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Cincinnati, N. O. & T. P. R. Co. v. Rankin, 241 U. S. 319, 326, 60 L. ed. 1025, L.R.A.1917A, 265, 36 Sup. Ct. Rep. 555; Chesapeake & O. R. Co. v. McLaughlin, 242 U. S. 142, 61 L. ed. 207, 37 Sup. Ct. Rep. 40; Erie R. Co. v. Stone, 244 U. S. 332, 335, 61 L. ed. 1173, 1174, 37 Sup. Ct. Rep. 633; St. Louis, I. M. & S. R. Co. v. Starbird, 243 U. S. 592, 596, 61 L. ed. 917, 921, 37 Sup. Ct. Rep. 462.

The limitation as to notice of claim for damage in a bill of lading may not be waived by the agent at destination.

Georgia, F. & A. R. Co. v. Blish Mill. Co. 241 U. S. 190, 60 L. ed. 948, 36 Sup. Ct. Rep. 541; Missouri, K. & T. R. Co. v. Ward, 244 U. S. 383, 388, 61 L. ed. 1213, 1216, 37 Sup. Ct. Rep. 617; Chicago & A. R. Co. v. Kirby, 225 U. S. 155, 166, 56 L. ed. 1033, 1038, 32 Sup. Ct. Rep. 648, Ann. Cas. 1914A, 501; Phillips Co. v. Grand Trunk Western R. Co. 236 U. S. 662, 59 L. ed. 774, 35 Sup. Ct. Rep. 444; Southern R. Co. v. Prescott, 240 U. S. 639, 60 L. ed. 839, 36 Sup. Ct. Rep. 469.

The question of whether there is any evidence of waiver under the terms of an interstate bill of lading is essentially Federal.

St. Louis, I. M. & S. R. Co. v. Starbird, 243 U. S. 592, 601, 61 L. ed. 917, 923, 37 Sup. Ct. Rep. 462.

Mr. Frank W. Hackett argued the cause, and, with Messrs. B. M. Lee and John S. Blair, filed a brief for respond

ent.

Mr. Justice McReynolds delivered the opinion of the court:

Respondent Leach sued the petitioners for damages sustained en route by cattle delivered at East St. Louis, [218] Illinois, October 1, 1914, for shipment to Georgetown, Kentucky. In defense the carriers set up noncompliance with the following provision contained in bill of lading issued as required by act of Congress: "That no claim for damages which may accrue to the said shipper under this contract shall be allowed or paid by the said carrier, or sued for in any court by the said shipper, unless a claim for loss or damages shall be made in writing, verified by the affidavit of the shipper or his agent, and delivered to the general freight agent of said carrier, at his office in Cincinnati, Ohio, within five days from the time said stock is removed from said car or cars; and that if any loss or damage occurs upon the line of connecting carrier, then such carrier shall not be liable unless a claim shall be made in like manner and deliv

ered in like time, to some proper officer or agent of the carrier on whose line the loss or injury occurs." This averment was not denied; but the shipper replied that he promptly advised the railroad's agent at Georgetown of all essential facts, and maintained that requirements in respect of written notice to general freight agent had been waived.

The point involved has been discussed in our recent opinions and we can find nothing which takes this case out of the rule requiring compliance with a provision in a bill of lading like the one above quoted. St. Louis, I. M. & S. R. Co. v. Starbird, 243 U. S. 592, 61 L. ed. 917, 37 Sup. Ct. Rep. 462; Southern P. Co. v. Stewart [decided January 13, 1919, 248 U. S. 446, ante, 350, 39 Sup. Ct. Rep. 139].

The judgment below is reversed and the cause remanded for further proceedings not inconsistent with this opinion. Reversed and remanded.

Mr. Justice Pitney and Mr. Justice Brandeis concur in the result.

Mr. Justice Clarke, dissenting: In this case the shipper sued two connecting interstate [219] carriers for damages to a carload of cattle, caused by delay in transit. Three died in the car and four more within three or four days of arrival at destination, and the defense sustained by the court is failure to notify the carrier of claim for damages within five days of unloading.

The carrier pleaded that one of the terms of the bill of lading was the fiveday limitation, quoted in the opinion of the court. This was immediately preceded, in the same paragraph, by the following:

"That in the event of any unusual delay or detention of said live stock, caused by the negligence of the said carrier, or its employees, or its connecting carriers, or their employees, or otherwise, the said shipper agrees to accept as full compensation for all loss or damage sustained thereby the amount actually expended by said shipper in the purchase of food and water for said live stock, while so detained."

In Boston & M. R. Co. v. Piper, 246 U. S. 439, 62 L. ed. 820, 38 Sup. Ct. Rep. 354, Ann. Cas. 1918E, 469, a provision in exactly these terms was held "illegal and consequently void," as an attempt by the carrier to exonerate itself from loss negligently caused by it. This is the only provision in the bill of lading, as pleaded, which is applicable to a claim for delay, such as the shipper made in this case, and

since it is void, there is nothing in the con- | his office," and of statutory provisions tract for carriage on which the five-day supplementing the Constitution, one of limitation could operate, for it applied in which provides that all moneys belonging terms only to claims "for damages which to the state, deposited in banks by the state may accrue to said shipper under this credit as an individual, but in his name as treasurer, shall be deposited not to his

contract."

The suit of the shipper was based on the common-law liability of the carrier,-not at all on the bill of lading; the five-day limitation is in terms applicable only to claims under the bill of lading; the only provision in the bill of lading applicable to claims for delay was void, and therefore it seems very clear that the five-day

limitation was not available as a defense.

Permit me to add that the many cases coming into this [220] and other courts show that this five-day limitation is unreasonably short, and in my judgment, for this reason, it should be declared void upon its face. Certainly it should not be made a favorite of the law and extended beyond its strict terms, in presence of the act of Congress, approved March 4, 1915 (38 Stat. at L. 1196, chap. 176, Comp. Stat. 1916, § 8604a), declaring that where in such suit the damage complained of is "due to delay or damage

in trans

it by carelessness or negligence, then no notice of claim nor filing of claim shall be required as a condition precedent to recovery." While the case before us arose prior to the passing of this act, it is an important declaration of public policy by Congress, which should not be overlooked. For the reasons thus briefly stated, I cannot concur in the opinion of the court.

Mr. Justice McKenna also dissents.

state treasurer.

[For other cases, see Officers, IV. in Digest

Sup. Ct. 1908.]

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STATE OF SOUTH DAKOTA, Complain- and it is provided by the Constitution

ant,

V.

CHARLES B. COLLINS.

(See S. C. Reporter's ed. 220–223.)

compensation

interest on

Officers public moneys. The retention by the state treasurer of South Dakota of interest received by him as such officer upon moneys of the state deposited by him in various banks must be deemed unlawful, in view of the provision of the Constitution of that state,

that the state treasurer shall not "receive any fees or perquisites whatever for the performance of any duties connected with

Note.-On meaning of term "perquisites" in statutes or ordinances in relation to officers-see note, to Ware v. Battle Creek, L.R.A.1918E, 675.

of the state that neither the treasurer nor any other officer of the state shall "receive any fees or perquisites whatever for the performance of any duties connected with his office." And there are statutory provisions supplementing the Constitution, one of which is that "all moneys belonging to the state, deposited in banks by the state treasurer, shall be deposited not to his credit as an individual, but in his name as state treasurer, and not otherwise." Rev. Pol. Code 1903, § 333.

It is alleged that defendant received the sum of $10,000 and more, and it is prayed that he be required to make a full and correct accounting of the moneys received by him and wrongfully withheld from the state.

Defendant answered as follows: "I

hereby deny the allegation as set forth in the complaint, and plead not guilty to the charge of misappropriating, withholding, or converting to my personal use any money belonging to the state of South Dakota during my term of office." On motion of plaintiff a referee was appointed to take the testimony on its part and that of defendant, and make findings and recommendations.

On May 9, 1918, the referee made return of his proceedings, with the evidence adduced, from which he concluded as follows:

supreme court of the state has decided (December 4, 1917), construing [223] § 333, supra, and other statutory provisions, that in cases like that at bar it is state funds that are deposited and that earn the interest, and not the money of the treasurer, and that, therefore, the interest becomes a mere increment of the principal fund, and when it is paid to the treasurer it is in effect paid into the state treasury, and the treasurer becomes liable for it. State v. Schamber, 39 S. D. 492, L.R.A.1918B, 803, 165 N. W. 241.

The report of the referee is approved and judgment directed to be entered against defendant in the sum of $32,094.27, with interest thereon at the rate of 7 per cent per annum from January 1, 1907, and for costs and disbursements of the suit.

[222] "That between January 1st, 1903, and January 10th, 1907, there was paid to the defendant as interest upon the moneys of the state of South Dakota, which was received by him as treasurer of said state, and paid to him on deposits in the several banks above named, interest amounting to $32,094.27; that said sum was received by the defendant as inter- ALVAH CROCKER et al., Trustees, Peest upon the public moneys of the state of South Dakota deposited by him as

titioners,

V.

Revenue.

(See S. C. Reporter's ed. 223–235.) Internal revenue

sociations - trust.

income tax - as

such state treasurer in said banks in JOHN F. MALLEY, Collector of Internal excess of his salary and all other sums due him from said state as state treasurer, and that the same was received and retained by him, and he rendered no account thereof to the plaintiff nor any of its officers, and paid no part of the same to the plaintiff or any of its officers, and that the said defendant appropriated the said sum to his own use." And the referee recommended that judgment be entered in favor of plaintiff and against defendant in the sum of $32,094.27, with interest thereon at the rate of 7 per cent per annum from January 1, 1907, and for plaintiff's costs and disbursements of the suit.

The case was put down for argument and subsequently submitted on brief, the defendant filing none.

1. The income from а common-law trust under which the trustees are to collect rents and income of such property as may be in their hands, and pay over to the holders of trustees' receipt certificates what they shall determine to be fairly distributable net income, with the right to apply any funds in their hands for the repair or development of the property held by them, or the acquisition of other property pending conversion and distribution, the receipt holders having no joint action is not taxable to the trustees as an asor interest and no control over the fund, sociation without any deductions in respect to dividends received from a corporation Counsel for the state submits quite a that itself pays an income tax by reason of long argument to sustain the report, with the provisions of the Income Tax Act of citation of authorities to establish the October 3, 1913 (38 Stat. at L. 166, chap. liability of defendant. It is not neces-16), § II. G (a), imposing a tax upon sary to review them. There is no doubt of defendant's liability. He has not appeared to contend to the contrary, and at the taking of the testimony his defense or extenuation was that he acted upon his faith in a decision of the supreme court of Colorado; and, to evade or to withhold aid from any possible criminal prosecution, he declined to answer in regard to transactions concerning the receipt of interest on the public moneys he had deposited in various banks.

the income of every corporation, joint stock company, or association, "no matter how created or organized:" and it is immaterial whether the individual receipt holders are entitled (as seems to be the practical construction) to the income of the fund subject to an unexercised power in the trustees, in their reasonable discretion, to divert it to the improvement of the capital, or whether they are not entitled to the income as such until they receive it.

Note. On meaning of term "association" as used in Income Tax Act-see note to the report of this case in 2

Further discussion is unnecessary. The A.L.R. 1606.

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re

covery back of excessive tax tention of amount justly due. 2. The collector of internal revenue, who unlawfully, but with probable cause, assessed for income-tax purposes the trustees in a common-law trust as an asso

income tax - re-, 114, 33 Week. Rep. 509, 54 L. J. Ch. N. S. 682; Re Thomas, L. R. 14 Q. B. Div. 379, 54 L. J. Q. B. N. S. 336, 51 L. T. N. S. 602, 33 Week. Rep. 583; Taylor v. Davis (Taylor v. Mayo) 110 U. S. 330, 28 L. ed. 163, 4 Sup. Ct. Rep. 147; Re Associated Trust, 222 Fed. 1012; Eliot v. Freeman, 220 U. S. 178, 55 L. ed. 424, 31 Sup. Ct. Rep. 360; Ward v. Brigham, 127 Mass. 27.

ciation, may retain out of the sum received by him the amount of the tax that they should have paid as trustees, since any recovery for the excess will, under U. S. Rev. Stat. § 989, Comp. Stat. 1916, § 1635, be from the United States, and if the United States retains from the amount received by it the amount that it should have received, it cannot recover that sum in a subsequent suit.

[For other cases, see Internal Revenue, VII. i, in Digest Sup. Ct. 1908.]

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The facts are stated in the opinion. Mr. Felix Rackemann argued the cause, and, with Mr. Harrison M. Davis, filed a brief for petitioners:

No claim can properly be made in this case of any association on the partnership theory.

Mayo v. Moritz, 151 Mass. 481, 24 N. E. 1083; Williams v. Milton, 215 Mass. 1, 102 N. E. 355; Meehan v. Valentine, 145 U. S. 611, 36 L. ed. 835, 12 Sup. Ct. Rep. 972; Bartlett v. Slater, 211 Mass. 334, 97 N. E. 991; Tyrrell v. Washburn, 6 Allen, 466; Hoadley v. Middlesex County, 105 Mass. 519; Whitman v. Porter, 107 Mass. 522; Cook v. Gray, 133 Mass. 106; Gleason v. McKay, 134 Mass. 419; Phillips v. Blatchford, 137 Mass. 510; Ricker v. American Loan & T. Co. 140 Mass. 346, 5 N. E. 284; Cunniff v. MeDonnell, 196 Mass. 7, 81 N. E. 879; Quimby v. Tapley, 202 Mass. 601, 89 N. E. 167; Williams v. Boston, 208 Mass. 500, 94 N. E. 808; Smith v. Anderson, L. R. 15 Ch. Div. 247, 43 L. T. N. S. 329, 29 Week. Rep. 21, 50 L. J. Ch. N. S. 39; Crowther v. Thorley, 50 L. T. N. S. 43, 32 Week. Rep. 330, 48 J. P. 292; Re Siddall, L. R. 29 Ch. Div. 1, 52 L. T. N. S.

In the interpretation of statutes levying taxes, it is the established rule not to extend their provisions by implication beyond the clear import of the language used, or to enlarge their operations so as to embrace matters not specifically pointed out. In case of doubt, they are construed most strongly against the government, and in favor of the citizen.

Gould v. Gould, 245 U. S. 151, 153, 62 L. ed. 211, 213, 38 Sup. Ct. Rep. 53.

If the court of appeals is correct as to the partnerships excluded from § II. G. (a), it would follow that organizations like the McKay Sewing Machine Association could not be taxed under that section. See Gleason v. McKay, 134 Mass. 419. This would be a surprising result.

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A suit against a collector of internal revenue to recover taxes claimed to have been illegally exacted is not a suit against the United States. United States v. Emery, B. T. Realty Co. 237 U. S. 28, 31, 59 L. ed. 825, 827, 35 Sup. Ct. Rep. 499.

It is settled that in suits of this kind

the plaintiff, if successful, recovers in

terest. Interest cannot be recovered in

an action against the United States.

Kinney v. Conant, 92 C. C. A. 410, 166 Fed. 720; Treat v. Farmers' Loan & T. Co. 108 C. C. A. 98, 185 Fed. 760; Schell v. Cochran, 107 U. S. 625, 27 L. ed. 543, 2 Sup. Ct. Rep. 827; National Home v. Parrish, 229 U. S. 494, 57 L. ed. 1296, 33 Sup. Ct. Rep. 944; Gulf Oil Corp. V. Lewellyn, 242 Fed. 709, affirmed in 248 U. S. 71, ante, 133, 39 Sup. Ct. Rep. 35; Klock Produce Co. v. Hartson, 212

Fed. 758.

A suit against a collector to recover taxes paid under protest cannot be brought against the collector's successor in office; it must be brought against the person to whom, as collector, the taxes were paid, although he ceased to be collector before suit brought.

Philadelphia, H. & P. R. Co. v. Lederer, 155 C. C. A. 268, 242 Fed. 492.

If such an action has been commenced and the defendant collector dies pending the suit, the cause of action survives, and the collector's personal representative,

not his successor in office, is the proper, tion whatever inter sese)," upon trust to party to be summoned in to defend. Patton v. Brady, 184 U. S. 608, 46 L. ed. 713, 22 Sup. Ct. Rep. 493.

Assistant Attorney General Frierson argued the cause and filed a brief for respondent:

This trust is a business organization which properly comes within the meaning of the word "association," as used in the act in question.

convert the same into money and distribute the net proceeds to the persons then holding the trustees' receipt certificates, the time of distribution being left to the discretion of the trustees, but not to be postponed beyond the end of twenty years after the death of specified persons then living. the trustees were to have the powers of They were to distribute what

owners.

In the meantime

Re Associated Trust, 222 Fed. 1012; 1 they determined to be fairly distributBouvier's Law Dict. "Association," Pests of the cestui que trusts, but could able net income according to the inter269; 4 Cyc. 301; 1 Words & Phrases, P. apply any funds in their hands for the repair or development of the property held by them, or the acquisition of other property, pending conversion and distribution.

584.

Mr. Justice Holmes delivered the opinion of the court:

court.

This is an action to recover taxes paid under protest to the collector of internal revenue by the petitioners, the plaintiffs. The taxes were assessed to the plaintiffs as a joint-stock association within the meaning of the Income Tax Act of October 3, 1913, chap. 16, § II. G (a), 38 Stat. at L. 114, 166, 172, and were levied in respect of dividends received from a corporation that itself was taxable upon its net income. The plaintiffs say that they were not an association, but simply trustees, and subject only to the duties imposed upon fiduciaries by § II. D. The circuit court of appeals decided that the plaintiffs, together, it would seem, with those for whose benefit they held the property, were an association, and ordered judgment for the defendant, reversing the judgment of the district C. C. A. —, 250 Fed. 817. [231] The facts are these: A Maine paper manufacturing corporation with eight shareholders had its mills on the Nashua river in Massachusetts, and owned outlying land to protect the river from pollution. In 1912 a corporation was formed in Massachusetts. The Maine corporation conveyed to it seven mills and let to it an eighth, that was in process of construction, together with the outlying lands and tenements, on a long lease, receiving the stock of the Massachusetts corporation in return. The Maine corporation then transferred to the plaintiffs as trustees the fee of the property subject to lease, left the Massachusetts stock in their hands, and was dissolved. By the declaration of trust the plaintiffs declared that they held the real estate and all other property at any time received by them thereunder, subject to the provisions thereof, "for the benefit of the cestui que trusts (who shall be trust beneficiaries only, without partnership, associate or other rela

The trust was explained to be because of the determination of the Maine corporation to dissolve without waiting for the final cash sale of its real estate, and was declared to be for the benefit of the eight shareholders of the Maine Company, who were to receive certificates subject to transfer and subdivision. [232] Then followed a more detailed statement of the power of the trustees and provision for their compensation, not exceeding 1 per cent of the gross income unless with the written consent of a majority in interest of the cestui que trusts. A similar consent was required for the filling of a vacancy among the trustees, and for a modifica

tion of the terms of the trust. In no other matter had the beneficiaries any control. The title of the trust was fixed for convenience as the Massachusetts Realty Trust.

The declaration of trust on its face is an ordinary real estate trust of the kind familiar in Massachusetts, unless in the particular that the trustees' receipt provides that the holder has no interest in any specific property and that it purports only to declare the holder entitled to a certain fraction of the net proceeds of the property when converted into cash, "and meantime to income." only property expressly mentioned is the

The

real estate not transferred to the Massa

chusetts corporation. Although the trustees in fact have held the stock of that corporation and have collected dividends. upon it, their doing so is not contemplated in terms by the instrument. It does not appear very clearly that the eight Maine shareholders might not have demanded it had they been so minded. The function of the trustees is not to manage the mills, but simply to collect the rents and income of such property as may be in their hands, with a large

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