which the district court is sitting, whenever the individual judge sitting as such court may consider such sovereign laws to be inequitable, the decision is revolutionary, wholly without precedent, and dangerous in the extreme. Messrs. Charles J. Faulkner, Jr., and Mark McMahon submitted for Armour Fertilizer Works, respondent. Mr. George S. Wright submitted for National Fire Insurance Co., respondent. Mr. Justice McReynolds delivered the opinion of the Court. New York Life Ins. Co. v. Dunlevy (1916), 241 U.S. 518, exhibited the serious problems encountered by insurance companies when conflicting demands are made by residents of different States. There two individuals, residents of California and Pennsylvania, claimed the surrender value of a life policy. The insurer unsuccessfully sought through interpleader proceedings in Pennsylvania to secure release from all liability. In order to mitigate the difficulties, Congress, by the Act of February 27, 1917, 39 Stat. 929, authorized insurance companies to file bills of interpleader in District Courts of the United States. An amendment followed 190 SANDERS v. FERTILIZER WORKS. 195 Opinion of the Court. February 25, 1925, 43 Stat. 976, U.S.C.A. 28, § 41 (26). And the Act of May 8, 1926, 44 Stat. 416, U.S.C.A. 28, Supp., § 41 (26) (in the margin 0, rewrote and amplified the provisions of the earlier enactments. J Act approved May 8, 1926, 44 Stat. 416. Chap. 273—“The district courts of the United States shall have original jurisdiction to entertain and determine suits in equity begun by bills of interpleader duly verified, filed by any casualty company, surety company, insurance company or association or fraternal or beneficial society, and averring that one or more persons who are bona fide claimants against such company, association, or society resides or reside within the territorial jurisdiction of said court; that such company, association, or society has in its custody or possession money or property of the value of $500 or more, or has issued a bond or a policy of insurance or certificate of membership providing for the payment of $500 or more to the obligee or obligees in such bond or as insurance, indemnity, or benefits to a beneficiary, beneficiaries, or the heirs, next of kin, legal representatives, or assignee of the person insured or member; that two or more adverse claimants, citizens of different States, are claiming to be entitled to such money or property or the penalty of such bond, or to such insurance, indemnity, or benefits; that such company, association, or society has deposited such money or property or has paid the amount of such bond or policy into the registry of the court, there to abide the judgment of the court. “ Sec. 2. In all such cases if the policy or certificate is drawn payable to the estate of the insured and has not been assigned in accordance with the terms of the policy or certificate the district court of the district of the residence of the personal representative of the insured shall have jurisdiction of such suit. In case the policy or certificate has been assigned during the life of the insured in accordance with the terms of the policy or certificate, the district court of the district of the residence of the assignee or of his personal representative shall have jurisdiction. In case the policy or certificate is drawn payable to a beneficiary or beneficiaries and there has been no such assignment as aforesaid the jurisdiction shall be in the district court of the district in which the beneficiary or beneficiaries or their personal representatives reside. In case there are claimants of such money or property, or in case there are beneficiaries under any such bond or policy resident in more districts than one, then jurisdiction shall be in the district court in any district in which a 196 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. National Fire Insurance Company and Hartford Fire Insurance Company, Connecticut corporations, under policies issued to him, became indebted to W. D. Sanders, resident of the Eastern District of Texas, for loss by fire (July 3, 1927) of property located therein and part of his homestead. Texas statutes exempt from execution the proceeds of such insurance. The indebtedness of the two insurers respectively was adjusted at $3400.00 and $4250.00; these sums they agreed to pay. Both Companies were garnished in a foreign attachment proceeding against Sanders instituted July 18, 1927, in an Illinois court by Armour Fertilizer Works, a corporation of that State. This proceeding was based upon his notes which undertook to waive homestead and exemption rights. The garnishees admitted liability to Sanders but gave notice of his claim that the proceeds of the policies were exempt from garnishment under Texas laws. He did not appear. After proper pubheation, judgment was entered against him September 19, 1927. This sustained the attachment and awarded recovery against him in favor of beneficiary or the personal representative of a claimant [sic] or a deceased claimant or beneficiary resides. Notwithstanding any provision of Part I of this title to the contrary, said court shall have power to issue its process for all such claimants and to issue an order of injunction against each of them, enjoining them from instituting or prosecuting any suit or proceeding in any State court or in any other Federal court on account of such money or property or on such bond or on such policy or certificate of membership until the further order of the court; which process and order of injunction shall be returnable at such time as the said court or a judge thereof shall determine and shall be addressed to and served by the United States marshals for the respective districts wherein said claimants reside or may be found. “ Sec. 3. Said court shall hear and determine the cause and shall discharge the complainant from further liability; and shall make the injunction permanent and enter all such other orders and decrees as may be suitable and proper, and issue all such customary writs as may be necessary or convenient to carry out and enforce the same.” 190 SANDERS V. FERTILIZER WORKS. 197 Opinion of the Court. the Fertilizer Works for the amount due upon the notes— $7,589.81; also directed execution. It is in the margin.2 Before final trial in the Illinois court under their answers, as permitted by the Act of May 8, 1926, the Insurance Companies, claiming to be mere stakeholders, filed separate interpleader proceedings in the District Court, Eastern District of Texas—June 12, 1928. Sanders and Armour Fertilizer Works, alleged adverse claimants, were made defendants. The sums admitted to be 2 “ On motion of the plaintiff herein, the defendant, W. D. Sanders, is ruled to appear herein instanter, and thereupon said defendant being called in open court comes not, nor does anyone for said defendant, but herein said defendant makes default, and it appearing to the court that said defendant was duly notified by publication of notice according to law duly notifying said defendant of the pendency of this suit and of the time required of said defendant to appear herein, all of which was a sufficient number of days prior to the time required of said defendant to appear as aforesaid to now require of, said defendant that said defendant either appear in this cause at this time or that said defendant suffer judgment by default for want of such appearance, and it further appearing to the court that said defendant is still in default of an appearance herein, it is, on motion of the plaintiff, ordered by the court that default be entered herein against said defendant for want of an appearance. “And as to the damages sustained by the plaintiff herein, the court hears the evidence contained in the affidavit of plaintiff’s claim filed herein and finds therefrom that there is due to the plaintiff the sum of money shown in said affidavit of claim to be due, and assessed the plaintiff’s damages at the sum of seven thousand, five hundred eighty-nine and 81/100 dollars ($7,589.81). “ This cause coming on for further proceedings herein, it is considered by the court that the attachment herein be and it hereby is sustained, that the plaintiff have judgment on the default and assessment of damages herein, and that the plaintiff have and recover of and from the defendant, W. D. Sanders, the damages of the plaintiff amounting to the sum of seven thousand, five hundred eighty-nine and 81/100 ($7,589.81) in form as aforesaid assessed, together with the costs by the plaintiff herein expended and that execution issue therefor.” 198 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. due under the fire policies were paid into court. An injunction restrained the Armour Fertilizer Works from proceeding further in the Illinois court. Answers by both, defendants followed. The causes were consolidated. The District Court awarded the fund to Sanders; the Circuit Court of Appeals held that it should go to Armour Fertilizer Works and reversed the trial court. National Fire Ins. Co. v. Sanders, 33 F. (2d) 157; National Fire Ins. Co. v. Sanders, 38 F. (2d) 213. Certiorari, granted upon Sanders’s petition, brings the matter here. The facts are not in dispute. The parties agree that the proceedings in Illinois were according to her statutes; and that under the settled law there Sanders’s claim of exemption would have been denied and judgment given against the garnishees if the cause had followed the ordinary course. The Circuit Court of Appeals overruled objections to the jurisdiction of the District Court and affirmed the latter’s authority to consider and determine the rights of the claimants. It concluded that the Texas statutes did not control; that the Act of May 8, 1926, was intended to afford protection to stakeholders, not to alter the rights of adverse claimants; that the rights of each claimant under the law of the State where they arose should be considered; and that equitable principles commonly accepted in federal courts should be applied. It held that by the Illinois garnishment the money payable by the Companies to Sanders was sequestrated and that this was good against his claim of exemption; that the lien so obtained followed the fund paid into court. And it directed that the Illinois judgment against him should be satisfied. Upon the first hearing the District Court dismissed the bill for lack of jurisdiction; the Circuit Court of Appeals reversed. Judgment went for San- SANDERS v. FERTILIZER WORKS. 199 190 Opinion of the Court. ders on the second trial; the Circuit Court of Appeals again reversed. Objection to jurisdiction of the District Court is now made upon the theory that the defendants are not adverse claimants within the intendment of the interpleader Act since one admits the attached debt is payable primarily to the other and seeks to recover because of his indebtedness to it. The court below adequately answered this contention— “We think that the facts in this case show that the District Court is mistaken in concluding that the claims of Armour and Sanders are not adverse. Each is claiming the proceeds of the policies to the exclusion of the other. Armour claims by virtue of its Illinois judgment against Sanders and the attachment, and Sanders, while not disputing his obligation to Armour, claims the proceeds, notwithstanding, by virtue of the exemption under the laws of Texas. The statute is remedial and to be liberally construed. It is broad enough to cover any adverse claims against the proceeds of the policies, no matter on what grounds urged. Its terms are not to be interpreted as meaning only adverse claims of those pretending to be beneficiaries of the insured?’ [38 F. (2d) 214.] The general purpose and effect of the Act of March 8, 1926, were also well stated below— “ Suits for interpleader in which actions in other courts are enjoined were familiar to equity when the Constitution was adopted [see Spring v. South Carolina Ins. Co., 8 Wheat. 268] and are one of the forms of controversy to which, when arising between citizens of different States, the federal judicial power was extended. The Act enlarges the processes of the District Court to cover a broad territory, but otherwise authorizes only an ordinary form of equitable relief. . . . The District Court, of course, is bound on an interpleader to give full faith and credit to 200 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. the garnishment proceedings in Illinois. Cooper n. Newell, 173 U.S. 567. ... [63 F. (2d) 903.] “ We do not think the filing of the federal interpleader and the payment thereunder of the money into the District Court in Texas operated to bring it under the dominion of Texas law. The applicant for interpleader often has a choice of forum, and he cannot at his will subject the rights of the contesting claimants to one set of laws rather than another. The purpose of the interpleader statute was to give the stakeholder protection, but in nowise to change the rights of the claimants by its operation. The interpleader is a suit in equity, and equitable principles and procedure are the same throughout the federal jurisdiction. The court is to weigh the right or title of each claimant under the law of the State in which it arose, and determine which according to equity is the better. The decision should be the same whether the interpleader is filed in Illinois or in Texas. No one’s rights are intended to be altered by paying the fund into the court, which as an impartial neutral is to determine them.” [63 F. (2d) 906.] Assertion by the complainant of entire disinterestedness is essential to a bill of interpleader. Groves v. Sen-tell, 153 U.S. 465, 485. “ In such a bill it is necessary to aver that the complainant has no interest in the subjectmatter of the suit; he must admit title in the claimants and aver that he is indifferent between them, and he cannot seek relief in the premises against either of them.” Killian v. Ebbinghaus, 110 U.S. 568, 571. The situation here is .unlike that presented where one voluntarily subjects himself to its jurisdiction and seeks the aid of a court to enforce his claim. See Story on Conflict of Laws (8th ed.) § 598. The Armour Fertilizer Works asks nothing under any Texas law. Brought into the District Court against its will it was held there against its protest and enjoined from proceeding further in Illinois. 190 SANDERS v. FERTILIZER WORKS. 201 Opinion of the Court. It now claims priority of right and only asks what it would have secured but for the injunction. Under such circumstances, to hold that the statutes of Texas control would destroy rights duly obtained in Illinois; would permit the Insurance Companies by interpleader proceedings to change the positions of defendants; and, in effect, seriously interfere with the impartial adjustment of existing equities. We think Congress had no intention to permit such destruction of acquired rights, if indeed it had power so to do. By his answer Sanders thus stated his claim to the fund in court— “That by reason of the fact that the property which was the subject of insurance covered by said insurance policy was the homestead of the defendant, W. D. Sanders, the proceeds of the same which have been tendered into court by the plaintiff herein are exempt to the defendant, W. D. Sanders, under the laws and Constitution of the State of Texas, and his rights therein are superior and prior to the rights of the defendant, Armour Fertilizer Works.” Armour Fertilizer Works asserted— “On or about the 18th day of July, 1927, it filed a suit in the Municipal Court of Chicago, Cook County, Illinois, styled Armour Fertilizer Works, a corporation, trading as the Planters Fertilizer and Chemical Company, versus W. D. Sanders, being numbered 1,413,423. Said suit was based upon eight promissory notes upon which there was due at that time, including principal, interest and attorney’s fees, the sum of $7,589.81. That in connection with said proceedings a writ of attachment and garnishment was issued out of said court, and was, on the 19th day of July, 1927, served upon the plaintiff herein. That the defendant W. D. Sanders was duly cited by publication, in accordance with the laws of the State of Illinois, to appear and answer said suit. Judgment was taken 202 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. against the said W. D. Sanders in said suit on September 19, 1927, for the sum of $7,589.81. That said case has not been dismissed as between this defendant and the plaintiff herein, garnishee in that suit. The judgment rendered in said suit is a valid and binding judgment and was procured in accordance with the laws of the State of Illinois, and is a valid judgment against the defendant W. D. Sanders to the extent of the funds impounded by said garnishment. That under the terms of said judgment the said attachment and garnishment against the plaintiff herein and against the defendant W. D. Sanders was sustained and all matters in dispute and with reference to the funds involved herein, were and have been judicially determined by said judgment.” We are not now primarily concerned with rights of a garnishee. The Insurance Companies have paid their debts and obtained complete discharge. Only Sanders and the Armour Fertilizer Works are interested. He presented claims against Connecticut corporations arising under insurance contracts which he had not undertaken to enforce. These were free from execution in Texas. He might have sued upon them in Illinois; there they were subject to valid attachment. The Armour Fertilizer Works, an Illinois corporation, presented the judgment against Sanders duly rendered by a court of that State in a proceeding properly begun and prosecuted. It had secured a lien upon the claims against the Insurance Companies. There is no ground for any claim of fraud. True, no final judgment had gone against the garnishees; but as between Sanders and the Fertilizer Works judgment stood against him; also, sequestration of the debts. The precise effect which would be given this preliminary judgment, as against the garnishees, in proceedings involving their rights may be doubtful, but opinions by the Supreme Court of Illinois clearly indicate that Armour Ferlitizer Works secured a lien 190 SANDERS v. FERTILIZER WORKS. 203 Opinion of the Court. upon the Sanders claims; and that, but for the injunction, final valid judgment would have gone against the Insurance Companies, accompanied by a lien good against all the world. The effect of the proceedings in Illinois as against one occupying the position of Sanders is plain enough under her statutes and decisions. The Illinois courts would have rejected his claim of exemption under the laws of Texas. This view is affirmed here by agreement. The Illinois rule is that garnishment imposes an inchoate lien subject to defeat by certain subsequent events, none of which are present here. Also, that final judgment in Illinois against the garnishee prior to one in another jurisdiction is conclusive of the rights of the parties. Lancashire Ins. Co. v. Corbetts, 165 Ill. 592; 46 N.E. 631; Becker v. Illinois Central R. Co., 250 Ill. 40; 95 N.E. 42. Also, “that property, real and personal, attached, and funds in the hands of the garnishee, are placed on the same footing,—that is, when attached, such property or funds are appropriated from that time to the payment of a certain class of judgment creditors specifically enumerated.” Accordingly, the principal debtor may not assign his claim against the garnished one after the writ has been served upon the latter. National Bank of America V. Indiana Banking Co., 114 Ill. 483, 489; 2 N.E. 401. Martin v. Dryden, 6 Ill. 187, declares— “ Without a levy of the attachment, or the service of a garnishee, the court has no jurisdiction to proceed, by publication of notice, to render any judgment. But, by the seizure of any estate or property of the defendant, or the service by garnishment upon any having estate, property, or effects of his in their hands, the law has laid hold of a fund, which it may condemn, and appropriate to the satisfaction of whatever judgment it may render against the defendant, and thereupon the court proceeds to hear as to the indebtedness, [p. 212] . . . 204 OCTOBER TERM, 1933. Opinion of the Court. 292U.S. “ These remarks and views apply also to the question of lien. This specific appropriation of property must amount to something as to those who may deal in relation to it; else the defendant could, at any time before judgment, defeat the object of the party by a sale, and possibly, even the jurisdiction of the court. We are of opinion, that the attachment is a lien from the date of the levy, when followed by a judgment, and which will have relation back to it. This doctrine is sanctioned by numerous authorities, which I will not review.” [p. 213] In the circumstances presented the proceedings in Illinois gave to Armour Fertilizer Works a paramount right or superior equity to the proceeds of the policies. To hold that the District Court in Texas could enjoin the Fertilizer Works from proceeding further and then declare that because the last step in the Illinois suit had not been taken Sanders, in some way, became entitled to priority, plainly would be inequitable. Moreover, it would deny to the garnishment proceedings the credit and effect accorded them in the State where taken. It is unnecessary to enter upon discussion of vexed questions arising out of garnishment proceedings in different jurisdictions. The different views are well stated in Minor on Conflict of Laws, §§ 125, 126, 209. This Court has had occasion to consider the general subject in Cole v. Cunningham, 133 U.S. 107; Chicago, R. I. P. Ry. v. Sturm, 174 U.S. 710; King v. Cross, 175 U.S. 396; Harris v. Balk, 198 U.S. 215, 223. The latter says— “Notice to the debtor (garnishee) of the commencement of the suit, and notice not to pay to his creditor, is all that can be given, whether the garnishee be a mere casual and temporary comer, or a resident of the State where the attachment is laid. His obligation to pay to his creditor is thereby arrested and a lien created upon the debt itself. Cahoon v. Morgan, 38 Vermont 234, 236; National Fire Ins. Co. v. Chambers, 53 N.J.Eq. 468, 483. 190 SANDERS v. FERTILIZER WORKS. 205 Opinion of the Court. We can see no reason why the attachment could not be thus laid, provided the creditor of the garnishee could himself sue in that State and its laws permitted the attachment.” Petitioner’s argument proceeds upon the erroneous assumption that the money paid into court came under the dominion of Texas law—especially her exemption statutes. This view is not in harmony with the settled law of Illinois that an attachment when levied on the debtor fixes a lien upon the claim and prevents subsequent transfer by the creditor; also, with the reasoning and conclusion in Chicago, R. I. & P. Ry. v. Sturm, supra. The latter case—approved in King v. Cross, supra, and Harris v. Balk, supra—held that garnishment proceedings pending in Iowa against a claim for wages due by the Railway to a resident of Kansas, and there exempt from execution, constituted good defense when the wage-earner subsequently sued the Railway in Kansas. It approved the doctrine that debts accompany the debtor and may be attached wherever he can be sued by his creditor. Among others, it cited with approval, National Fire Ins. Co. v. Chambers, 53 N.J.Eq. 468; 32 Atl. 663. It declared that the exemption law was no part of the contract of employment and disapproved the notion that when debts are exempt from execution in the State where created this privilege follows as an incident into other jurisdictions. In National Fire Ins. Co. v. Chambers, supra, (an interpleader proceeding—1895) Vice Chancellor Pitney elaborately discussed a situation substantially similar to the one before us. After full review of the authorities, he held that a pending garnishment proceeding properly instituted under the laws of Pennsylvania against indebtedness due to a resident of New Jersey created a lien thereon and gave the attaching creditor superior equity 206 OCTOBER TERM, 1933. Cardozo, J., dissenting. 292U.S. to one who claimed by transfer from the New Jersey creditor. He applied the familiar principle that he who is first in time is best in right. See also American Bank v. Rollins, 99 Mass. 313, and Garity v. Gigie, 130 Mass. 184. The record does not indicate that any other creditor was interested in the fund impounded in Illinois. The court below rightly gave precedence to the claim of the Fertilizer Works; also properly ruled that the controversy should be terminated by a decree devoting the fund in court to the Illinois judgment against Sanders. Affirmed. Mr. Justice Cardozo, dissenting. The federal court in Texas is under a duty, prescribed by statute (R.S. § 905; 28 U.S.C. § 687; American Surety Co. v. Baldwin, 287 U.S. 156, 166), to give full faith and credit to judicial proceedings in Illinois, including proceedings under writs of garnishment or attachment. Green v. Van Buskirk, 7 Wall. 139. This does not mean that the proceedings are to have any greater effect than they have by law or usage in the courts of Illinois. Robertson v. Pickrell, 109 U.S. 608, 610, 611; Ohio v. Chattanooga Boiler Co., 289 U.S. 439, 443. The duty is fulfilled if the force and efficacy are the same. Garnishment in Illinois does not create a lien upon the debt or chose in action subjected to the writ. Bigelow v. Andress, 31 Ill. 322, 330, 332 (distinguishing Brashear v. West, 7 Pet. 608, which was based upon a different statute) ; Gregg n. Savage, 51 Ill. App. 281, 284, aff’d, 150 Ill. 161; 37 N.E. 312; McElwee v. Wilce, 80 Ill. App. 338, 342. In substance it is a monition whereby the defendant is apprised that he will be acting at his peril if he makes a voluntary payment to the original creditor, the peril consisting in this, that he may have to pay again. Bigelow v. Andress, supra; Gregg n. Savage, supra; McElwee v. WUce, 190 SANDERS v. FERTILIZER WORKS. 207 Cardozo, J., dissenting. supra.1 The writ has no effect upon involuntary payments before the stage of judgment. Some other attaching creditor, suing the same defendant, may garnish the same debt in another jurisdiction. The Illinois plaintiff, though the first to have recourse to garnishment, will be postponed to the other plaintiff who is first with execution. Lancashire Ins. Co. v. Corbetts, 165 Ill. 592; 46 N.E. 631. Indeed, the primary creditor, i.e., the debtor of the attaching plaintiff, may bring suit against the garnishee in another jurisdiction, and collect the indebtedness if he wins the race to judgment. Becker v. Illinois Central R. Co., 250 Ill. 40; 95 N.E. 42.2 The garnishment suit is in personam against the debtor of a debtor {Harris v. Balk, 198 U.S. 215), and the res is not impounded till the compulsion of judgment and execution has caused it to be paid. Then, but not before, the garnishee will have protection against the hazard of conflicting claims. Cf. Harris v. Balk, supra; Louisville & N. R. Co. v. Deer, 200 U.S. 176; B. & O. R. Co. v. Hostetter, 240 U.S. 620. What has been written does not go beyond the law as declared in Illinois. The fact is not ignored that there are other jurisdictions in which the process of gamish- X“A garnishment is an attachment of the effects of the debtor in the hands of the garnishee; creating no lien upon anything, but holding the garnishee to a personal liability.” Gregg v. Savage, supra. sThe Illinois Supreme Court in that case did, it is true, refer to a garnishment in Missouri as creating an “ inchoate ” lien, but coupled the description with a ruling that the inchoate lien was not a charge upon a cause of action elsewhere against the same defendant. “ By the service of the garnishee summons in Missouri, Miller [the plaintiff in that action] acquired a contingent or inchoate lien upon the debt, and appellant could not thereafter make a voluntary payment to the appellee; but the right which Miller acquired was dependent upon subsequently acquiring judgment, and that was not accomplished until a judgment had been recovered in this state, where the debt was free from any right or claim that he had.” Becker v. Illinois Central R. Co., supra, 208 OCTOBER TERM, 1933. Cardozo, J., dissenting. 292 U.S. ment receives a different meaning. Sometimes the service of the writ is held to impose upon the debt a fixed and present lien which will have recognition and enforcement everywhere. See, e.g., Embree v. Hanna, 5 Johns. 100; Wallace v. McConnell, 13 Pet. 136; In re Rans]ord, 194 Fed. 658, 661; Chicago, R. I. & P. Ry. Co. n. Sturm, 174 U.S. 710. Sometimes the lien is spoken of as a quasi lien or an inchoate one. See e.g., Focke v. Blum, 82 Tex. 436, 441; 17 S.W. 770; North Star Boot Co. v. Ladd, 32 Minn. 381, 383; 20 N.W. 334; In re Ransford, supra. Cf. Becker v. Illinois Central R. Co., supra. In the conflict of laws the difference may be important between realities and metaphors, between the organism and the germ. Sometimes the Illinois rule is accepted, and there is said to be no lien, or one that does no more than restrain the garnishee from making voluntary payments. See e.g., Commercial State Bank v. Pierce,3 176 la. 722; 158 N.W. 481; McGarry n. Lewis Coal Co., 93 Mo. 237; 6 S.W. 81; Parker N. Farr, 2 Browne (Pa.) 331. Little is to be gained by dilating upon these and like decisions, for they are rooted in local laws or customs. Garnishment and attachment today are statutory remedies. They are what the state creating them declares that they shall be. It is of no moment that Illinois might have made their efficacy greater as long as her legislature and courts have preferred to make them less. In that state of the law the garnishee would have been remiss if it had failed to shape its course with prudent recognition of conflicting possibilities. Its indebtedness 8 “ The garnishment proceedings created no lien upon any property belonging to the original defendant, if any, in the hands of the garnishee. By the garnishment proceedings a personal claim was acquired against the garnishees to the extent of any money or property that might be in their hands at the time the garnishment was served, belonging to the judgment defendant.” Commercial State Bank V. Pierce, supra, at 732. 190 SANDERS v. FERTILIZER WORKS. 209 Cardozo, J., dissenting. to Sanders had been subjected to garnishment by the Armour company in Illinois, but Sanders was threatening it with suit in Texas. If Sanders had a judgment there before Armour was in a position to issue execution in Illinois, the garnishment in all likelihood would count for nothing, yet there was a possibility even then of dispute and litigation. Plainly in the race for judgments and its aftermath, there was the risk of expense and embarrassment, if not of double payment. The garnishee in this dilemma paid the amount of the indebtedness into the registry of the federal court in Texas and had the rival claimants interplead. 28 U.S.C., § 41 (26). The claimant Sanders was entitled to the money unless the Armour company had a lien, and the courts of Illinois had held there was no lien. True there had been a judgment against Sanders, though not against his codefendant, the insurer, but this judgment had been obtained by default after service by publication, not followed by an appearance. It was therefore ineffective as a judgment in personam, and in the absence of a lien did not operate in rem. Pennoy er v. Neff, 95 U.S. 714; New York Life Ins. Co. v. Dunlevy, 241 U.S. 518. The joinder of Sanders had no effect except to give him notice of the garnishment and an opportunity to come in, if he was so minded, and contest the plaintiff’s claim. Harris v. Balk, supra, p. 27. He declined the invitation and preferred to litigate at home. Whatever lien has been adjudged as the result of his default was contingent upon the consummation of proceedings to charge the garnishee, and ended when they lapsed, just as if the suit were discontinued. It did not rise to the rank of a general interest in property, adhering to the debt everywhere and qualifying the title in another jurisdiction. Probably no one would contend that by force of the judgment against Sanders a suit could have been maintained by Armour as quasi owner of the policies outside of Illinois. If that was so before 61745°—34-------14 210 OCTOBER TERM, 1933. , Syllabus. 292 U.S. the interpleader, it was even more plainly so thereafter. By the express terms of the decree the stakeholder was discharged when the fund was paid into the registry, 38 F. (2d) 212, with the result that there was no longer the possibility of pursuing the garnishee anywhere and thus perfecting the attachment. If some inchoate incumbrance had existed until then, it was then obliterated forever. The fund was free and clear. The federal court in Texas was thus driven to a choice between a claimant with a foreign attachment which by the law of its creation was of no extraterritorial validity till it had ripened into payment under the compulsion of a judgment, and a claimant whose title to the fund was undisputed unless the lien of the attachment was presently effective. It is not easy to see how there could be any choice but one. The decree of the Court of Appeals should be reversed and that of the District Court affirmed. The Chief Justice, Mr. Justice Brandeis, and Mr. Justice Stone join in this dissent. AVERY v. COMMISSIONER OF INTERNAL REVENUE. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SEVENTH CIRCUIT. Nos. 791 and 792. Argued April 5, 1934.—Decided April 30, 1934. Where dividends were declared payable on or before December 31st, but, pursuant to the invariable practice and the purpose of the corporation, were paid by checks so transmitted that they did not and could not reach the shareholders until the first business day in January of the following calendar year, held: 1. That, within the intendment of § 213 (a) of the Revenue Act of 1924, and like provisions of the Act of 1928, such dividends were “ received ” in the calendar years in which the checks were received. P. 214. AVERY v. COMMISSIONER. 211 210 Opinion of the Court. 2. They were not on December 31st preceding “ cash or other property unqualifiedly made subject ” to the shareholder’s demands, within the meaning of Treasury Regulations 65, Art. 1541. Id. 67 F. (2d) 310, reversed. Certiorari, 291 U.S. 657, to review the affirmance of an order of the Board of Tax Appeals, decision unreported, which sustained deficiency assessments of income taxes. Mr. Leland K. Neeves for petitioner. Assistant Solicitor General MacLean, with whom Solicitor General Biggs, Assistant Attorney General Wideman, and Messrs. Julius C. Martin, James W. Morris, and Morton K. Rothschild were on the brief, for respondent. Mr. Justice McReynolds delivered the opinion of the Court. The petitioner was a large stockholder, and president, of the United States Gypsum Company. In November, 1924, the Company declared a dividend payable on or before the 31st day of December following. Its check, dated December 31st, for the amount attributable to his stock, payable to him, was received by petitioner January 2, 1925. In November, 1929, another dividend was declared, payable on or before the following December 31st, and the Company’s check for petitioner’s portion was received by him January 2, 1930. Annually, dividend checks, signed by the proper corporate officers and dated December 31st, were on that day mailed out to all stockholders except those who were officers and employees, including the petitioner. Checks for the latter were held in the treasurer’s office until the first business day of the next month and then distributed through the office mail. The Company declared dividends quarterly; and in every instance they were made payable on or before the 212 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. last day of some month. The dividend checks never left the treasurer’s office or went to the mailing department until the afternoon of the last day of the month. They were mailed on the last day of the month so as to be in the stockholders’ hands on the first business day of the following month. The practice was without exception that no stockholder, whether employee or officer, should receive his check before the first business day of the month following the month in which the dividend was made payable. Petitioner kept his accounts on the cash receipts and disbursements and calendar year basis. The Commissioner assessed the dividends above described as part of the petitioner’s income for the years 1924 and 1929. The Board of Tax Appeals approved; and the court below affirmed this action. The facts are not in dispute. The only question for our determination is when, within intendment of the statutes, the dividends were “ received ” by petitioner. He maintains that under the plain language of the Revenue Acts of 1924 and 1928 the dividends—like other assessable items—should be treated as income for the taxable years during which they were actually received—1925 and 1930. The Commissioner claims that under Treasury Regulations promulgated in 1921 and in effect ever since, the dividends constituted income for the years in which they were declared and made payable.1 The regulation specially important here (No. 65, Art. 1541) follows:— “ Dividends. ... A taxable distribution made by a corporation to its shareholders shall be included in the gross income of the distributees when the cash or other property is unqualifiedly made subject to their demands.” xSee Treasury Regulations, No. 62 (1921), Arts. 53 and 1541; No. 65 (1924), Arts. 52 and 1541; No. 69 (1926), Arts. 52 and 1541; Nos. 74 and 77 (1928-32), Arts. 333 and 621. 210 AVERY V. COMMISSIONER. Opinion of the Court. 213 The Revenue Act of 1924, c. 234,43 Stat. 253, provides— “ Sec. 212. (b) The net income shall be computed upon the basis of the taxpayer’s annual accounting period (fiscal year or calendar year, as the case may be) in accordance with the method of accounting regularly employed in keeping the books of such taxpayer; but if no such method of accounting has been so employed, or if the method employed does not clearly reflect the income, the computation shall be made in accordance with such method as in the opinion of the Commissioner does clearly reflect the income. If the taxpayer’s annual accounting period is other than a fiscal year as defined in section 200 or if the taxpayer has no annual accounting period or does not keep books, the net income shall be computed on the basis of the calendar year. “ Sec. 213. For the purposes of this title, . . . “(a) The term ‘gross income’ includes gains, profits, and income. . . . The amount of all such items shall be included in the gross income for the taxable year in which received by the taxpayer, unless, under methods of accounting permitted under subdivision (b) of section 212, any such amounts are to be property accounted for as of a different period. . . . “ Sec. 1001. The Commissioner, with the approval of the Secretary, is authorized to prescribe all needful rules and regulations for the enforcement of this Act.” Sections 41, 42 and 62, Revenue Act of 1928, c. 852, 45 Stat. 791, are substantially like corresponding ones quoted from the 1924 Act. Similar provisions appear in the Revenue Act of 1918 and all subsequent ones. The Revenue Act of 1921, c. 136, 42 Stat. 227, 229, is peculiar in that it makes distinction between dividends and other income items by the following provision which does not appear in subsequent Acts. “ Sec. 201. (e) For the purposes of this Act, a taxable distribution made by a corporation to its shareholders or 214 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. members shall be included in the gross income of the distributees as of the date when the cash or other property is unqualifiedly made subject to their demands.” If we give the words of the statutes their ordinary meaning, clearly the dividends under consideration were not actually received by the taxpayer during 1924 and 1929. Certainly, they were not received when declared. They did not come into the taxpayer’s hands on December 31st simply because payable on that day. And unless Congress has definitely indicated an intention that the words should be construed otherwise, we must apply them according to their usual acceptation. The petitioner insists that the word “ receive ” is free from ambiguity and admits of no interpretation; the statute furnishes the sole measure as to when dividends are to be reported. In behalf of the Commissioner it is said— The Revenue Act directs that the amount of all such (specified) items shall be included in the gross income for the taxable year in which received by the taxpayer. The word “ received,” as applied to dividends, is not entirely clear since there are different times at which it reasonably may be claimed the taxpayer receives them. To meet this situation the Commissioner promulgated the regulation that dividends are taxable when unqualifiedly made subject to the stockholder’s demand. This provision has been included in all Treasury Regulations since 1918 and has been approved and accepted by Congress through subsequent re-enactments of the statute. When a dividend unqualifiedly becomes subject to a taxpayer’s demand is essentially a question of fact. Here, the Board of Tax Appeals and the Circuit Court of Appeals agree that the dividends were subject to the taxpayers demand on December 31st. It is unnecessary for us to determine how far the quoted Treasury Regulation was incorporated into the Acts of AVERY v. COMMISSIONER. 215 210 Opinion of the Court. 1924 and 1928. If we assume that the Regulation, in effect, became part of those enactments, nevertheless we think the Commissioner’s action was erroneous. In the disclosed circumstances the dividends cannot properly be considered as cash or other property unqualifiedly subject to the petitioner’s demand on December 31st. It was the practice of the Company to pay all dividends by checks not intended to reach stockholders until the first business day of January; there is nothing to show that petitioner could have obtained payment on December 31st, he did not expect this and the practice shows the company had no intention to make actual payrpent on that day. Nothing indicates that it recognized an unrestricted right of stockholders to demand payment except through checks sent out in the usual way. The checks did not constitute payments prior to their actual receipt. The mere promise or obligation of the corporation to pay on a given date was not enough to subject to petitioner’s unqualified demand 11 cash or other property ”; and none of the parties understood that it was. This subject has been considered with varying results in Commissioner v. Bingham, 35 F. (2d) 503 (1929); Hadley v. Commissioner, 59 App.D.C. 139; 36 F. (2d) 543 (1929); Commissioner v. Adams, 54 F. (2d) 228, 230 (1931); Shearman v. Commissioner, 66 F. (2d) 256 (1933). The facts here disclose a situation substantially like that in the Adams case; and we agree with the conclusion of the court therein, stated as follows: “ We are also of the opinion that, on the facts found, the dividends were 1 not unqualifiedly made subject to the demand of the stockholder,’ in the year 1924, if article 52 of the Departmental Regulations can be said to be valid and not in conflict with the express language of section 213 (a).” Reversed. 216 OCTOBER TERM, 1933. Statement of the Case. 292U.S. LOUGHRAN v. LOUGHRAN et al., TRUSTEES. CERTIORARI TO THE COURT OF APPEALS OF THE DISTRICT OF COLUMBIA. No. 565. Argued March 7, 1934.—Decided April 30, 1934. 1. Marriages not polygamous or incestuous, or otherwise declared void by statute, will, if valid by the law of the State where entered into, be recognized as valid in every other jurisdiction. P. 223. 2. A statute of the domicile forbidding remarriage of a spouse divorced for adultery, has only territorial effect and does not invalidate a marriage solemnized in another State in conformity with the laws thereof. Code, D.C., § 966. P. 223. 3. Section 1287 of the Code of the District of Columbia, providing that if any marriage declared illegal “ by the foregoing sections ” shall be entered into in another jurisdiction by persons having and retaining their domicile in the District, such marriage shall be deemed illegal, etc., refers to preceding sections dealing with void or voidable marriages, and not to § 966, which deals with divorce a vinculo on the ground of adultery and provides that only the innocent party may remarry. P. 223. 4. A woman who, while domiciled in the District of Columbia, was divorced for her adultery with a resident of the District and was forbidden to remarry there by § 966 of the District Code, but who was afterwards lawfully married to him in a State, became upon his death his lawful widow and entitled to dower in his real property in the District. P. 225. 5. The full faith and credit clause held applicable to a decree of alimony rendered in a State and sought to be enforced in the District of Columbia. P. 227. 6. The mere fact that a woman was, while a resident of the District of Columbia, divorced there on the ground of adultery, with the result that, by D.C. Code, § 966, she was forbidden to remarry in that jurisdiction, affords no procedural obstacle to her assertion in the courts of the District of rights to dower arising from her subsequent marriage with the co-adulterer, solemnized in another jurisdiction, and of her rights under a judgment for alimony recovered against him in another jurisdiction. P. 228. 62 App.D.C. 262; 66 F. (2d) 567, reversed. Certiorari, 290 U.S. 621, to review the reversal of a decree for dower. 216 LOUGHRAN v. LOUGHRAN. Argument for Respondents. 217 Mr. Robert H. McNeill for petitioner. Mr. Wm. E. Leahy, with whom Messrs. Wm. J. Hughes, Jr., Eugene B. Sullivan, and James F. Reilly were on the brief, for respondents. As the answer denied that plaintiff became a bona fide resident of Florida, and that the marriage in Florida was in good faith, the only question submitted to the Court is whether a residence in Florida acquired in bad faith, and a marriage in bad faith, must be recognized by the District of Columbia courts. Not only therefore does the record show that defendants denied that plaintiff acquired a bona fide domicile in Florida, but other facts in the record show that it is unlikely that she could have acquired a bona fide residence in Florida within the short time which elapsed between the date she was adjudged guilty of adultery with Loughran and the date she married him. The good faith of the Florida residence and marriage being denied, the present case is exactly like Olverson v. Olverson, 54 App.D.C. 48, followed by the court below. The full faith and credit clause does not require the District of Columbia courts to recognize a marriage in violation of the public policy of the District of Columbia itself. It does not apply in the District of Columbia; in so far as it is effective, it operates in the District only by reason of a federal statute. Act of March 27, 1804; 28 U.S.C., § 687. The full faith and credit clause does not require the courts of a given jurisdiction to recognize a public act or record of another jurisdiction which is contrary to the public policy of the State of the forum. Simmons v. Simmons, 57 App.D.C. 216. It is difficult to conceive how § 966 of the D.C. Code can be construed other than as a declaration of public policy. The legislative history of that section shows that it is so. 218 OCTOBER TERM, 1933. Argument for Respondents. 292 U.S. The divorce law of the District both as to length of time for residence and also in limiting the causes of divorce to adultery, is one of the most stringent in the country. The Court of Appeals has not declared the public policy of this jurisdiction; it has merely taken cognizance of and applied an Act of Congress which does so. It seems to be conceded by petitioner’s counsel that if the marriage in the present case were a polygamous, incestuous or an abhorrent marriage, the full faith and credit clause would not require it to be recognized in the District even though it had been entered into in Florida. Am.L.Inst., Restatement of the Law of Marriage and Divorce, §§ 137, 138, 139, 142. The foregoing sections of the Restatement are of interest in the present case for the reason that Congress in enacting the District of Columbia Code has put the marriage of persons whose previous marriage has not been terminated by divorce in exactly the same classification as incestuous and polygamous marriages. D.C. Code, c. 43, § 1283. If the marriage has not been terminated by death or a decree of divorce, it is in exactly the same classification as an incestuous marriage. The marriage of plaintiff to Daye was not terminated by a decree of divorce within the meaning of the word “ terminate ” as used in § 1283. A further indication that the marriage has not been terminated in any absolute or complete sense is the fact that § 966 prohibiting the remarriage of a guilty party does not in so many words prescribe a penalty. It must be presumed that Congress enacted this with some intelligent purpose in mind and intended to make it as effective as it reasonably could. If it be conceded that it prescribes no penalty, and if it does not impinge upon the completeness of the decree of divorce, it follows that it is ineffec- 216 LOUGHRAN v. LOUGHRAN. Argument for Respondents. 219 five for any purpose whatsoever. The only rational interpretation of this section is that it is a statutory provision which is read into the decree of divorce in an applicable case, and that it deprives that decree of the absoluteness and completeness which it would otherwise have. It should be noted also that the proviso of § 966 to the effect that only the innocent party may remarry is contained in the very section which conveys power upon the court to grant a divorce. Certainly it can not be contended that a court of the District could, in the teeth of § 966, pass a decree of divorce authorizing the guilty party to remarry. This being so, the reservation of the right of the guilty party to remarry is a limitation upon the power of the court to terminate a marriage by divorce. The importance of whether plaintiff’s marriage has been terminated within the meaning of § 1283 becomes clear when it is considered that § 1287 of the District of Columbia Code makes illegal in the District any marriage of persons domiciled in the District, if celebrated outside of the District, which marriage is illegal inside the District. A court of equity has the right to deny equitable relief to one who has deliberately created a situation contrary to the public policy of the lex fori. Petitioner herein, in equity, seeks the remedy of the District of Columbia court, whose decree in personam she has flouted and ignored. Her claim for dower is founded upon a marriage prohibited by a statute of the jurisdiction in which she seeks relief. Armstrong v. Toler, 11 Wheat. 258; Hall v. Coppell, 7 Wall. 542; Oscanyan v. Arms Co., 103 U.S. 261; Higgins v. McCrea, 116 U.S. 671; Hunter v. Wheate, 53 App.D.C. 206; Olverson v. Olver-son, 54 App.D.C. 48; Morck v. Abel, 3 B. & P. 35; Collins v. Blanterm, 1 Smith’s Lead. Cas., Pt. 2, p. 716; Vandyck 220 OCTOBER TERM, 1933. Argument for Respondents. 292 U.S. v. Hewitt, 1 East. 96; Clugas v. Penaluna, 4 T.R. 466; Weymel v. Read, 5 T.R. 599; Monteflori v. Monteflori, 1 W. Black. 363; Wilde v. Wilde, 37 Neb. 891; Lanktree v. Lanktree, 42 Cal. App. 648; Beard v. Beard, 65 Cal. 354. No principle seems to be better settled than that no court will lend its aid to one who founds his cause of action upon an illegal act. The good faith of the alleged Florida residence and the marriage therein being denied, the petitioner appeared in the court below as one whose position was created by reason of her violation of § 966, a positive law of the District of Columbia. Upon that ground, the court refused to lend to her its aid. The status she created was prohibited by law, on this present record. Many cases are cited by petitioner to the effect that a marriage valid where performed is valid everywhere. To this rule there are exceptions as well known as the rule itself. Of these the most important is a marriage which the legislature, either by express terms or necessary implication, has declared to be invalid because of the public policy of the enacting State. Maynard v. Hill, 125 U.S. 190. If the statute prohibiting the remarriage of the guilty party in divorce actions, contrary to the statute of the forum, is interpreted as an expression of the public policy of the enacting State, then a subsequent remarriage in another jurisdiction is invalid in the enacting State, notwithstanding the lex loci of the second jurisdiction. Andrews v. Andrews, 188 U.S. 14; Haddock v. Haddock, 201 U.S. 564; Georgia v. Tutty, 41 Fed. 753; Jackson v. Jack-son, 82 Md. 17; Simmons v. Simmons, 57 App.D.C. 216; Pennegar v. Tennessee, 87 Tenn. 244; Williams n. Oates, 27 N.C. 535; In re Stulls Estate, 183 Pa. 625; Heflinger v. Heflinger, 136 Va. 289. See also, Restatement of the Law of Contracts, Am.L.Inst., § 142, p. 181. 216 LOUGHRAN v. LOUGHRAN. Opinion of the Court. 221 Mr. Justice Brandeis delivered the opinion of the Court. This case is here on certiorari to the Court of Appeals of the District of Columbia. It is a suit in equity brought in the Supreme Court of the District in 1932, by Ruth Loughran, then resident there. The defendants are John Loughran and others, trustees of real estate there located. The estate of Daniel Loughran, Jr., deceased, is a beneficiary. The plaintiff alleges that she is Daniel’s widow; and she seeks to enforce, as such, rights in the nature of dower and to recover unpaid alimony. She alleges that in 1926 she married Daniel in Florida after living there more than two years; that in 1927 she and her said husband established their domicile in Virginia; that in 1929, while they were residing in Virginia, she obtained there a decree of divorce from him a mensa et thoro, with an award of alimony payable monthly; and that in 1931, while she remained Daniel’s wife, he died, leaving a part of the alimony unpaid. The trustees defend on the ground that before her marriage to Daniel, the plaintiff had been married to Henry Daye; that in 1924, while she and Daye were domiciled in the District, he had secured there an absolute divorce for her adultery with Daniel; that being the guilty party, she was by § 966 of the Code of the District prohibited from remarrying; and that, having remarried in violation of the statute, she is not in a position to enforce in a court of the District the alleged rights in the estate of the deceased. A copy of the record of the Daye diyorce proceeding is annexed to the answer. Section 966 provides: “ A divorce from the bond of marriage may be granted only where one of the parties has committed adultery during the marriage: Provided, That in such case the 222 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. innocent party only may remarry, but nothing herein contained shall prevent the remarriage of the divorced parties to each other: . . .” On motion of the plaintiff, the case was heard on bill and answer. The trial court entered a decree for the plaintiff in respect to the claim in the nature of dower. That decree was reversed by the Court of Appeals of the District. It ordered that the cause be remanded to the lower court for further proceedings not inconsistent with the opinion, 62 App.D.C. 262, 263; 66 F. (2d) 567, 569, saying: “ It is unnecessary for us to concern ourselves with the legality of the Florida marriage in that State, or with the subsequent divorce proceedings in the State of Virginia since the disposition of the case is dependent entirely upon the law of the District of Columbia. In so far as the law of the District is concerned, the marriage between plaintiff and Daniel Loughran, Jr., in Florida, if performed in the District of Columbia, would be absolutely void, and the plaintiff, being the offending party against the law of the District, is in no position to enforce any claim against the estate of Daniel Loughran, Jr., growing out of the marriage in Florida.” Disclaiming consideration of the doctrine of clean hands, the court added: “ Plaintiff, by her own unlawful conduct has placed herself without the pale of the law, and cannot be heard in a court of equity to take advantage of her own wrong.” The trustees insist that the bill was properly dismissed because the plaintiff, retaining her domicile in the District, went to Florida and married there in order to evade the prohibition of § 966. The plaintiff contends that the admitted facts constitute no defence; that because the marriage was legal in Florida, its legality should, under the established doctrines governing conflict of laws, have been recognized by the courts of the District; and, more- 216 LOUGHRAN v. LOUGHRAN. Opinion of the Court. 223 over, that this was required by the full faith and credit clause, since the validity of the Florida marriage had been adjudicated by the Virginia decree of divorce a mensa et thoro. First. Marriages not polygamous or incestuous, or otherwise declared void by statute,1 will, if valid by the law of the State where entered into, be recognized as valid in every other jurisdiction. Meister v. Moore, 96 U.S. 76; Travers v. Reinhardt, 205 U.S. 423, 440. The mere statutory prohibition by the State of the domicile either generally of the remarriage of a divorced person, or of remarriage within a prescribed period after the entry of the decree, is given only territorial effect. Such a statute does not invalidate a marriage solemnized in another State in conformity with the laws thereof.2 Second. We have no occasion to decide what the rights of the parties would be if it appeared that the plaintiff and her paramour, retaining at all times their domicile in the District, had gone to Florida for the purpose of evading § 966 by a marriage there; and had then returned to the District to live as man and wife.3 It is argued that marriage within the District would have been illegal because prohibited by § 966; and that a marriage which would be illegal if entered into within the District must be treated under § 1287 as void, even if valid under the law of the State in which it was solemnized. But § 1287 1 For collection of statutes see: Vernier, American Family Laws, §§ 32, 45, 92. Compare The American Law Institute, Restatement of Conflict of Laws, Proposed Final Draft No. 4, March 22, 1934, pp. 88-95. aSee Commonwealth v. Lane, 113 Mass. 458; Dudley v. Dudley, 151 Iowa 142; 130 N.W. 785; In re Miller's Estate, 239 Mich. 455; 214 N.W. 428. 3 By the widely prevailing view, the marriage would, even under such circumstances, be held valid by the courts of the domicile in the absence of express provision to the contrary. For cases see Joseph H. Beale, et al., Marriage and Domicile, 44 Harv.L.Rev. 501, 514-517. 224 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. has no application to marriages in violation of the prohibition of § 966. Section 1287 provides: 11 If any marriage declared illegal by the aforegoing sections shall be entered into in another jurisdiction by persons having and retaining their domicile in the District of Columbia, such marriage shall be deemed illegal, and may be decreed to be void in said District in the same manner as if it had been celebrated therein.” The sections preceding § 1287 relate solely to marriages void, because incestuous or polygamous, and to those which are voidable, because entered into by a person who was a lunatic, under the age of consent, or impotent, and those which are voidable because procured by force or fraud. In the case at bar, there is no suggestion of any such obstacle to the validity of the marriage. The only objection urged is that by marrying in Florida the plaintiff violated § 966. But the preceding sections do not refer to § 966; and they contain no reference to remarriage of divorced persons. Their only reference to divorce is in Paragraph Third of § 1283 which declares void: “ The marriage of any persons either of whom has been previously married and whose previous marriage has not been terminated by death or a decree of divorce.” Since the plaintiff had been legally divorced from Daye in the District while the parties were domiciled there, and the decree became effective under § 983a unconditionally and irrevocably, she was thereafter an unmarried woman; and if she had cohabited with Daniel in the District after the Florida marriage she would not have been guilty of polygamy. Commonwealth v. Lane, 113 Mass. 458, 460, 462. Moreover, it does not appear that the plaintiff and Daniel did retain their domiciles in the District after her divorce, or that after the Florida marriage they ever lived in the District as man and wife. The trustees argue that it must be assumed on the pleadings that plaintiff’s resi- 216 LOUGHRAN v. LOUGHRAN. Opinion of the Court. 225 dence in Florida and the marriage there were not in good faith.4 But the bill alleged the good faith of the residence and marriage in Florida; and the answer contains no specific denial of that allegation. Nor does it contain any averment that the residence in Florida and marriage there were with the intent of evading the prohibition against remarriage.5 The Court of Appeals did not pass upon the issue sought to be raised. It expressly disclaimed deciding whether the Florida marriage was valid or what the effect of the Virginia decree was. And the question whether the marriage in Florida should be deemed void within the District because the parties went to Florida to evade the prohibition of § 966 was not presented by the petition for a writ of certiorari. Third. The Court of Appeals stated that “ the single question for determination here is, whether or not plaintiff is entitled to her dower interest ”; and it held that the bill should be dismissed, regardless of whether the marriage was valid under the law of Florida. The requisites of dower are a valid marriage; seizin of the husband; and his death. It may be assumed that the law of the situs of real estate determines whether a widow is entitled to dower. Compare De Vaughan v. Hutchinson, 165 U.S. 566, 570. But, if the marriage was valid under the laws of Florida, the plaintiff was, under established doctrines of the conflict of laws, Daniel’s widow. As such she was entitled, as an incident'of the marriage, to dower in the property within the District. For, while a statute of the 4 The argument rests upon the phraseology of the answer and the equity rules of the Supreme Court of the District. 5--The allegation is “that having openly and in utter disregard of the prohibition contained in said statute violated the terms thereof, she cannot now return to this jurisdiction and this Honorable Court and herein make application for relief with respect to the very situation and relationship which she could and did create only in direct violation of the prohibitory mandate of the statute.” 61745°—34-------15 226 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. District provides for forfeiture of dower in case of the wife’s adultery during marriage;6 none denies dower to a widow because she had been guilty of adultery prior to the marriage with her late husband. Section 966 is not extra-territorial in its operation. It does not purport to prohibit remarriage outside the District; and no other statute denies dower to a widow because by remarrying elsewhere she had disregarded the prohibition contained in § 966. It does not make remarriage a crime, or in terms impose any penalty, even if contracted within the District; and obviously it could not make criminal remarriage elsewhere. Nor does it in terms declare the remarriage void. Apparently, it is the law of the District that a remarriage elsewhere in disregard of the prohibition of § 966, even where both parties remained domiciled in the District, is not void ab initio, but, at most, voidable; and that a voidable marriage cannot be annulled after the death of either spouse.7 No case has been found in which, independently of statutory direction, a widow has been denied dower on the ground that a remarriage, legal by the law of the place where celebrated, had been entered into in violation of some prohibition imposed by the law of the State in 6The Code of the District 1929, Title 14, § 30, declares: “If a wife willingly leave her husband, and go away, and continue with her advouterer, she shall be barred forever of action to demand her dower, that she ought to have of her husband’s lands, if she be convict thereupon, except that her husband willingly, and without coercion reconcile her, and suffer her to dwell with him in which case she shall be restored to her action.” 'Sammons n. Sammons (S.C.D.C.), 46 W.L.R. 39, 41. See Tyler v. Andrews, 40 App.D.C. 100, 104; Simmons v. Simmons, 57 AppD.C. 216, 218-219; 19 F. (2d) 690, 692-3; Abramson v. Abramson, 60 AppD.C. 119, 121, 122; 49 F. (2d) 501, 503, 504. Compare Dimpfel v. Wilson, 107 Md. 329; 68 Atl. 561; Bonham v. Badgley, 7 Ill. 622. 216 LOUGHRAN v. LOUGHRAN. Opinion of the Court. 227 which the divorce was granted and the property was situated.8 Ordinarily the operation of a statute of descent and distribution is held not affected even by the fact that the death of the decedent was caused by a crime of the heir;9 and, by the common law, dower is not barred even by misconduct during marriage. Since, as matter of substantive law, the plaintiff is entitled to dower in property within the District, if the marriage in Florida was valid, and its validity was assumed by the Court of Appeals, we have no occasion to consider whether the decree in the Virginia divorce proceedings made that matter res judicata. Fourth. The relief sought by the bill includes, besides dower rights, a claim under the Virginia decree for the alimony which had accrued and remained unpaid at the time of Daniel’s death. The right to recover the alimony is independent of the right to dower. It rests upon a judgment to which, so far as appears, full faith and credit must be given by the courts of the District. It is true that, under rules of law generally applicable, these courts may refuse to enforce a mere right of contract if it provides for doing within the District things prohibited by its laws. Bothwell v. Buckbee, Mears Co., 275 U.S. 274, 278. It may, in the exercise of the police power, prohibit the enjoyment by persons within its borders of many rights acquired elsewhere and refuse to lend the aid of its courts to enforce them. Home Insurance Co. v. Dick, 281 U.S. 397, 410. But when rights, however arising, have ripened into a judgment of a court in another State, the full faith ’Compare Putnam v. Putnam, 8 Pick. 433; Dickson v. Dickson’s Heirs, 1 Yerg. 110. See 18 C.J., p. 859, § 102. 9 McAllister v. Fair, 72 Kan. 533; 84 Pac. 112; Eversole v. Eversole, 169 Ky. 793; 185 S.W. 487; Gollnick v. Meng el, 112 Minn. 349; 128 N.W. 292; Holloway v. McCormick, 41 Okla. 1; 136 Pac. 1111; Johnson’s Estate, 29 Pa. Sup. Ct. 255. 228 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. and credit clause applies. Fauntleroy v. Lum, 210 U.S. 230; Converse v. Hamilton, 224 U.S. 243, 260; Kenney v. Supreme Lodge, 252 U.S. 411, 415. And courts of the District are bound, equally with courts of the States, to observe the command of the full faith and credit clause, wherever applicable. Bradford Electric Light Co. v. Clapper, 286 U.S. 145, 155. Thus, the facts stated afford no basis in the substantive law for dismissal of the bill so far as it seeks to recover unpaid alimony. Whether the fact that this claim has been presented also in the probate court constitutes a reason for denying relief here, was not discussed below, and on this matter we express no opinion. Fifth. It remains to consider whether the denial of relief can be justified on some principle of adjective law. The Court of Appeals holds that the “ plaintiff by her own unlawful conduct has placed herself without the pale of the law ” ; but it does not state specifically the ground for that conclusion. The bar applied is not the plea of illegality commonly interposed in suits brought to enforce contracts tainted by illegality. In those suits the illegality relied on is inherent in the causé of action ; is directly connected with the relief sought; and constitutes a substantive defence. Here, the relation of the illegality to the relief sought is indirect and remote. The wrong done is a thing of the past and is collateral. By the long line of cases following Connolly v. Union Sewer Pipe Co., 184 U.S. 540, it is settled that illegality constitutes no defense when merely collateral to the cause of action sued on. A “ person does not become an outlaw and lose all rights by doing an illegal act.” National Bank & Loan Co. v. Petrie, 189 U.S. 423, 425. Courts grant relief against present wrongs and to enforce an existing right, although the property involved was acquired by some past illegal act. Brooks v. Mar tin, 2 Wall. 70, 79, 80; Planters’ Bank V. Union Bank, 16 Wall. 483, 499, 500. LOUGHRAN v. LOUGHRAN. 229 216 Opinion of the Court. The Court of Appeals, while it disclaimed acting on the doctrine of clean hands,10 declared that Olverson v. Olverson, 54 App.D.C. 48; 293 Fed. 1015 (decided by it in 1923) is decisive of the case at bar. But both the facts and the relief sought are different in the two cases. In the first place, the parties in the Olverson case were at the time of the marriage domiciled in the District; remained so when they went to Baltimore for the marriage ceremony with the purpose of evading the prohibition of § 966; returned immediately thereafter to the District; and then lived in the District as man and wife. On the other hand, in the case at bar it does not appear that the plaintiff and Daniel were domiciled in the District at the time of the marriage; or that they went to Florida in order to evade the prohibition of § 966; or that during their marriage they lived in the District; or that they ever cohabited there as man and wife. In the second place, the Olverson suit was brought by a wife for a decree of divorce a mensa et thoro with a motion for alimony; and was dismissed on the ground that the plaintiff could not “ ask the courts of this jurisdiction to relieve her of the obligations of a relation which she willfully and wrongfully assumed.” The suit at bar was brought after termination of the marriage by death to enforce existing property rights growing out of the marriage in Florida and the decree entered in Virginia. It was not brought to enforce any transaction had within the District; nor was it brought to enforce an illegal contract; or to further an illegal relation.11 Equity does not demand that its suitors shall have led blameless lives. Neither the doctrine of clean 10 It had stated in Simmons v. Simmons, 57 App.D.C. 216, 218; 19 F. (2d) 690, 693, that the Olverson case rested on the doctrine of clean hands. 1 Compare Western Union Telegraph Co. v. Union Pacific Ry. Co.. 3 Fed. 423, 427-8; Bateman v. Fargason, 4 Fed. 32. 230 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. hands, nor any kindred principle on which courts refuse relief, is applicable here. The decree of the Court of Appeals is vacated and the cause remanded to it for further proceedings not inconsistent with this opinion. Reversed. McKNETT v. ST. LOUIS & SAN FRANCISCO RAILWAY CO. CERTIORARI TO THE SUPREME COURT OF ALABAMA. No. 597. Argued March 12, 1934.—Decided April 30, 1934. The Federal Constitution forbids that a State should close its courts to transitory causes of action against foreign corporations arising in other States under federal law (Federal Employers’ Liability Act) while opening them to the litigation of all like transitory causes arising in other States under state law. P. 232. 227 Ala. 349; 149 So. 822, reversed. Certiorari, 290 U.S. 621, to review the affirmance of a judgment for the railway company in an action for damages. Mr. J. Kirkman Jackson, with whom Mr. Walter S. Brower was on the brief, for petitioner. Mr. L. D. Gardner, Jr., for respondent. Mr. Justice Brandeis delivered the opinion of the Court. This action was brought under the Federal Employers’ Liability Act, in the Circuit Court of Jefferson County, Alabama, to recover damages for an injury suffered in Tennessee. The plaintiff, McKnett, is a resident of Tennessee. The defendant, St. Louis & San Francisco Railway Company, is a foreign corporation doing business in Alabama. It pleaded in abatement that the court lacked jurisdiction, since the cause of action had arisen wholly McKNETT v. ST. LOUIS & S. F. RY. CO. 231 230 Opinion of the Court. in Tennessee and did not arise by the common law or statute of that State. The plea rested upon the limiting words of the Act of 1907, now embodied in § 5681, Code of 1923, which declares: “ Whenever, either by common law or the statutes of another state, a cause of action, either upon contract or in tort, has arisen in such other state against any person or corporation, such cause of action shall be enforcible in the courts of this state, in any county in which jurisdiction of the defendant can be legally obtained in the same manner in which jurisdiction could have been obtained if the cause of action had arisen in this state.” A demurrer to the plea was overruled; and the judgment entered thereon for the defendant was affirmed by the highest court of the State. 227 Ala. 349; 149 So. 822. This Court granted certiorari. The courts of Alabama have, at all times, taken jurisdiction of suits between natural persons on transitory causes of action arising in another state, even if both of the parties were non-residents of Alabama.1 But prior to the Act of 1907, it had been consistently held, under the rule established by Central Railroad & Banking Co. v. Carr, 76 Ala. 388, that no Alabama court had jurisdiction of any suit against a foreign corporation unless the cause of action had arisen within the State.2 In the case at bar, the court held that, despite the 1907 Act, lack of 1 Steen v. Swadley, 126 Ala. 616, 621; 28 So. 620. Lee v. Baird, 139 Ala. 526; 36 So. 720. Compare Smith v. Gibson, 83 Ala. 284; 3 So. 321. 2 The conclusion seems to have been reached largely as a matter of statutory construction. Pullman Palace Car Co. v. Harrison, 122 Ala. 149, 153-155; 25 So. 697; Steen v. Swadley, 126 Ala. 616, 622; 28 So. 620; compare Lee v. Baird, 139 Ala. 526, 529; 36 So. 720. Apparently the rule was applied whether the plaintiff was a resident or a non-resident. See Louisville & Nashville R. Co. v. Dooley, 78 Ala. 524; compare Iron Age Publishing Co. v. Western Union Telegraph Co., 83 Ala. 498, 505-6; 3 So. 449. 232 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. jurisdiction still existed in respect to causes of action arising in another state under the federal law; because, since the statute was in plain terms limited to suits arising under the law of the other state, it could not be extended by construction to include causes of action arising in such other state under a federal law. The plaintiff contends that by refusing to entertain jurisdiction, the state court has denied him a right expressly conferred by Congress and guaranteed by the Federal Constitution. The defendant insists that the statute as construed is consistent with the Federal Constitution; since a state may determine the limits of the jurisdiction of its courts, the character of the controversies which shall be heard in them; Anglo-American Provision Co. v. Davis Provision Co., No. 1, 191 U.S. 373; Chambers v. Baltimore & Ohio R. Co., 207 U.S. 142, 148-9; and the extent to which its courts shall become a forum for the trial of transitory causes of action arising in other states. Missouri Pacific R. Co. v. Clarendon Boat Oar Co., 257 U.S. 533; Douglas v. New York, N. H. & H. R. Co., 279 U.S. 377. Alabama has granted to its circuit courts general jurisdiction of the class of actions to which that here brought belongs, in cases between litigants situated like those in the case at bar.3 The court would have had jurisdiction of the cause between these parties if the accident had occurred in Alabama. It would have had jurisdiction although the accident occurred in Tennessee, if the defendant had been a domestic corporation. It would have had jurisdiction, although the defendant was a foreign corporation, the plaintiff a nonresident, and the accident ’Compare Western Union Telegraph Co. v. Pleasants, 46 Ala. 641; Equitable Life Assurance Society v. Vogel’s Executrix, 76 Ala. 441; Southern Ry. Co. v. Jordan, 192 Ala. 528, 529 ; 68 So. 418; National Council v. Hill, 208 Ala. 63; 93 So. 812; Jefferson Island Salt Co. v. E. J. Longyear Co., 210 Ala. 352, 355; 98 So. 119. McKNETT v. ST. LOUIS & S. F. RY. CO. 233 230 Opinion of the Court. occurred in Tennessee, if the suit had been brought for an injury suffered while engaged in intrastate commerce. Thus, the ordinary jurisdiction of the Alabama circuit court is appropriate to enforce the right against this defendant conferred upon the plaintiff by the Federal Employers’ Liability Act. And its jurisdiction was invoked according to the rules of procedure prevailing in that court. The power of a State to determine the limits of the jurisdiction of its courts and the character of the controversies which shall be heard in them is, of course, subject to the restrictions imposed by the Federal Constitution. The privileges and immunities clause requires a state to accord to citizens of other states substantially the same right of access to its courts as it accords to its own citizens. Corfield n. Coryell, 4 Wash.C.C. 371, 381. Compare Canadian Northern Ry. Co. n. Eggen, 252 U.S. 553. The full faith and credit clause requires a state court to take jurisdiction of an action to enforce a judgment recovered in another state, although it might have refused to entertain a suit on the original cause of action as obnoxious to its public policy. Faurttleroy v. Lum, 210 U.S. 230; Kenney n. Supreme Lodge, 252 U.S. 411, 415; Loughran v. Loughran, decided this day, ante, p. 216. By Mondou v. New York, N. H. & H. R. Co., 223 U.S. 1, an action in a Connecticut court against a domestic corporation, it was settled that a state court whose ordinary jurisdiction as prescribed by local laws is appropriate for the occasion, may not refuse to entertain suits under the Federal Employers’ Liability Act. While Congress has not attempted to compel states to provide courts for the enforcement of the Federal Employers’ Liability Act, Douglas v. New York, N. H. & H. R. Co., 279 U.S. 377, 387, the Federal Constitution prohibits state courts of general jurisdiction from refusing to do so solely because the suit is brought under a federal 234 OCTOBER TERM, 1933. Syllabus. 292 U.S. law. The denial of jurisdiction by the Alabama court is based solely upon the source of law sought to be enforced. The plaintiff is cast out because he is suing to enforce a federal act. A state may not discriminate against rights arising under federal laws. Reversed. LOCAL LOAN CO. v. HUNT. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SEVENTH CIRCUIT. No. 783. Argued April 4, 5, 1934.—Decided April 30, 1934. 1. A court of bankruptcy has jurisdiction by ancillary proceedings to enforce an order of discharge by enjoining the prosecution of suits brought against the debtor. P. 239. 2. Such a proceeding being ancillary and dependent, the jurisdiction of the court follows that of the original cause, and may be maintained without regard to the citizenship of the parties or the amount involved, and nothwithstanding the provisions of § 265 of the Judicial Code; R.S., § 720; 28 U.S.C., § 379. P. 239. 3. Where the legal remedy of setting up a discharge as a defense in an action involving the rights of the bankrupt under it, would entail not only his intervention in a state court of first instance, but also, because of previous decisions of the State Supreme Court, a succession of appeals, causing disproportionate trouble, embarrassment, expense and possible loss to the bankrupt, held that the remedy was inadequate, and that the equitable jurisdiction of the court of bankruptcy by way of an ancillary suit for injunction was properly engaged. P. 241. 4. An assignment of future-earned wages to secure a loan, held not a lien within the meaning of § 67 (d) of the Bankruptcy Act. P. 242. 5. That such an assignment, even if a lien under the state law, should survive the discharge of the debt in bankruptcy, would be contrary to the policy of the Bankruptcy Act to free the debtor; and so it must be held, where the suit is ancillary in the bankruptcy court to enforce the discharge, though the decisions of the state court be to the contrary. P. 244. 67 F. (2d) 998, affirmed. 234 LOCAL LOAN CO. v. HUNT. Argument for Petitioner. 235 Certiorari, 291 U.S. 657, to review the affirmance of a decree by a court of bankruptcy enjoining prosecution of a suit in a state court. Mr. Frederic Burnham, with whom Messrs. David F. Rosenthal, Orville W. Lee, and Richard Mayer were on the brief, for petitioner. It is not within the jurisdiction of a bankruptcy court, after granting a discharge in bankruptcy, to adjudicate the effect of such discharge upon a claim or demand made against the bankrupt by a person not a party to the bankruptcy proceedings. In re Marshall Paper Co., 102 Fed. 872; Hellman v. Goldstone, 161 Fed. 913; In re Havens, 272 Fed. 975; In re DeLauro, 1 F.Supp. 678; In re Madden, 257 Fed. 581; In re Weisberg, 253 Fed. 833; In re Lockwood, 240 Fed. 161; In re Levitan, 224 Fed. 241; In re McCarty, 111 Fed. 151; In re Rosenthal, 108 Fed. 368; In re Mussey, 99 Fed. 71; In re Black, 97 Fed. 493. Contra: Sims v. Jamison, 67 F. (2d) 409. A bankruptcy court has no right to oust, by permanent injunction, the prior possession by a court of general jurisdiction of a suit brought against a bankrupt after discharge upon an obligation from which the bankrupt claims to have been freed by his discharge. Jud. Code, § 265; Peck n. Jeness, 7 How. 612; Metcalf v. Barker, 187 U.S. 165; Hull v. Burr, 234 U.S. 712; Phelps v. Mutual Reserve Fund Life Assn., 112 Fed. 453, aff’d, 190 U.S. 147. The injunction in this case does not come within the scope of the express exception to Jud. Code, § 265, by reason of being authorized by any provision of the Bankruptcy Act. §§ 2 (15), 11 (a); Hull v. Burr, 234 U.S. 712. By the above section courts of bankruptcy are not invested with general equitable jurisdiction, but only such equitable powers as are necessary to carry out their stat- 236 OCTOBER TERM, 1933. Argument for Petitioner. 292 U.S. utory jurisdiction in bankruptcy matters. Bardes v. Hawarden Bank, 178 U.S. 524; In re Judith Gap Commercial Co., 5 F. (2d) 307. Bankruptcy courts have no jurisdiction to adjudicate the rights of one who claims, adversely to the bankrupt, property not in the court’s possession, even though it is part of the bankrupt’s estate. Such an adverse claim must be litigated in a plenary proceeding in a court of general jurisdiction. Bardes v. Hawarden Bank, 178 U.S. 524; Louisville Trust Co. v. Comingor, 184 U.S. 18; Harris v. First Nat. Bank, 216 U.S. 382; Galbraith v. Valley, 256 U.S. 46; Harrison v. Chamberlin, 271 U.S. 191. An assignee claiming wages earned subsequent to adjudication is an adverse claimant within the foregoing rule. Progressive Bldg, de Loan Co. n. Hall, 220 Fed. 45; Copeland v. Martin, 182 Fed. 805. The wages in this case were earned after adjudication and therefore were not even part of Hunt’s estate in bankruptcy. Bankruptcy courts have no power to entertain or enjoin litigation between a bankrupt and a third party with respect to property not a part of the bankrupt’s estate. Dufiy n. Tegeler, 19 F. (2d) 305; Roden Grocery Co. v. Bacon, 133 Fed. 515; In re Amy, 263 Fed. 8; In re Rashbaum, 4 F.Supp. 724. A stay under § 11 (a) can not delay the prosecution of a suit longer than the determination of the application for a discharge. In re Byrne, 296 Fed. 98; In re Federal Biscuit Co., 214 Fed. 221. The protection extended to bankrupts under that section expires with the granting or refusal of a discharge. In re DeLauro, 1 F.Supp. 678; In re Lockwood, 240 Fed. 161. Since no power in the District Court to issue the injunction in this case is expressed in or can be implied from any provisions of the Bankruptcy Act, the injunction must be one which comes directly within the prohibitive language of § 265 of the Judicial Code. Such conclusion is 234 LOCAL LOAN CO. v. HUNT. Argument for Petitioner. 237 the only one compatible with the fundamental principles of comity upon which § 265 is based. Phelps v. Mutual Reserve Fund Life Assn., 112 Fed. 453, aff’d, 190 U.S. 147. A bankruptcy court may not disregard the decisions of the highest court of a State in determining whether in that State an assignment of future wages creates such a lien as is preserved from discharge in bankruptcy by § 67 (d) of the Bankruptcy Act. Peck v. Jeness, 7 How. 612; Dooley v. Pease, 180 U.S. 126; Thompson v. Fairbanks, 196 U.S. 516; Humphrey v. Tatum, 198 U.S. 91; Hiscock v. Vanek Bank, 206 U.S. 28; Benedict v. Ratner, 268 U.S. 353; In re Robert Jenkins Corp., 17 F. (2d) 555; In re Simpson, 35 F. (2d) 840; Sims v. Jamison, 67 F. (2d) 409. In view of the cases cited above, it can not be supposed that this Court has ever considered that the doctrine of Swift v. Tyson, 16 Pet. 1, applies in a bankruptcy case where the nature and extent of a lien are in question. The Supreme Court of Illinois holds that in Illinois an assignment of future wages creates such a lien as gives the assignee a vested property right from the date of the assignment, and that such a lien is within the terms of § 67 (d) of the Bankruptcy Act, and is therefore not invalidated by the assignor’s discharge in bankruptcy. Mallin v. Wenham, 209 Ill. 252; Monarch Discount Co. v. C.&O. Ry. Co., 285 Ill. 233. The most representative statement of the supposed impossibility of a lien upon unearned wages is found in Seaboard. Small Loan Corp. n. Ottinger, 50 F. (2d) 856. The notion that there can be no lien upon something which does not exist is demonstrably fallacious. Even at common law a lien upon live stock attached to the increase thereof. In many States mortgages of after-acquired chattels are perfectly valid. In some States mortgages of unplanted crops are valid. Butt n. Ellett, 19 Wall. 544; Sims v. Jamison, 67 F. (2d) 409. 238 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. Unearned wages in an existing employment are not distinguishable in nature from other types of property having no actual existence, but having a potential existence sufficient to enable them to be ear-marked and subjected to rights of ownership which will attach to them as soon as they come into existence. Mr. Lloyd A. Faxon for respondent. Mr. Justice Sutherland delivered the opinion of the Court. On September 17,1930, respondent borrowed from petitioner the sum of $300, and as security for its payment executed an assignment of a portion of his wages thereafter to be earned. On March 3, 1931, respondent filed a voluntary petition in bankruptcy in a federal district court in Illinois, including in his schedule of liabilities the foregoing loan, which constituted a provable claim against the estate. Respondent was adjudicated a bankrupt; and, on October 10, 1932, an order was entered discharging him from all provable debts and claims. On October 18, 1932, petitioner brought an action in the municipal court of Chicago against respondent’s employer to enforce the assignment in respect of wages earned after the adjudication. Thereupon, respondent commenced this proceeding in the court which had adjudicated his bankruptcy and ordered his discharge, praying that petitioner be enjoined from further prosecuting said action or attempting to enforce its claim therein made against respondent under the wage assignment. The bankruptcy court, upon consideration, entered a decree in accordance with the prayer; and this decree on appeal was affirmed by the court below, 67 F. (2) 998, following its decision in In re Skorcz, 67 F. (2d) 187. Challenging this decree, petitioner contends: That the bankruptcy court was without jurisdiction to entertain LOCAL LOAN CO. v. HUNT. 239 234 Opinion of the Court. a proceeding to enjoin the prosecution of the action in the municipal court; that, assuming such jurisdiction, the rule is that an assignment of future wages constitutes an enforceable lien; but that, in any event, the highest court of the State of Illinois has so decided, and by that decision this court is bound. First. The pleading by which respondent invoked the jurisdiction of the bankruptcy court in the present case is in substance and effect a supplemental and ancillary bill in equity, in aid of and to effectuate the adjudication and order made by the same court. That a federal court of equity has jurisdiction of a bill ancillary to an original case or proceeding in the same court, whether at law or in equity, to secure or preserve the fruits and advantages of a judgment or decree rendered therein, is well settled. Root v. Woolworth, 150 U.S. 401, 410-412; Julian v. Central Trust Co., 193 U.S. 93, 112-114; Riverdale Mills v. Manufacturing Co., 198 U.S. 188, 194 et seq.; Freeman v. Howe, 24 How. 450, 460. And this, irrespective of whether the court would have jurisdiction if the proceeding were an original one. The proceeding being ancillary and dependent, the jurisdiction of the court follows that of the original cause, and may be maintained without regard to the citizenship of the parties or the amount involved, and notwithstanding the provisions of § 265 of the Judicial Code (R.S., § 720), U.S.C., Title 28, § 379.1 Julian v. Central Trust Co., supra, 112; Dietzsch n. Huide-koper, 103 U.S. 494, 497; Root n. Woolworth, supra, 413; M’Donald v. Seligman, 81 Fed. 753; St. Louis, I. M. •& S. Ry. Co. v. Bellamy, 211 Fed. 172, 175-177; Brun v. Mann, 151 Fed. 145, 150. 1 “ The writ of injunction shall not be granted by any court of the United States to stay proceedings in any court of a State, except in cases where such injunction may be authorized by any law relating to proceedings in bankruptcy.” 240 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. These principles apply to proceedings in bankruptcy. In re Swofford Bros. Dry Goods Co., 180 Fed. 549, 554; Sims v. Jamison, 67 F. (2d) 409, 410; Pell v. M’Cabe, 256 Fed. 512,515-516; Seaboard Small Loan Corp. N. Ottinger, 50 F. (2d) 856, 859. Petitioner relies upon a number of decisions where other federal courts sitting in bankruptcy have declined to entertain suits similar in character to the present one, on the ground that the effect of a discharge in bankruptcy is a matter to be determined by any court in which the discharge may be pleaded. See, for example, Hellman v. Goldstone, 161 Fed. 913; In re Marshall Paper Co., 102 Fed. 872, 874; In re Weisberg, 253 Fed. 833, 835; In re Havens, 272 Fed. 975. To the extent that these cases conflict with the view just expressed they are clearly not in harmony with the general rule in equity announced by this court. And we find nothing, either in the nature of the bankruptcy court or in the terms of the bankruptcy act, which necessitates the application of what would amount to a special rule on this subject in respect of bankruptcy proceedings. Courts of bankruptcy are constituted by §§ 1 and 2 of the bankruptcy act (U.S.C., Title 11, §§ 1 and 11), and are invested “ with such jurisdiction at law and in equity as will enable them to exercise original jurisdiction in bankruptcy proceedings,” etc. The words “ at law ” were probably inserted to meet clause (4) of § 2, which empowers such courts to arraign, try and punish certain designated persons for violations of the act. Bardes v. Hawarden Bank, 178 U.S. 524, 53^536. But otherwise courts of bankruptcy are essentially courts of equity, and their proceed* ings inherently proceedings in equity. Bardes N. Hawarden Bank, supra, 535; In re Rochford, 124 Fed. 182, 187; In re Siegel-Hillman Dry Goods Co., Ill Fed. 980, 983; Swarts v. Siegel, 117 Fed. 13,16; Dodge v. Norlin, 133 Fed. 363, 368-369; In re Swofford Bros. Dry Goods Co., supra, at p. 553; In re Lahongrais, 5 F. (2d) 899, 901; French v. LOCAL LOAN CO. v. HUNT. 241 234 Opinion of the Court. Long, 42 F. (2d) 45, 47. And, generally, proceedings in bankruptcy are in the nature of proceedings in rem, adjudications of bankruptcy and orders of discharge being, as this court clearly has treated them, in every essential particular decrees in equity determining a status. Hanover National Bank v. Moyses, 186 U.S. 181, 192; Commercial Bank of Manchester v. Buckner, 20 How. 108, 118, 119. What has now been said establishes the authority of the bankruptcy court to entertain the present proceeding, determine the effect of the adjudication and order, and enjoin petitioner from its threatened interference therewith. It does not follow, however, that the court was bound to exercise its authority. And it probably would not and should not have done so except under unusual circumstances such as here exist. So far as appears, the municipal court was competent to deal with the case. It is true that respondent was not a party to that litigation; but undoubtedly it was open to him to intervene and submit to that court the question as to the effect upon the subject matter of the action of the bankruptcy decrees. And it may be conceded that the municipal court was authorized in the law action to afford relief the equivalent of that which respondent now seeks in equity. Nevertheless, other considerations aside, it is clear that the legal remedy thus afforded would be inadequate to meet the requirements of justice. As will be shown in a moment, the sole question at issue is one which the highest court of the State of Illinois had already resolved against respondent’s contention. The alternative of invoking the equitable jurisdiction of the bankruptcy court was for respondent to pursue an obviously long and expensive course of litigation, beginning with an intervention in a municipal court and followed by successive appeals through the state intermediate and ultimate courts of appeal, before reaching a court whose judgment upon the merits of the question had not been predetermined. The 61745°—34-----16 242 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. amount in suit is small, and, as pointed out by Judge Parker in Seaboard Small Loan Corp. v. Ottinger, supra, at p. 859, such a remedy is entirely inadequate because of the wholly disproportionate trouble, embarrassment, expense, and possible loss of employment which it involves. Second. Whether an assignment of future earned wages constitutes a lien within the meaning of § 67 (d) of the bankruptcy act,2 is a matter upon which the decisions of the state and federal courts are not in complete accord; although by far the larger number of cases and the greater weight of authority are in the negative. We do not stop to review the state decisions. Among those which deny the existence of the lien are Leitch v. Northern Pacific Ry. Co., 95 Minn. 35, 38; 103 N.W. 704; Levi v. Loevenhart & Co., 138 Ky. 133, 136; 127 S.W. 748; Public Finance Co. v. Rowe, 123 Ohio St. 206; 174 N.E. 738; Hupp v. Union Pac. R. Co., 99 Neb. 654; 157 N.W. 343. The only state cases definitely to the contrary which have been called to our attention are certain Illinois cases, mentioned later, and Citizens Loan Assn. v. Boston & Maine R. Co., 196 Mass. 528; 82 N.E. 696. The lower federal courts which have had occasion to consider the question concur in the view that the lien has no existence or is ineffective as against an adjudication and discharge in bankruptcy. Judge Bellinger, in In re West, 128 Fed. 205, succinctly stated the ground of his ruling in accordance with that view as follows: “ The discharge in bankruptcy operated to discharge these obligations as of the date of the adjudication, so that the obligations were discharged before the wages intended 2 “ Liens given or accepted in good faith and not in contemplation of or in fraud upon this Act, and for a present consideration, which have been recorded according to law, if record thereof was necessary in order to impart notice, shall, to the extent of such present consideration only, not be affected by this Act.” U.S.C. Title 11, § 107 (d). 234 LOCAL LOAN CO. v. HUNT. Opinion of the Court. 243 as security were in existence. The law does not continue an obligation in order that there may be a lien, but only does so because there is one. The effect of the discharge upon the prospective liens was the same as though the debts had been paid before the assigned wages were earned. The wages earned after the adjudication became the property of the bankrupt clear of the claims of all creditors.” This conclusion finds ample support in the following decisions among others. In re Home Discount Co., 147 Fed. 538, 547 et seq.; In re Lineberry, 183 Fed. 338; In re Voorhees, 41 F. (2d) 81; In re Fellows, 43 F. (2d) 122; In re Potts, 54 F. (2d) 144; and especially Seaboard Small Loan Corp. n. Ottinger, supra. The earning power of an individual is the power to create property; but it is not translated into property within the meaning of the bankruptcy act until it has brought earnings into existence. An adjudication of bankruptcy, followed by a discharge, releases a debtor from all previously incurred debts, with certain exceptions not pertinent here; and it logically cannot be supposed that the act nevertheless intended to keep such debts alive for the purpose of permitting the creation of an enforceable lien upon a subject not existent when the bankruptcy became effective or even arising from, or connected with, preexisting property, but brought into being solely as the fruit of the subsequent labor of the bankrupt. Third. To the foregoing array of authority petitioner opposes the decisions of the Supreme Court of Illinois in Mallin v. Wenham, 209 Ill. 252; 70 N.E. 564, and Monarch Discount Co. v. C. & 0. Ry. Co., 285 Ill. 233; 120 N.E. 743. Undoubtedly, these cases hold, as petitioner asserts, that in Illinois an assignment of future wages creates a lien effective from the date of the assignment which is not invalidated by the assignor’s discharge in bankruptcy. The contention is that even if the general rule be otherwise, this court is bound to follow the Illinois 244 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. decisions, since the question of the existence of a lien depends upon Illinois law. We find it unnecessary to consider whether this contention would in a different case find support in § 34 of the Judiciary Act of 1789, now § 725, Title 28, U.S.C.,8 since we are of opinion that it is precluded here by the clear and unmistakable policy of the bankruptcy act. It is important to bear in mind that the present case is one not within the jurisdiction of a state court, but is a dependent suit brought to vindicate decrees of a federal court of bankruptcy entered in the exercise of a jurisdiction essentially federal and exclusive in character. And it is that situation to which we address ourselves, and to which our decision is confined. One of the primary purposes of the bankruptcy act is to “ relieve the honest debtor from the weight of oppressive indebtedness and permit him to start afresh free from the obligations and responsibilities consequent upon business misfortunes.” Williams v. U.S. Fidelity & G. Co., 236 U.S. 549, 554-555. This purpose of the act has been again and again emphasized by the courts as being of public as well as private interest, in that it gives to the honest but unfortunate debtor who surrenders for distribution the property which he owns at the time of bankruptcy, a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt. Stellwagen v. Clum, 245 U.S. 605, 617; Hanover National Bank v. Moyses, supra; Swarts v. Fourth National Bank, 117 Fed. 1, 3; United States v. Hammond, 104 Fed. 862, 863; Barton Bros. v. Texas Produce Co., 136 Fed. 355, 357; Hardie n. Swafford Bros. Dry Goods Co., 165 Fed. 588, 591; Gilbert v. 8 “ The laws of the several States, except where the Constitution, treaties, or statutes of the United States otherwise require or provide, shall be regarded as rules of decision in trials at common law, in the courts of the United States, in cases where they apply.” 234 LOCAL LOAN CO. v. HUNT. Opinion of the Court. * 245 Shouse, 61 F. (2d) 398. The various provisions of the bankruptcy act were adopted in the light of that view and are to be construed when reasonably possible in harmony with it so as to effectuate the general purpose and policy of the act. Local rules subversive of that result cannot be accepted as controlling the action of a federal court. When a person assigns future wages, he, in effect, pledges his future earning power. The power of the individual to earn a living for himself and those dependent upon him is in the nature of a personal liberty quite as much as, if not more than, it is a property right. To preserve its free exercise is of the utmost importance, not only because it is a fundamental private necessity, but because it is a matter of great public concern. From the viewpoint of the wage earner there is little difference between not earning at all and earning wholly for a creditor. Pauperism may be the necessary result of either. The amount of the indebtedness, or the proportion of wages assigned, may here be small, but the principle, once established, will equally apply where both are very great. The new opportunity in life and the clear field for future effort, which it is the purpose of the bankruptcy act to afford the emancipated debtor, would be of little value to the wage earner if he were obliged to face the necessity of devoting the whole or a considerable portion of his earnings for an indefinite time in the future to the payment of indebtedness incurred prior to his bankruptcy. Confining our determination to the case in hand, and leaving prospective liens upon other forms of acquisitions to be dealt with as they may arise, we reject the Illinois decisions as to the effect of an assignment of wages earned after bankruptcy as being destructive of the purpose and spirit of the bankruptcy act. Decree affirmed. 246 OCTOBER TERM, 1933. Syllabus. 292 U.S. OLSON v. UNITED STATES.* CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE EIGHTH CIRCUIT. No. 580. Argued March 9, 1934.—Decided April 30, 1934. 1. By the Fifth and Fourteenth Amendments of the Federal Constitution, as also under Art. I, § 13 of the Constitution of Minnesota, appropriation of private property for a public use is forbidden unless a full and exact equivalent be returned to the owner. P. 254. 2. That equivalent is the market value of the property at the time of the taking contemporaneously paid in money. P. 255. 3. The sum required to be paid the owner of land does not depend upon the uses to which he has devoted it but is to be ascertained upon just consideration of all the uses for which it is suitable. P. 255. 4. The fact that the most profitable use of a parcel can be made only in combination with other lands does not necessarily exclude that use from consideration if the possibility of combination is reasonably sufficient to affect market value. Nor does the fact that it may be or is being acquired by eminent domain negative consideration of availability for use in the public service. P. 256. 5. But the value to be ascertained does not include, and the owner is not entitled to compensation for, any element resulting subsequently to or because of the taking. Considerations that may not reasonably be held to affect market value are excluded. P. 256. 6. Elements affecting value that depend upon events or combinations of occurrences which, while within the realm of possibility, are not fairly shown to be reasonably probable, should be excluded from consideration. P. 257. 7. Dams constructed for power and other purposes at the outlet of the Lake of the Woods in Canada had raised the water-level on the shore lands, situate in Canada and Minnesota. Arrangement was made by treaty for maintaining the level, under control of both Governments, to a designated contour in the interests of navigation as well as power production and other uses. For the costs of acquiring the easement of flowage within its territory, the United * Together with No. 581, Karlson v. United States; and No. 582, Brewster n. United States. 246 OLSON v. UNITED STATES. Counsel for Parties. 247 States assumed all liability to private landowners. In a suit to condemn such rights in Minnesota, brought under the Act of May 22, 1926, as amended, to carry out the treaty, held: (1) That the use of Minnesota shore lands for reservoir purposes, as the result of the trespass committed by means of the dams, showed merely their physical adaptability to such purposes but did not affect their market value. P. 256. (2) Having regard to the fact that the lands bordering the Lake and its islands, upon which flowage easements must be acquired to make lawful the raising of the level, are situate in two countries, and are held by very numerous private owners, by Indian Tribes and by sovereign proprietors, there is no legal and practical possibility that any person—other than the expropriating authority—could acquire those easements. Therefore there was no element of value belonging to the landowners that could legitimately be attributed to use and adaptability of their lands for reservoir purposes; and evidence of competition between power companies for purchase of flowage rights from private owners, and of prices paid, and of estimates or opinions based, upon the assumption that value to owners includes elements arising from the prospect of the Government’s acquiring the flowage rights, was properly rejected. Boom Co. v. Patterson, 98 U.S. 403, distinguished. Pp. 557, 560. 8. A point not made in the specification of errors or in the reasons given in the petition for certiorari, is not properly before the Court. P. 262. 9. Under the Act of May 22, 1926, providing for acquisition of flowage easements on lands in Minnesota bordering upon the Lake of the Woods in Minnesota, claims for damages caused by unlawful floodings prior to the taking are not included in the condemnation proceedings but are to be dealt with by the Secretary of War under § 3 of the statute. P. 262. 67 F. (2d) 24, affirmed. Certiorari, 290 U.S. 623, to review the affirmance of judgments in three condemnation cases which were tried together before a jury. Mr. I. K. Lewis, with whom Messrs. C. E. Berkman and John H. Hougen were on the brief, for petitioners. 248 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. Mr. Harry H. Peterson, Attorney General of Minnesota, and Mr. David J. Erickson, Assistant Attorney General, joined in petitioners’ brief on behalf of the State of Minnesota. Mr.^ Charles Bunn, with whom Solicitor General Biggs and Assistant Attorney General Blair were on the brief, for the United States. Mr. George Wharton Pepper, with whom Mr. John E. Read was on the brief, for the Government of Canada. Mr. Justice Butler delivered the opinion of the Court. These cases arise in a condemnation proceeding instituted by the United States in the federal district court for Minnesota to acquire easements of flowage upon lands bordering upon the Lake of the Woods in that State. The only substantial question is whether, on the facts disclosed by the record and others of which judicial notice may be taken, the actual use and special adaptability of petitioners’ shorelands for the flowage and storage of water, that inter alia will be available for the generation of power, may be taken into consideration in ascertaining the just compensation to which petitioners are entitled. The superficial area of the Lake of the Woods is between fourteen and fifteen hundred square miles; it lies in Minnesota, Ontario and Manitoba. Many streams flow into it. The Rainy River and Warroad River are the largest of those touching Minnesota. The former, coming from the east along the international boundary, drains a very large territory lying on both sides of the line. The latter, not so large, coming from the south, drains a considerable area within Minnesota and empties into the southwesterly part of the lake. The outlets of the lake are in Canada; they combine to make the Winnipeg, a great river, flowing northwesterly to Lake Winnipeg. In 1898 a Canadian corporation, by agreement with the 246 OLSON v. UNITED STATES. Opinion of the Court. 249 Crown, put in operation the Norman dam for the control of outflow down the Winnipeg. Since the construction of this dam and in consequence of it and other dams in the outlets, shorelands, in disregard of the rights of owners, have been intermittently flooded for the impounding of water used in Canada for the generation of power and other purposes. In 1909 the United States and Great Britain made a treaty which (Art. VIII) created an international joint commission and conferred upon it jurisdiction in terms broad enough to include cases involving the elevation of the Lake of the Woods as the result of these dams. 36 Stat. 2451. In 1912 questions arising out of the raising of the lake were referred to the commission; and after hearings and extensive studies it made its final report in 1917. The United States and Great Britain then consummated the treaty of 1925, which provides (Article VIII): “A flowage easement shall be permitted up to elevation 1064 sea level datum upon all lands bordering on Lake of the Woods in the United States, and the United States assumes all liability to the owners of such lands for the costs of such easement.”1 1 Article IX provides: “The United States and the Dominion of Canada shall each on its own side of the boundary assume responsibility for any damage or injury which may have heretofore resulted to it or to its inhabitants from the fluctuations of the level of Lake of the Woods or of the outflow therefrom. “Each shall likewise assume responsibility for any damage or injury which may hereafter result to it or to its inhabitants from the regulation of the level of Lake of the Woods in the manner provided for in the present Convention.” Article X contains the following: “In consideration, however, of the undertakings of the United States as set forth in Article VIII, the Government of Canada shall pay to the Government of the United States the sum of two hundred and seventy-five thousand dollars ($275,000) in currency of the United States. Should this sum prove insufficient to cover the cost of such undertakings one-half of the excess of such cost over the said sum shall, if the expenditure be in- 250 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. By an Act to carry into effect the provisions of the last mentioned treaty (Act of May 22, 1926, 44 Stat. 617, as amended April 18,1928, 45 Stat. 431) Congress directed the Secretary of War to acquire by purchase or condemnation flowage easements up to the specified elevation upon all lands in Minnesota bordering upon the Lake of the Woods, the Warroad River and the Rainy River, and that compensation should be made in accordance with the Constitution of Minnesota, which declares (Article I, § 13): u Private property shall not be taken, destroyed or damaged for public use, without just compensation therefor first paid or secured.” Commissioners appointed to ascertain the damages sustained by the several owners by reason of such taking made their awards. The United States and these petitioners appealed. The cases were tried together, the jury returned verdicts for the amounts to which petitioners were found severally entitled, and judgments were entered accordingly.2 Petitioners ap-curred within five years of the coming into force of the present Convention, be paid by the Government of Canada.” Treaty of February 24, 1925, 44 Stat. 2108. 3 Petitioner Olson, as stated in the condemnation petition, owns, as part of a homestead, 55.21 acres below contour 1064. He claimed $300 per acre, making in all $16,563. The commissioners awarded $1,296.50, including $40 for damage to dock and wharf. The jury’s verdict was $490. Petitioner Karlson, as stated in the condemnation petition, owns 163.65 acres below contour 1064. It lies in two parcels, one of which, 120 acres, he bought in 1921 for $175, or about $1.45 per acre. He claimed $275 per acre, or a total of about $44,000. The commissioners made but one award, $3,660. The jury’s verdict was $880. Petitioner Brewster, as stated in the condemnation petition, owns as part of his homestead 98.55 acres (exhibits indicate this should be about 156 acres) below contour 1064. Though contiguous, it is listed as three parcels. He claimed $300 per acre, making in all $46,965. The commissioners awarded $640.70 for one parcel of 32.15 acres and $3,195.80 for the remainder, about 124 acres, making in all $3,836.50. The jury’s verdict for all three was $900. OLSON v. UNITED STATES. 251 246 Opinion of the Court. pealed. The Circuit Court of Appeals affirmed. 67 F. (2d) 24. At the trial petitioners sought to have just compensation ascertained on the theory that the flooding of their lands (for brevity called “use for reservoir purposes”), the circumstances which make them specially adaptable for that use, and the fact that prior to condemnation such adaptability had increased their market value, should be considered by the jury in determining just compensation. And, in order to establish a basis on which to rest that submission, petitioners offered to prove the following facts: There are valuable power sites at the outlets and in the Winnipeg river which cannot be fully developed without flooding the shorelands. The industries using these waters to produce power are well established and financially responsible. Demand for electricity there produced will increase. The raising of the lake level creates a storage reservoir, of which petitioners’ lands form a part, that serves to increase potential capacity by about 200,-000 continuous horse power, which is worth more than one million dollars annually. Competition exists for the right to develop and control that capacity, the value of which is so great that one or another of the competitors would have acquired the flowage rights if the United States had not done so. It is entirely practicable for private enterprises to acquire flowage easements. Publicity, long given to the great value of the lake as a storage reservoir, created a demand and affected the market value of shorelands needed for that purpose. And, in connection with the facts above stated, petitioners offered to prove the fair market values of their lands before and after the imposition of the flowage easement, taking into consideration all the facts and circumstances affecting market prices. 252 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. Respondent, having obtained leave to establish foundation for objection to petitioners’ offers to prove, introduced evidence of the following facts: The main shore line of the Lake of the Woods, including the affected reaches of the Rainy river, exceeds 1035 miles, of which more than 110 are in Minnesota. There are in the lake a number of islands of a mile or over in length and approximately 10,000 smaller ones. The shorelines of the islands exceed 1180 miles, of which about 20 miles are in Minnesota. Below sea-level datum 1064, established by the treaty, there are about 850 parcels owned by more than 775 individuals. If mortgagees and other claimants are counted, the number to be dealt with is not less than 1225 persons. Of these, only 496 live on or near the land, 186 live elsewhere in Minnesota, and 123 in other parts of the United States and Canada. The addresses of 401 are unknown. The United States owns a considerable part—about one-fifth—of the shore line in Minnesota. Small areas are held under homestead entries. The State of Minnesota owns a small piece subject to contracts of sale. And it was made to appear: None of the 35 miles of shore lands in Manitoba, of which about 14,427 acres lie below contour 1064, are privately owned. In 1915 they were reserved by the Dominion in anticipation of action by the International Joint Commission to regulate lake levels, and in 1930 they were transferred to the Province. In Ontario more than 700 persons own shorelands. In 1920 that Province, in accordance with the recommendations of the Commission, withdrew its lands below the established level—about 13,043 acres—from private entry. On the Canadian side about 40 Indian reservations include 8,600 acres below the established level along about 250 miles of shore line. These lands may be disposed of only with the assent of a majority of the male members of the band of the full age 246 OLSON v. UNITED STATES. Opinion of the Court. 253 of 21 years, at a meeting summoned for that purpose according to the rules of the band, and subject to the approval of governmental authority. The Lake of the Woods is one of the water communications which by the Webster-Ashburton Treaty is required to be free and open to the use of the citizens and subjects of both countries. Its usefulness for navigation is a matter of great concern. The United States is interested in navigation and in the protection of owners of shore lands on the American side rather than in the development of power in Canada. The levels controlled by dams in the outlets were regulated by Canadian authority until the creation of an international regime in pursuance of the Treaty of 1925. Regulation has not been exclusively for the production of power but, so far as practicable, for the protection of all interests, including navigation, logging, domestic use of water, irrigation and power. The trial judge, being of opinion that under the circumstances neither the use nor the special adaptability of petitioners’ lands for reservoir purposes could be considered in determining their market value, excluded the evidence offered by the petitioners. He instructed the jury first to determine as to each piece of land its fair market value on May 4, 1929—before the easement was imposed—taking into consideration the fact that prior to the taking the Government had the right to maintain the level of the lake up to 1059 sea-level datum (that may be taken as the natural level); next to find the fair market value after the taking, and that the difference is the amount for which the Government is liable. To guide the jury in the ascertainment of such values, the court charged: “ You will take into consideration all of the uses for which the property was available on May 4, 1929, and May 5th, 1929, and determine what use it was most valuable for, and base your award thereon; but you will not 254 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. make an award based on any claim for reservoir value. I have held that under the law the value of these lands could not be based upon the use of the lake and its shores for reservoir purposes. It is, as I understand it, conceded that the only other use for which these lands are suited, with the exception perhaps of Mr. Olson’s tract, is for agricultural purposes, or purposes relating to agriculture, so that it is for those purposes that you are to value these lands.” The court suggested that petitioner Olson’s lands might be used for fishing purposes and instructed the jury, if it so found, to 11 add to the value which it might have for agricultural purposes, any added value which might accrue to it, because of its usefulness as a fishing station.” Under these instructions the Government was not entitled to, and it has not claimed, lesser awards because of diminution of value caused by the unauthorized flooding of petitioners’ lands. The owners were severally entitled to the compensation then due as if no such trespass had been committed. The rule prescribed by the Minnesota constitution is not, at least so far as concerns these cases, to be distinguished from that expressed by the just compensation clause of the Fifth Amendment and implied in the due process clause of the Fourteenth Amendment to the Federal Constitution. The judicial ascertainment of the amount that shall be paid to the owner of private property taken for public use through exertion of the sovereign power of eminent domain is always a matter of importance for, as said in Monongahela Navigation Co. v. United States, 148 U.S. 312, 324: “ In any society the fulness and sufficiency of the securities which surround the individual in the use and enjoyment of his property constitute one of the most certain tests of the character and value of the government.” The statement in that opinion (p. 32fi) that 11 no private property shall be appropriated to public uses unless a full and exact equivalent for it be returned 246 OLSON v. UNITED STATES. Opinion of the Court. 255 to the owner ” aptly expresses the scope of the constitutional safeguard against the uncompensated taking or use of private property for public purposes. Reagan v. Farmers’ Loan & Trust Co., 154 U.S. 362, 399. That equivalent is the market value of the property at the time of the taking contemporaneously paid in money. Seaboard Air Line Ry. n. United States, 261 U.S. 299, 306. Jacobs v. United States, 290 U.S. 13, 17. 2 Lewis, Eminent Domain, 3d ed., § 682, p. 1172. It may be more or less than the owner’s investment. He may have acquired the property for less than its worth or he may have paid a speculative and exorbitant price. Its value may have changed substantially while held by him. The return yielded may have been greater or less than interest, taxes and other carrying charges. The public may not by any means confiscate the benefits, or be required to bear the burden, of the owner’s bargain. Vogelstein & Co. v. United States, 262 U.S. 337, 340. He is entitled to be put in as good a position pecuniarily as if his property had not been taken. He must be made whole but is not entitled to more. It is the property and not the cost of it that is safeguarded by state and federal constitutions. Minnesota Rate Cases, 230 U.S. 352, 454. Just compensation includes all elements of value that inhere in the property, but it does not exceed market value fairly determined. The sum required to be paid the owner does not depend upon the uses to which he has devoted his land but is to be arrived at upon just consideration of all the uses for which it is suitable. The highest and most profitable use for which the property is adaptable and needed or likely to be needed in the reasonably near future is to be considered, not necessarily as the measure of value, but to the full extent that the prospect of demand for such use affects the market value while the property is privately held. Boom Co. v. Patterson, 98 U.S. 403, 408. Clark’s Ferry Bridge Co. v. 256 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. Public Service Comm’n, 291 U.S. 227. 2 Lewis, Eminent Domain, 3d ed., § 707, p. 1233. 1 Nichols, Eminent Domain, 2d ed., § 220, p. 671. The fact that the most profitable use of a parcel can be made only in combination with other lands does not necessarily exclude that use from consideration if the possibility of combination is reasonably sufficient to affect market value. Nor does the fact that it may be or is being acquired by eminent domain negative consideration of availability for use in the public service. New York v. Sage, 239 U.S. 57, 61. It is common knowledge that public service corporations and others having that power frequently are actual or potential competitors, not only for tracts held in single ownership but also for rights of way, locations, sites and other areas requiring the union of numerous parcels held by different owners. And, to the extent that probable demand by prospective purchasers or condemnors affects market value, it is to be taken into account. Boom Co. v. Patterson, ubi supra. But the value to be ascertained does not include, and the owner is not entitled to compensation for any element resulting subsequently to or because of the taking. Considerations that may not reasonably be held to affect market value are excluded. Value to the taker of a piece of land combined with other parcels for public use is not the measure of or a guide to the compensation to which the owner is entitled. New York v. Sage, ubi supra. United States v. Chandler-Dunbar Co., 229 U.S. 53, 76, 80. Shoemaker v. United States, 147 U.S. 282, 305. Kerr v. South Park Commissioners, 117 U.S. 379, 386. Union Electric Light & Power Co. v. Snyder Estate Co., 65 F. (2d) 297, 304. The use of shore lands for reservoir purposes prior to the taking shows merely the physical possibility of so controlling the level of the lake. But physical adaptability alone cannot be deemed to affect market value. There must be a reasonable possibility that the owner could 246 OLSON v. UNITED STATES. Opinion of the Court. 257 use his tract together with the other shore lands for reservoir purposes or that another could acquire all lands or easements necessary for that use. The trespass committed by means of the dams added nothing to the value of the shore lands. Flowage easements upon these lands were not currently bought or sold to such an extent as to establish prevailing prices, at or as of the time of the expropriation. As that measure (United States v. New River Collieries, 262 U.S. 341, 344) is lacking, the market value must be estimated. In respect of each item of property that value may be deemed to be the sum which, considering all the circumstances, could have been obtained for it; that is, the amount that in all probability would have been arrived at by fair negotiations between an owner willing to sell and a purchaser desiring to buy. In making that estimate there should be taken into account all considerations that fairly might be brought forward and reasonably be given substantial weight in such bargaining. Brooks-Scanlon Corp. v. United States, 265 U.S. 106, 124. The determination is to be made in the light of all facts affecting the market value that are shown by the evidence taken in connection with those of such general notoriety as not to require proof. Elements affecting value that depend upon events or combinations of occurrences which, while within the realm of possibility, are not fairly shown to be reasonably probable, should be excluded from consideration, for that would be to allow mere speculation and conjecture to become a guide for the ascertainment of value—a thing to be condemned in business transactions as well as in judicial ascertainment of truth. Cf. Minnesota Rate Cases, supra, p. 452. Smith v. Illinois Bell Tel. Co. 282 U.S. 133, 152. Los Angeles Gas Co. v. Railroad Comm’n, 289 U.S. 287, 319. Petitioners rely on Boom Co. n. Patterson, 98 U.S. 403. At the time of that condemnation, logs belonging to many 61745°—34-----17 258 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. owners were floated down the Mississippi to sawmills at and below the Falls of St. Anthony. Patterson owned three islands, about 34 acres, in the river a few miles above the falls, lying near to each other and approximately parallel to the west bank. The company, merely by closing the spaces between the islands and connecting the downstream end to the bank so as to prevent the passage of floating logs, created a boom about a mile long and a quarter of a mile wide. The owner objected to that use of his property and the company condemned. There was evidence of value other than for boom purposes and also of value for all purposes. The jury specially found that aside from boom purposes the value of the land was $300 and that, in view of the adaptability for boom purposes, it had an additional value of $9,058.33. There was a general verdict for the sum of these amounts. The court ordered the verdict set aside unless the owner consent to reduce it to $5,500. He did consent and judgment was entered for that amount. Upon appeal this court affirmed and, speaking through Mr. Justice Field, said (pp. 407-409): “ In determining the value of land appropriated for public purposes, the same considerations are to be regarded as in a sale of property between private parties. The inquiry in such cases must be what is the property worth in the market, viewed not merely with reference to the uses to which it is at the time applied, but with reference to the uses to which it is plainly adapted. . . . The position of the three islands . . . fitting them to form, in connection with .the west bank ... a boom of immense dimensions . . . added largely to the value of the lands. . . . Their adaptability for boom purposes was a circumstance, therefore, which the owner had a right to insist upon as an element in estimating the value of his lands. We do not understand that all persons, except the plaintiff in error, 246 OLSON v. UNITED STATES. Opinion of the Court. 259 were precluded from availing themselves of these lands for the construction of a boom, either on their own account or for general use. . . . The Mississippi is a navigable river above the Falls of St. Anthony, and the State could not confer an exclusive use of its waters, or exclusive control and management of logs floating on it, against the consent of their owners.” The principle governing that case has been frequently applied here 3 and in the lower federal courts.4 The decision is authoritative in state courts in all condemnation cases in which the owner invokes protection of the due process clause of the Fourteenth Amendment.6 But clearly it does not support petitioners’ contention here. 3 Chicago, B. & Q. R. Co. v. Chicago, 166 U.S. 226, 250. Boston Chamber of Commerce v. Boston, 217 U.S. 189, 195. United States v. Chandler-Dunbar Co., 229 U.S. 53, 77. McGovern v. New York, 229 U.S. 363, 372. Minnesota Rate Cases, 230 U.S. 352, 451. Vogelstein & Co. v. United States, 262 U.S. 337, 340. United States v. New River Collieries, 262 U.S. 341, 344. Mitchell v. United States, 267 U.S. 341, 345. 4Murhard Estate Co. v. Portland & Seattle Ry. Co., 163 Fed. 194, 199. Weiser Valley Land & Water Co. v. Ryan, 190 Fed. 417, 421-422. Denver & R. G. R. Co. v. Mills, 222 Fed. 481, 489. Northern Pac. Ry. Co. v. North American Tel. Co., 230 Fed. 347, 356. North American Telegraph Co. v. Northern Pac. Ry. Co., 254 Fed. 417, 419. United States v. Boston, C. C. & N. Y. Canal Co., 271 Fed. 877, 893. Ford Hydro-Electric Co. v. Neely, 13 F. (2d) 361, 362. Guste v. United States, 55 F. (2d) 115, 116. 6Illustrative cases are: Poles v. Easthampton, 162 Mass. 422, 425; 38 NE. 1129. Smith v. Commonwealth, 210 Mass. 259, 261; 96 N.E. 666. North Shore R. Co. v. Penna. Co., 251 Pa. 445, 450; 96 Atl. 990. Rock Island & Peoria Ry. Co. v. Leisy Brewing Co., 174 Ill. 547, 555; 51 N.E. 572. Currie v. Waverly & N. Y. B. R. Co., 52 N.J.L. 381, 396; 20 Atl. 56. Russell n. St. Paul, Minneapolis & Manitoba Ry. Co., 33 Minn. 210, 214; 22 N.W. 379. Conan v. Ely, 91 Minn. 127, 131; 97 N.W. 737. Santa Ana v. Harlin, 99 Cal. 538, 542; 34 Pac. 224. Alloway v. Nashville, 88 Tenn. 510, 519; 13 S.W. 123. 260 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. The circumstances there disclosed required submission to the jury of the question whether the use and special adaptation of the islands for boom purposes affected market value at the time of the taking. They were amply sufficient to warrant a finding that the islands were well suited and presently needed for that purpose and that demand for them, actual or prospective, to form a part of a boom greatly enhanced their market value. The boom company could not exclude others from handling logs floated in the river. The owner and others had the right to use the island lands to construct a boom for their own purposes or for general use. The situation in respect of lands bordering the Lake of the Woods is essentially different. The fact that the raising of the lake would take or damage shore lands could not affect their market value. There could be no rational basis for any demand that would affect value to the owner for reservoir purposes unless, as a legal and practical possibility, he or some other person or persons—other than the expropriating authority—could have acquired the right to flow the lands necessary for the lawful raising of the lake. The lands upon which the flowage easement is condemned are located in two countries. Neither could authorize expropriation in the other. Petitioners did not cite or offer evidence of any instance of acquisitions, without reliance upon the power of eminent domain, that are at all comparable with those under consideration. When regard is had to the number of parcels, private owners, Indian tribes and sovereign proprietors to be dealt with, it is clear that there is no foundation for opinion evidence to the effect that it was practicable for private parties to acquire the flowage easements in question. The policy of joint governmental control of the lake levels was indicated years before the taking. The lands in Manitoba and Ontario that long prior to the condemna- 246 OLSON v. UNITED STATES. Opinion of the Court. 261 tion were reserved in anticipation of measures to be taken for the raising of the lake level were essential to the enterprise. Additional reservoir capacity could not lawfully be created without them, and they could not be purchased or condemned. There was no justifiable basis for competition for the purchase of flowage rights from private owners. Rivalry between power companies or others to secure opportunity to develop capacity resulting incidentally from lake levels established in the settlement of, or to prevent, controversy between the parties to the treaty or between either of them and nationals of the other is too remote to warrant a finding that market value of petitioners’ lands was thereby enhanced. It had no direct, and could have no substantial or legitimate, influence upon such value. As just compensation includes no increment resulting from the taking, petitioners were not entitled to elements of value arising from the prospect that the Government would acquire the flowage easements. Under the circumstances, intention to acquire was the equivalent of the formal designation of the property to be taken. Prices actually paid, and estimates or opinions based, upon the assumption that value to owners includes any such elements are not entitled to weight and should not be taken into account. On the facts shown, it conclusively appears that there was no element of value belonging to petitioners that legitimately could be attributed to use and adaptability of their lands for reservoir purposes. The evidence covered by petitioners’ offers was inadmissible. The court rightly excluded reservoir uses from consideration. In their brief, petitioners complain that the trial court instructed the jury “ to consider only the value of the lands for agriculture, although it was admitted that the lands were not suitable for agriculture and had never been used for that purpose.” The parts of the charge 262 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. above quoted show that the statement is without foundation as to Olson’s land and inaccurate as to all. The record definitely shows that petitioners did not claim that, except for reservoir purposes, their lands are worth more than their value for agriculture. Moreover, the point is not made in the specification of errors or in the reasons given in the petition for this writ. The contention is not properly before us. Gunning v. Cooley, 281 U.S. 90, 98. Petitioners maintain that the Circuit Court of Appeals erred in holding that the Treaty of 1909 did not give redress, and that they had no remedy, for the wrongful flooding of their lands. The statements in the opinion assailed by specifications of error in petitioners’ brief were made arguendo and do not constitute decision of any point on which petitioners there sought reversal. The questions considered below concerned compensation for flowage easements. The condemnation was under § 1 of the Act of May 22, 1926, supra. The property taken was the right to use in the future. The commissioners were not authorized to make any award on account of damages caused by unlawful flooding of shore lands prior to the taking. That is clear from § 1, and especially so when its provisions are read in connection with the general condemnation Act of August 1, 1888, 25 Stat. 357, and the rule of just compensation prescribed by the Constitution of Minnesota, both of which are expressly adopted by that section. Moreover, § 3 directs the Secretary of War to deal with all claims for damages caused, prior to the acquisition of flowage easements under this Act, to the inhabitants of the United States by fluctuation of the water levels of the Lake of the Woods due to artificial obstructions in the outlets. No question of liability for, or the amount of, such damages was before the lower courts. Judgments affirmed. HEALY v. RATTA. Syllabus. 263 HEALY, CHIEF OF POLICE, v. RATTA. APPEAL FROM THE CIRCUIT COURT OF APPEALS FOR THE FIRST CIRCUIT. No. 731. Argued April 4, 1934.—Decided April 30, 1934. 1. A merchant whose business had been conducted through salesmen in a city and elsewhere in the State, alleging that a state law imposing a state-wide license tax on each salesman or graduated local tax in cities was in denial of equal protection of the laws, brought suit in a federal court to enjoin the enforcement of the law, naming as sole defendant a city officer whose authority to enforce it was confined to his particular city. Held: (1) That the matter in controversy did not embrace the right to restrain enforcement of the law by other officers in other places in the State, and that the collateral effect of the decree, by virtue of stare decisis, upon other and distinct controversies with other officers, could not be considered in ascertaining whether the jurisdictional amount was involved, even though their decision might turn on the same question of law. P. 266. (2) Evidence of injury to the plaintiff’s business outside of the city, and of the cost of licenses for doing it, must therefore be disregarded in determining the amount in controversy. P. 267. 2. In an injunction suit in a federal court challenging the constitutionality of a state law which imposes license taxes on plaintiff’s salesmen and subjects them to arrest and fine for non-payment, the issue being confined to the right of the State to collect the taxes and not extending to the method of enforcement, the amount in controversy is the amount of the taxes due from plaintiff or demanded of him and does not include the penalty or loss of business which payment of the tax would avoid. P. 267. 3. The inability of a taxpayer to litigate the validity of a tax without risk of irreparable injury to his business, which is ground for invoking the equitable jurisdiction of a federal court, affords no measure of the value of the matter in controversy. P. 269. 4. The policy of Congress to narrow the jurisdiction of federal courts in suits between citizens of different States or based on federal questions, calls for strict construction of the statute in determining the value of the matter in controversy. P. 270. 5. The power reserved to the States, under the Constitution, to provide for the determination of controversies in their courts may be 264 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. restricted only by the action of Congress in conformity with the judiciary sections of the Constitution. P. 270. 6. Due regard for the rightful independence of state government, which should actuate federal courts, requires that they scrupulously confine their own jurisdiction to the precise limits which the statute has defined. P. 270. 7. In suits to enjoin the collection of a tax payable annually or the imposition of penalties in case it is not paid, the sum due or demanded is the matter in controversy, and the amount of the tax, not its capitalized value, is the measure of the jurisdictional amount. P. 270. 67 F. (2d) 554, reversed. Appeal from the affirmance of a decree against Healy, a police officer, perpetually enjoining him from making arrests, prosecuting or otherwise interfering with the plaintiff or his dealers in the City of Manchester, for failure to pay license taxes imposed by a New Hampshire “ Hawkers & Peddlers ” law. Mr. H. Thornton Lorimer, Assistant Attorney General of New Hampshire, for appellant. Mr. Fred C. Demond argued the cause, and Mr. Jonathan Piper filed a brief, for appellee. Mr. Justice Stone delivered the opinion of the Court. This case comes here on appeal from a decree of the Court of Appeals for the First Circuit, affirming a decree of the District Court for New Hampshire, which enjoined appellant, the chief of police for the City of Manchester, from enforcing the “ Hawkers and Peddlers Act,” c. 102, New Hampshire Laws of 1931, as an infringement of the Fourteenth Amendment. An appeal taken directly to this Court from the district court, three judges sitting, was dismissed for want of jurisdiction here since, in the lower court, appellee had waived his prayer for temporary relief. 289 U.S. 701; see Smith v. Wilson, 273 U.S. 388, 391. 263 HEALY v. RATTA. Opinion of the Court. 265 The Act, effective April 14, 1931, requires payment of an annual license tax or fee for every hawker or peddler, defined to be “any person, either principal or agent, who goes from town to town, or place to place in the same town, selling or bartering, or carrying for sale or barter, or exposing therefor any goods, wares or merchandise.” The tax is $50.00 for a statewide license. Local licenses are obtainable at a rate graduated according to population. That for Manchester is stated to be $85.00 for each license. Violation of the Act is punishable by a fine of not more than $200.00. Appellee’s chief ground of attack upon the statute, sustained by both the courts below, is that it denies the equal protection of the laws by excepting from its operation certain classes of hawkers and peddlers, in which appellee and his agents are not included. The bill of complaint alleges that until the effective date of the Act, appellee, a resident of Massachusetts, was engaged in Manchester and elsewhere in New Hampshire in the distribution of vacuum cleaners through their sale and delivery to purchasers by traveling salesmen; that the business was conducted in such a manner as to subject the salesmen to the tax, which they were unwilling or unable to pay; and that their arrest and prosecution, which appellant threatens if they continue to sell without paying the tax, would destroy appellee’s business. The value of his business and his loss on account of the enforcement of the Act are each alleged to be more than $3,000.00. Appellant’s answer and motion to dismiss the cause, as not within the jurisdiction of the district court, admit the facts stated in the complaint, so far as now material, except that they deny the allegation that the matter in controversy exceeds $3,000, the jurisdictional amount. On this issue a trial was had, in the course of which evidence was given to show the extent of appellee’s busi- 266 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. ness in Manchester and elsewhere in New Hampshire and in adjoining states, and the profits derived from it in New Hampshire both before and after the enactment of thQ taxing statute. No interlocutory injunction was sought; and after the effective date of the statute appellee changed the method of doing his business in New Hampshire in a way to avoid the necessity of a license, sales being made by sample, with later delivery by shipping the merchandise directly to the purchaser from outside the state. The business was carried on in this manner in 1931 at a loss. It appeared that the total number of salesmen employed in conducting appellee’s business in Manchester during 1931, when the statute was enacted, was six, and that in earlier years a larger number had been employed. During those years from twenty-two to twenty-seven salesmen were employed elsewhere in the state. It is appellee’s contention that the matter in controversy is either the tax which he would be required to pay annually in order to continue his business in New Hampshire, or his right to conduct the business there without payment of the tax, and that the value of each exceeds $3,000. He argues upon the evidence that the expenditure for payment of the tax which he would be obliged to bear in order to continue his business in Manchester is at least $350.00 per annum, and that the capitalized value of this expenditure would exceed $3,000.00. The District Court concluded that as the tax which would be imposed for the conduct of appellee’s business in Manchester would amount to at least $300.00 per annum, its capitalized value, which would exceed $3,000, satisfies the jurisdictional requirement. The Court of Appeals thought that the matter in controversy was appellee’s right to do business throughout the state, which is valued at more than $3,000.00 It is conceded that the authority of appellant, as chief of police, to make arrests for violation of the statute is 263 HEALY v. RATTA. Opinion of the Court. 267 restricted to the City of Manchester. The bill of complaint does not allege, nor does appellee assert, that appellant will cause the arrest of his salesmen or otherwise interfere with them or with his business outside the city. The controversy here is that defined by the pleadings, see Smith v. Adams, 130 U.S. 167, 175, and the matter in controversy does not embrace more than the right asserted to restrain appellant from compelling compliance with the statute in Manchester by criminal prosecutions. Appellee neither asks nor could he properly be awarded a decree in the present suit restraining enforcement of the law by police officers elsewhere, and the collateral effect of the decree, by virtue of stare decisis, upon other and distinct controversies may not be considered in ascertaining whether the jurisdictional amount is involved, even though their decision turns on the same question of law. Lion Bonding Co. N. Karatz, 262 U.S. 77, 85; Colvin n. Jacksonville, 158 U.S. 456; New England Mortgage Co. v. Gay, 145 U.S. 123; Vicksburg, S. de P. R. Co. v. Smith, 135 U.S. 195; Gibson v. Shufeldt, 122 U.S. 27; Elgin v. Marshall, 106 U.S. 578. If the threatened* action of appellant is not restrained, the consequence will be either the payment of the tax by appellee, or the suppression of his business in Manchester because of his failure to pay it. Hence we disregard evidence of injury to appellee’s business outside the city and of the cost of licenses for doing it, and confine ourselves to the inquiry whether his right to do the business in Manchester or the tax which must be paid for doing the business there is the matter in controversy, and whether the record shows that its value does not exceed $3,000.00. That the issue between the parties is the right of the state to collect the tax cannot be gainsaid. There is no question of the authority of a state to suppress the conduct of a business for the non-payment of an exaction lawfully imposed upon it, or of the appellant’s authority 268 OCTOBER TERM, 1933. Opinion of the Court. 292U.S. to suppress the business here, by threat of criminal prosecution of the salesmen, if this tax is valid. The dispute as to the lawfulness of the tax is the controversy which alone gives vitality to the litigation. Once that is resolved, no other issue survives for decision. It has been said that it is the value of the “ object of the suit ” which determines the jurisdictional amount in the federal courts, Mississippi & Missouri R. Co. v. Ward, 2 Black 485; Packard v. Banton, 264 U.S. 140, 142. But this does not mean objects which are merely collateral or incidental to the determination of the issue raised by the pleadings. The statute itself does not speak of objects of the suit. It confers jurisdiction only if “ the matter in controversy exceeds . . . the sum or value of $3,000.00.” It has never been thought that the federal courts have jurisdiction of suits to restrain the collection of a property tax or other money exaction of less than the jurisdictional amount assailed as unconstitutional merely because the penalty for non-payment, which has not been incurred, exceeds that amount. Atlantic Coast Line Ry. Co. v. Railroad Comm’n, 281 Fed. 321. The tax, payment of which is demanded or resisted, is the matter in controversy, since payment of it would avoid the penalty and end the dispute. See Ross v. Prentiss, 3 How. 771, 772. Whether and in what manner the penalty for non-payment may be enforced in the event the tax is valid are but collateral and incidental to the determination whether payment may be exacted. Only when the suit is brought to restrain imposition of a penalty already accrued by reason of failure to comply with the statute or order assailed can the penalty be included as any part of the matter in controversy. See McNeill v. Southern Ry. Co., 202 U.S. 543; Kansas City Southern Ry. Co. v. Ogden Levee Dist., 15 F. (2d) 637; compare Barry v. Edmunds, 116 U.S. 550. 263 HEALY v. RATTA. Opinion of the Court. 269 The case of a tax or fee exacted for the privilege of doing a particular business presents no different considerations. Where a challenged statute commands the suppression or restriction of a business without reference to the payment of any tax, the right to do the business, or the injury to it, is the matter in controversy. Scott v. Donald, 165 U.S. 107; see Bitterman v. Louisville & Nashville R. Co., 207 U.S. 205; Hunt v. New York Cotton Exchange, 205 U.S. 322; Gallardo v. Questell, 29 F. (2d) 897? But the possible suppression of the business here, through the prosecution of those who conduct it, is but the threatened consequence or penalty for non-payment of the challenged tax. It is true that where there is no method at law to test the legality of a tax without risk of incurring a penalty, the imminence of the penalty may involve such a threat of irreparable injury as |o satisfy the requirements of equity jurisdiction. See Matthews v. Rodgers, 284 U.S. 521, 526. But the inability of a taxpayer to litigate the validity of a tax without risk of irreparable injury to his business, which is ground for invoking the equity powers of a federal court, affords no measure of the value of the matter in controversy. Atlantic Coast Line Ry. Co. v. Railroad Comm’n, supra. The disputed tax is the matter in controversy, and its value, not that of the penalty or loss which payment of the tax would avoid, determines the jurisdiction. See Washington & Georgetown R. Co. v. District of Columbia, 146 U.S. 227; compare Elliott v. Empire Natural Gas Co., 4 F. (2d) 493. Not only does the language of the statute point to this conclusion, but the policy clearly indicated by the successive acts of Congress regulating the jurisdiction of federal courts supports it. Compare Davis v. Mills, 99 Fed. 39,40. From the beginning suits between citizens of different 1 These and other authorities are discussed in 34 Col. L. Rev. 311. 270 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. states, or involving federal questions, could neither be brought in the federal courts nor removed to them, unless the value of the matter in controversy was more than a specified amount. Cases involving lesser amounts have been left to be dealt with exclusively by state courts, except that judgment of the highest court of a state adjudicating a federal right may be reviewed by this Court. Pursuant to this policy the jurisdiction of federal courts of first instance has been narrowed by successive acts of Congress, which have progressively increased the jurisdictional amount.2 The policy of the statute calls for its strict construction. The power reserved to the states, under the Constitution, to provide for the determination of controversies in their courts may be restricted only by the action of Congress in conformity to the judiciary sections of the Constitution. See Kline v. Burke Construction Co., 260 U.S. 226, 233-234. Due regard for the rightful independence of state governments, which should actuate federal courts, requires that they scrupulously confine their own jurisdiction to the precise limits which the statute has defined. See Matthews v. Rodgers, supra, at 525; compare Elgin n. Marshall, 106 U.S. 578. The contested license fees must be paid annually as a condition precedent to doing the business. But it does not follow that capitalization of the tax is the method of determining the value of the matter in controversy. The bill of complaint does not allege, nor can it be assumed, that the appellant will act to compel compliance with the statute by appellee in future years for which no tax is yet payable, or that the appellee will seek to continue his business in Manchester indefinitely in the future, or that 2 The amount originally fixed by § 11 of the Judiciary Act of 1789 at $500, exclusive of costs, 1 Stat. 78, was increased to $2,000, exclusive of interest and costs by Act of March 3, 1887, 24 Stat. 552, and to $3,000, exclusive of interest and costs, by the Act of March 3, 1911, 36 Stat. 1091; see U.S.CA.. § 41 (1). 263 HEALY v. RATTA. Opinion of the Court. 271 the taxing act will be continued on the statute books, unmodified either as to thé amount of the tax or the features to which the appellee objects. These, or like considerations, have led to the conclusion that, in suits to enjoin the collection of a tax payable annually or the imposition of penalties in case it is not paid, the sum due or demanded is the matter in controversy and the amount of the tax, not its capitalized value, is the measure of the jurisdictional amount. Washington & Georgetown R. Co. v. District of Columbia, supra; Holt v. Indiana Manufacturing Co., 176 U.S. 68, 72; Citizens Bank v. Cannon, 164 U.S. 319; see Atlantic Coast Line v. Railroad Comm’n, supra; Vicksburg, S. & P. Ry. Co. v. Nat tin, 58 F. (2d) 979; cf. Wright v. Mutual Insurance Co. of New York, 19 F. (2d) 117; Elliott v. Empire Natural Gas Co., supra. A different question is presented where the matter in controversy is the validity of a permanent exemption by contract from an annual property tax, Berryman v. Whitman College, 222 U.S. 334, 348; see Riverside & A. Ry. Co. v. Riverside, 118 Fed. 736; or the validity of an order of a state commission directing a railroad to construct and maintain an unremunerative spur track. Western & Atlantic R. Co. n. Railroad Comm’n, 261 U.S. 264, 267. There the value of the matter drawn into controversy, the contract providing permanent immunity from taxation, or the order to maintain a permanent structure for an unlimited time, is more than a limited number of the annual payments demanded. Compare Glenwood Light & Water Co. v. Mutual Light, Heat & Power Co., 239 U.S. 121. In such a case the burden which rests on a defendant who challenges the plaintiff’s allegation of the jurisdictional amount, see Hunt v. New 'York Cotton Exchange, 205 U.S. 322, 333, may well not be sustained by the mere showing that the annual payment is less than the jurisdictional amount. 272 OCTOBER TERM, 1933. Syllabus. 292 U.S. Here the record shows affirmatively, see Vance n. W. A. Vandercook Co. (No. 2), 170 'U.S. 468, that the total amount of the tax demanded, or which may be demanded, within any time reasonably required to conclude the litigation, is less than the jurisdictional amount; that any action by appellant to compel compliance by appellee or his salesmen with the taxing act in future years is at most conjectural; and that the effect of any decree rendered in the present suit upon the tax for other years, or with respect to appellee’s business outside the City of Manchester, is collateral to the present controversy. The decree will be reversed, with instructions to thé district court to dismiss the cause for want of jurisdiction. Reversed. SAUDER, ADMINISTRATRIX, et al. v. MID-CONTINENT PETROLEUM CORP. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE TENTH CIRCUIT. No. 660. Argued April 3, 1934.—Decided April 30, 1934. 1. Under an oil and gas lease on a royalty basis for a stated number of years and so long thereafter as oil or gas can be produced in paying quantities, a lessee who has produced oil in paying quantities from a fraction of the land and continues such production after the expiration of the primary term, remains under an implied obligation to prosecute development of the other part. P. 279. 2. The lessee, in the circumstances stated, can not hold the undeveloped part of the land indefinitely, as against the lessor, merely because it may contain oil, and without drilling or any present intention to drill at any time in the future. P. 279. 3. Where the lessee in an oil and gas lease covering a forty-acre tract and an adjacent half section produced oil on the forty acres but for many years abstained from drilling on the half-section, held that the lessor was equitably entitled to have the lease canceled as to the half-section unless within a reasonable time an exploratory well were drilled upon it. P. 281. 67 F. (2d) 9, reversed. SAUDER v. MID-CONTINENT CORP. 273 272 Argument for Respondent. Certiorari, 291 U.S. 655, to review the reversal of a decree canceling in part an oil and gas lease, in a suit begun by the lessor in a state court and prosecuted by his administratrix and heirs after removal. Mr. Harry W. Colmery, with whom Mr. Ray S. Pierson was on the brief, for petitioners. Mr. Richard H. Wills, with whom Mr. James C. Denton was on the brief, for respondent. The primary question is whether there was any implied obligation to drill additional wells upon the leased premises. It is the universal rule that an oil and gas lessee is not unconditionally required to drill an exploratory well at every location upon the leased premises, but is only required to drill such wells as an ordinarily prudent operator, under all the circumstances, would drill. In reliance on this rule, it has been unusual for lessees to drill an exploratory well at every location, even under a producing lease. The case is of much importance to the oil and gas industry. Respondent contends that its lease does not impose upon it any implied obligation to drill an additional well upon the leased premises, in the absence of an affirmative showing that, under all the circumstances, there was a reasonable probability that oil or gas, in paying quantities, would have been discovered, or that a reasonably prudent operator would have drilled. Brewster v. Lanyon Zinc Co., 140 Fed. 801; Texas Co. v. Waggoner, 239 S.W. 354; Goodwin v. Standard Oil Co., 290 Fed. 92; Orr n. Comar Oil Co., 46 F. (2d) 59; Smith v. McGill, 12 F. (2d) 32; Denker v. Mid-Continent Petroleum Corp., 56 F. (2d) 725; Cosden Oil Co. v. Scarborough, 55 F. (2d) 634; Franklin v. Wigton, 132 Okla. 236; Robinson v. Miracle, 146 Okla. 31; Empire Gas & Fuel Co. v. Haggard, 152 Okla. 35; Gypsy Oil Co. v. Cover, 78 Okla. 158. 61745°—34-----18 OCTOBER TERM, 1933. Argument for Respondent. 274 292 U.S. Inasmuch as it is admitted that the two wells were drilled during the primary term of the lease; that oil was discovered in paying quantities in each of them; that at all times subsequent to their completion they had produced oil in paying quantities and were still so producing, it necessarily follows that respondent’s lease was in full force and effect as to each and every part of the leased premises, unless it had abandoned some portion, or unless it had failed to drill some “ offset ” well, which it was required to drill, or unless a reasonably prudent operator, under the circumstances, would have drilled an additional well. The burden was upon the petitioners to plead and prove that some one of these conditions existed. None of the Kansas cases, before or after the execution of the lease, except certain dicta in McCamey v. Freel, 121 Kan. 189, conflicts with respondent’s contention; but, if anything, they support it. The court below was not required to follow a Kansas decision later than the lease. The construction of an oil and gas lease is a matter of general law concerning which the federal courts will reach their own conclusion. The fact that the contract happens to relate to property having a fixed situs should make no difference, particularly in view of the Kansas decisions with respect to the nature of such leases. Black & White Taxi Co. v. Brown & Yellow Taxi Co., 277 U.S. 518; Swift v. Tyson, 16 Pet. 1; Kuhn v. Fairmont Coal Co., 215 U.S. 348; Midland Valley R. Co. v. Jarvis, 29 F. (2d) 539; Midland Valley R. Co. v. Sutter, 28 F. (2d) 163, cert, dismissed, 280 U.S. 521. Since the relief sought is wholly in equity, the court below was not bound by any Kansas decisions. Rev. Stats., § 721; 28 U.S.C., § 725; Bucher v. Cheshire R. Co., 125 U.S. 555; Brill v. Foshay Co., 65 F. (2d) 420; Lynn v. Union Gas & Oil Co., 274 Fed. 957; Guffey v! Smith, 237 U.S. 101; Dallas v. Higginbotham-Bailey-Logan Co., 37 F. (2d) 513. SAUDER v. MID-CONTINENT CORP. 275 272 Opinion of the Court. Mr. Justice Roberts delivered the opinion of the Court. Philip Sauder, as owner of the E^ of Sec. 16, Twp. 23, Range 13, Greenwood County, Kansas, and the SE% of the SW% of the same section, amounting in all to 360 acres, brought suit in a Kansas state court for the cancellation of an oil and gas lease. The cause was removed td the federal district court, where, after Sauder’s death, it was revived in the right of his administratrix and heirs. The lease was made June 6, 1916; by sundry assignments the Petroleum Corporation had become the tenant. The recited consideration was $1.00 and the covenants and agreements on the part of the lessee. The term was ten years, and as long thereafter as oil and gas could be procured in paying quantities. The lessee was to deliver to the lessor one-eighth of the oil realized, and if gas should be found, $100 per year was to be paid for each gas well so long as its product was sold or marketed. If no well were commenced within one year all rights and obligations of the parties were to cease upon notice from the lessor to that effect, provided that the lessee should have the right to continue the lease in force from year to year until a well should be drilled, by paying an annual rental of $1.00 per acre. N The instrument provided that the lessee might enter upon the premises for the purposes of the lease, use water from any creek or pond, or drill for water, to run machinery for prospecting and for operating the wells, should have the exclusive right to erect, lay and maintain pipe, machinery and structures necessary for producing, storing or transporting oil or gas. The contract ran in favor of and against the heirs, assigns, successors and personal representatives of the parties. To offset two wells drilled on adjoining property, the lessee completed one well in November, 1921, and a sec-' ond in January, 1922; but no other wells have been sunk, 276 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. nor have any locations for wells been made. On the date of the expiration of the fixed term Sauder wrote the respondent stating that the lease had expired, and adding that he understood if it was a profitable contract respondent was supposed to operate, and if not, he understood the term had run out, and the respondent should release all the tract except the portion on which the wells were being operated. He asked what action the respondent proposed to take. The reply was that respondent considered it had a paying lease and would not surrender it. The suit was instituted June 27, 1930. In addition to reciting the facts above outlined, the complaint asserted there had been development and production of oil on adjacent tracts, with consequent drainage of oil from the leased land; the respondent was bound to explore and develop the land and had neglected so to do; unless the lease were cancelled the respondent would continue to hold it for speculative purposes, and the plaintiffs be deprived of the objects and considerations for which the lease was made. The answer denied that the lease was being held for speculative purposes, denied the operations on surrounding tracts were causing drainage, alleged the drilling of the two wTells was a fulfilment of the obligation to offset wells likely to drain from the demised premises, and denied any breach of the lease. Upon the trial the petitioners offered in evidence a map showing the number of wells drilled on adjacent premises, the date when they came into production, and the amount of production from each, as well as the location of all which proved to be dry holes. The respondent offered expert testimony showing that in the vicinity there were two sands, the upper of which pinched out eastward of the demised premises, and that the wells on the latter and those on lands to the west and south thereof were in the lower sand, known as the Mississippi lime. These SAUDER v. MID-CONTINENT CORP. 277 272 Opinion of the Court. witnesses testified that in their judgment the geological formation, and the experience with wells drilled on nearby lands, made it so unlikely that oil would be obtained as to justify a prudent operator in abstaining from drilling additional wells on the Sauder tract. The district judge found that the two wells were drilled as offsets and had been producing oil in small but paying quantities. He summarized the evidence as to drilling on adjacent territory, and found that there was some probability that damage was being done to the leasehold through drainage by wells on adjoining properties. He was unable to decide the question of the likelihood that additional wells on the Sauder tract would produce oil or gas in paying quantities, and held that in the state of the proofs nothing but exploration and positive test by drilling could settle the controversy. After referring to the notice sent by Sauder to the respondent at the termination of the ten year period, he found that no effort had thereafter been made toward exploration or development by drilling wells or otherwise, and that the respondent and its officers had no present intention of further exploring and developing, unless and until developments in the immediate vicinity should convince them that it would pay to take such action. The conclusion was that petitioners had no adequate remedy at law; that respondent and its predecessors in title had not in good faith and with reasonable diligence explored and developed the lands as required by the express and implied covenants of the lease; that it would be inequitable to permit the respondent to hold the property without further exploration and development, as it proposed to do; and that the petitioners were entitled to a decree cancelling the lease, except as to a portion of the SE^ of the of Sec. 16 (upon which the two off-set wells were drilled), as to which the respondent may hold and enjoy its leasehold right so long as it produces gas or oil there- 278 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. from in paying quantities. A decree was entered in accordance with the findings, adding the qualification that as to tanks, pipes and equipment located somewhat north of the acreage which the respondent was permitted to retain, these need not be moved until they should become obstacles to the development of the petitioners’ land. Upon appeal, the Circuit Court of Appeals (one judge dissenting) reversed the decree, holding that the respondent had not violated the covenants of its lease, and until it should be guilty of a breach it was entitled to continue to hold the whole tract. The reversal was without prejudice to the bringing of a new suit in the event changed conditions should indicate a breach of respondent’s implied covenant to develop. We brought the case here by writ of certiorari. The question for decision is whether the respondent failed to comply with an implied covenant to develop the tract with reasonable diligence. The petitioners’ position is that since the lease was of land in Kansas the case is to be decided according to the rule of law adopted by the Supreme Court of the State, which is said to be more stringent as respects the lessee’s obligation than that generally applied by state and federal courts. The majority of the Court of Appeals were of opinion that at the date of the making of the lease the law of the State, as evidenced by the decisions of its Supreme Court, was the same as that followed by the federal courts; and if, by decisions announced subsequent to the effective date of the lease, a broader rule was laid down, the federal courts ought not to apply it with retroactive effect. The petitioners assert that the court was in error in both conclusions. It is unnecessary to inquire as to the law of Kansas, or the effect to be given it in this case, since we think that the rule followed generally requires a reversal of the decree dismissing the bill. SAUDER v. MID-CONTINENT CORP. 279 272 Opinion of the Court. It is conceded that a covenant on respondent’s part to continue the work of exploration, development and production is to be implied from the relation of the parties and the object of the lease; and that this covenant was not abrogated by the expiration of the primary term of ten years.1 The matter in dispute is the respondent’s alleged failure to comply with its obligation. The petitioners say that if the lessee with good reason believes there is no mineral to be obtained by further drilling it should give up the lease; the respondent insists that as there is only a possibility of finding mineral, no prudent operator would presently develop, but the mere possibility entitles it to hold the lease, because it is producing oil from a portion of the area. We think the respondent’s contention cannot be sustained. With respect to a lease quite similar in its provisions it was said in Brewster v. Lanyon Zinc Co., 140 Fed. 801, 810, 814: “ The implication necessarily arising from these provisions—the intention which they obviously reflect—is that if, at the end of the five-year period prescribed for original exploration and development, oil and gas, one or both, had been found to exist in the demised premises in paying quantities, the work of exploration, development, and production should proceed with reasonable diligence for the common benefit of the parties, or the premises be surrendered to the lessor. 'Allegheny Oil Co. v. Snyder, 106 Fed. 764; Brewster v. Lanyon Zinc Co., 140 Fed. 801; Acme Oil & Mining Co. v. Williams, 140 Cal. 681; 74 Pac. 296; Daughetee v. Ohio Oil Co., 263 Ill. 518; 105 N.E. 308; Gadbury v. Ohio & Indiana Consol. Nat. & III. Gas Co., 162 Ind. 9; 67 N.E. 259; Dinsmoor v. Combs, 177 Ky. 740; 198 S.W. 58; Harris v. Ohio Oil Co., 57 Oh. St. 118; 48 N.E. 502; Indiana Oil, Gas & Development Co. v. McCrory, 42 Okla. 136; 140 Pac. 610; Kleppner v. Lemon, 176 Pa. 502; 35 Atl. 109; J. M. Guffey Petrol. Co. v. Jeff Chaison Townsite Co., 48 Tex. Civ. App. 555; 107 S.W. 609; Hall v. South Penn Oil Co., 71 W.Va. 82; 76 S.E. 124; Phillips v. Hamilton, 17 Wyo. 41; 95 Pac. 846. 280 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. “ The object of the operations being to obtain a benefit or profit for both lessor and lessee, it seems obvious, in the absence of some stipulation to that effect, that neither is made the arbiter of the extent to which or the diligence with which the operations shall proceed, and that both are bound by the standard of what is reasonable.” After commenting on the fact that the lessee is not required to carry the operations on beyond the point where they will be profitable to him, even though some benefit to the lessor will result, the court adds: “ Whether or not in any particular instance such diligence is exercised depends upon a variety of circumstances, . . . Whatever, in the circumstances, would be reasonably expected of operators of ordinary prudence, having regard to the interests of both lessor and lessee, is what is required.” This definition of the scope of the implied covenant has been generally adopted in decisions of federal and state courts.2 The facts demonstrate that the respondent has not complied with its obligations. It has held a half section for seventeen years without the drilling of an exploratory well, and claims to be entitled to hold the lease for an indefinite period with no exploration unless some other operator brings in a producing well on adjoining land, or fresh geological data come to light. The two producing wells are on the forty acres comprising the smaller of the adjacent areas embraced in the lease. The justification for the respondent’s position is that the geologic data and the experience upon surrounding lands 2 Goodwin v. Standard OU Co., 290 Fed. 92; Becker v. Submarine Oil Co., 55 Cal. App. 698; 204 Pac. 245; Daughetee v. Ohio Oil Co., 263 Ill. 518; 105 N.E. 308; Austin v. Ohio Fuel Oil Co., 218 Ky. 310; 291 S.W. 386; Prince v. Standard Oil Co., 147 La. 283; 84 So. 657; Indiana Oil, Gas & Development Co. v. McCrory, 42 Okla. 136; 140 Pac. 610; Texas Co. v. Ramsower, (Tex.) 7 S.W. (2d) 872; Jennings v. Southern Carbon Co., 73 W.Va. 215; 80 S.E. 368; Phillips v. Hamilton, 17 Wyo. 41; 95 Pac. 846. SAUDER v. MID-CONTINENT CORP. 281 272 Opinion of the Court. are both unfavorable to the discovery of oil or gas upon the east half of section 16 (the 320 acre tract). The respondent’s officers state that they desire to hold this tract because it may contain oil; but they assert that they have no present intention of drilling at any time in the near or remote future. This attitude does not comport with the obligation to prosecute development with due regard to the interests of the lessor. The production of oil on a small portion of the leased tract cannot justify the lessee’s holding the balance indefinitely and depriving the lessor not only of the expected royalty from production pursuant to the lease, but of the privilege of making some other arrangement for availing himself of the mineral content of the land. The decisions3 on which the Circuit Court of Appeals relied recognize and apply the rule of Brewster v. Lanyon Zinc Co., supra, but are distinguishable because of a difference in the circumstances in which the rule was applied. Some of them involved the duty to drill wells to offset others brought into production on adjoining lands; others turned upon a waiver by the lessor of the lessee’s obligation to explore, or the meaning of the phrase 11 so long as oil or gas is produced in paying quantities.” In none of them was there a neglect to explore or develop for any such period as is here shown, or an expressed intention not to do so, in a comparable situation. The petitioners are entitled to relief in equity as they have no adequate remedy at law. Brewster n. Lanyon Zinc Co., supra, pp. 818-819; Guffey v. Smith, 237 U.S. 101, 114. The District Court decreed a cancellation as to all except a strip four hundred feet wide along the southern boundary of the SE% of the SW% of Section 16, con- 3 Goodwin v. Standard Oil Co., 290 Fed. 92; Humphreys Oil Co. v. Tatum, 26 F. (2d) 882; Orr v. Comar Oil Co., 46 F. (2d) 59; Denker v. Mid-Continent Petroleum Corp., 56 F. (2d) 725; Pelham Petro- leum Co. v. North, 78 Okla. 39; 188 Pac. 1069; Broswood Oil & Gas Co. v. Mary Oil & Gas Co., 164 Okla. 200; 23 P. (2d) 387. 282 OCTOBER TERM, 1933. Syllabus. 292 U.S. taining about eight acres. The dissenting judge in the court of appeals thought that a decree should be entered cancelling the lease as to the 320 acre tract (the E% of the Section) unless within a reasonable time an exploratory well should be drilled therein to the Mississippi lime, and that the 40 acres embraced in the SE% of the SW^ of Section 16 should remain under the lease. We are of opinion that such a decree would recognize and protect the equities of both parties. The judgment is reversed and the cause remanded to the District Court for further proceedings in conformity with this opinion. Reversed. Mr. Justice Stone took no part in the consideration or decision of this case. MISSISSIPPI VALLEY BARGE LINE CO. v. UNITED STATES et al. APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF MISSOURI, EASTERN DIVISION. No. 807. Argued April 5, 1934.—Decided April 30, 1934. 1. Findings of the Interstate Commerce Commission may not be assailed in a suit to set its order aside in the absence of the evidence on which they were made. This settled rule can not be avoided by the submission of additional evidence in the form of affidavits. P. 286. 2. It is not for a court to substitute its judgment for that of the Interstate Commerce Commission in the adjustment of a rate schedule; the judicial function is exhausted when there is found a rational basis for the Commission’s conclusion. P. 286. 3. Order of the Commission permitting lower rail rates on sugar, to meet water competition on the Mississippi and Ohio Rivers, held supported by the facts set forth in its report. Id. 282 MISS. VALLEY BARGE CO. v. U. S. 283 Opinion of the Court. 4. The policy of Congress with respect to rail and water transportation, as evinced by the Transportation and the Inland Waterways Transportation Acts, does not mean that carriers by rail shall be required to maintain a rate that is too high for fear that through a change they may cut into the profits of carriers by water. The most that it can mean, unless, conceivably, in circumstances of wanton or malicious injury, is that where carriers by land and water are brought within the range of the regulatory powers of the Commission, as e.g., in establishing through routes or joint rates, there shall be impartial recognition and promotion of the interests of all. P. 288. 5. The permissive minimum rail rate in this case, fixed high enough to more than pay the cost of service, involves no discrimination against the complaining water competitor. P. 288. 4 F.Supp. 745, affirmed. Appeal from a decree of the District Court, constituted of three judges, dismissing a bill to set aside an order of the Interstate Commerce Commission. Mr. James R. Van Slyke, with whom Messrs. Guy A. Thompson and Truman P. Young were on the brief, for appellant. Mr. J. Stanley Payne, with whom Solicitor General Biggs, Assistant Attorney General Stephens, and Messrs. Elmer B. Collins, and Daniel W. Knowlton were on the brief, for the United States and Interstate Commerce Commission, appellees. Mr. Elmer A. Smith for the Illinois Central R. Co., et al., interveners. Mr. Justice Cardozo delivered the opinion of the Court. The appellant, Mississippi Valley Barge Line Company, is a common carrier by water, operating towboats and barges on the Mississippi and Ohio Rivers. It derives a large part of its earnings from the transportation 284 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. of sugar, which it carries from New Orleans to Cincinnati and St. Louis and intermediate ports. It is in active competition with rail carriers serving the same ports and inland points beyond. In 1932, the Illinois Central Railroad Company and other carriers by rail filed with the Interstate Commerce Commission proposed schedules of reduced rates on sugar from New Orleans to northern points, the rates to become effective October 1 of that year. The aim of the reduction was to meet the competition of the appellant and other carriers by water who had been able by reason of low and unregulated rates to divert to themselves a large part of the traffic in sugar that till then had moved by rail. The railway companies perceived that they frere threatened with still heavier losses in the future unless something was done by a reduction of their own charges to recover the business that was slipping from their grasp. Indeed the change had gone so far that already they were hauling practically no sugar within the field of competition. In 1932 the barge movement amounted to over 500,000 tons, about ten times as much as moved all-rail from Louisiana to the north. Of the water-borne traffic, by far the greater part was carried by the Federal Barge Line, which has acquiesced in the new schedules, preferring to let the rail carriers fix the rate level. The residue has been carried, part of it by this appellant, part by the American Barge Company, and part by tramp or contract operators. During the year 1932, one railway company, the Illinois Central, lost about half a million dollars by traffic thus diverted. The new schedules that were filed in the attempt to retrieve these losses proposed two different sets of rates, one based upon a minimum weight of 60,000 pounds per car, and the other upon a minimum weight of 80,000 pounds per car. To illustrate their effect, the old rate between New Orleans and Chicago had MISS. VALLEY BARGE CO. v. U. S. 285 282 Opinion of the Court. been 56^ per 100 lbs.; the new one was 30^ per 100 lbs. for the 80,000 minimum and 39^ per 100 lbs. for the 60,000 minimum. Between New Orleans and St. Louis the old rate of 52^ became 28^ and 34^. Protests against these changes having been filed by the appellant and others, the Interstate Commerce Commission proceeded to an investigation under § 15 (7) of the Interstate Commerce Act, and in the meantime ordered that the schedules be suspended. There were full hearings of the parties in interest, with testimony and argument. On July 3, 1933, the Commission found by its report that the respondents (the interveners in the court below) had justified the proposed rates with the 60,000 pound minimum. It found that they had not justified the proposed rates with the 80,000 pound minimum, but that they had justified rates four cents higher. “ So far as the 80,000 pound minimum is concerned,” the Commission said, “ this means all-rail rates from New Orleans of 34 cents to Chicago and 32 cents to St. Louis.” Sugar Cases of 1933, 195 I.C.C. 127. The rail carriers accepted this proposal, and an amended order of the Commission gave approval to the schedules so revised. Under the Urgent Deficiencies Act (October 22, 1913, c. 32, 38 Stat. 208, 220; 28 U.S.C., §§ 47, 48), the Mississippi Valley Barge Line Company filed a bill to enjoin and set aside the order of the Commission, joining the United States and the Commission as defendants. A number of rail carriers who had been respondents in the proceeding were allowed to intervene. After the filing of answers, the suit was heard by a District Court of three judges in accordance with the statute. 28 U.S.C., § 47. None of the evidence received by the Commission was placed before the court. All that the court had, aside from the report and orders, was a group of affidavits by the complainant’s officers, which were in substance to the 286 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. effect that the water carriers would be unable to compete with the carriers by rail if the schedules were to stand approved. These affidavits were received without objection as to their form, but subject to the objection that they were inadmissible in so far as they were inconsistent with what had been found in the report. The court dismissed the bill, holding that the findings of the report were conclusive as to the facts, and that they were sufficient on their face to uphold the lowered rates. 4 F.Supp. 745. An appeal to this court followed. Judicial Code, § 210; 28 U.S.C. § 47a. The settled rule is that the findings of the Commission may not be assailed upon appeal in the absence of the evidence upon which they were made. Spiller v. A., T. & S. F. Ry. Co.., 253 U.S. 117, 125; Louisiana & Pine Bluff Ry. Co. v. United States, 257 U.S. 114, 116; Nashville, C. & St. L. Ry. Co. v. Tennessee, 262 U.S. 318, 324; Edward Hines Trustees v. United States, 263 U.S. 143, 148; Chicago, I. & L. Ry. Co. v. United States, 270 U.S. 287, 295. The appellant did not free itself of this restriction by submitting additional evidence in the form of affidavits by its officers. For all that we can know, the evidence received by the Commission overbore these affidavits or stripped them of significance. The findings in the report being thus accepted as true, there is left only the inquiry whether they give support to the conclusion. Quite manifestly they do. The structure of a rate schedule calls in peculiar measure for the use of that enlightened judgment which the Commission by training and experience is qualified to form. Florida v. United States, ante, p. 1. It is not the province of a court to absorb this function to itself. I.C.C. v. Louisville & Nashville R. Co., 227 U.S. 88,100; Western Paper Makers’ Chemical Co. v. United States, 271 U.S. 268, 271; Virginian Ry. Co. v. United States, 272 U.S. 658, 663. The judicial func- MISS. VALLEY BARGE CO. v. U. S. 287 282 Opinion of the Court. tion is exhausted when there is found to be a rational basis for the conclusions approved by the administrative body. In this instance the care and patience with which the Commission fulfilled its appointed task are plain, even to the casual reader, upon the face of its report. The rates were not approved as the respondents had submitted them. For the 80,000 pound minimum, they were found to be too low. Not till there had been an increase of four cents per 100 pounds did the schedule win approval. There was a sedulous endeavor to guard against a rate war that would end in mere oppression. We are told for the appellant that upon the face of the report the Commission has been heedless of the mandate of a statute. By § 500 of Transportation Act, 1920 (Feb. 28, 1920, c. 91, 41 Statr499; 49 U.S.C. § 142) “it is declared to be the policy of Congress to promote, encourage and develop water transportation, sendee, and facilities in connection with the commerce of the United States, and to foster and preserve in full vigor both rail and water transportation.” Following this declaration, which is in the last title of the act, a duty is imposed upon the Secretary of War to do certain acts with the object of developing facilities for inland waterway transportation, and in particular to investigate the subject of water terminals both for inland waterway traffic and for through traffic by water and rail; to advise and cooperate with communities, cities and towns; and to ascertain whether the inland waterways “ are being utilized to the extent of their capacity” and are meeting the demands of traffic. By earlier sections of the act, § 418; 49 U.S.C. § 15; 15 (1), 15 (4), the regulatory powers of the Commission had been broadened in respect .of through or joint rates for carriers by rail and water, Chicago, R. I. & P. Ry. Co. v. United States, 274 U.S. 29, 36; and by the Inland Waterways Transportation Act as amended in 1928, these pow- 288 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. ers had a new extension. Act of May 29, 1928, c. 891, § 2, 45 Stat. 978; 49 U.S.C. § 153 (e); United States v. Illinois Central R. Co., 291 U.S. 457. For the determination of this case there is no need to go into the question whether the declaration of the policy of Congress to foster rail and water transportation creates a new standard of duty for the Commission in the ordering of rates, or is a source of private rights if the duty is ignored. That question does not become important until the policy of the lawmakers appears to have been flouted; and here it was obeyed. The admonition does not mean that carriers by rail shall be required to maintain a rate that is too high for fear that through the change they may cut into the profits of carriers by water. The most that it can mean, unless, conceivably, in circumstances of wanton or malicious injury, is that where carriers by land and water are brought within the range of the regulatory powers of the Commission, as e.g., in establishing through routes or joint rates, there shall be impartial recognition and promotion of the interests of all. No discrimination of that kind is proved or even charged. The rates affected by this schedule do not involve the division of joint earnings between land and water carriers. The appellant makes its own rates from port to port, and may increase or lower them at will. What has been done by the Commission affects the carriers by rail alone, at least in its immediate consequences. Transportation by water may feel the repercussions of regulation elsewhere. It has not been regulated directly. Even for transportation by land, the Commission has done no more than establish a permissive minimum, and this a minimum sufficient to give assurance that the carriage of the sugar will not involve a loss. “ There is no reasonable doubt,” we are told in the report, “ that the proposed rates are high enough to pay more than the cost of service.” 282 MISS. VALLEY BARGE CO. v. U. S. 289 Opinion of the Court. The appellant insists that it is fighting for its life, and that the effect of the new competition will be to drive it out of business. Nothing in the findings gives substance to the fear. There is significance in the fact that the Federal Barge Line, the leading carrier by water, submitted without protest. We do not overlook a sentence that the appellant has lifted from its setting and put before us as a finding. “ If respondents succeed, the barge lines will be dealt a staggering blow.” Taken by themselves the words suggest a finding that the new schedules will affect the barge lines to the point of destruction, or something very near it. Read in the light of the context, they are not a finding at all, but a summary of the grounds of protest, an outline of the pleadings, or of what amounts to the pleadings before an administrative body. This being so, we do not now consider whether the destruction of a rival through the mere force of competition is legally a wrong, unless “ disinterested malevolence ” (American Bank & Trust Co. v. Federal Reserve Bank, 256 U.S. 350, 358), or something akin thereto, has supplied the motive power. M. Steinert & Sons Co. v. Tagen, 207 Mass. 394, 397; 93 N.E. 584; Nann v. Raimist, 255 N.Y. 307, 319; 174 N.E. 690. There is no substance to the contention that the effect of the report is to give the sanction of the Commission to an illegal combination in restraint of trade and commerce. Nor is there substance to the contention that discretion was abused by denying a rehearing. United States v. Northern Pacific Ry Co., 288 U.S. 490, 494. For the purposes of this appeal we have assumed, as it was assumed in the court below, that the appellant has a standing sufficient to maintain the suit. See, however, Sprunt & Son, Inc. v. United States, 281 U.S. 249. We have made a like assumption in answer to the argument of counsel for the railways that the order of the Com-617450—34-----19 290 OCTOBER TERM, 1933. Syllabus. 292 U.S. mission is negative in form and substance, and hence not subject to review. Alton R. Co. n. United States, 287 U.S. 229. These objections to the suit coalesce to such an extent with the merits of the appellant’s grievance under § 500 of the statute (Transportation Act, 1920) as to make it unnecessary to separate them. The decree is Affirmed. DAYTON POWER & LIGHT CO. v. PUBLIC UTILITIES COMMISSION OF OHIO. APPEAL FROM THE SUPREME COURT OF OHIO. No. 609. Argued March 13, 14, 1934.—Decided April 30, 1934. 1. In fixing the rates of a gas distributing company, the State is not bound to allow as operating expenses the full amounts paid for gas supplied the distributor under a contract between it and a closely affiliated seller, but may inquire into the reasonableness of the contract price. P. 295. 2. To prove that a lower allowance, found reasonable by the state authorities, resulted in a confiscatory rate, the distributor in this case was under the burden of showing that, in its transactions with the affiliated seller, which was itself subject to rate regulation, the contract price was no higher than would fairly be payable in a regulated business by a buyer unrelated to the seller and dealing at arms length. Pp. 295, 308. 3. Where a gas distributing company claimed that a rate fixed by a State was confiscatory, upon the ground that the allowance made for purchase of its gas supply from an affiliated producing company and chargeable to its operating expenses was inadequate, and this question turned upon the value of leases of gas land held by the affiliate, which were appraised by the state authorities at more than book value, held that the burden of proving such appraisal so inadequate as to result in confiscation through its effect upon the rate was not sustained by evidence consisting (a) of testimony of friendly experts who gave widely variant estimates based on forecasts of production capacity and on the assumption that the product would be sold in an unregulated market; and (b) actual sales of other gas leaseholds in sporadic transactions, separate in 290 DAYTON P. & L. CO. v. COMMON. Syllabus. 291 time and place, and at prices too disparate to supply a helpful test of value. United Fuel Gas Co. v. Railroad Comm’n, 278 U.S. 200. P. 298. 4. Allowance for amortization and depletion of operated gas leaseholds and of the well-structures and equipment used in connection therewith, held not only adequate, but excessive, due to an overestimate of the value of such leaseholds and an underestimate of the life expectancy of the supply from the wells and from other sources not as yet tapped but available for the future. P. 303. 5. Estimate made by the state commission of accrued depreciation of wells and equipment of the affiliated gas producing company; and allowances for maintenance of its other plant and for depreciation of property of the distributing company,—considered and upheld. P. 305. 6. Any excess in estimated accrued depreciation of gas wells and equipment in this case is offset by excess in allowance for amortization and depletion. P. 306. 7. “ Delay rentals ” paid by a producing gas company to keep alive leases of gas land held in reserve, should not be charged to operating expenses when an annual amortization allowance makes provision whereby new leases can be acquired and paid for out of current earnings. P. 306. 8. In deciding upon the reasonableness of a price for gas charged by a producing company to an affiliated distributing company, the state commission was not concluded by evidence of prices between producers and distributors in other cities, when the prices were not uniform and the conditions affecting cost of transportation and delivery were not shown and, for all that appeared, the buyers and sellers were parts of the same system of affiliated companies. P. 306. 9. The burden is upon the public utility to sustain the fairness of payments for the managerial service of an affiliated company, which it makes to the affiliate and charges to its own operating expenses, and which have been found excessive by the public ratemaking authority in fixing its rates. P. 307. 10. Failure to make an allowance for going value in addition to the valuation of the assets upon the basis of a plant in successful operation, was not unreasonable or arbitrary in this case, in view of the smallness of the company and the simplicity of its organization. P. 308. 11. Refusal of a state commission to make allowances for conjectural organization or preconstruction costs, and costs of financing 292 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. the business, as part of the hypothetical expense of reproduction, held no ground for declaring rates confiscatory in this case. P. 309. 12. Rate of return of 6%% for a distributing gas company held adequate, in view of business conditions judicially noticed. P. 311. 13. When a gas company, resisting a rate reduction, adduces valuations purporting to show that the rates which it has been receiving and those which it seeks to put into effect, as well as the prices at which it buys gas from an affiliate, are all greatly below the level of a fair return, the argument proves too much, and the valuations are discredited by the test of experience, since in the absence of extraordinary conditions, not proved to exist, business is not voluntarily transacted at confiscatory rates. P. 312. 127 Oh. St. 137; 187 N.E. 18, affirmed. Appeal from a judgment which affirmed an order of the Public Utilities Commission of Ohio by which a schedule of increased rates filed by the appellant Gas Company was stricken, and the Company was enjoined from putting it into effect. Mr. John E. Mullin, with whom Messrs. Edwin P. Matthews, Charles P. Pfarrer, and Chester J. Gerkin were on the brief, for appellant. Mr. Donald C. Power, Assistant Attorney General of Ohio, with whom Mr. John W. Bricker, Attorney General, was on the brief, for appellee. Mr. Justice Cardozo delivered the opinion of the Court. The Dayton Power and Light Company, an Ohio corporation, is here as appellant challenging the validity of an order of the Public Utilities Commission of Ohio, affirmed by the Supreme Court of that state, which prescribes the rates chargeable to consumers of natural gas. The appellant is a distributing company, producing no gas and owning no wells. The gas that it distributes it buys from the Ohio Fuel Gas Company, an affiliated corporation, delivery being made to it by the seller at the 290 DAYTON P. & L. CO. v. COMM’N. Opinion of the Court. 293 gateways of the towns and cities where its mains and service pipes are laid. Both seller and buyer are subsidiaries of the Columbia Gas and Electric Corporation, which owns the entire capital stock of each of them as well as that of other companies producing in other fields or distributing in other cities. On June 17, 1929, the appellant filed with the Commission a new schedule of “ rates and prices ” to take effect thirty days later unless suspended or annulled. The average rate of increase was 5.67 cents per thousand cubic feet. Under the authority of statute (Pence Law, 110 Ohio Laws 366, General Code, § 614-20), the Commission suspended the operation of the new schedule for 120 days, and at the same time initiated an inquiry of its own motion as to the fairness of'the increase. The proceedings being undetermined at the end of the period of suspension, the statute permitted the appellant to put the schedule into effect at once upon filing a bond securing the repayment to the consumers of such portion of the increased rate as the Commission, upon final hearing, might determine to have been unreasonable or excessive. Such a bond was given on October 9, 1929. The proceeding was then continued, but a decision was not announced till November 3, 1932. There had been a pause in the hearings to await the final submission of the testimony in the case of the Columbus Gas and Fuel Company, an affiliated corporation serving other territory. Much of the testimony in that case was read into the record by stipulation as testimony in this. Upon the record thus supplemented the Commission announced its decision that the revenues under the earlier schedule were sufficient to yield a yearly net return of 6^ per cent, upon the fair value of the property, that this return was reasonable, and that more must not be charged. An order was therefore made striking the new schedule from the files of the Commission, 294 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. restraining the appellant from collecting the higher rates and directing as to the past that the difference between the old rates and the new ones, with six per cent, interest, be refunded to consumers in accordance with the bond. Upon appeal to the Supreme Court of Ohio, the order was affirmed, 127 Ohio St. 137; 187 N.E. 18, against the protest of the appellant that there had been an infringement of its privileges and immunities under .the Constitution of the United States. Amendment XIV; Article I, § 10. Upon appeal to this court, Judicial Code, § 237 (a); 28 U.S.C. § 344, the protest is renewed. At the threshold there is a controversy as to the scope of the problem before us for solution. The appellee argues that the only question for the Commission was one as to the reasonableness of the new schedule in the very form proposed: let the rates be excessive by ever so little, the schedule, it is said, was to be rejected altogether, and no other could be substituted. In opposition the appellant urges that this is too narrow a construction of the function and powers of the Commission under the applicable statute : if the proposed schedule was too high and the earlier one too low, there was a duty to fix a rate between, and thereby make the compensation adequate. We accept this broader view in the absence of a ruling to the contrary by the courts of the state. It is borne out by the terms of the bond and by the requirements of the statute under which the bond was given: such part of the new collections as shall be found to be unreasonable, that and no more is to be refunded to the customers. It is borne out again by the findings and the order: the rate is to be returned to what it had been before the change, and the difference repaid. Finally it is borne out by the opinion of the state court, which considers upon the merits the objections enumerated by the appellant in its petition to review the order of the Commission, and finds them all to be untenable. 290 DAYTON P. & L. CO. v. COMM’N. Opinion of the Court. 295 With the field of inquiry thus charted, we turn to the objections in the effort to determine whether separately or collectively they support the claim of confiscation. They fall into three classes: (1) objections to the computation of operating expenses; (2) objections to the valuation of the property making up the rate base; and (3) objections to the rate itself. First. Objections to the computation of operating expenses. The chief item of controversy under this head is the price payable to the affiliated seller for gas delivered at the gates. The contract between the appellant and the Ohio Fuel Gas Company called for payment at the rate of 45 cents per thousand cubic feet ; the Commission found this price to be excessive to the extent of 6 cents, thereby reducing to 39 cents the allowance to be made as a proper operating expense.1 There is no doubt under the decisions of this court that the Commission was not concluded by the price fixed in the agreement. This results from the relation of intimate alliance between the buyer and the seller. They were not dealing with each other at arm’s length, and the prices that they fixed in their intercompany transactions were of no concern to the consumer unless kept within the bounds of reason. Western Distributing Co. v. Public Service Commission of Kansas, 285 U.S. 119; Smith v. Illinois Bell Telephone Co., 282 U.S. 133; United Fuel Gas Co. v. Railroad Commission of Kentucky, 278 U.S. 300, 320. Whether the bounds were overpassed or heeded is next to be considered. 1. First in order of importance is the value of the gas fields. a The appraisal of the appellant’s property at the amount fixed by the Commission will allow a return of 6^ % if operating expenses are lowered by this reduction of the gateway price. At the contract price of 45 cents the return will be less. 296 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. The Ohio company, the seller, does not own its fields in fee. It does own leases covering nearly three million acres in Ohio and elsewhere. Some of these it uses as a source of supply to meet the present needs of customers. Others are held as a standby for the future. Are all to be included in determining the base on which a fair price is to be reckoned? Are some to be ruled out until the wells now in use are wholly depleted, or until depletion is near at hand? If some or all are to be included, what shall be the principle of appraisal: shall it be market value, or value as shown by the books, or some compromise between them? These and like questions have been much debated in the opinions below and in the arguments of counsel. They suggest interesting and important problems in the process of rate making for companies with wasting assets. When regard is had, however, to what has been done by the Commission and the state court as distinguished from what has been said, the case assumes another aspect. Much of the debate is then perceived to be irrelevant to the issue of confiscation vel non—confiscation, that is to say, of the property interests of the appellant—which in ultimate analysis is the only issue to be determined. To bring this out more clearly there is need to amplify the statement of the subject matter to be valued and the mode of valuation. The leaseholds, operated and unoperated, are grouped into four classes. Class No. 1 (291,396 acres) is made up of “ tracts of land having producing gas wells drilled thereon from which gas is being furnished to the public.” Class No. 2 (164,739 acres, unoperated) is made up of “ tracts of land proved by actual developments and operations in the immediate vicinity thereof to be good gasproducing lands, but which do not have any producing wells drilled thereon.” Class No. 3 (312,631 acres, unoperated) is made up of “ tracts of land shown by sur- 290 DAYTON P. & L. CO. v. COMM’N. Opinion of the Court. 297 rounding or neighboring developments of operations, geological considerations, etc., to be reasonably certain to be good gas land, at least as to large portions thereof, but not yet demonstrated to be such by actual drilling.” Class No. 4 (2,065,421 acres, unoperated) is made up of “ tracts of land situate within the areas of territory where gas sands are known or assumed to exist from general geological conditions, but which are so remote from actual gas-producing wells or territory that they are merely prospective gas lands.” The Commission has stated in its opinion that the leases in class No. 1 are the only ones that are presently “ used and useful ” in the public business of the owner, and hence the only ones to be valued in estimating a fair return.2 The Commission has also stated in effect that there was no satisfactory evidence before it either of market or of intrinsic value for any portion of the acreage. This is what was said, but what was done was different. The value of the 291,396 acres in class No. 1 was $1,569,-479 on the basis of their original cost with certain overheads and expenses added; the book value of the other classes, after deducting what is found to have been an arbitrary write up of about $3,700,000, was $3,160,765, a total for all classes of $4,730,244.3 Instead of resorting to those tests the Commission made an allowance of $25 per acre for the 291,396 acres in class No. 1, selecting that figure because it had been approved by the Supreme Court ’Under the Ohio law a corporation selling its entire product to public utilities which in turn sell that product to consumers is itself a public utility if the shares are owned by the same persons. Ohio Mining Co. v. P. U. Comm’n, 106 Ohio St. 138, 146, 150; 140 N.E. 143. ’The Ohio Fuel Gas Company took over in June, 1929, the leases of an affiliated company, the Logan Gas Company and its predecessor, the Logan Natural Gas and Fuel Company. These leases, after being carried on the Logan books at about $2,500,000, were marked up in 1919 so as to show an increase in value of $3,748,036.48, 298 OCTOBER TERM, 1933. Opinion of the Court. 292 U.S. of Ohio in another litigation affecting part of the same lands. Logan Gas Co. v. Public Utilities Comm’n, 124 Ohio St. 248; 177 N.E. 587. The result was an appraisal of $7,284,900, which was about $2,500,000 more than the book value of all the leases in classes 1 to 4 inclusive. On appeal this method of valuation did not pass without impeachment. The Supreme Court of Ohio said in its opinion (Columbus Gas & Fuel Corp. v. Public Utilities Commission of Ohio, 127 Ohio St. 109; 187 N.E. 7; Dayton Power