Miller v. Milwaukee, 272 U.S. 713 (1927)
Case details
Citation
272 U.S. 713
Full caption
MILLER et al ., EXECUTORS, v. MILWAUKEE.
Country
United States
Jurisdiction
Federal
Court
Supreme Court of the United States
Decided
Jan. 3, 1927
Concurrence
Brandeis (Justice)
Concurrence
Sanford (Justice) in the result
MILLER et al ., EXECUTORS, v. MILWAUKEE.
ERROR TO THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN.
No. 73. Argued December 13, 1926.—Decided January 3, 1927.
1. Conduct which in usual situations the law protects may become unlawful when part of a scheme to reach a prohibited result. P. 715. 2. Where income from bonds of the United States which by Act of Congress is exempt from state taxation is reached'purposely, in the case of corporation-owned bonds, by exempting the income therefrom in the hands of the corporation, and taxing only so much of the stockholder’s dividends as corresponds to the corporate income not assessed, the tax is invalid. P. 714. Reversed.
Error to a judgment of the District Court (January 9, 1925) in favor of Fred Miller and Elise K. John, as executors of the will of Ernest G. Miller, in their suit against the City of Milwaukee to recover the amount of income taxes alleged to have been unconstitutionally collected under the laws of Wisconsin, from their testator.
Mr. A. W. Schutz for plaintiffs in error.
Mr. Walter J. Mattison, with whom Mr. John M. Niven was on the brief, for defendant in error.
Opinion of the Court 272 TJ. S.
Mr . Justice Holme s delivered the opinion of the Court.
This is a suit to recover the amount of taxes alleged to have been unconstitutionally exacted from the plaintiffs’ testator. The facts are agreed and the only question is the validity of the tax under the Constitution of the United States. The testator held stock in Wisconsin corporations that owned United States bonds issued under the Acts of April 24, and September 24, 1917. The interest upon these bonds was credited by the corporations to their surplus, and subsequently was distributed to the stockholders in dividends of stock or cash. The corporations paid a tax upon their income, except, of course, upon that received from the bonds of the United States. But this exemption was met in the laws of Wisconsin by a provision that while the stockholders were not taxed upon dividends received from corporations the income of which was assessed, yet if only part of the income of the corporation was assessed, only a corresponding part of the dividends or income received therefrom should be deducted from the income taxed to the stockholders. The law also provides that taxable income shall include all dividends from the earnings of corporations, whether in cash or stock. The testator was taxed in accordance with the statute, against his protest that the attempt to make up from him what the State could not take from the corporations was forbidden by the Constitution and laws of the United States. The District Court ruled that the action could not be maintained and the case was brought directly to this Court.
There is no doubt that in general a corporation is a nonconductor that cuts off connection between dividends to its stockholders and the corporate funds from which the dividends are paid. Des Moines National Bank v. Fairweather, 263 U. S. 103. A system of taxation that applied to stockholders of all corporations equally might tax, we assume for purposes of argument, the p. 715stockholders of a corporation that had invested all its property in United States bonds. But it would be a different matter if the State selected such corporations, supposing a number of them to exist, and taxed their stockholders alone. It is a familiar principle that conduct which in usual situations the law protects may become unlawful when part of a scheme to reach a prohibited result. If the avowed purpose or self-evident operation of a statute is to follow the bonds of the United States and to make up for its inability to reach them directly by indirectly achieving the same result, the statute must fail even if but for its purpose or special operation it would be perfectly good. Under the laws of Wisconsin the income from the United States bonds may not be the only item exempted from the income tax on corporations, but it certainly is the most conspicuous instance of exemption at the present time. A result intelligently foreseen and offering the most obvious motive for an act that will bring it about, fairly may be taken to have been a purpose of the act. On that assumption the immunity of the national bonds is too important to allow any narrowing beyond what the Acts of Congress permit. We think it would be going too far to say that they allow an intentional interference that is only prevented from being direct by the artificial distinction between a corporation and its members. A tax very well may be upheld as against any casual effect it may have upon the bonds of the United States when passed with a different intent and not aimed at them, but it becomes a more serious attack upon their immunity when they are its obvious aim. In such a case the Court must consider the public welfare rather than the artifices contrived for private convenience and must look at the facts. See Home Insurance Co. of New York v. New York, 134 U. S. 594, 598; Gillespie v. Oklahoma, 257 U. S. 501, 505; United States Grain Corporation v. Phillips, 261 U. S. 106, 113.
Judgment reversed.
Brandeis and Stone, J. J., concurring. 272 U. S.
By agreement, the decision in this case controls the decision in No. 74, Chas. A. Miller, et al. v. City of Milwaukee; No. 75, Emil P. Miller v. City of Milwaukee, and No. 76, Harry G. John v. City of Milwaukee.
Mr . Justice Brandeis , concurring.
I agree that the judgment must be reversed; but on a different ground. It was stipulated before the state board which upheld the tax that it was levied upon “ that portion of the mentioned dividends which were directly declared from interest accruing from United States Bonds issued under and by virtue of the Acts of Congress passed April 24th, 1917 and September 24th, 1917.” A similar stipulation was entered into in the court below. Thus the dividends were earmarked as the direct proceeds of the interest on the war bonds. The later Act provided, in terms, the former in substance, that the bonds “ shall be exempt both as to principal and interest from all taxation now or hereafter imposed by . . . any state . . . upon the income or profits of individuals, partnerships, associations or corporations.” The provision creating the exemption was clearly within the power of Congress “ to borrow money on the credit of the United States,” Art. I, § 8, Par. 2, and was also within its war powers. As a matter of statutory construction, a dividend paid directly from the interest seems to me within the exemption expressly conferred. The tax levied was, therefore, void because it violated that exemption.
I do not think it can properly be said that the state statute discriminates against Government bonds. The statute makes no reference to them or to any particular class of securities. The tax imposed upon the stockholder results, not from discrimination practiced by a State against the Federal Government, but from the fact that the corporation happened to earn its dividend from securities on which, under the Wisconsin law, it was not required
• p. 717713 Brandeis and Stone, J. J., concurring.
to pay a tax. Compare State ex ret. Columbia Construction Co. v. Tax Commission, 166 Wis. 369. The operation and effect of the statute would be precisely the same if the dividend had been paid out of any other corporate income exempt from the state tax; from interest upon other tax exempt bonds, if any; or out of income from the part of a business carried on in another State, United States Glue Co. v. Oak Creek, 247 U. S. 321; State ex rel. Arpin v. Eberhardt, 158 Wis. 20; Van Dyke v. Milwaukee, 159 Wis. 460, 466, or out of rentals or mine royalties received from land without the State, or out of profits received from the sale of property having a situs out of the State, Wisconsin Statutes, 71.02(3) (see State ex rel. Mariner v. Hampel, 172 Wis. 67); or out of dividends received from banks, Wisconsin Statutes, 71.05(1)(e).
The purpose of the Legislature was solely to prevent double taxation by the State of Wisconsin, of the income received by individuals in the form of dividends. The deduction allowed is limited to that necessary to prevent double taxation. Under the Wisconsin law as originally enacted in 1911 the individual was allowed to deduct from the aggregate income on which the tax was payable all “ dividends or incomes received . . . from stocks or interest in any corporation . . . , the income of which shall have been assessed under the provisions of this act.” The proviso here in question, namely: “that where only part of the income of any corporation . . . shall have been assessed under the act only a corresponding part of the dividend or income received therefrom shall be deducted,” was added in 1913, four years before the United States entered the World War. At that time there were substantially no Government bonds outstanding except those used by national banks as the basis for note issues. And in view of the exemptions enumerated above, it can not well be said, even after the war, that the tax upon dividends paid out of interest on United
Syllabus. 272 U.S.
States bonds furnishes the most conspicuous instance of the operation of the section in question.
Moreover, under the Wisconsin law, the source out of which the dividend was declared is immaterial. The thing received as income is taxable to him who receives it although the fund or property out of which it was paid was exempt from taxation in the hands of the payor. “ It is the relation that exists between the person sought to be taxed and the property claimed as income to him that determines whether there shall be a tax.” State ex rel. Sallie F. Moon Co. v. Wisconsin Tax Commission, 166 Wis. 287, 290. Compare Paine v. City of Oshkosh, 190 Wis. 69.
Mr . Just ice Stone concurs in this opinion.
STEAMSHIP WILLDOMINO v. CITRO CHEMICAL COMPANY.
STEAMSHIP WILLDOMINO v. PFIZER & COMPANY.
CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE THIRD CIRCUIT.
Nos. 29, 30. Argued January 22, 1926.—Decided January 3, 1927. p. 719718 Argument for Petitioner.
1
An inexcusable deviation from her permitted course renders a vessel liable as an insurer for any damage suffered by the cargo. P. 725.
2
A steamship, bound from Messina, Sicily, to New York, put into the Azores for repairs, and thence cleared for New York with a supply of coal known by her owners and officers to be grossly inadequate for the trip, and, after sailing for some days in that direction, until the inadequacy became manifest, changed her course to North Sydney, Nova Scotia, where she recoaled before proceeding to her destination. Held that there was an inexcusable deviation, even if she had a right to go to North Sydney from the Azores and so intended when leaving there, since in that event the preliminary sailing towards New York was unjustifiable; whereas, if the duty 23468°—27------ 46
was to sail direct to New York, the change of Course to North Sydney was due to negligence in not supplying fuel. P. 726. 3. An emergency sufficient to excuse a departure cannot arise out of circumstances deliberately planned nor from gross negligence. P.727. 300 Fed. 5, affirmed.
Certi orar i (266 U. S. 297) to decrees for damages to cargo, entered by the Circuit Court of Appeals, reversing the District Court, in proceedings in rem against a vessel.
Messrs. George C. Sprague and Francis Rawle, with whom Messrs. George W. Betts, Jr., and Joseph W. Henderson were on the brief, for petitioner.
The voyage of the Willdomino was by stages. The stage beginning at Lisbon was to North Sydney; it was not to New York. The vessel was ordered by her owner to go to North Sydney, and these orders were literally obeyed. A turbine breakdown interrupted the stage from Lisbon to North Sydney and caused the vessel to put into Ponta Delgada, Azores Islands. Her orders were not changed at Ponta Delgada, and upon completion of repairs she resumed the stage of her voyage to North Sydney. She had sufficient bunker coal to reach North Sydney both upon sailing from Lisbon and from Ponta Delgada. She reached North Sydney with coal to spare. The Circuit Court of Appeals, therefore, erred in holding that she was unseaworthy upon sailing from Lisbon and from Ponta Delgada because of insufficiency of bunker coal to reach New York.
The respondent’s cargo was damaged by sea-water as a result of the stranding of the Willdomino, which was caused by negligent navigation. The alleged unseaworthiness was in no sense causally connected with the stranding and the consequent damage to the cargo. Both courts below so found.
The voyage to North Sydney was not a deviation. The liberties of the bills of lading gave the Willdomino the right to go to North Sydney for sufficient bunkers to
Argument for Petitioner. 272 U.S.
carry her to New York. The liberty of bunkering in the printed clause was not narrowed by the clause of handwriting. “Filling up” refers only to cargo and not to fuel for bunkers. Where the bill of lading contains a clause providing that the vessel may call “ at any port or ports in or out of the customary route in any order,” or other words of similar import, it is uniformly held that she is entitled to proceed to and stop at ports which are off the regular and customary route (if such changes are reasonable). Such a departure is not a deviation, because the parties have agreed that it shall not be. South Atl. S. S. Line v. London Stores Co., 255 Fed. 306; The Blandon, 287 Fed. 722; The Panola, 1925 A. M. C. 1173; Akbar <& Sons v. Persian S. S. Co., 11 Com. Cas. 219; Attorney General v. Smith & Co., 34 T. L. R. 566; Citta di Messina, 169 Fed. 472; Austrian S. S. Co. v. Calafiore, 194 Fed. 377; Emelia S. de Perez, 187 Fed. 361, affirmed 288 Fed. 1019; The Tokuyo Maru, 7 Fed. (2d) 889.
The liberties of the bills of lading gave the Willdomino the right (had she desired so to do) to take sufficient bunkers at North Sydney to get away from New York, as well as to get there. Austrian Union S. S. Co. v. Calafiore, 194 Fed. 377; Shipping Board n . Bunge & Bom, Ltd., 41 T. L. R. 73.
Admitting for the purpose of the argument that the ship was unseaworthy upon sailing from Lisbon and from Ponta Delgada because of an insufficient coal supply, and that the stranding was the result of faults or errors in navigation, yet, since there was no causal relation between such unseaworthiness and the stranding which caused the damage to respondent’s cargo, neither the ship nor the shipowner was by such unseaworthiness deprived of the protection of the Harter Act. International Nav. Co. v. Farr Mfg. Co., 181 U. S. 218; The Southwark, 191 U. S. 1; The Wildcroft, 201 U. S. 378; The Turret Crown, 282 Fed. 354; 284 Fed. 439; 297 Fed. 766. Also, English cases: p. 721718 Argument for Respondents.
The Europa, [1908] 98 L. T. R. 246; Havelock v. Geddes, (1809) 10 East 555; Kish v. Taylor, (1912) A. C. 604; Atlantic Shipping Co. v. Dreyjuss, (1922) A. C. 250; Elder & Co. v. Patterson, (1924) A. C. 522. See also the British “ Carriage of Goods by Sea Act, 1924.” This Act follows the Hague Rules of 1921 and 1922. A diplomatic conference on maritime law was held at Brussels in October, 1922, and it adopted the Hague Rules with slight modifications. See Scrutton, Charter Parties and Bills of Lading, 12th ed., 1925, App. IV.
The interpretation for which we contend will bring the law in the United States into conformity with the law of Great Britain. The Eliza Lines, 199 U. S. 119; Queen Ins. Co. v. Globe Ins. Co., 263 U. S. 487.
The Harter Act should be so construed as to include the rule of causal relation between the unseaworthiness and the disaster causing cargo damage. The Irrawaddy, 171 U. S. 187; The Southwark, 191 U. S. 1; The Jason, 225 U. S. 32; International Nav. Co. v. Farr Mjg. Co., 181 U. S. 218; The Turret Crown, 282 Fed. 354; Parsons, Shipping, vol. I, p. 320; 16 Harv. Law Rev. 157; Havelock v. Geddes, 10 East 555. The Harter Act is concerned only with seaworthiness in which deviation plays no part. The sole effect of deviation is to displace the bill of lading. The St. Johns, 263 U. S. 119.
The petitioner took reasonable care of the damaged merchandise after the stranding.
Mr. D. Roger Englar, with whom Mr. James D. Carpenter, Jr., was on the brief, for respondents.
The court below found that it was the deliberate purpose of the petitioner not to take on board sufficient coal to carry the vessel to New York, but only barely enough to carry her to North Sydney; and to conceal this intent and put into North Sydney as a port of refuge under a necessity created by the petitioner itself. The court found that the vessel was, therefore, unseaworthy, and
Argument for Respondents. 272 U. S.
that this unseaworthiness resulted directly from the owner’s cable instructions. These findings are fully sustained by the evidence.
Having failed to use due diligence to make the Willdomino seaworthy as required by § 3 of the Harter Act, 27 Stat. 445, and having on the contrary, directed her to sail in an unseaworthy condition, the petitioner, as owner of the vessel, cannot invoke the protection of that section, but is liable for damage to cargo resulting from the negligence of its servants. The Jason, 225 U. S. 32; International Nav. Co. v. Farr Mjg. Co., 181 U. S. 218; The Wildcroft, 201 U. S. 378; The Southwark, 191 U. S. 1.
Petitioner’s argument is that it would be absurd to hold it responsible, on account of the shortage of fuel, for damage which did not result from that cause. This argument is plausible enough on its face, but it is based on a misstatement of the facts. The petitioner was not held liable because its vessel was short of fuel, but because its servants were guilty of negligence in navigation, which directly caused the damage to respondents’ cargo. The basis of petitioner’s liability is the fundamental principle of all law, that one who negligently damages the property of another is liable for the damage; together with the rule of respondeat superior, which extends this liability to include the negligence of his servants. It is true that Congress has created a statutory modification of this general liability, of which the petitioner might have obtained the benefit by complying with the conditions upon which it is granted. Not having complied with these conditions, the petitioner, of course, cannot obtain the benefits of the statute.
The very structure of the third section of the Harter Act clearly indicates that there is no causal connection contemplated between the condition and the exemption. There will rarely be any connection between unseaworthiness and negligence in navigation; and yet due diligence p. 723718 Argument for Respondents.
to make the ship seaworthy is made the condition of exemption in respect of negligent navigation. If the Act were based on causal relation, one would expect that a shipowner who had used due diligence to make his ship seaworthy would be relieved from liability for losses resulting from unseaworthiness. The Act does not say this, however, and is not so construed. The Carib Prince, 170 U. S. 655.
Owing to the deviations of the Willdomino from the voyage specified in the bills of lading, the petitioner has forfeited all protection under the clauses of its bills of lading, and is liable as an insurer of libellants’ goods. The Citta di Messina, 169 Fed. 472; The Dunbeth, (1897), P Div. 133; Scaramanga v. Stamp, 5 C. P. Div. 295; Davis v. Garrett, 6 Bing. 716; Leduc v. Ward, 20 Q. B. Div. 475; Bond v. The Cora, 3 Fed. Cas. No. 1620; Johnson v. New York Cent. R. R., 33 N. Y. 610; Knox v. The Ninetta, 14 Fed. Cas. 827; Carver, Carriage of Goods by Sea, 6th ed., p. 398; Am. & Eng. Enc. L., vol. 7, p. 208; Morrison v. Shaw, (1916), 2 K. B. 783; South Atlantic S. S. Line v. London-Savannah Co., 255 Fed. 306; The Blandon, 287 Fed. 722; Emelia S. de Perez, 1923 Am. Mar. Cas. 42.
The Willdomino deviated on the voyage from Ponta Delgada to North Sydney in not following the direct route; the uncontradicted testimony of the officers of the Willdomino establishes that they followed the course to New York for several days and then changed their course for North Sydney. Michaels v. Railroad, 30 N. Y. 564; Constable v. Nat. S. S. Co., 154 U. S. 51; Hostetter v. Park, 137 U. S. 30; Carver, Carriage of Goods by Sea, 6th ed., p. 393; 9 Amer. & Eng. Encyl. of Law, pp. 419-421; 26 Cyc. 625. In proceeding to North Sydney instead of to New York direct, the Willdomino would have been guilty of an unjustified deviation, even if she had proceeded from Ponta Delgada to North Sydney by the most direct route.
As found by the Circuit Court of Appeals, the petitioner is liable, irrespective of unseaworthiness or deviation, because of its gross neglect to care for and preserve the respondents’ cargo after the disaster.
Mr . Just ice Mc Reynolds delivered the opinion of the Court.
Respondents instituted proceedings in rem against the “Willdomino,” a British vessel, to recover the value of five hundred and three (168 and 335) casks of citrate of lime owned by and consigned to them, which she accepted June 10, 1920, at Messina, Sicily, for delivery at New York, subject to issued bills of lading. After leaving Messina the vessel put in at Gibraltar, Lisbon, Ponta Delgada (The Azores), North Sydney (Nova Scotia) and Halifax. While passing between the last-named ports, through negligent navigation, she struck a reef or submerged object; water filled her forward compartment and respondents’ goods were so damaged that they refused acceptance at destination. The causes were heard upon the same record and present identical questions. In the District Court petitioner prevailed; but the Circuit Court of Appeals thought otherwise and entered judgments for the damages sustained. 300 Fed. 5.
The petition for certiorari alleges that the causes involve three questions—
1. When in normal condition citrate of lime contains sixty-four per centum of citric acid; the cargo offered for delivery at New York contained sixty per centum of citric acid. Was it in sound condition?
2. Having regard to the bills of lading, did the “ Willdomino ” deviate when she went to North Sydney?
3. Must there be causal connection between the lack of due diligence to make a vessel seaworthy and the accident from which damage results in order to deprive the p. 725vessel of the exemptions granted by § 3 of the Harter Act?*
We confine our consideration to the points specified by the petition and agree with the conclusions of the Circuit Court of Appeals concerning the essential facts, although they are radically different from those of the trial court. It is unnecessary now to discuss the evidence—that was adequately done below.
The first of the above-stated questions has not been pressed here and is either abandoned or inconsequential.
The Circuit Court of Appeals, we think, rightly held that the “ Willdomino ” made an inexcusable deviation from the permitted course when she went to North Sydney. Consequently, she became liable as an insurer for any damage suffered by the cargo. St. Johns Corp. n . Companhia Geral, etc., 263 U. S. 119, 124; The Citta di Messina, 169 Fed. 472, 474, 475; The Sarnia, 278 Fed. 459.
Except as to inserted name of the consignee and number of casks the printed bills of lading were identical. They acknowledge receipt of “. . . casks citrate of lime ” “ for shipment, in apparent good order and condition, from Ferd. Baller & C., to be transported by the good p. 726Steamship Willdomino to New York, with liberty to call at intermediate ports or any port or ports in or out of the customary route in any order, to receive and discharge coal, cargo, passengers, and for any other purposes.” And they provide: “ The ship has liberty of filling up and/or bunkering at any port or ports in or out of the way.” “Filling up only in ports on the way westwards of New York,” is written at the bottom of each bill, and all agree that of therein really means to.
*
“ Sec . 3. That if the owner of any vessel transporting merchandise or property to or from any port in the United States of America .shall exercise due diligence to make the said vessel in all respects seaworthy and properly manned, equipped, and supplied, neither the vessel, her owner or owners, agent, or charterers shall become or be held responsible for damage or loss resulting from faults or errors in navigation or in the management of said vessel nor shall the vessel, her owner or owners, charterers, agent, or master be held liable for losses arising from dangers of the sea or other navigable waters, acts of God, or public enemies, or the inherent defect, quality, or vice of the thing carried, or from insufficiency of package or seizure upder legal process, or for loss resulting from any act or omission of the shipper or owner of the goods, his agent or representative, or from saving or attempting to save life or property at sea, or from any deviation in rendering such service.” Act of February 13, 1893, (the Harter Act) c. 105, 27 Stat. 445.
The “ Willdomino ” left Messina with five hundred and sixty-nine tons of coal—not sufficient under any circumstances to carry her to New York. At Gibraltar, a customary coaling port, she took on four hundred tons and left there for Lisbon with seven hundred and fifty-six tons in her bunkers. From Lisbon she cleared for New York—two thousand, nine hundred and five miles away—with but six hundred and fifty-one tons, an inadequate amount. When five days out from Lisbon an accident befell the high-pressure turbine and she put into Ponta Delgada for repairs. Finding that port not properly equipped therefor, the master decided to proceed on the low-pressure turbine alone. She took on two hundred and fifty tons of coal and cleared for New York—two thousand, two hundred and ninety miles—with six hundred and twenty-nine tons on board. This was grossly inadequate for that distance, as her officers knew. After proceeding five or six days toward New York it became manifest that there was not enough coal to make that port and thereupon she radically changed her course and proceeded to North Sydney, where she arrived with sixty-two tons.
It is (Jlear enough that for some reason not quite definitely disclosed the officers of the vessel under direction of the owners, while realizing that there was not enough coal on board for such voyage, wished to create the impression that she left Ponta Delgada bound directly p. 727for New York, when in truth they intended to take her to North Sydney under pretense of an emergency.
In such circumstances by proceeding for five or six days in the direction of New York the vessel deviated from any permissible course to North Sydney, even if it be true, as her counsel now maintain, that she had the right to go and intended to proceed to the latter port from Ponta Delgada.
If, on the other hand, the vessel started from Ponta Delgada with the intention of going to New York, the only emergency claimed to justify departure from the ordinary course and procedure to North Sydney arose from wilful failure to take on sufficient coal.
An emergency sufficient to excuse a departure cannot arise out of circumstances deliberately planned nor from gross negligence.
Whether the intention was to proceed directly from Ponta Delgada to New York, as counsel for the petitioner are said to have maintained below, or to North Sydney, as they now insist, there was inexcusable departure.
“ In the law maritime a deviation is defined as a ‘ voluntary departure without necessity or any reasonable cause from the regular and usual course of the ship insured? ” Constable v. National Steamship Co., 154 U. S. 51, 66. “ The voyage must be prosecuted without unnecessary delay or deviation. The shipowner’s undertaking is that he will be diligent in carrying the goods on the agreed voyage and will do so directly without any unnecessary deviation.” Carver on Carriage of Goods by Sea, 6th Ed., 393.
Nothing in the present bills of lading suggests that the vessel might wander about the sea, heading first for one port, and then without adequate reason for another. If the “ Willdomino ” had the privilege of going from Ponta Delgada to North Sydney and intended so to do, it was
Counsel for Parties. 272 U. S.
her duty to take the ordinary course. This she did not do.
What has been said of the second question renders it unnecessary to discuss the third.
The decrees of the Circuit Court of Appeals are
Affirmed.
HEIRS OF SAMUEL GARLAND, DECEASED, v. CHOCTAW NATION.
PITCHLYNN et al ., HEIRS-AT-LAW, v. CHOCTAW NATION.
APPEALS FROM THE COURT OF CLAIMS.
Nos. 42, 43. Argued December 1, 2, 1926.—Decided January 3, 1927.
1. Upon a reference to determine a claim for services on a quantum meruit basis, when the Court of Claims finds the amounts already paid the claimant, and dismisses his petition, or renders judgment for an additional sum, this is a determination that he was not entitled to more, although there is no definite finding of the value of the services. P. 730. 2.In* determining the value of services rendered the Choctaw Nation, the Court of Claims was not bound by opinions of the Choctaw legislature or executive officers. P. 731. 59 Ct. Cis. 768; Id. 796, affirmed.
Appeals from decisions of the Court of Claims on claims for services, against the Choctaw Nation, referred to that Court by Acts of Congress. See Garland's Heirs v. Choctaw Nation, 256 U. S. 439.
Mr. Harry Peyton for appellants, in No. 42.
Messrs. Harry Peyton and Thomas P. Gore for appellants, in No. 43.
Assistant Attorney General Galloway, with whom Solicitor General Mitchell, and Messrs. George T. Stormont, and Hampton Tucker were on the brief, for appellee, in Nos. 42 and 43.
Mr . Justice Mc Reynol ds delivered the opinion of the Court.
These causes, although heard separately and upon different records, may be disposed of conveniently by one opinion.
Samuel Garland, Peter P. Pitchlynn and two others were appointed delegates of the Choctaw Nation under an Act of the Legislative Assembly approved November 9, 1853, and charged with the duty of pressing to settlement a claim against the United States for ceded lands. They performed valuable services and each of them received therefor considerable sums of money. Their heirs sought large additional payments. Finally Congress referred the matter to the Court of Claims. The Act of June 21, 1906, c. 3504, 34 Stat. 325, 345, provides—“ That the Court of Claims is hereby authorized and directed to hear and adjudicate the claims against the Choctaw Nation of the heirs of Peter P. Pitchlynn, deceased, and to render judgment thereon in such amounts, if any, as may appear to be equitably due. Said judgment, if any, in favor of the heirs of Pitchlynn, shall be paid out of any funds in the Treasury of the United States belonging to the Choctaw Nation, said judgment to be rendered on the principle of quantum meruit for services rendered and expenses incurred. Notice of said suit shall be served on the governor of the Choctaw Nation, and the Attorney-General of the United States shall appear and defend in said suit on behalf of said nation.” A like Act, approved May 29, 1908, c. 216, 35 Stat. 444, 445, directed adjudication of the claim of Samuel Garland, deceased.
Garland’s heirs brought suit in the Court of Claims September 3,’ 1908. It held against them upon the theory that the delegation which represented the Choctaw Nation should be treated as a unit and as such had been fully p. 730paid for the entire service. Upon appeal, this Court reversed the judgment and sent the cause back, after saying—“ The contention under the facts disclosed in the petition is technical. The petition showed services rendered and, if the petition be true, valuable services—and for them there should have been recovery if the Nation was liable, and we think it was. How much we do not say nor did the Court of Claims consider, it being of opinion that the Nation was not liable for anything. Upon the return of the case it may determine the amount due Garland, if anything, dependent upon what his services contributed in securing the congressional appropriation.” Garland's Heirs v. Choctaw Nation, 256 U. S. 439, 445.
Much evidence has been presented in both causes and there are elaborate findings. The court held the heirs of Garland—No. 42—were not entitled to recover anything, and dismissed their petition. It rendered judgment for $3,113.92 in favor of Pitchlynn’s heirs—No. 43. The causes are here by appeals allowed, respectively, January 19 and February 2, 1925.
In neither cause did the Court of Claims definitely find the value of the services rendered by the delegate, but it ascertained and stated the sums received by each of them. By dismissing the petition of Garland’s heirs, it adjudged, in effect, that he had received full compensation; and the judgment in favor of Pitchlynn’s heirs for $3,113.92 determined that the amount theretofore received plus such recovery would amount to full compensation for his services.
We think the findings of fact sufficient to permit us to dispose of the causes, and accordingly deny the motion to remand.
The enabling Acts very clearly provide for recoveries upon the principle of quantum meruit for services rendered and expenses incurred. The Court of Claims was not p. 731728 Statement of the Case.
bound to accept opinions of the legislature or executive officers of the Choctaw Nation; its duty was to determine for itself what the services were worth. After consideration of the evidence it reached the above-stated conclusions, and we find no adequate reason for overturning the result.
The judgments below are
Affirmed.
DE LA METTRIE et al . v . DE GASQUET JAMES
ET AL.
KEANE, RECEIVER, v. DE GASQUET JAMES et al .
APPEALS FROM THE COURT OF APPEALS OF THE DISTRICT OF COLUMBIA.
Nos. 54, 55. Argued December 6, 1926.—Decided January 3, 1927.
1. Under § 9-e of the Trading with the Enemy Act, a debt to one who is not a citizen of the United States can not be allowed unless it “ arose with reference to money or property ” held by the Alien Property Custodian or the Treasurer of the United States. P. 732. 2. The debts in this case,—consisting of judgments against a person whose interest in a fund was seized by the Custodian—did not so arise. Id. 3. A receiver appointed by a New York Court in proceedings supplementary to execution, to collect the judgments, was in no better position than the judgment creditors. Trading with the Enemy Act, § 9-f. P.733. 55 App. D. C. 354; 6 F. (2d) 479, affirmed.
Appeals from decrees of the Court of Appeals of the District of Columbia which sustained the Supreme Court of the District in refusing to permit Keane, receiver, to intervene in a suit under the1 Trading with the Enemy Act, and in dismissing the suit after hearing. The plaintiffs, Pauline André de la Mettrie and George Pratt de Gasquet James, in 1915, had recovered judgments against the defendant Elizabeth Pratt de Gasquet James, in the settlement of her accounts as executrix of her husband’s p. 732will, in a surrogate’s court in New York; and sought by this suit to reach, and apply to the judgments, the interest of the defendant James in a voluntary trust created by herself in 1887, before her husband’s death, and which had been taken over by the Alien Property Custodian. The other appellant, Keane, had been appointed receiver of the property of the defendant James, in proceedings in New York supplementary to the judgment.
Mr. J. Noble Hayes, with whom Mr. Guy H. Johnson was on the brief, for the appellants.
Mr. Mansfield Ferry, with whom Messrs. Frank Davis, Jr., S. M. Stellwagen, William J. Neale, and Victor Hugo Duras were on the brief, for the appellee James.
Solicitor General Mitchell for Sutherland, Alien Property Custodian, submitted. Assistant Attorney General Letts and Mr. Dean Hill Stanley, Special Assistants to the Attorney General, were also on the brief.
Mr . Justi ce Mc Reynolds delivered the opinion of the Court.
The challenged decrees were entered March 2, 1925, 6 Fed. (2d) 479. Both causes had been heard upon a single record.
In No. 54, appellants, citizens of France, sought to recover from the Alien Property Custodian certain funds seized by him November 5, 1918, as the property of an alien enemy. They relied upon § 9, Trading with the Enemy Act, as amended June 5, 1920, c. 241, 41 Stat. 977. The court below held that the claim did not arise with reference to money or property held by the Custodian or by the Treasurer of the United States and affirmed the decree of the trial court which dismissed the bill. Banco Mexicano v. Deutsche Bank, 263 U. S. 591. Considering the facts disclosed and the definite terms of the statute, this action was clearly right. Subsection (e) of § 9 provides—
u No money or other property shall be returned nor any debt allowed under this section to any person who is a citizen or subject of any nation which was associated with the United States in the prosecution of the war, unless such nation in like case extends reciprocal rights to citizens of the United States; nor in any event shall a debt be allowed under this section unless it was owing to and owned by the claimant prior to October 6, 1917, and as to claimants other than citizens of the United States unless it arose with reference to the money or other property held by the Alien Property Custodian or Treasurer of the United States hereunder.”
No. 55 is a separate appeal by a receiver. The appellants in No. 54 instituted in the Supreme Court, New York County, supplemental proceedings for the purpose of enforcing judgments which they held against Mrs. James and on June 18, 1923, that court appointed David Keane receiver of all the debtor’s property. Thereafter he asked to be made party to cause No. 54, claiming that by reason of such appointment he had an interest in the fund held by the Custodian. The trial court denied this application and upon appeal the court below affirmed that action. The claim is without merit. Subsection (f) of § 9, Trading with the Enemy Act, provides: “ Except as herein provided, the money or other property conveyed, transferred, assigned, delivered, or paid to the Alien Property Custodian, shall not be liable to lien, attachment, garnishment, trustee process, or execution,, or subject to any order or decree of any court.” The appointment of the receiver gave him no better position than the one occupied by the judgment creditors—the New York court had no jurisdiction over funds held by the Custodian.
The decrees below are
Affirmed.
In No. 55 Mr . Justi ce Brandeis , Mr . Justice Sanford and Mr . Justice Stone concur in the result.