text:
Ludloff v. United States/Opinion of the Court

This is an information filed by the United States in the district court for the district of Maryland, against a quantity of domestic cigars, to obtain their condemnation as forfeited to the United States. The information alleges, as a cause of forfeiture, that the cigars were found in the possession of two persons by the name of Ludloff, doing business as Ludloff Bros., who had manufactured them, and who had unlawfully removed certain cigars, by them manufactured at their manufactory in the city of Baltimore, without the proper stamps donating the tax thereon, contrary to section 3400 of the Revised Statutes. Ludloff Bros. put in a claim and plea, denying forfeiture, and the issue was tried before a jury, who found a verdict for the United States. Thereupon a judgment of condemnation of the cigars seized was rendered, which was affirmed by the circuit court, and is now brought here for review by a writ of error taken by the claimants.

The material facts of the case, as they appear by the bill of exceptions, are these:

Prior to the seizure of the cigars, and before May 1, 1878, the claimants carried on the manufacture of cigars in the rear part of a small room on the first floor of the building known as No. 60 West Fayette street, in the city of Baltimore, and at the same time and place were also engaged in doing the business of dealers in tobacco; that is to say, selling imported and domestic cigars, partly manufactured by themselves, and partly purchased from others, and also selling pipes, smoking material, chewing tobaccoo, snuff, etc., they having first paid to the United States the special tax as dealers in tobacco, and also the special tax as manufacturers of cigars. In the course of said business they sold to their customers cigars so manufactured by them in the rear part of said room, in quantities less than 25, but out of stamped boxes, which boxes were duly branded, marked, and stamped, and then deposited in a show-case before said sale was made. No cigars were sold by them upon which the tax had not been paid.

On the twenty-first of March, 1870, the commissioner of internal revenue had issued a circular (No. 181) in the following terms:

'The portions of the law regulating the manufacture and sale     of cigars, without declaring in specific language that the      two kinds of business, to-wit, manufacturing cigars and      selling manufactured tobacco and cigars at retail, shall not      be carried on in the same place at the same time, impose such      restrictions, make such requirements, and declare such      forfeitures and penalties, as renders it impracticable for      these two kinds of business to be carried on together, as      above stated. See sections 3387, 3392, 3397, of the Revised     Statutes of the United States; also, Special 85, revised, and      Form 36 1/2. Under as lenient a construction of these several     sections of the law as their language and the purpose for      which they were enacted, to-wit, the protection of the      revenue, will admit, it is held that a cigar factory, or the      place where cigars can be made for sale, must be at least an      entire room, separated by walls and partitions from all other      parts of the building, and that the factory or place of manufacture      designated and described in form 36 1/2 cannot be used, nor      can any portion thereof, even though marked off or separated      from the remainder by a railing, counter, bench, screen, or      curtain, be used as a store where the manufacturer can sell      his cigars otherwise than in legal boxes, properly branded,      labeled, and stamped. When a cigar manufacturer has a store     in a room adjoining his factory, a door and windows may be      allowed between the factory and store; and, if necessary for      light or ventilation, the upper portion of the partition      between the factory and store may be of glass or wire-cloth. Collectors and all other revenue officers are enjoined to see     that these instructions are strictly enforced on and after      May 1, 1878.'

This order was disregarded by the claimants, because in June, 1878, the said district court had decided that the business of manufacturing and selling cigars at retail, by the same person, at the place of manufacture, as well as selling at said place manufactured tobacco, pipes, and other smoking material, was not prohibited by law. Thereupon, in August, 1878, the cigars in suit were seized as forfeited, and were found, when seized, in boxes not stamped, in the rear part of the room before described. Such rear part had been designated as the factory or place of manufacture where the claimants proposed to carry on their business in manner and form as prescribed by the commissioner of internal revenue, as follows:

'(36 1/2.)

'UNITED STATES INTERNAL REVENUE.

'Cigar Manufacturers' Statement.

'To be rendered to the collector or deputy collector in     duplicate, without previous demand therefor, by every      manufacturer of cigars before commencing or continuing      business. Act of July 20, 1868, § 82, as modified by section     1, act of December 24, 1872; section 3387, Rev. St.

'Ludloff Bros., of Baltimore, in the sixth division of the     third district of the state of Maryland, at No. 60 West      Fayette street, propose to manufacture cigars; and so much of      the building or parts of the building, stories, apartments, room or rooms, as      hereinafter described, is to be used exclusively and solely      for manufacturing cigars, and is to be known as my      manufactory, or place where cigars are made, to-wit, in the      room adjoining the store in the rear, on the first floor of      premises No. 60 West Fayette street.

'There are employed in the premises above described, or I     propose to employ, five persons in making cigars; which      cigars are manufactured for or to be sold and delivered to      _____, residing at No. ___, in the ___, and by occupation a      _____.

[Signed] 'LUDLOFF BROS.

'I, William Ludloff, do swear that the above is, to the best     of my knowledge and belief, a true and correct statement of      the place, street, number, and the exact premises where the      business of manufacturing cigars is, or is to be, carried on      by Ludloff Bros., and all the other matter stated herein is      true and correct.

[Signed] 'WILLIAM LUDLOFF.

'Sworn before me this twenty-fifth day of May, 1878.

[Signed] 'R. G. KING, Deputy Collector.

'NOTE. The blank space in this form after the words 'to wit'     is to be filled with a precise and accurate description of      the premises. If the manufactory comprises anything less than     the entire building, then the description must specify what      portion of the building,-whether the first, second, or third      story of the same,-and what room or rooms therein. The same     premises or room cannot be used for carrying on the business      of a cigar manufacturer and a dealer in cigars. In any     building, room, or apartment of any building designated in      this statement as the manufactory or place of manufacture, no      cigars can be sold except such as are there manufactured, and      are in original and full packages.'

At the time of said seizure, the wire partition having been previously removed by the claimants, there was no division or separation between the said rear part of the room, designated as the factory as aforesaid, and the front part of the room, where the business of selling cigars, etc., was carried on by the claimants, except a wooden counter extending part of the way across the room, and from three to three and half feet high, upon which said wire part of the partition had rested.

The court instructed the jury that if at the time of the seizure the cigars were found in possession of the claimants, and they were carrying on the business of manufacturing cigars and selling the same by retail, such retail sales being in quantity less than 25, and not sold in stamped boxes, and that said manufacture and said retail sales were carried on in a room in which there was no separation except a wooden bar about three feet high, extending, partly across the said room, the jury should find for the United States, although they might find that the claimants made cigars only behind said wooden bar and sold at retail out of stamped boxes. The court also instructed the jury that such retail selling, under such circumstances, to persons who took the cigars away, constituted a removal by the claimants of cigars from their manufactory without the proper stamps on the boxes denoting the tax thereon. The court refused to instruct the jury that the business of manufacturing cigars and selling the same in less quantities than by the box, at the place of manufacture, is not prohibited by law, provided the manufacturer has a license as a dealer in tobacco, when he sells products other than his own manufacture. These instructions and refusal were excepted to by the claimants.

The substance of the instruction of the court was that if the claimants had sold cigars manufactured by themselves in quantities less than 25, and not in boxes duly stamped, from the show-case in the part of the room in front of the bar, they had incurred the forfeiture in question, although the cigars were made by them in the rear part of the same room behind the bar, and were sold at retail out of stamped boxes. It is to be understood from the bill of exceptions, in connection with the instructions and the verdict, that the claimants, after having had the rear part of the room, namely, the part designated in their 'statement' as their manufactory, separated from the front part or store part of the same room by a wire partition, so as to substantially make two rooms, and to make the factory an entire room and a separate room, in accordance with the instructions of said circular, had, at the time of the sales at retail complained of as a ground of forfeiture, removed the wire partition, so that the factory was not then a separate room in the sense of said circular, but the manufacturing was carried on in the same room in which the show-case was and in which the sales at retail took place. This being so, we are of opinion that the instructions were correct; that the requirements of the circular were within the power of the commissioner to prescribe, and not repugnant to any statutory provisions; that the retail sales in question were in violation of law; and that the forfeiture enforced was incurred.

The claimants contend that section 3236 of the Revised Statutes provides that whenever more than one of the pursuits or occupations thereinafter described are carried on in the same place by the same person at the same time, except as thereinafter provided, the tax shall be paid for each according to the rates severally prescribed; that, by subdivision 8 of section 3244, a dealer in tobacco pays a special tax of five dollars, and can sell manufactured tobacco, snuff, and cigars, and by subdivision 10 of the same section, a manufacturer of cigars pays a special tax of $10; that the claimants had paid both of these special taxes; that subdivision 8 of section 3244 provides that no manufacturer of tobacco, snuff, or cigars shall be required to pay a special tax as dealer in manufactured tobacco and cigars for selling his own products at the place of manufacture; that section 3392, forbidding the sale of cigars in any other form than in new boxes containing at least 25 cigars, provides that nothing in that section shall be construed as preventing the sale of cigars at retail by retail dealers who have paid the special tax as such, from boxes packed, stamped, and branded in the manner prescribed by law; and that, under these enactments, no cause of forfeiture existed.

But we are of the opinion that there is nothing in these provisions which authorizes a manufacturer of cigars to sell at the place of manufacture, from and out of boxes, cigars there made by him, even though he has paid a special tax as a dealer in tobacco. The provision in section 3236 refers only to pursuits or occupations which can be carried on in the same place by the same person at the same time consistently with other requirements of law on the subject of the special pursuit or occupation. It has no reference to the grant of any authority to carry on two occupations at the same time and place by the same person, but concerns only the obtaining of a tax for each of two occupations when they are lawfully carried on.

The provision in section 3244 has no other effect than not to require that a manufacturer of tobacco, snuff, or cigars, who sells his own products at the place of manufacture in such manner as is consistent with other provisions of law as to the manner of the sale of such products, shall pay a special tax as a dealer in manufactured tobacco and cigars. It has relation solely to the exaction of a tax and not to the conferring of authority to sell.

The provision cited from section 3392 has no relation to cigars sold as those in the present case were sold, by the manufacturers, at the place of manufacture. The cigars sold were not in their hands as retail dealers, but as manufacturers, because the requirements of law as to the removal of the cigars from the manufactory had not been observed, and the cigars were still in the manufactory.

We perceive nothing in sections 3387, 3388, or 3390 which affects the foregoing views.

Section 3392 requires that all cigars shall be packed and sold in new boxes containing at least 25. Section 3397 forbids for removal of cigars from any manufactory or place where cigars are made, without being packed in boxes as required, or without the proper stamp thereon denoting the tax. Section 3400 provides that if a manufacturer of cigars removes or sells any cigars without the proper stamps denoting the tax thereon, he shall forfeit to the United States all cigars found in his possession or in his manufactory. Under these provisions the removal of the cigars in this case, from the place where they were manufactured, by selling them at retail, not in stamped boxes, was ground for the forfeiture of the cigars seized.

The regulations prescribed by the commissioner by the circular referred to were within his authority, under section 3396, to prescribe such regulations for the inspection of cigars and the collection of the tax thereon as he may deem most effective for the prevention of frauds in the payment of such tax. Thacher's Distilled Spirits, 103 U.S. 679.

The proposition asserted in the instruction asked for by the claimants, and which the court refused to give, is understood to be, that, as the claimants sold at their shop, as dealers in tobacco who had paid the special tax, articles not of their own manufacture, in addition to cigars which they made in the same room, the sale of the last-named cigars were not prohibited by law. If this proposition has any other meaning than the propositions before considered, it must be held to be entirely without support in law or in reason.

Although the record shows that the claimants were, as dealers in tobacco, engaged at their shop in the business of selling cigars which they purchased, as well as cigars which they made, there is nothing in the case which raises any other questions than those above considered.

The judgment of the circuit court is affirmed.


text: Talk:Ludloff v. United States/Opinion of the Court

license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


text:
Mayor and Aldermen of the City of Savannah v. Kelly

[Syllabus from page 184 intentionally omitted]

[Statement of Case from pages 184-185 intentionally omitted]

A. R. Lawton and W. S.C.hisholm, for plaintiffs in error.

[Argument of Counsel from pages 185-187 intentionally omitted]

''Geo. A. Mercer'', for defendant in error.

MATTHEWS, J.


text: Talk:Mayor and Aldermen of the City of Savannah v. Kelly


text:
Mayor and Aldermen of the City of Savannah v. Kelly/Opinion of the Court

The Savannah, Albany & Gulf Railroad Company was a corporation of Georgia, authorized to construct and operate a railroad, the principal and beginning point of which was the city of Savannah. That city was, in fact, owner of more than one-half of its capital stock, which it had subscribed in pursuance of law to aid in its construction. For purposes of construction-that is, partly to pay debts incurred for construction then made, and partly to pay for future improvements-the railroad company in 1859 made an issue of its bonds, in the usual form, payable to bearer 20 years after date, amounting in the aggregate to $300,000, bearing interest at the rate of 7 per cent. per annum. On each of this series of bonds there was indorsed the following:

'State of Georgia. For value received, the mayor and aldermen     of the city of Savannah and hamlets thereof, hereby, as      authorized by a public meeting of the citizens thereof, held      on the fourteenth day of May, 1859, guaranty the payment of      the within bond, principal and interest, as the same may      become due, according to the tenor thereof.

Witness the hand of the mayor, with the seal of said     corporation affixed.

[Seal of City.]

'THOMAS M. TURNER, Mayor.

'Attest: EDWARD G. WILSON, Clerk of Council.'

The bonds were issued with this guaranty indorsed, and were purchased in open market for value. The present action was brought by the defendant in error to enforce the liability of the city of Savannah upon this guaranty. And it is not denied that the city is liable upon it, if at the time it was made there was authority of law for the city to bind itself in that form for such purposes. The judgment of the circuit court affirms this liability, and is sought to be reversed, upon this writ of error, for that cause.

The fifth section of an act, which took effect December 27, 1838, entitled 'An act to extend the limits of the city of Savannah, and to authorize the corporate authorities of said city to borrow money for works of internal improvement,' authorizes the mayor and aldermen 'to obtain money on loan, on the faith and credit of said city, for the purpose of contributing to works of internal improvements.' This provision is relied on as conferring authority for the guaranty in question.

It is claimed, however, on behalf of the plaintiff in error, that this provision of the act of 1838 was not in force at the date of the guaranty, having been repealed by an act of March 4, 1856. Wilson, Dig. 526. This act expressly repeals only such acts as conflict with it, and the repeal, if effected, must be, therefore, by implication. The eighth section of the act of 1856 is supposed to have wrought this result. It is as follows:

'And whereas, doubts have been entertained whether certain     bonds issued and disposed of by the city of Savannah for      internal improvements were legal and valid, therefore, be it      further enacted, that all bonds heretofore issued by the      constituted authorities of the city of Savannah are hereby      declared legal and valid, and from and after the passage of      this act the mayor and aldermen of the city of Savannah, and      the hamlets thereof, upon the recommendation of a public      meeting of the citizens of Savannah, called for that purpose,      shall have power and authority to cause bonds to be issued      and disposed of in such manner as they may direct, for      purposes of internal improvement, which bonds, so issued,      shall be legal and valid.'

Whether the latter repeals the former law depends on whether the two are inconsistent; and, in the present instance, that depends on whether it is manifest from the words of the enactments that both cover the same ground, and that the latter was intended to be a substitute for the former. The act of 1856 relates entirely to the issue of bonds by the city of Savannah; the act of 1838 does not specify bonds at all as a mode of obtaining money on loan, on the faith and credit of the city. If it be assumed that the only mode by which that could be done under the act of 1838 was by issuing bonds, it might then be argued that the two acts covered the same subject, and the latter was designed to supersede the former. But to assume that construction of the act of 1838 to be correct, is to beg the question at issue, which is, whether that act requires the issue of bonds as the exclusive mode of obtaining money on loan on the faith and credit of the city. For if it does not, there is no inconsistency between the two statutes, and the act of 1838 is not repealed. Whether it be repealed, then, depends on what it means; and if it authorizes a guaranty such as that sued on, then it is not repealed; unless it might be supposed that the term 'bonds,' used in the act of 1856, was generic and not technical, and was designed to embrace every form of obligation whereby the city might extend the aid of its credit to purposes of internal improvement. In that event, the repeal of the act of 1838 might be affected by conceding that the act of 1856 was large enough to embrace every case, even that of a guaranty, which might have been included in the act of 1838. But conceding, as we are disposed to do for the purposes of this case, that the term 'bond,' as used in the act of 1856, is to be taken in a strict sense, as confined to direct municipal obligations in the usual form of securities known as such, then we are clear that the act of 1838 is not repealed by any necessary implication, because it is not confined to the case of bonds of that description; and the question remains whether it fairly includes that of an obligation, such as the guaranty sued on. The argument for the plaintiff in error moves in a circle. It is, that the act of 1838 does not confer authority to make the guaranty, because it is repealed; and that it is repealed, because it does not confer authority to make a guaranty.

The language of the act of 1838 is broad and unqualified. It confers upon the mayor and aldermen plenary power 'to obtain money on loan, on the faith and credit of said city, for the purposes of contributing to works of internal improvement.' The money paid for the guarantied bonds was obtained on loan, and upon the faith and credit of the city, and it was for the purpose of contributing to works of internal improvement. The fact that it was not advanced directly to the city, but, upon its assurance of repayment, to the railroad company, is not a departure even from the letter of the law, much less its meaning; nor does the fact that the money was advanced partly on the credit of the railroad company diminish the presumed reliance of the purchaser upon that of the city, with which it was joined. It is difficult to conceive of language more comprehensive than that employed, to embrace every form of security in which the faith and credit of the city might be embodied; and that in such cases it is not important to the character of the transaction that the money is obtained in the first instance by the railroad company, upon the credit of the city, was directly ruled in Rogers v. Burlington, 3 Wall. 654-666, and affirmed in Town of Venice v. Murdock, 92 U.S. 494-501. If the city of Savannah had, by virtue of an arrangement with the railroad company, received from the latter its bonds, and had itself, having indorsed the guaranty in suit, delivered them after sales to purchasers, and, receiving the money, had paid it over to the railroad company as a contribution to purposes of internal improvement, the transaction could not have been made the subject of a cavil, as unauthorized by the act of 1838; and yet this is the precise legal equivalent of the transaction as made. We have no hesitation in saying that it is equally embraced within the meaning of that statute, and that the act in question was in force at the date of the guaranty and accordingly governs it. The substance of the transaction was that, in consideration of the money advanced to the railroad company as a loan on the faith and credit of the city, the latter required the railroad company to indemify it against loss on that account,-a precaution which no implication in the statute forbids,-and that result was accomplished by the form of the obligation, by which the railroad company became the principal debtor, and the city of Savannah guarantor merely of its bonds.

It does not detract from the force of this conclusion that the guaranty recites that it was authorized by a public meeting of the citizens thereof, as if it were the case of bonds issued under the act of 1856, which required the recommendation of such a meeting. But if the fact is immaterial, the recital is not injurious. And the official record of the transactions shows that such a meeting was held for the purpose of quieting doubts, and not to raise them. The authorities of the city at that time were only anxious to omit nothing which the most critical might regard as important in securing for its obligations all the weight and value properly belonging to an unquestionable pledge of its faith and credit; and certainly now, after the lapse of 20 years, in which no such question has been raised, it would, in the language of Mr. Justice GRIER, in Mercer Co. v. Hacket, 1 Wall. 83-94, 'be contrary to good faith and common justice to permit them to allege a newly-discovered construction of an equivocal power.' Van Hostrup v. Madison City, 1 Wall. 291; Meyer v. City of Muscatine, 1 Wall. 391; James v. Milwaukee, 16 Wall. 159.

In our opinion the act of 1838 authorized the guaranty made by the city of Savannah upon the bonds of the railroad company, and it constitutes a valid and subsisting liability. This disposes of the only question in the case deserving serious consideration; and the judg ment of the circuit court is, therefore, affirmed.


text: Talk:Mayor and Aldermen of the City of Savannah v. Kelly/Opinion of the Court


text:
Mayor and Aldermen of the City of Savannah v. Martin

A. R. Lawton and W. H. Chisholm, for plaintiffs in error.

''Geo. A. Mercer'', for defendant in error.

MATTHEWS, J.


text: Talk:Mayor and Aldermen of the City of Savannah v. Martin


text:
Mayor and Aldermen of the City of Savannah v. Martin/Opinion of the Court

This case is identical in its circumstances with that of Mayor and Aldermen of the City of Savannah v. Kelly, ante, 468.

Judgment affirmed.


text: Talk:Mayor and Aldermen of the City of Savannah v. Martin/Opinion of the Court


text: United States v. James H Britton and Barton Bates


text: Talk:United States v. James H Britton and Barton Bates


text:
United States v. James H Britton and Barton Bates/Opinion of the Court

v.

JAMES H. BRITTON AND BARTON BATES.

No. 410.

Argued October 1882, Decided April 1883.

In case No. 410, (UNITED STATES v. JAMES H. BRITTON and

BARTON BATES,) on certificate of division in opinion from the same

court, the indictment contained five counts, all substantially

What we have said in reference to the indictment in case

applies to the indictment in this case. As the indictment is bad,

and no good indictment can be framed upon the facts as they appear

therein, it is unnecessary and we decline to answer the specific


text: Talk:United States v. James H Britton and Barton Bates/Opinion of the Court


text:
Kirkbride v. Lafayette Co

[Syllabus from page 209 intentionally omitted]

[Statement of Case from pages 208-210 intentionally omitted]

J. B. Henderson, for plaintiff in error.

''Alex. Graves'', for defendant in error.

HARLAN, J.

title: Kirkbride v. Lafayette Co


text: Talk:Kirkbride v. Lafayette Co

title: Talk:Kirkbride v. Lafayette Co


text:
Kirkbride v. Lafayette Co/Opinion of the Court

This is an action upon sundry coupons of bonds issued in November, 1868, and March, 1869, by the county court of Lafayette county, Missouri, in the name of that county, and in payment of a subscription by it made, in behalf of Lexington township, in that county, to the capital stock of the St. Louis & St. Joseph Railroad Company, a corporation created under the laws of that state. The bonds recite that they were authorized by a vote of the people, and also that they were issued 'under and pursuant to an order of the county court of Lafayette county, by authority of an act of the general assembly of the state of Missouri, approved March 23, 1868, entitled 'An act to facilitate the construction of railroads in the state of Missouri."

The special finding of facts presents a single question, viz., whether there was legislative authority for this issue of bonds. Its decision depends upon the construction to be given to that part of the before-mentioned act which invests county courts in Missouri with power to subscribe in behalf of townships, in their respective counties, to the capital stock of any railroad company within that state, 'building or proposing to build a railroad into, through, or near such township,' etc.

When these bonds were voted by the township, as well as when they were issued, the St. Louis & St. Joseph Railroad Company did not propose to build the road into or through Lexington township, but it was proposing to build the road which its charter authorized it to construct and operate, to-wit, from Richmond, in Ray county, by the way of Plattsburg, to St. Joseph, in Buchanan county. Richmond is nine miles distant from Lexington township. The contention of the defendant in error is that a road so far away was not, within the provisions of the statute, near to the township. The word 'near' is relative in its signification. What would be near in one locality would not be in another. Each case must be governed by its special circumstances. The main inquiry was whether a railroad, when constructed, would be near enough to contribute to the convenience or advance the business interests of the particular township involved. It cannot be said, as a matter of law, that this road was not near enough to Lexington township to bring about such results. That was a question which the people of that township and the county court of the county were qualified and, within reasonable limits, authorized to settle for themselves. Their action in favor of a subscription was supplemented by payment of interest for three years. Under these circumstances, as between the township and a Bona fide holder for value, as the plaintiff is conceded to be, the courts should acquiesce in the determination by the qualified voters and the local authorities that the road in question was near to Lexington township. If there was error in this determination, it is not so plain as to justify the courts in disturbing the practical construction put upon the statute, at the time the bonds were voted and issued, by those immediately interested in executing its provisions. Von Hoxtrup v. Madison, 1 Wall. 291; Meyer v. Muscatine, Id. 391.

The judgment is reversed, with directions to enter judgment for plaintiff.


text: Talk:Kirkbride v. Lafayette Co/Opinion of the Court


text:
St. Paul Railway Company v. McLean

This action was brought in the court of common pleas for the city and county of New York by Samuel McLean, a citizen of that state, against the St. Paul & Chicago Railway Company, a corporation of the state of Minnesota. After answer, the action was, upon the petition of the defendant, accompanied by a proper bond, removed for trial into the circuit court of the United States for the southern district of New York. The sole ground of removal was that the case presented a controversy between the citizens of the different states. The removal was had before the term at which the cause could have been first tried in the state court. The first day of the next session of the federal court, succeeding the removal, was the seventh day of April, 1879. But the copy of the record from the state court was not filed in the federal court until April 10, 1879, on which day, upon motion of the attorney for the company, an ex parte order was made, stating the filing of such copy, the appearance of defendant, and that the action should proceed in that court as if originally commenced therein. Subsequently, April 14, 1879, the plaintiff, upon notice to defendant, moved the court to remand the cause for the failure of the defendant to file copy of the record and enter his appearance within the time prescribed by statute. This motion was resisted upon the ground, supported by affidavit, that it was by inadvertence that the record was not filed in the federal court in proper time, and that counsel did not discover that fact until April 10, 1879, when it was filed, and notice thereof, on the same day, given to plaintiff's attorney. This motion to remand was granted by an order entered May 24, 1879.

On the twenty-eighth of May, 1879, the company filed in the state court a second petition, accompanied by the required bond, for the removal of the action into the federal court upon the same grounds as those specified in its first petition. A copy of the record was promptly filed in the federal court, but the cause, upon motion of plaintiff, was again remanded by an order entered December 27, 1879.

The present writ of error brings before this court both of the orders of the circuit court remanding the cause to the state court.

C. W. Bangs and F. L. Stetson, for plaintiff in error.

[Argument of Counsel from pages 213-215 intentionally omitted]

D. M. Porter, for defendant in error.

HARLAN, J.

title: St. Paul Railway Company v. McLean


text: Talk:St. Paul Railway Company v. McLean

title: Talk:St. Paul Railway Company v. McLean


text:
St. Paul Railway Company v. McLean/Opinion of the Court

In Removal Cases, 100 U.S. 474, the court had occasion to construe the act of March 3, 1875, determining the jurisdiction of circuit courts of the United States and regulating the removal of causes from state courts. The court there said, speaking by the chief justice:

'While the act of congress requires security that the     transcript shall be filed on the first day, it nowhere      appears that the circuit court is to be deprived of its      jurisdiction, if by accident the party is delayed until a      later day of the term. If the circuit court, for good cause     shown, accepts the transfer after the day and during the term, its jurisdiction will, as a general rule, be      complete and the removal properly effected.'

In reference to this language, it was said in Railroad Co. v. Koontz, 104 U.S. 16: 'This was as far as it was necessary to go in that case, and in entering, as we did then, on the construction of the act of 1875, it was deemed advisable to confine our decision to the facts we then had before us.' In the latter case, it was further determined that 'if the petitioning party is kept by his adversary, and against his will, in the state court, and forced to a trial there on the merits, he may, after having obtained in the regular course of procedure a reversal of the judgment and an order for the allowance of the removal, enter the cause in the circuit court, notwithstanding the term of that court has gone by during which, under other circumstances, the record should have been entered.'

In ''Nat. Steam-ship Co. v. Tugman'', at the present term, [1 SUP. CT. REP. 58,] it was ruled that upon the filing of the petition for removal, accompanied by a proper bond,-the suit being removable under the statute,-the jurisdiction of the federal court immediately attached, in advance of the filing of a copy of the record; and whether that court should retain jurisdiction, or dismiss or remand the action because of the failure to file such copy, was for it, not for the state court, to determine.

These cases abundantly sustain the proposition that the failure of the defendant to file the copy on or before the first day of the succeeding session of the federal court, does not deprive that court of jurisdiction to proceed in the action, and that whether it should do so or not upon the filing of the copy, is for it to determine. In this case it was undoubtedly within the sound legal discretion of the circuit court to proceed as if the copy had been filed within the time prescribed by statute. But clearly it had a like discretion to determine whether the reasons given for the failure to comply in that respect with the law were sufficient. We do not say that in the exercise of that discretion the court may not commit an error which would bring its action under the reviewing power of this court. But since the question whether the cause should be remanded for failure to file the necessary copy in due time is one of law and fact, its determination to remand, for such a reason, should not be disturbed unless it clearly appears that the discretion with which the court is invested has been improperly exercised.

We perceive no ground whatever to question the correctness of the order of May 28, 1879, or to conclude that there was any abuse by the court of its discretion. The only reason given for the failure to file the transcript within proper time was inadvertence upon the part of counsel; in other words, the filing was overlooked. It is scarcely necessary to say that this did not constitute a sufficient legal reason for not complying with the statute. At any rate, the refusal of the court to accept it as satisfactory cannot be deemed erroneous. But it is contended that the order of December 27, 1879, remanding the cause, was erroneous, because the copy, upon the second petition for removal, was filed in the federal court within due time, after that petition, with the accompanying bond, was presented in the state court. Assuming that the second petition for removal was filed before or at the term at which the cause could have been tried in the state court, we are of opinion that a party is not entitled, under existing laws, to file a second petition for the removal upon the same grounds, where, upon the first removal by the same party, the federal court declined to proceed and remanded the suit, because of his failure to file the required copy within the time fixed by the statute. When the circuit court first remanded the cause,-the order to that effect not being superseded,-the state court was reinvested with jurisdiction, which could not be defeated by another removal upon the same grounds, and by the same party. A different construction of the statute, it can be readily seen, might work injurious delays in the preparation and trial of causes. Judgment affirmed.


text: Talk:St. Paul Railway Company v. McLean/Opinion of the Court


text:
Manhattan Medicine Company v. Wood

This is a suit in equity to restrain the defendants from using an alleged trade-mark of the complainant, upon certain medicines prepared by them, and to compel an accounting for the profits made from its use in their sale of the medicines; also, the payment of damages for their infringement of the complainant's rights. The complainant, a corporation formed under the laws of New York, manufactures in that state medicines designated as 'Atwood's Vegetable Physical Jaundice Bitters;' and claims as its trade-mark this designation, with the accompanying labels. Whatever right it possesses it derives by various mesne assignments from one Moses Atwood, of Georgetown, Massachusetts. The bill alleges that the complainant is, and for a long time previous to the grievances complained of was, the manufacturer and vendor of the medicine mentioned; that it is put up and sold in glass bottles with 12 panel-shaped sides, on five of which, in raised words and letters, 'ATWOOD'S GENUINE PHYSICAL JAUNDICE BITTErs, georgetOWn, mass.,' are bLown in the glass, each bottle containing about a pint, with a light-yellow printed label pasted on the outside, designating the many virtues of the medicine, and the manner in which it is to be taken; and stating that it is manufactured by Moses Atwood, Georgetown, Massachusetts, and sold by his agents throughout the United States. The bill also alleges that the bottles thus filled and labeled are put up in half-dozen packages with the same label on each package; that the medicine was first invented and put up for sale about 25 years ago by one Dr. Moses Atwood, formerly of Georgetown, Massachusetts, by whom, and his assigns and successors, it has been ever since sold 'by the name, and in the manner, and with the trade-marks, label, and description substantially the same as aforesaid;' that the complainant is the exclusive owner of the formula and recipe for making the medicine, and of the right of using the said name or designation, together with the trade-marks, labels, and good-will of the business of making and selling the same; that large sales of the medicine under that name and designation are made, amounting annually to 12,000 bottles; that the defendants are manufacturing and selling at Portland, Maine, and at other places within the United States unknown to the complainant, an imitation of the medicine, with the same designation and labels, and put up in similar bottles, with the same, or nearly the same, words raised on their sides, in fraud of the rights of the complainant and to its serious injury; that this imitation article is calculated and was intended to deceive purchasers, and to mislead them to use it instead of the genuine article manufactured by the complainant, and has had, and does have, that effect. The bill, therefore, prays for an injunction to restrain the defendants from affixing or applying the words 'Atwood's Vegetable Physical Jaundice Bitters,' or either of them, or any imitation thereof, to any medicine sold by them, or to place them on any bottles in which it is put up, and also from using any labels in imitation of those of the complainant. It also prays for an accounting of profits and for damages.

Among the defenses interposed are these: That Moses Atwood never claimed any trade-mark of the words used in connection with the medicine manufactured and sold by him; and assuming that he had claimed the words used as a trade-mark, and that the right to use them had been transferred to the assignors of the complainant, it was forfeited by the misrepresentation as to the manufacture of the medicine on the labels accompanying it,-a misrepresentation continued by the complainant.

Philo Chase and Thorndike Saunders, for appellant.

''Wm. Henry Clifford'', for appellee.

[Argument of Counsel from pages 220-222 intentionally omitted]

FIELD, J.

title: Manhattan Medicine Company v. Wood


text: Talk:Manhattan Medicine Company v. Wood

title: Talk:Manhattan Medicine Company v. Wood


text:
Manhattan Medicine Company v. Wood/Opinion of the Court

In the view we take of the case it will not be necessary to consider the first defense mentioned, nor the second, so far as to determine whether the right to use the words mentioned as a trade-mark was forfeited absolutely by the assignor's misrepresentations as to the manufacture of the article. It is sufficient for the disposition of the case that the misrepresentation has been continued by the complainant. A court of equity will extend no aid to sustain a claim to a trade-mark of an article which is put forth with a misrepresentation to the public as to the manufacturer of the article, and as to the place where it is manufactured, both of which particulars were originally circumstances to guide the purchaser of the medicine.

It is admitted that whatever value the medicine possesses was given to it by its original manufacturer, Moses Atwood. He lived in Georgetown, Massachusetts. He manufactured the medicine there. He sold it with the designation that it was his preparation, 'Atwood's Vegetable Physical Jaundice Bitters,' and was manufactured there by him. As the medicine was tried and proved to be useful, it was sought for under that designation, and that purchasers might not be misled, it was always accompanied with a label, showing by whom and at what place it was prepared. These statements were deemed important in promoting the use of the article and its sale, or they would not have been continued by the assignees of the original inventor. And yet they could not be used with any honest purpose when both statements had ceased to be true. It is not honest to state that a medicine is manufactured by Moses Atwood, of Georgetown, Massachusetts, when it is manufactured by the Manhattan Medicine Company in the city of New York.

Any one has as unquestionable right to affix to articles manufactured by him a mark or device not previously appropriated, to distinguish them from articles of the same general character manufactured or sold by others. He may thus notify the public of the origin of the article, and secure to himself the benefits of any particular excellence it may possess from the manner or materials of its manufacture. His trade-mark is both a sign of the quality of the article and an assurance to the public that it is the genuine product of his manufacture. It thus often becomes of great value to him, and in its exclusive use the court will protect him against attempts of others to pass off their products upon the public as his. This protection is afforded not only as a matter of justice to him, but to prevent imposition upon the public. Manuf'g Co. v. Trainer, 101 U.S. 54.

The object of the trade-mark being to indicate, by its meaning or association, the origin or ownership of the article, it would seem that when a right to its use is transferred to others, either by act of the original manufacturer or by operation of law, the fact of transfer should be stated in connection with its use; otherwise a deception would be practiced upon the public and the very fraud accomplished, to prevent which courts of equity interfere to protect the exclusive right of the original manufacturer. If one affix to goods of his own manufacture signs or marks which indicate that they are the manufacture of others, he is deceiving the public and attempting to pass upon them goods as possessing a quality and merit which another's skill has given to similar articles, and which his own manufacture does not possess in the estimation of purchasers. To put forth a statement, therefore, in the form of a circular or label attached to an article, that it is manufactured in a particular place, by a person whose manufacture there had acquired a great reputation, when, in fact, it is manufactured by a different person at a different place, is a fraud upon the public which no court of equity will countenance.

This doctrine is illustrated and asserted in the case of Leather Cloth Co. (limited) v. American Leather Cloth Co. (limited,) which was elaborately considered by Lord Chancellor WESTBURY, and afterwards in the house of lords on appeal from his decree. 4 De G., J. & S. 137, and 11 Clark, H. L. Cas. 523.

In that case an injunction was asked to restrain the defendant from using a trade-mark to designate leather cloth manufactured by it, which trade-mark the complainant claimed to own. The article known as leather cloth was an American invention, and was originally manufactured by J. R. & C. P. Crockett, at Newark, New Jersey. Agents of theirs sold the article in England as 'Crockett's Leather Cloth.' Afterwards a company was formed entitled 'The Crockett International Leather Cloth Company,' and the business previously carried on by the Crocketts was transferred to this company, which carried on business at Newark, in America, as a chartered company, and at West Ham, in England, as a partnership. In 1856 one Dodge took out a patent in England for tanning leather cloth and transferred it to this company. In 1857 the complainant company was incorporated, and the international company sold and assigned to it the business carried on at West Ham, together with the letters patent and full authority to use the trade-mark which had been previously used by it in England. A small part of the leather cloth manufactured by the complainant company was tanned or patented. It, however, used a label which represented that the articles stamped with it were the goods of the Crockett International Leather Cloth Company; that they were manufactured by J. R. & C. P. Crockett; that they were tanned leather cloth; that they were patented by a patent obtained in 1856, and were made either in the United States or at West Ham, in England. Each of these statements or representations was untrue so far as they applied to the goods made and sold by the complainant.

The defendant having used on goods manufactured by it a mark having some resemblance to that used by the complainant, the latter brought suit to enjoin the use. Vice-Chancellor WOOD granted the injunction, but on appeal to the lord chancellor the decree was reversed and the bill dismissed. In giving his decision the lord chancellor said that the exclusive right to use a trade-mark with respect to a vendible commodity is rightly called property; that the jurisdiction of the court in the protection of trade-marks rests upon property; and that the court interferes by injunction because that is the only mode by which property of that description can be effectually protected. But he added:

'When the owner of the trade-mark applies for an injunction     to restrain the defendant from injuring his property by      making false representations to the public, it is essential that the      plaintiff should not in his trade-mark, or in the business      connected with it, be himself guilty of any false or      misleading representation; for if the plaintiff makes any      material false statement in connection with the property he      seeks to protect, he loses, and very justly, his right to      claim the assistance of a court of equity.'

'Where a symbol or label, claimed as a trade-mark, is so     constructed or worded as to make or contain a distinct      assertion which is false, I think no property can be claimed      in it, or, in other words, the right to the exclusive use of      it cannot be maintained.'

When the case reached the house of lords the correctness of this doctrine was recognized by Lord CRANWORTH, who said that of the justice of the principle no one could doubt; that it is founded in honesty and good sense, and rests on authority as well as on principle, although the decision of the house was placed on another ground.

The soundness of the doctrine declared by the lord chancellor has been recognized in numerous cases. Indeed, it is but an application of the common maxim that he who seeks equity must present himself in court with clean hands. If his case discloses fraud or deception or misrepresentation on his part, relief there will be denied.

Long before the case cited was before the courts, this doctrine was applied when protection was sought in the use of trade-marks. In Pidding v. How, 8 Sim. 477, which was before Vice-Chancellor SHADWELL in 1837, it appeared that the complainant was engaged in selling a mixed tea, composed of different kinds of black tea, under the name of 'Howqua's Mixture,' in packages having on three of their sides a printed label with those words. The defendant having sold tea under the same name, and in packages with similar labels, the complainant applied for an injunction to restrain him from so doing. An ex parte injunction, granted in the first instance, was dissolved, it appearing that the complainant had made false statements to the public as to the teas of which his mixture was composed, and as to the mode in which they were procured. 'It is a clear rule,' said the vice-chancellor, 'laid down by courts of equity, not to extend their protection to persons whose case is not founded in truth.'

In Perry v. Truefitt, 6 Beav. 66, which was before Lord LANGDALE, master of the rolls, in 1842, a similar ruling was had. There it appeared that one Leathart had invented a mixture for the hair, the secret and recipe for mixing which he had conveyed to the plaintiff, a hair-dresser and perfumer, who gave the composition the name of 'Medicated Mexican Balm,' and sold it as 'Perry's Medicated Mexican Balm.' The defendant, one Truefitt, a rival hair-dresser and perfumer, commenced selling a composition similar to that of plaintiff, in bottles with labels closely resembling those used by him. He designated his composition and sold it as 'Truefitt's Medicated Mexican Balm.' The plaintiff thereupon filed his bill, alleging that the name or designation of 'Medicated Mexican Balm' had become of great value to him as his trade-mark, and seeking to restrain the defendant from its use. It appeared, however, that the plaintiff, in his advertisements to the public, had falsely set forth that the composition was 'a highly-concentrated extract from vegetable balsamic productions' of Mexico, and was prepared from 'an original recipe of the learned J. F. Von Blumenbach, and was recently presented to the proprietor by a very near relation of that illustrious physiologist;' and the court, therefore, refused the injunction, the master of the rolls holding that, in the face of such a misrepresentation, the court would not interpose in the first instance, citing with approval the decision in the case of Pidding v. Howe.

In a case in the superior court in the city of New York (Fetridge v. Wells, 4 Abb. Pr. 144) this subject was very elaborately and ably treated by Chief Justice DUER. The plaintiff there had purchased a recipe for making a certain cosmetic, which he sold under the name of 'The Balm of a Thousand Flowers.' The defendants commenced the manufacture and sale of a similar article, which they called 'The Balm of Ten Thousand Flowers.' The complainant, claiming the name used by him as a trade-mark, brought suit to enjoin the defendants in the alleged infringement upon his rights. A temporary injunction was granted, but afterwards, upon the coming in of the proofs, it was dissolved. It appeared that the main ingredients of the compound were oil, ashes, and alcohol, and not an extract or distillation from flowers. Instead of being a balm the compound was a soap. The court said it was evidence that the name was given to it and used to deceive the public, to attract and impose upon purchasers; that no representation could be more material than that of the ingredients of a compound recommended and sold as a medicine; that there was none so likely to induce confidence in its use, and none, when false, that would more probably be attended with injurious consequences. And, it is also said: 'Those who come into a court of equity, seeking equity, must come with pure hands and a pure conscience. If they claim relief against the frauds of others, they must themselves be free from the imputation. If the sales made by the plaintiff and his firm are effected, or sought to be, by misrepresentation and falsehood, they cannot be listened to when they complain that, by the fraudulent rivalry of others, their own fraudulent profits are diminished. An exclusive privilege for deceiving the public is assuredly not one that a court of equity can be required to aid or sanction. To do so would be to forfeit its name and character.'

See, also, Seabury v. Grosvenor, 14 Blatchf. 262; Hobbs v. Francais, 19 How. Pr. 567; Connell v. Reed, 128 Mass. 477; Palmer v. Harris, 60 Pa. St. 156.

The doctrine enunciated in all these cases is founded in honesty and good sense; it rebukes fraud and encourages fair dealing with the public. In conformity with it, this case has no standing before a court of equity. The decree of the court below dismissing the bill must therefore be affirmed; and it is so ordered.


text: Talk:Manhattan Medicine Company v. Wood/Opinion of the Court


text:
Memphis v. United States (108 U.S. 228)

[Syllabus from page 228 intentionally omitted]

[Statement of Case from pages 228-229 intentionally omitted]

W. Y. C. Humes, for plaintiff in error.

[Argument of Counsel from pages 229-230 intentionally omitted]

''Sol. Gen. Phillips'', for defendant in error.

WAITE, C. J.

title: Memphis v. United States (108 U.S. 228)


text: Talk:Memphis v. United States (108 U.S. 228)


text:
Memphis v. United States (108 U.S. 228)/Opinion of the Court

over taxes upon dividends and interest paid by the Memphis & Charleston Railroad Company between the first day of July, 1862, and the first day of December, 1865. The items which go to make up the amount of the judgment brought here for review are thus stated in the verdict of the jury.

'(1) On dividend declared March 17, 1863, a tax of $1,625.45,     being 3 per centum on $57,515.60, the value in legal      currency, when paid, of $143,789, the whole amount of said      dividend then paid in confederate money. (2) On interest     coupons of said defendant falling due November 1, 1862, May      1, 1863, November 1, 1863, and May 1, 1864, a tax of $819.17,      being 3 per cent. on $27,326.55, the value, when paid, in     legal currency of $88,935, the portion of such coupons paid      in confederate money; and the further tax of $2,274.45 on the      remaining maining portion of said coupons falling due as      aforesaid, being 3 per cent. on $75,815.83, such remaining     portion of said coupons. (3) On interest coupons of said     defendant falling due November 1, 1864, May 1, 1865, and      November 1, 1865, a tax of $6,793.50, the same being 5 per      centum on $135,870, the amount of said last-named coupons.' The questions presented by the bill of exceptions may be separated into three classes, as follows:

(1) Those which relate to dividends and interest paid in     confederate money and during the late civil war; (2) those      which relate to the payments of interest after the close of      the war; and, (3) those which relate to an alleged compromise      between the United States and the railroad company under date      of September 24, 1870.

These will be considered in their order.

1. As to payments in confederate money. Upon this branch of the case the facts are these:

At the beginning of the war the Memphis & Charleston Railroad     Company was the owner of an equipped line of railroad      extending from Memphis, in the state of Tennessee, through      the states of Tennessee, Mississippi, and Alabama, to      Stevenson, in the last-named state. It was divided into two     divisions,-one known as the Eastern Division, extending from      Stevenson westward to Bear Creek, on the line between      Mississippi and Alabama, having its principal office at      Huntsville, Alabama; and the other, known as the Western      Division, extending from Bear Creek to Memphis, and having      its principal office at Memphis. On the eleventh of April,     1862, the military forces of the United States took      possession of the Eastern Division of the road, with all its      rolling stock and equipment, and kept it until the close of      the war. The Western Division was run by the officers of the     company, under the control of the military superintendent of      the confederate authorities, until the sixth of June, 1862,      when it was taken possession of by the United States. Three     days before the capture of Memphis by the military forces of      the United States, the officers and rolling stock of the      Western Division were moved south within the confederate      lines, by command of the confederate military authorities,      and were kept there until the end of the war. During this     period the rolling stock was hired by the officers of the      company to other railroad companies, and in this way a large      amount in confederate treasury notes came into the hands of      the officers of the company within the confederate lines. On the seventeenth of March, 1863, a resolution was     passed within the confederate lines declaring a dividend of 4      per cent. on the capital stock, payable in confederate     treasury notes on the fifteenth of April. Under this     resolution payments were made to the amount stated in the      verdict. The confederate money used to pay the coupons, as     stated in the verdict, was all obtained from the hire of the      rolling stock within the confederate lines.

Upon this state of facts the court instructed the jury, in substance, that the United States were entitled to such a verdict as was rendered, and the question presented here is, in effect, whether that instruction was right.

At the times when the dividend and interest now in question were paid, the entire railroad of the company and its two principal offices were within the lines of the military forces of the United States. The act of 1862, c. 119, which provided for the tax, was not passed until after the United States had established their military possession of the territory traversed by the railroad, and within which the principal offices were located. The corporation was, therefore, subject to the actual governmental control of the United States, and the laws of the United States were both operative upon and enforceable against it. No one will deny that the internal-revenue laws were intended to reach all persons and corporations within the dominion of the United States against whom they could for the time being be enforced by judicial process or otherwise. They were broad enough in their language to embrace all, and could be limited only in their operation by the power of the United States to enforce them. Clearly, then, if this dividend had been declared, and the dividend and interest paid at either of the principal offices of the company, or within the military lines of the United States, the taxes sued for would have been recoverable, notwithstanding the payments were made out of earnings derived from the use of property which had been taken inside the lines of the enemy. Thus the question now to be determined seems to be whether the company is exempt from the tax, because the resolution declaring the dividend was adopted within the confederate lines, and the payments, on account of which the taxes are demanded, were actually made there.

In ''Ry. Co. v. Collector, 100 U.S. 595, followed at the present term in Eric Ry. Co. v. U.S.'', it was held that the internal-revenue tax on interest and dividends was an excise tax on the business of corporations, to be paid by the corporations out of their earnings, income, and profits. The payments made in this case were for dividends to stockholders and interest to bondholders out of the earnings, income, and profits of the corporation in its business. By means of the dividend the surplus earnings were distributed to the stockholders, and the debts of the company were discharged to the extent of the interest paid. In this way the earnings on the inside of the confederate lines were made available to the corporation, which was subject to the actual control of the United States, and bound for the payment of all internal-revenue taxes chargeable by law against it. To our minds it is a matter of no importance that the income came from property which was within confederate territory. The property, although within the confederate lines, belonged to the company, and the income derived from its use was actually paid out by the company in dividends to stockholders, and to discharge the corporate debts for interest. We think it would hardly be claimed that if a private individual, living in one of the loyal states during the war, derived an income, which he actually reduced to possession, or used in the payment of debts, from property in confederate territory, he would be exempt from the income tax imposed on him by the internal-revenue laws, because of the source from which his income was derived. But, if he would not be, it is difficult to see how this corporation is. In both cases the tax is in legal effect on the income of persons subject to the actual dominion and control of the United States. The tax is payable by the person because of his income, according to its amount, and without any reference to the way in which it was obtained.

Under the instructions which were given the jury, the verdict was only for the taxes on the value of the confederate treasury notes in legal currency at the times the dividend and interest were paid. In this way the company has only been charged with an income estimated in lawful money. Without, therefore, considering in detail the particular instructions given to the jury or refused as stated in the bill of exceptions, it is sufficient to say that, upon the undisputed facts, it would have been proper for the court to have directed the verdict for the United States which was given in this branch of the case.

2. As to the payments of interest not made in confederate notes notes. All these payments were made after the close of the war, and there is no pretense that they were made out of earnings or income. The statement in the bill of exceptions is that they were paid 'either in cash or in second-mortgage bonds of the defendant company at a discount, at the option of the holder.' As to this the court instructed the jury as follows:

'The defendant's counsel insists that a portion of the     interest on which a tax is claimed by the plaintiffs was      funded in second-mortgage bonds of the company, and that such      funding did not amount to a payment of such interest. If you     find that any of the interest on the bonds of the defendant      on which a tax is claimed in this suit was so funded, and      that it was optional with the holders of such interest      coupons to have the same paid in cash or funded in      second-mortgage bonds at a discount, I charge you that if      such holders of interest coupons took second-mortgage bonds      in preference to the cash, that it did amount to a payment,      and the plaintiffs would be entitled to recover the tax      claimed on the amount so funded.'

'It is in proof that some of the coupons were not paid in     cash, but were funded in second-mortgage bonds. It appears     that the creditor had his option to take payment in cash, or      take these new bonds at a certain agreed discount. It was,     therefore, substantially a payment in cash, and a      reinvestment of the amount in second-mortgage bonds. This can     constitute no defense to the suit.'

In this, we think, there was error. Although the tax is imposed on interest paid, the evident intention of congress was to tax only such payments as were either in fact or in legal effect made from the income. As was said in Railroad Co. v. Collector, supra, 'the tax * *  * is essentially an excise on the business of the class of corporations mentioned in the statute. The section is a part of a system of taxing incomes, earnings, and profits adopted during the late war, and abandoned as soon after the war was ended as it could safely be done.' Under ordinary circumstances, it will be conclusively presumed that payments of interest were made from earnings, but when it appears that at the end of a civil war, during which interest had fallen in arrear, and earnings had been substantailly suspended, the company, in reorganizing its affairs for future business, either funded its past-due coupons in a new issue of bonds, or paid them from the proceeds of the sales of new bonds, no such presumption can arise, and if the facts are established they will constitute a complete defense to a suit for the recovery of a tax charged on such payments of interest. Any other construction would be in violation of the whole spirit and purpose of the statute. The bondholder would undoubtedly be taxable for his income derived in that way, but the payment would not be one upon which the company could be taxed.

3. As to the alleged compromise. Without recapitulating the facts connected with this part of the case, it is sufficient to say that in all the correspondence which preceded the payment of the money on the twenty-fourth of September, 1870, and in the receipt given for the money when paid, reference was had only to the payments of interest maturing from May, 1866, to July, 1869. It was not erroneous, therefore, for the court to exclude all testimony showing a different understanding on the part of the officers of the company, and to instruct the jury that the legal effect of the papers in evidence was to confine the compromise to the claims of the United States for taxes and penalties growing out of the interest maturing between the dates specified in the receipt of the collector. It nowhere appears that the officers of the United States had any knowledge of the payments, either of interest or dividends, which had been made at earlier dates.

There are other assignments of error, but those already considered dispose of the entire case in a way to render the others immaterial on another trial.

The judgment is reversed, and the cause remanded for such further proceedings, not inconsistent with this opinion, as justice may require.


text: Talk:Memphis v. United States (108 U.S. 228)/Opinion of the Court


text:
Norton

C. Case and

This is an application for a writ of mandamus to the circuit court of the United States for the Eastern District of Louisiana, requiring that court to take jurisdiction of, and hear and determine, an appeal by the petitioner, Emery E. Norton, from a decree of the district court of that district.

The case as presented shows that Norton, being assignee in bankruptcy of Govy Hood, filed in the district court a bill in equity against Hood, the bankrupt, John Asberry, sheriff of the parish of East Carroll, and Henry Frellsen, setting forth that Hood, being insolvent, in April, 1866, confessed a judgment in favor of Frellsen for $39,319.49; that in July, 1868, execution was issued on this judgment and levied on three plantations belonging to Hood, known, respectively, as 'Black Bayou,' 'Home Place,' and 'Hood & Wilson Place;' that on the fifth of September, 1868, there was a pretended sale of these plantations to Frellsen, under an execution issued on his judgment, for the sum of $24,000; that on the twenty-third of November, 1868, another execution was issued on the judgment and levied on other property, which was also nominally sold under the execution to Frellsen; that in December, 1869, the Black Bayou plantation was said to William Alling for $32,000, one-half of which was paid in cash, and for the other half Frellsen took from Alling a half interest in the land; that in January, 1869, Hood was adjudged a bankrupt on his own petition, and in January, 1871, received his discharge; that in May, 1871, Frellsen reconveyed to Hood all the property he had bought under the executions, except the Black Bayou plantation, for $30,152, payable in seven installments, and evidenced by mortgage notes; that all these transactions, except the sale of the one-half of the Black Bayou plantation to Alling, were a fraud upon the bankrupt law, and devised for the purpose of giving Frellsen an unlawful preference, and to keep the property from the other creditors; that from the beginning it was the understanding between Hood and Frellsen that Frellsen should buy the property under his judgment, hold it for Hood during the bankruptcy proceedings, and then reconvey it to Hood, subject only to any balance that might remain due upon the judgment, after deducting the rents and profits and the proceeds of any sales in the mean time received by Frellsen; and that all the facts were unknown to Norton, the assignee, until certain disclosures were made on the trial of a suit between Frellsen and Hood, in the Thirteenth district court of the parish of East Carroll, growing out of proceedings by Frellsen to foreclose his mortgage notes received on the reconveyance of the property. It further appears that in the proceedings for foreclosure, Asberry, the sheriff, had been empowered to sell the property reconveyed to Hood to pay what remained due on the mortgage debt.

The prayer of the bill of Norton, as stated in the petition for mandamus, was that Norton 'be decreed to be the owner, in his capacity as assignee of said bankrupt, of all the property described in his said bill, from the twenty-ninth day of December, 1868, (when said Hood filed his petition to be decreed a bankrupt,) and entitled to recover the rents and revenues thereof from the said Hood and Frellsen; that said Hood be ordered to transfer to complainant the property reconveyed to him by said Frellsen as aforesaid; that the mortgage put upon the same by said Hood in favor of said Frellsen be canceled, annulled, and erased, and the sale thereof, under said executory process foreclosing said mortgage, or any other process against said Hood, be enjoined and prohibited; that said Frellsen be ordered and decreed to convey to complainant one-half of the Black Bayou plantation, which he had retained by some arrangement with William Alling, the purchaser, and to pay the complainant the sum of $16,000, received from said Alling for the sale of the other half of said plantation, together with the interest thereon from the date of said sale, and for general relief, process,' etc.

Answers were filed and testimony taken. After hearing, the district court entered a decree declaring 'that the judgment in favor of Henry Frellsen against Govy Hood, in the parish of Carroll, in the year 1866, and the executions thereunder in 1868, with the sales and conveyances by the sheriff, as shown in the record, have been established as valid and operative, and that no fraud, collusion, nor malpractice is established against him; that these proceedings entitle him to property so conveyed to him, discharged of any claim of the plaintiff in this suit;' and further declaring 'that whatever surplus may arise from the sale of the property under the process in favor of Henry Frellsen, * * * which is described in the plaintiff's bill and which is now held by the sheriff, and has been levied on the plantations known as the Home Place and Hood & Wilson Place, the said surplus shall not be paid to said Hood, but shall be paid to the complainant, * * * after deducting such costs as this court may decree shall be paid out of the same.' The injunction which had been allowed restraining the sheriff from the execution of the process was dissolved, and he was permitted to proceed, but was to dispose of the surplus that might remain in his hands after the payment of the debt specified in the process as due to Frellsen, and the costs of suit, as directed by the district court of the United States. Leave was granted the complainant to apply for further orders regulating the sale in respect to time, and appraisement and sale on credit, according to the laws of Louisiana. The sheriff was directed to make a return of his sale to the district court of the United States, and the question of costs was reserved until the coming in of the return.

From this decree an appeal was taken to the circuit court, where, on the twenty-seventh of May, 1882, the appeal was dismissed on the ground that the decree appealed from was not a final decree within the meaning of that term as used in the statute regulating appeals from the district to the circuit court. The writ now asked for is to require the circuit court to set aside its order of dismissal and take jurisdiction.

J. D. Rouse, for petitioner.

[Argument of Counsel from pages 240-241 intentionally omitted]

John A. Campbell, for respondent.

[Argument of Counsel from pages 241-242 intentionally omitted]

WAITE, C. J.

title: Norton


text: Talk:Norton

title: Talk:Norton


text:
Norton/Opinion of the Court

casion at the present term, in Bostwick v. Brinkerhoff, 1 SUP. CT. REP. 15; Grant v. ''Phoenix Mut. Life Ins. Co.'' Id. 414; and St. Louis, I. M. & S. R. Co. v. Southern Exp. Co., ante, 6, to state the rule applicable to the determination of the question here involved, and we there say: 'A decree is final for the purpose of an appeal * *  * when it terminates the litigation between the parties, and leaves nothing to be done but to enforce by execution what has been determined.' Under this rule, we think, this appeal was well taken. The decree settled every question in dispute between the parties, and left nothing to be done but to complete the sale under the proceedings in the state court for foreclosure, and hand over to Norton any surplus of the proceeds there might be after satisfying the debt due Frellsen, as stated in the process under which the sale was made. The case stands precisely as it would if Frellsen were proceeding in the district court for the foreclosure of his mortgage, and a decree had been entered establishing his rights, ascertaining the amount due to him, and ordering a sale of the property and the payment to Norton of the surplus after discharging the mortgage debt. Here the bill was filed by Norton to set aside the proceedings for foreclosure and obtain a conveyance of the mortgaged property. The court refused to set aside the proceedings or to order a conveyance, but did order the sale to go on, and that the proceeds, after the mortgage was satisfied, be paid to Norton. It adjudged the case on the merits in favor of Frellsen as against Norton, and in favor of Norton as against Hood. The bill was not dismissed in form because it asked relief both as against Frellsen and Hood, and relief was granted as against Hood. It was in legal effect dismissed as to Frellsen when the decree was entered in his favor on all the questions in which he was interested.

The writ of mandamus asked for is granted, but without costs.

title: Norton/Opinion of the Court


text: Talk:Norton/Opinion of the Court

title: Talk:Norton/Opinion of the Court


text:
District of Columbia v. Washington Market Company

The object of this action was to recover the sum of $53,847.23, with interest, alleged to be due from the Washington Market Company, by virtue of the terms of its charter, to the city of Washington, of which the plaintiff in error is the legal successor. The act of congress to incorporate the Washington Market Company (16 St. at Large, 124) took effect May 20, 1870. By the second section it was enacted that the company—

'Is hereby authorized and empowered to locate and construct a     suitable building or buildings upon the following-described      grounds, namely, commencing at the intersection of the center      line of B street north with the west line of Seventh street      west; running thence north along the west side of Seventh      street to the southerly side of Pennsylvania avenue; thence      westerly along the southerly side of Pennsylvania avenue to      the southerly side of Louisiana avenue; thence westerly along      the southerly side of Louisiana avenue to the east side of      Ninth street west; thence along the east line of Ninth street      to the center line of B street; thence along the center line      of B street to the place of beginning,-and to use and occupy      the same by the erection of a suitable building or buildings      for a public market-house, including the necessary stalls and      sheds, and also for stores, public halls, and such other      purposes as may be determined by said company, not      inconsistent with its use as a public market. The buildings     herein designated to be used for the purposes of a market      shall be used for no other purpose inconsistent therewith,      but the same shall remain a public market as hereinbefore      described.'

And provision was made, when the building was ready for occupancy, for letting out parts of the same as stalls and stands for market purposes, the rents for which were to belong to the market company. The buildings were to be constructed according to plans set forth in a schedule made part of the act. The company was required to purchase and pay for all buildings and fixtures then on the premises belonging to individuals, at prices to be fixed, if not agreed on, and to completely finish its structures and improvements within two years and sixty days after obtaining possession of the premises described. The twelfth, thirteenth, and fourteenth sections of the act are as follows:

'Sec. 12. And be it further enacted, that the privileges     conferred by this act shall be enjoyed by said company for      the term of 99 years, unless sooner terminated for a      non-compliance or abuse of the conditons herein imposed upon      said company, which may be done by suit in the name of the      United States, to recover possession of said property. At the     end of said period of 99 years, the said lands, with all the      erections and improvements thereon shall revert to the United      States, unless congress shall by law extend the period of      occupation thereof by said company: provided, that if the      corporation of the city of Washington shall, after a period      of 30 years from the approval of this act, by a vote of the      councils thereof, express a desire to possess itself of the      said market buildings and grounds, congress may authorize the      corporate authorities to take possession of the same upon      payment to the said market-house company of a sum of money      equal to a fair and just valuation of the buildings and      improvements then standing on said grounds, and the mode and      manner of ascertaining such valuation shall be determined by      congress.

'Sec. 13. And be it further enacted, that the real estate     herein described is hereby vested in the said corporation for      and during the said term of 99 years, or until a forfeiture      of its rights and privileges by a breach of the conditions      herein imposed on said company, and said estate shall be      taken and considered as a determinable fee. The real and     personal property of said corporation shall be subject to      assessment and taxation for all district and municipal      purposes, in the same manner and to the same extent that like property in the city of Washington owned and      possessed by individuals is liable to assessment and      taxation.

'Sec. 14. And be it further enacted, that in consideration of     the privileges granted by this act to the Washington Market      Company, the said company shall pay yearly, every year during      the said term of 99 years, unto the city of Washington, the      sum of $25,000; which sum shall be received by said city, and      set apart and expended by and under the direction of the city      government of said city, for the support and relief of the      poor of said city and of the District of Columbia; and said      city may enforce the payment of said sum from time to time as      the same shall become due, either by an action at law or by      the same proceedings now authorized by law for the collection      of taxes by said city.'

The real estate granted by this act was public property of the United States. It had been, and at the time of the passage of the act was, used as a market, and the buildings thereon, erected by individuals for such use, and which the market company were required to purchase, were subsequently destroyed by fire. Thereupon congress passed the following joint resolution, which took effect December 20, 1870, (16 St. at Large, 589:)

'Be it resolved by the senate and house of representatives of     the United States of America in congress assembled, that the      chairman of the committees on public buildings and grounds of      the senate and house of representatives, with the mayor of      Washington, be and hereby are constituted commissioners to      require the Washington Market Company, organized under the      fifteenth section of the act of May 20, 1870, promptly to      furnish temporary market accommodations for the marketmen who      were driven out by the late fire; and also to erect, at the      earliest possible day, the first stories or market portions      of the permanent market buildings provided for in said act;      and that said commissioners be authorized to make such      alterations in the buildings and such arrangements with said      company as shall be best calculated to secure the speedy      erection of buildings creditable to the city, and      sufficiently commodious for all the wants of the public:      provided, however, that the passage of this resolution shall      not be construed to supersede, delay, or in any way affect the pending investigations into the affairs of said company,      nor to relieve the company or any person from consequences of      any acts under investigation.'

On February 21, 1871, the municipal government of the city of Washington was superseded by the act of congress of that date, providing a government for the District of Columbia as its successor, and the legislative assembly of the District of Columbia, on August 23, 1871, passed the following resolution:

'Be it resolved by the legislative assembly of the District     of Columbia, that the governor be authorized and required to      act as one of the commissioners of the Washington Market      Company, under the resolution of congress approved December      20, 1870; and that he be requested to procure such      alterations in the plan of the buildings to be erected by      said company as shall transfer the proposed hall from the      Ninth-street wing to the main building on Pennsylvania      avenue, and also to secure a reduction from $25,000 to      $20,000 of the annual rental required to be paid by said      company, and which is now assessed by the company upon the      stall-holders.'

The act of congress making appropriations to supply deficiencies, etc., approved March 3, 1873, (17 St. at Large, 540,) contains the following paragraph:

'For the purchase by the United States of the interest of the     District of Columbia in the present city-hall building in      Washington, now used solely for government purposes, such sum      as may be determined by three impartial appraisers, to be      selected by the secretary of the interior, not exceeding      $75,000, the same to be applied by said district only for the      erection of a suitable building for the district offices; and      the governor and board of public works are authorized, if      they deem it advisable for that purpose, to make arrangements      to secure sufficient land fronting on Pennsylvania and      Louisiana avenues, between Seventh and Ninth streets:      provided, that the government of the United States shall not      be liable for any expenditures for said land, or for the purchase money therefor, or for the      buildings to be erected thereon; and no land, or the use      thereof, is hereby granted for the purpose of erecting any      building thereon for such building.'

On June 26, 1873, the legislative assembly of the District of Columbia passed an act appropriating the sum of $90,000 for the erection of a suitable building for the district offices, under the direction of the governor and board of public works, which included the sum of $75,000, receivable for its interest in the city-hall building, under the provisions of the above paragraph from the deficiency appropriation act.

In view of that expenditure the governor and board of public works had made an arrangement for a site for the intended structure with the Washington Market Company, which is contained in the following memorandum of agreement between them:

'In pursuance of the act of congress of March 3, 1873,     authorizing the governor and board of public works, if they      deem it advisable, for the purpose of erecting thereon a      suitable building for district offices, to make arrangements      to secure sufficient land fronting on Pennsylvania and      Louisiana avenues, between Seventh and Ninth streets, it is      hereby agreed that—

'(1) The Washington Market Company shall, by good and     sufficient quitclaim deed, release and convey to the District      of Columbia all the title and interest of said company      acquired under act of congress of May 20, 1870, incorporating      said company, in and to so much of the land within said      district, described in section 2 of said act, and fronting      Pennsylvania and Louisiana avenues, as is contained within      the following limits: Beginning at the southwest corner of      Seventh street and Pennsylvania avenue; thence westerly along      the southerly side of Pennsylvania avenue to its intersection      with the southerly side of Louisiana avenue; thence westerly      along the southerly side of Louisiana avenue to the east side      of Ninth street; thence along the east line of Ninth street      86 feet; thence easterly on a line parallel with the      aforesaid southerly line of Louisiana avenue to a point 86      feet south of said intersection of the southerly line of      Pennsylvania and Louisiana avenues; and thence on a line      parallel with the aforesaid southerly side of Pennsylvania avenue to the westerly line of Seventh street, at a point 86      feet from the corner began at; thence northerly along the      west line of Seventh street 86 feet to the corner began at.

'The Washington Market Company shall also, in said deed,     convey to said district the right to use in common with said      market company, as a passageway and court-yard, all the land      between the lot conveyed in said deed and a line drawn      westerly from Seventh to Ninth street, 10 feet north of the      north walls of the present Seventh and Ninth street buildings      of said market company.

'(2) In consideration of the aforesaid release and conveyance     by the Washington Market Company to the District of Columbia,      the district will assume and fulfill all obligation imposed      upon the company by section 14 of said act of May 20, 1870,      (as modified by act of the legislative assembly of the      district of August 23, 1871,) except as follows:

'The Market Company shall pay annually to the District of     Columbia, during the term, and for the purpose mentioned in      said section 14, the sum of seven thousand five hundred      dollars, payable quarterly, which sum shall during said term      be in the place of all rental for the ground occupied by the      market buildings of said company; and in case in any year the      general district taxes upon said ground and market buildings      shall exceed $5,500, the excess above that amount shall be      deducted from said rental of $7,500, so that the total annual      payments for rental and taxes shall not exceed $13,000; the      district, however, not hereby releasing, but expressly      reserving, and the market company hereby confirming, the      right of the district, given by section 2 of the act of May      20, 1870, of fixing and controlling, for the protection of      the market dealers and of the public, the amount of rentals      of the stalls and stands in said market buildings; and it is      also hereby agreed that the annual rental of stalls and      stands in the other markets in the city of Washington shall      not be fixed by the district authorities at a lower rate per      square foot of area than 70 per cent. of the rate fixed under     said section for stalls and stands in the market buildings of      said company; and the district shall not use the land      released and conveyed as aforesaid for the purpose of a      market.

'This agreement shall take effect April 1, 1873, and the market company shall at once settle its past rental account     to that time at the rate, since August 23, 1871, fixed by the      resolution of the legislative assembly of that date, and      shall immediately pay the balance due the treasurer of the      district.

'Possession of the land conveyed shall be given the district     upon the day of executing this agreement.

'Dated at Washington, March 18, 1873.

'WASHINGTON MARKET COMPANY,

By M. G. EMERY, President.

'H. D. COOKE, Governor,

'ALEX. R. SHEPHERD,

'JAMES A. MAGRUDER,

'S. P. BROWN,

'ADOLF CLUSS,

'Board of Public Works.'

By a deed of the same date the Washington Market Company conveyed and released to the District of Columbia the real estate described in the agreement, which deed was delivered and recorded.

From the bill of exceptions, taken upon the trial of the action in the supreme court of the District of Columbia, it appears that—

'To further maintain the issues upon its part joined, the     defendant offered and gave evidence to the jury tending to      prove that immediately upon the execution of said agreement      of March 18, 1873, said defendant settled with the proper      officers of said District of Columbia its past rental account      on the terms and in the manner fixed in said agreement, and      paid to the treasurer of said district the balance agreed in      said settlement to be due from the defendant to said      district; that defendant had paid its said rental account      from and including March 18, 1873, to April 1, 1873, at the      rate of $20,000 per annum. Defendant further gave in evidence     a letter dated April 1, 1873, signed officially by the      comptroller at that date of said district, and addressed to      said defendant, acknowledging that defendant had settled and      paid to said district all amounts due from defendant on      rental account up to said April 1, 1873. Defendant further     proved that from said last date to the date of this suit it      has paid to the plaintiff, on account of said rent, at the rate of $7,500      annually; that immediately subsequent to the date of said      agreement and execution and delivery of said indenture,      conveying to the plaintiff the property fronting on      Pennsylvania avenue between Seventh and Ninth streets      north-west, in the city of Washington, District of Columbia,      the plaintiff took possession of the ground between said      limits, and made excavations for a foundation for a building      for offices for the District of Columbia, but had not      proceeded more than a few days in excavating before the work      was stopped; that the defendant has not, from the date of      said indenture, been in possession of or exercised any power      or authority over the ground so conveyed, or any part      thereof.'

And there was no evidence inconsistent with this. The amount sought to be recovered by the plaintiff is the annual rental of $25,000, accrued during the period specified in the declaration, giving credit for payments actually made, but without regard to the reduction and settlement claimed by the defendant under the agreement of March 18, 1873. This agreement the plaintiff in error claims to be void. The court below, being of a different opinion, directed a verdict for the defendant, the judgment on which is brought into review by this writ of error.

A. G. Riddell and H. E. Davis, for plaintiff in error.

[Argument of Counsel from pages 251-254 intentionally omitted]

''Wm. Birney and B. F. Butler'', for defendant in error.

MATTHEWS, J.


text: Talk:District of Columbia v. Washington Market Company