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J. Osgood Nichols, Asst. U. S. Atty., and W. Wickham Smith, for the United States.
Comstock & Washburn (Albert H. Washburn, of counsel), for importers.
HOUGH, District Judge. Study of the printed record confirms the impression that this case requires and will receive decision by the high appellate tribunals. I find nothing in this record, however, which enlarges previous knowledge as to the origin, nature, manufacture, or use of "steel wool.” All that is newly brought forward is a technical description or explanation of the articles specifically enumerated in paragraph 135 of the tariff act of 1897 (Act July 24, c. 11, § 1, Schedule C, 30 Stat. 161 [U. S. Comp. St. 1901, p. 1638]), made by men for the most part engaged in the trades of manufacturing or selling them. The argument based upon such evidence is not really that courts and appraisers have hitherto been misled as to the nature of steel wool, but that they have not given sufficient importance to the nature of the articles specifically enumerated in paragraph 135 ; and it is strenuously urged that, had such due consideration been given, it would have appeared that the catalogue of articles contained in that paragraph comprises the cruder or simpler products of a rolling mill, and that therefore the catch-all clause thereof should not be extended to include so highly manufactured an article as is here under consideration; i. e., steel wool or steel shavings.
It seems to me going too far to describe the articles of steel specifically enumerated in paragraph 135 as “crude,” or even “simple," for many of them are of complex design, and all presuppose great inventive and mechanical skill, and are finished or completed in the sense that they are ready for the markets of the world. But it is true that as a class they are, though the finished products of the mill, but the raw material for some other metal industry for the machine shop or the builder. No article there enumerated is ordinarily used by the final consumer, or put to its ultimate use, by the name or in the shape described by the name used in paragraph 135. If, therefore, the material of a steel ingot (dutiable under paragraph 135), after becoming a wire rod (dutiable under paragraph 136), and next wire (dutiable under paragraph 137), and finally steel wool, legally reverts in its ultimate form to the category from which it started (as it does by being considered a “form or shape of steel"), it is certainly difficult to see how any manufacture wholly of steel can ever be assigned to paragraph 193. In truth an "article * * * composed wholly * * * of steel” is necessarily a "form or shape of steel.” To be sure, it is shown in this case that the word "shape” has a technical meaning and is applied to certain standard products of structural steel materiale. g., tees, angle bars, bulbs, etc. But no manufacturer could fill an order for steel forms or "forms of steel," so that the confusion between the two paragraphs obviously exists, unless the rule of ejusdem generis be applied to paragraph 135. With the Appraisers, who filed the decision appealed from, I feel the force of this reasoning, but perceive no facts in the present record authorizing a departure from (C. C.) 140 Fed. 772, while the legal reasoning above outlined can not be
reconciled with United States v. Binney, 82 Fed. 992, 27 C. C. A. 347.
It follows that the appeal of the United States cannot be sustained in this court.
The point raised by the importers' appeal has been decided adversely to it in previous cases ([C. C.] 140 Fed. 772); and it does not, in my opinion, bear further argument.
The importers' appeal is denied.
WESTERN UNION TELEGRAPH CO. v. ANDREWS et al.
(Circuit Court, E. D. Arkansas, W. D. June 22, 1907.) 1. COBPORATIONS-FOREIGN CORPORATIONS-DOING BUSINESS IN STATE
FAILURE TO COMPLY WITH LAW-PENALTIES_ACTIONS-NATURE AND
An action to recover a penalty against a foreign corporation for doing business in Arkansas without complying with Act May 13, 1907, was not a criminal prosecution, so as to be beyond the jurisdiction of the federal courts of chancery sitting in that state to enjoin the maintenance thereof, but was entirely a civil proceeding.
[Ed. Note.-Enjoining proceedings in state courts, see notes to Garner v. Second Nat. Bank, 16 C. C. A. 90; Central Trust Co. of New York
V. Grantham, 27 C. C. A. 575; Copeland v. Bruning, 63 C. C. A. 437.) 2. COURTS-FEDERAL COURTS-JURISDICTION-ACTION AGAINST STATE.
Act Ark. May 13, 1907, provides that foreign corporations shall not do business in the state until they have complied with the act, which requires the filing of a copy of the articles of incorporation, with the consent that service of process may be had on the Secretary of State, and that it will not remove any action against it to any federal court without consent of the other party, requires payment of certain specified fees, and declares that any foreign corporation failing to comply and doing business in the state shall be subject to a fine of not less than $1,000, to be recovered in suits to be brought in the name of the state by the prosecuting attorneys for the benefit of the county in which the suit is brought, and paid into the county's general revenue; one-fourth of the recovery to belong to the prosecuting attorney as a part of his compensation. Held, that a suit by a foreign telegraph company, having failed to comply. with such act, against the prosecuting attorneys of the judicial circuits of the state, to restrain them from instituting any proceedings to recover penalties against complainant for its refusal to comply with the act on the ground that it was unconstitutional, was an action against the defendants merely in their capacity as attorneys for the state, and was in effect a suit against the state, within Const. U. S. Amend. 11, declaring that the judicial power of the United States shall not extend to any suit commenced or prosecuted against one of the United States by citizens of another state, etc.
(Ed. Note.--Federal jurisdiction of suits against state, see note to Tindall v. Wesley, 13 C. C. A. 165.] SAUE-STATE AS PARTY.
No suit can be maintained in the courts of the United States against the officers of a state, when the state, though not named in the pleadings, is the real party against which the relief is asked and the judgment will operate.
(Ed. Note.--For cases in point, see Cent. Dig. vol. 13, Courts, $ 84442.] 4. SAME.
A suit is maintainable in the federal courts against a state officer claiming under an unconstitutional state statute, where he holds posses
sion or is about to take possession or commit a trespass on property belonging to or in plaintiff's possession.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 13, Courts, $ 84442.] 5. STATES-STATE OFFICERS-ACTIONS AGAINST OFFICERS.
The exemption of a state from judicial process does not protect its officers and agents from personal liability in an action of tort by a private person whose rights of property have been wrongfully invaded or injured by the authority of the state; and in case the remedy at law is inadequate the officers may be restrained by injunction from doing positive acts for which they would be personally liable for taking or injuring plaintiff's property in violation of the Constitution and laws of the
United States. 6. SAME--REAL PARTY IN INTEREST.
A state is the real party in interest in a suit brought against its officers, when the relief sought is that which inures to the state alone, or when the suit will have the effect of depriving the state of funds or prop
erty in its possession. 7. SAME-ENFORCEMENT OF TARIFF.
An action to prevent the enforcement of a tariff which is unreasonable and confiscatory, and which is to be enforced by a commission or other officials acting merely as administrative agents for the state, is not one against the state, if the act is unconstitutional and void as against the plaintiff ; but the rule is otherwise where the proceeding is against the officers of the state to test the constitutionality of the statute in the enforcement of which the officers will act only by formal judi. cial proceedings in the courts of the state as its attorneys.
Rose, Hemingway, Cantrell & Loughborough, Henry D. Estabrook, and Rush Taggart, for complainant.
William F. Kirby, Atty. Gen., and Lewis Rhoton, Pros. Atty., for defendants.
TRIEBER, District Judge. The complainant, a corporation existing under the laws of the state of New York and engaged in the business of conveying messages by telegraph, seeks by this bill to enjoin the defendants, who are the prosecuting attorneys of the 17 judicial circuits of the state of Arkansas, from instituting against it any proceedings for penalties for its failure or refusal to comply with the provisions of an act of the General Assembly of the state entitled “An act to permit foreign corporations to do business in Arkansas, and fixing fees to be paid by all corporations," approved May 13, 1907. The act is as follows:
“Section 1. Every company or corporation incorporated under the laws of other states, territory or country, including foreign railroad and foreign fire and life insurance companies, now or hereafter doing business in this state, shall file in the office of the Secretary of State of this state a copy of its charter or articles of incorporation or association, or a copy of its certificate of incorporation, duly authenticated and certified by the proper authority, together with a statement of its assets and liabilities, and the amount of its capital employed in this state, and shall also designate its general office or place of business in this state, and shall name an agent upon whom process may be served: Provided, before authority is granted to any foreign corporation to do business in this state, it must file with the Secretary of State a resolution adopted by its board of directors, consenting that service of process upon any agent of said company in this state, or upon the Secretary of State in this state in any action brought or pending in this state, shall be valid service upon said company; and if process is served upon
the Secretary of State it shall be his duty to at once send it by mail, addressed to the company at its principal office; and if any company shall, without consent of the other party to any suit or proceeding brought by or against it in any court of this state, remove said suit or proceeding to any federal court, or shall institute any suit or proceeding against any citizen of this state in any federal court, it shall be the duty of the Secretary of State to forthwith revoke all authority of said company and .its agents to do business in this state, and to publish such revocation in some newspaper of general circulation published in this state; and if any such corporation shall thereafter continue to do business in this state it shall be subject to the penalty of this act for each day it shall continue to do business in the state after such revocation.
"Sec. 2. Any foreign corporation which shall fail to comply with the provisions of this act, and shall do any business in this state, shall be subject to a fine of not less than $1,000 to be recovered before any court of competent jurisdiction, and all such fines so recovered shall be paid into the general revenue fund of the county in which the cause of action shall accrue, and it is hereby made the duty of the prosecuting attorneys to institute said suits in the name of the state for the use and benefit of the county in which the suit is brought, and such prosecuting attorney shall receive, as his compensation, one-fourth of the amount recovered ; and, as an additional penalty, any foreign corporation which shall fail or refuse to file its articles of incorporation or certificate as aforesaid, cannot make any contract in this state which can be enforced by it either in law or equity, and the complying with the provisions of this act after suit is instituted shall in no way validate sa id contract.
*Sec. 3. That all corporations hereafter incorporated in this state, and all foreign corporations seeking to do business in this state, shall pay into the treasury of this state for the filing of said articles a fee of $25 where the capital stock is $50,000 or under ; $75 where the capital stock is over $50,000 and not more than $100,000, and $25 additional for each $100,000 of capital stock. Any foreign mutual corporation having no capital stock shall be required to pay to the Secretary of State for filing its articles of incorporation the sum of $300: Provided, however, nothing in this section shall apply to fraternal orders that write insurance.
"Sec. 4. That Act No. 185, approved April 17, 1907, and entitled 'An act to provide a manner in which foreign corporations may become domestic corporations, and for other purposes,' and all laws and parts of laws in confiict herewith, be and the same are hereby repealed."
The bill, so far as it is necessary to set it out for the purpose of the demurrer to the jurisdiction, charges that the complainant is now, and has been for years, engaged in the telegraph business throughout the United States, and within the state of Arkansas, having fully complied with the acts of Congress which are set out in the bill, and also the valid laws of the state of Arkansas; that it has invested over $160,000 in building and maintaining its lines and offices in this state, and that for certain reasons unnecessary to mention in this statement this act is unconstitutional as to complainant; that for this reason it does not deem itself bound to pay the fees attempted to be exacted from it by this act for the purpose of continuing its business in this state, and which fees, it is alleged, exceed $25,000; that the various prosecuting attorneys of the state in whose districts complainant is carrying on its business, unless restrained by the order of the court, will, as they have threatened to do, institute numerous actions for the recovery of the penalties prescribed by the act, which is no less than $1,000 for each alleged violation. Defendants challenge the jurisdiction of this court upon two grounds: First, that an action for the penalties is a
criminal prosecution, and for this reason it is not within the jurisdiction of this court, sitting as a court of chancery, to enjoin actions for their recovery; second, that the action is one against the state, which is not the real party to be affected thereby, and for that reason within the prohibition of the eleventh amendment to the Constitution of the United Statės.
1. As the act merely provides for the recovery of a penalty, it is, under the laws of the state of Arkansas, as construed by the decisions of its highest court, a civil suit, and not a criminal prosecution, within the meaning of the Constitution and laws of the state of Arkansas. Railway Co. v. State, 56 Ark. 166, 19 S. W. 572; Kansas City & C. R. Ř. Co. v. State, 63 Ark. 134, 37 S. W. 1047; St. L., I. M. & S. Rv. Co. v. State, 68 Ark. 561, 60 S. W. 654; C., O. & G., etc., Ry. v. State, 75 Ark. 369, 87 S. W. 631. In those cases the actions were instituted for alleged violations of section 6595, Kirby's Dig., digested in Mansfield's Digest as section 5478, and in Sandels & Hill's Digest as section 6196. That act provided for a penalty of $200 for the failure of any railroad company to blow its whistle or ring its bell when at least 80 rods from the place where the train crosses a road. Following the construction of the highest court of the state in the interpretation of its Constitution and statutes, the court holds that this is not an action to restrain criminal prosecutions, but an action to enjoin civil suits for the recovery of penalties.
2. Is this an action against the state, within the prohibition of the eleventh amendment to the Constitution ? Counsel for. both parties have cited numerous cases to sustain their respective contentions. A careful examination of these cases shows that the supposed conflicting views of the Supreme Court of the United States, as well as those of the national courts inferior to that tribunal, are not real, and that, considering carefully the facts in each case, there is little trouble in reconciling these supposed divergent views and arriving at a correct conclusion as to what is now the settled law as declared by the Supreme Court of the United States. The principle as laid down by Chief Justice Marshall in Osborn v. Bank of the United States, 9 Wheat. 738, 856, 6 L. Ed. 204, that a state is not sued unless it is named as a defendant, upon the record, may be said to have been abandoned long ago. To review all the cases determined by the Supreme Court of the United States and the numerous inferior national courts on that subject since Osborn v. Bank of the United States would serve no useful purpose, as the later decisions review all these cases and formulate what must now be considered the law on that subject.
A leading case on that question is In re Ayers, 123 U. S. 443, 487, 502, 503, 8 Sup. Ct. 164, 31 L. Ed. 216. In that case Mr. Justice Matthews, delivering the opinion of the court, said:
"It must be held as the settled doctrine of this court, established by its recent decisions, that the question whether a suit is within the prohibition of the eleventh amendment is not always determined by reference to the nominal parties on the record.' This, it is true, is not in harmony with what was said by Chief Justice Marshall in Osborn v. Bank of the United States. "The state not being a party on the record, and the court having jurisdiction over those who are parties on the record, the true question is not one of jurisdiction, but whether, in the exercise of its jurisdiction, the court ought