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power under the act of 1898, it follows nec- See same case below, 46 C. C. A. 622, 106 essarily that the receiver was without any Fed. 653. authority whatever, and the third question The facts are stated in the opinion. must be answered no. Of course, in answer- Mr. John W. Davis and Messrs. Davis ing this question we express no opinion & Davis for appellant. whatever as to how far, if at all, the act of Messrs. Edwin Maxwell and J. Hop 1898 could validly operate to repeal the Woods for appellees. right of action in favor of creditors given by the Kansas statute of 1868, so far as * Mr. Chief Justice Fuller delivered tho* creditors are concerned, whose debts accrued opinion of the court: prior to the repeal. We, of course, also ex- This is an appeal from a decree of the press no opinion whatever upon the ques- United States circuit court of appeals for tion of how far the rights and remedies con- the fourth circuit affirming the decree of the ferred by the act of 1898 could lawfully be district court for the district of West Virenforced against stockholders in corpora- ginia dissolving an injunction and dismisstions who became such stockholders prior to ing a bill filed in that court by Dever Pickthe passage of that acte. And this, of ens against Susan C. Dent and others. 45 course, excludes the intimation of any opin. C. C. A. 522, 106 Fed. 653. ion as to how far a judgment rendered in a The facts necessary to be considered in court of Kansas in a suit brought by a re disposing of the case were stated by the circeiver against the corporation and the resi- cuit court of appeals in substance as foldent stockholders, to fix the sum required lows: January 24, 1889, Susan C. Dent ex. to pay the corporate debts, would be bind. hibited her bill in the circuit court of Bar. ing upon nonresident stockholders not di- bour county, West Virginia, against Dever rectly a party to such action, especially Pickens and others, to set aside as frauduwhere their subscription to stock had been lent a certain deed made by Pickens to trusmade prior to the enactment of the act of tees, bearing date January 14, 1889, and 1898. The third question will be answered assailing as fraudulent certain indebtedness no, and it is unnecessary to answer the thereby secured. At the succeeding Sepother questions.
tember rules an amended bill was filed al. And it is so ordered.
leging that complainant Dent on July 23, 1889, recovered a judgment at law against
Pickens for the sum of $10,000, with inter(187 U. S. 177)
est and costs. Complainant prayed that DEVER PICKENS, Appting
the real estate mentioned in the bill as the property of Pickens, and described in the
trust deed, might be sold, and the proceeds SUSAN C. DENT ROY et al
applied to the payment of her judgment and
in satisfaction of the liens existing on the Oourto-jurisdiction of court of bankruptoy land. The judgment was subsequently re-enjoining proceedings in state court. verred, and a retrial resulted on February
27, 1892, in a judgment for $9,000, with in1 A suit to enjoin the further prosecution lnterest and costs, and a second amended bill
a state court of a long pending suit by a
The circuit court of appeals did not deem therein sold and the proceeds applied to the it essential to give a history of the many payment of the judgment and the satisfac- years of “hard-fought and well-contested tion of the liens existing against the prop. litigation,” which followed, but stated that erty, 18 not within the jurisdiction of a court the case was pending and undisposed of by of bankruptcy,--especially where lastltuted the circuit court of Barbour county, Octoby the bankrupt himsell.
ber 30, 1899, when Pickens was adjudicated & The jurisdiction of a state court over a sult a bankrupt by the district court of the
by a judgment creditor to set aside a deed United States for the district of West Vir. as fraudulent is not lost by the action of the ginia on a petition filed October 27. After a preferred debt before the referee in bank- the adjudication, and on November 2, 1899, a roptcy proceedings; nor does such action Pickens filed an answer in the chancery amount to her consent to the exercise by a cause, in which he set up the proceedings in court of bankruptcy of Jurisdiction to en- bankruptcy, asked that all further action in Join further proceedings in the state court. the state court might be suspended until the
district court had disposed of those proceed(No. 78.]
ings, and contended that all his estate,
rights, and interests of every kind and deSubmitted November 10, 1902. Decided Description had passed from the control of the cember 1, 1902.
circuit court of Barbour county and into the
jurisdiction of the district court. On No Court of Appeals for the Fourth Cir. was appointed for Pickens's estate, who in cuit to review a decree which affirmed a de February, 1900, presented to the circuit cree of the District Court for the District court of Barbour county his petition in the of West Virginia dissolving, an injunction chancery cause, asking that he be made a and dismissing a bill to enjoin further pro party, that his petition stand as an answer, ceedings in a pending suit in a state court and that the circuit court proceed to the Affirmed
enforcement of the liens against the bank.
rupt's estato; and, thereafter, on February | modify this rule, but with unusual careful. 23, 1900, that court rendered a decree by ness guards it in all of its details, provided which, among other things, it was ordered the suit pending in the state court was in. that the deed of trust referred to in the bill stituted more than four months before the be set aside as fraudulent, and that a spe district court of the United States had adcial commissioner and receiver therein judicated the bankruptcy of the party enti. named should rent the land described until atled to or interested in the subject matter certain day and then sell the same, the pro- of such controversy." ceeds thereof to be applied to the payment
The court also ruled that the mere fact of the debts due by Pickens. November 20, that complainant Dent proved up her judg. 1899, complainant Dent, “without waiving ment as a preferred debt in bankruptcy, ber preference,” tendered her proof of debt when and as she did, did not operate to debefore the referee in bankruptcy, it being prive the state court of jurisdiction, nor the judgment in question, which was al amount to a consent to the exercise of ju. lowed as a preferred claim against the bank. risdiction by the district court as invoked. rupt's estate.
We are of opinion that the circuit court The receiver and commissioner appointed of appeals was right in its rulings. The in the chancery court was proceeding to ex. case in the one aspect came within Bardes ecute the decree therein when Pickens filed v. First Nat. Bank, and in the other within his bill in the district court March 31, 1900, the rule applied. Metcalf v. Barker, 187 against Dent and others, rehearsing the U. 8. 165, ante, 67, 23 Sup. Ot. Rep. 67. facts relating to the suit and to the pro Decree affirmed. ceedings in bankruptcy, charging that the trustee was not authorized to intervene in
(187 U. S. 281) the chancery cause, and asserting that the state court on the filing of Pickens's answer MILTENBERGER LAWDER ot ab, Peth setting up his adjudication should have
tioners, taken no further action, and that, therefore, the decree appointing the commissioner and WILLIAM F. STONE, Collector. receiver to rent and sell the real estate was without authority of law and void.
Duties worthless articles_decayed fruit. The prayer was that defendants be re strained from all further proceedings in the That portion of a cargo of pineapples which on suit so pending in the circuit court of Bar.
arrival within the limits of a port of entry bour county until the termination of the
of the United States was found to be so de
cayed as to be atterly worthless is not dubankruptcy proceedings; that the receiver
tlable, though the loss was less than 10 per and commissioner be enjoined from execut
cent of the total invoice, as entirely worthing the decree during their pendency; and less articles are not within the provision of that the possession and control of the prop- the customs administrative act of Juno erty be turned over to the trustee to be ad. 10, 1890, $ 23,' that no allowance shall be ministered under the direction of the court made for damage to "goods, wares, and mer. in bankruptcy.
chandise" imported into the United States, A preliminary injunction was granted by
unless the importer shall abandon to the the district judge, which was dissolved July
United States a portion of such articles
amounting at least to 10 per cent of the to26, 1900, and Pickens's bill dismissed with
tal invoice. costs. From that decree this appeal was taken.
(No. 82.) Such being the state of facts, the circuit court of appeals held that the district court Submitted November 11, 1902. Decided had no jurisdiction of the suit, even if it
December 1, 1902. had been brought in the name of the trustee, who could not have sued defendants be low in that court in respect of the banhe ONS_WRIT of Certiorari to the United
States Circuit Court of Appeals for the rupts property, unless by consent, while Fourth Circuit to review a decree which rethe bankrupt himself had no standing in versed a judgment of the Circuit Court for that court after adjudication (Bardes v. the District of Maryland affirming the deFirst Nat. Bank, 178 U. S. 524, 44 L. ed. cision of the board of general appraisers 1175, 20 Sup. Ct. Rep. 1000); and further, which sustained a protest of importers that as the circuit court of Barbour county against the assessment of duties on decayed had at the time of the adjudication, and had fruit. Reversed. had for years, complete jurisdiction and See same case below, 41 C. C. A. 621, 101 control over the bankrupt and his property, Fed. 710. that jurisdiction was not devested by the proceedings in bankruptcy, and it was the Statement by Mr. Justice White: right and duty of that court to proceed to In the months of May, June, and July, final decree notwithstanding adjudication, 1897, the petitioners, copartners trading as the rule being applicable that the court s. M. Lawder & Sons, Imported into the wbich first obtains rightful jurisdiction port of Baltimore from the British West over the subject matter should not be in. Indies several cargoes of pineapples, interfered with Frazier v. Southern Loan & voiced as a specified number of dozens. I. Co. 40 C. C. A. 76, 99 Fed. 707. And Upon the discharge of the cargo at Bal. Goff, J., speaking for the court, said: "The timore, after the pineapples had been taken bankrupt act of 1898 does not in the least out of the vessels and theis number esti
* U. 6. Comp. 8t 1901, D. 1930.
mated by the inspectors, there remained in vided, That the portion so abandoned shall the holds a quantity of what was described amount to 10 per centum or over of the as “slush,” consisting of decomposed reg: total value or quantity of the invoice; and etable matter, mixed with bilge water and the property so abandoned shall be sold by other débris of the cargo, some of it in a public auction, or otherwise disposed of for semi-liquid condition. This slush was the account and credit of the United States brought up from the holds in baskets and under such regulations as the Secretary of included by the inspectors in their appraise the Treasury may prescribe.” [26 Stat. at ment of the cargoes. The pineapples al. L. 140, chap. 407, U. S. Comp. Stat. 1901, leged to be contained in the slush were un. p. 1930.) countable, and their number was roughly Do pineapples, which, on the voyage to estimated by the inspectors by counting the this country, become so decayed as to be pineapple tops and butts contained in a utterly worthless, constitute, upon arrival number of baskets of the slush, striking an within the limits of a port of entry of the average of those baskets, and then calculat- United States, goods, wares, and merchan. ing the number contained in the whole dise imported into the United States, withquantity of slush according to that average in the meaning of this expression as em. The material thus removed from the vessels ployed in the section above quoted ? is the was commercially valueless, and under the question for decision. sanitary regulations of the city of Balti. In Marriott v. Brune (1850) 9 How. 619, more was taken down the river on a scow 13 L. ed. 282, it was held that, under the and dumped overboard. The number of 11th section of the tariff act of July 30, pineapples so estimated by the inspectors to 1846, where a portion of a cargo of sugar be contained in the slush was less than 10 and molasses was lost by leakage on the per cent of the total invoice, and the col. voyage to this country, duty should be ex sector treated the loss as a case of damage acted only upon the quantity of sugar and to the cargo within the meaning of_§ 23 of molasses which arrived here, and not upon the customs administrative act of June 10, the quantity which appeared to have been 1890, and assessed duty on the whole num- shipped. In the course of the opinion the ber of pineapples estimated by the inspect court said (p. 632, L. ed. p. 288) : ors to be contained in the cargoes, including “The general principle applicable tn such this quantity of slush.
a case would seem to be, that revenue should lze board of general appraisers sustained be collected only from the_quantity 01 a protest of the importere against the as- weight which arrives here. That is, what sessment of duties on the worthless and in- is imported,--for nothing is imported till it* distinguishable mass referred to, and this comes within the limits of a port. See decision was affirmed, ou appeal of the col. cases cited in Harrison v. Vose, 9 How. 372. lector, by the circuit court of the United 13 L. ed. 179. And by express provision iu States for the district of Maryland. On a all our revenue laws, duties are imposed further appeal by the collector the circuit only on imports from foreign countries; or court of appeals for the fourth circuit re the importation from them, or what is imversed the decisions which had been made ported. 5 Stat. at L. 548, 558, chap. 270. in favor of the importers and sustained the The very act of 1846 under consideration action of the collector. 41 C. C. A. 621, 101 imposes the duty on what is 'imported from Fed. 710. The case was then brought to foreign countries.' [9 Stat. at L. chap. this court by writ of certiorari.
74) p. 68 . The Constitution uses like
language on this subject. Art. 1, $$ 8, 9. Mr Edward S. Hatch for petitioners. Indeed, the general definition of customs Assistant Attorney General Hoyt and confirms this view; for says McCulloch (vol. Messrs. James A. Finch, John C. Rose, and 1, p. 548): 'Customs are duties charged Solicitor General Richards for respundent. upon commodities on their being imported
into or exported from a country.' *Mr. Justice White, after making the "As to imports, they therefore can cover foregoing statement, delivered the opinion nothing which is not actually brought into of the court:
our limits. That is the whole amount As mentioned in the preceding statement, which is entered at the custom house; that the collector of customs for the district of is all which goes into the consumption of Baltimore treated the loss arising from the the country; that, and that alone, is what worthless condition of the portion of the comes in competition with our domestic cargo in question as a case of damage to the manufactures, and we are unable to see any entire cargoes, within the meaning of $ 23 principle of public policy which requires of the customs administrative act of June the words of the act of Congress to be ex10, 1890. That section reads as follows: tended so as to embrace more,
“That no allowance for damage to goods, “When the duty was specific on this artiwares, and merchandise imported into the cle, being a certain rate, per pound, before United States shall hereafter be made in the the act of 1846, it could, of course, extend estimation and liquidation of duties there to no larger number of pounds than was on; but the importer thereof may, within actually entered. The change in the law ten days after entry, abandon to the United has been merely in the rate and form of the States all or any portion of goods, wares, duty, and not in the quantity on which it and merchandise included in any invoice, should be assessed. and be relieved from the payment of the du. “On looking a little further into the prin. ties on the portion so abandoned: Pro- ciples of the case, it will be seen that a do
duction must be made from the quantity / sound reason or any express provision of shipped abroad, whenever it does not all law. On the contrary, Congress, in several reach the United States, or we shall in instances, when the articles imported actutruth assess here what does not exist here. ally arrived here, and were afterwards deThe collection of revenue on an article not stroyed by fire before the packages had been existing, and never coming into the country, opened and entered into the consumption of would be an anomaly, a mere fiction of law, the country, have refunded or remitted the and is not to be countenanced where not ex duties. 2 Stat. at L. 201, chap. 6; 5 Stat. pressed in acts of Congress, nor required to at L. 284, chap. 174; 6 Stat. at L. 2, chap. enforce just rights.
20. "It is also the quantity actually received “But much more should duties not be exhere by which alone the importer is bene- acted on what was lost or destroyed on its fited. It is all he can sell again to custom- way hither, and which never came even into
It is all he can consume. It is all he the possession or control of the customcan re-export for drawback. 1 Stat. at L house officers, and much less into the use of 680-689, chap. 22; 4 Stat. at L. 29, chap. the community.”
The doctrine of this decision clearly supAfter instancing, certain cases provided ports the proposition that it would be in. * for in a statute where*a fixed percentage equitable and presumably not within the in
was directed to be deducted for leakage and tention of Congress to assess duty upon an breakage and a reduction in weight for tare article which on a voyage to this country and draff, the court further said (p. 633, L. and before arrival within the limits of a ed. p. 288):
port of entry had become utterly worthless "But beside these instances, in cases of an by reason of casualty, decay, or other natactual injury to an article arriving here in ural causes, and which the importer might a damaged state, a reduction from the value rightfully abandon and refuse to receive or is permitted expressly on account of the di- enter for consumption. In other words, minished value. 1 Stat. at L. 41, chap. 5, that articles thus circumstanced were not in 186, chap. 35, 365, chạp. 22.
truth within the category of goods, wares, “The former cases referred to for illus- and merchandise imported into the United tration rest on their peculiar principles, and States, within the meaning of the tariff allowances in them are made by positive laws. The ruling in Marriott v. Brune was provisions in acts of Congress, even though approved and applied in United States v. the quantity and weight of the real article Southnayd, 9 How. 637, 13_L. ed. 290, meant to be imported should arrive here. and Lawrence v. Caswell, 13 How. 488, 14 Because, knowing well that the whole is not L. ed. 235, and it has been consistently reclikely to arrive, and being able to fix, by a ognized by this court that as a general rule general average, the ordinary loss in those duties are intended to be levied only upon cases with sufficient exactness, the matter the value of goods which possess some in. has been legislated on expressly.
trinsic or other value at the time when "Yet there are other cases of loss, from ordinarily the duty would attach on an ar. various causes, which may be very uncer- ticle. tain in amount, for which no fixed and in- That the policy we have stated was re flexible rate of allowances can be prescribed, garded by Congress as the true doctrine to and which must, therefore, in each instance, be applied, is shown by the legislation with be left to be regulated by the general pro- respect to the remission of duties upon visions for assessing duties, and the general goods, wares, and merchandise in general, principles applicable to them, as before ex. to the extent that the same were damaged. plained. Consequently, where a portion of Thus, as stated in United States v. Bache, the shipment in cases like these does not ar- 8 C. C. A. 258, 20 U. S. App. 286, 59 Fed. rive bere, and hence does not come under 762, 763, the statutory system, from 1799 to the possession and cognizance of the cus- the adoption of the tariff act of October 6, tomhouse officers, it cannot, as heretofore 1890, in regard to rebates of duties on ac shown, be taxed on any ground of law or of count of damage to imported merchandise truth and propriety, and does not therefore in transit, was embodied in § 2927 of the require for its exemption any positive en- Revised Statutes, being a substantial re actment by Congress.
production of a section of the act of 1799. "Such is the case of a portion being lost | The section of the Revised Statutes reads as by perils of the sea, or by being thrown follows: overboard to save the ship; or by fire, or *"Sec. 2927. In respect to articles thati piracy or larceny, or barratry, or a sale and have been damaged during the voyage, delivery on the voyage, or by natural decay. whether subject to a duty ad valorem, or If there be a material loss, it can make no chargeable with a specific duty either by difference to the sufferer or the government number, weight, or measure, the appraisers whether it happened by natural or artificial shall ascertain and certify to what rate or causes. In either case, the article to that percentage the merchandise is damaged, and extent is not here to be assessed, nor to be the rate of percentage of damage, so ascer. of any value to the owner.
tained and certified, shall be deducted from "To add to such unfortunate losses, the the original amount subject to a duty ad burden of a duty on them, imposed after- valorem, or from the actual or original awards, would be an uncalled-for aggrava- number, weight, or measure, on which spe ation, would be adding cruelty to misfor. cific duties would have been computed. No tune, and would not be * justified by any allowance, however, for the damage on any
23 S. C.-6.
merchandise that has been entered, and on made in consequence of rust of iron or which the duties have been paid or secured steel, etc. Again, in treasury decision No. to be paid, and for which a permit has been 1,167, of date July 8, 1872, fruit which had granted to the owner or consignee thereof, become worthless on the voyage of importa and which may on examining the same tion was held not dutiable, and the proviprove to be damaged, shall be made, unless sion of the act of July 14, 1870, limiting proof to ascertain such damage shall be the damage allowance on fruit, was held not lodged in the custom house of the port to apply, and it was ordered that the case where such merchandise has been landed should be treated as if no importation had within ten days after the landing of such been made. In the course of the decision, merchandise.”
known as treasury decision No. 3,236, of So, also, by § 2921 of the Revised Stat- date May 14, 1877, after ruling that the utes [U. S. Comp. Stat. 1901, p. 1929), it "quantity" specified in the act of July 14, was provided as follows:
1870 (16 Stat. at L. 265, chap. 255, § 21), “Sec. 2921. If, on the opening of any limiting allowances for damage to green package, a deficiency of any article shall be fruit, referred to the quantity specified in found, on examination by the appraisers, the damage application and landed in the the same shall be certified to the collector United States, it was observed (italics not on the invoice, and an allowance for the in the original): same be made in estimating the duties.". “In many instances a portion of a cargo
By the act of July 14, 1870 (16 Stat. at of green fruit becomes wholly worthless by L. 265, chap. 255), however, an exception decay, and such portion is to be excluded in was ingrafted upon the general provision as considering the quantity upon which dam. to allowances for damage which might have age is to be estimated, unless it is included resulted to goods, wares, and merchandise in the damage warrant.” on the voyage, by the enactment that no al.
In treasury decision No. 3,272, dated lowance should be made with respect to cer- July 21, 1877, passing upon a case where an tain fruits, for loss by decay on a voyage, importer, in his application for damage.al. unless the same should exceed 25 per cen- lowance upon 41 barrels of oranges, in. tum of the whole quantity, and the allow- cluded as part of the 41 barrels, 204 bar. ance then made should be only for the rels of entirely worthless oranges, it was de amount of loss in excess of 25 per centum clared that, if the goods had been landed in of the whole quantity. As said in Scatter the United States as any other merchandise, good v. Tutton, 2 Fed. 28, the limitation and no damage application had been filed, was applied “manifestly to avoid allowance duty would have accrued thereon; whereas for trifling losses." While, however, cer: if they had been thrown overboard at sea, tain fruits were made dutiable by the tariff no duty would accrue, as there would have act of March 3, 1883 (22 Stat. at L. 504, been no importation of that quantity. In chap. 121), and certain other fruits (in treasury decision No. 4,126, of date August cluding pineapples) were placed on the free 1, 1879, upon application being made for list (1d. 519, chap. 121), the discrimination a damage allowance upon an invoice of cer. referred to against damage allowances upon tain oranges and lemons, the goods were reimportations of fruit *was not continued, ported damaged "to the extent of 100 per and in § 23 of the customs administrative cent,-in other words, entirely worthless." act of 1890 fruits are not discriminated The ruling in treasury decision No. 1,167 against.
was applied, and it was held that, where In its decisions upon applications of im. fruit was so damaged on the voyage of importers to be exempted from payment of portation as to be entirely worthless, the duties because of the practical destruction Clause in the statute limiting the damage of an article while in transit to this coun- allowance to the excess over 25 per cent did try, or for an allowance because of damage not apply, and that the case should be occasioned to imported goods before arrival treated the same as if no importation had here, the Treasury Department has fre been made. Treasury Decision No. 9,719, quently applied the doctrine enunciated by dated November 19, 1889, reads as follows: this court in Marriott v. Brune, viz., that "Sir: The Department is in receipt of the purpose of Congress in enacting tariff your letter of the 13th instant, reporting laws was to exact the payment of duty only further on the appeal (5370) of Messrs. upon imported articles which were in truth Riley & Grey from your assessment of duty and in fact, entitled to the appellation of on certain card clothing, imported by them goods, wares, and merchandise, articles per 'Bulgarian' February 16, 1889, and which were not absolutely worthless, but found, upon examination, to have been de may possess some value for use or consump-stroyed by water during the voyage of imtion. Thus, in treasury decision No. 424, portation. of date July 15, 1869, duties were ordered “The appraiser reports that the clothing to be remitted on four cases of needles in question was wound in coils, and has which had become worthless by reason of been subjected to a complete soaking with being submerged in salt water on the voy- salt water, which has permeated the entiro age of importation. It was held that the coil, oxidizing the wire and completely rotcase did not come within the prohibition of ting the cotton backing, so that it is abso the 33d paragraph of the 3d section of the lutely worthless, and cannot be uzsed for any act of July 14, 1862 (12 Stat. at L. 546, purpose whatever, even as old junk. chap. 153), which prescribed that no allow- "In view of this report, the Department ance for partial loss or decay should be is of opinion that the card clothing is not