tion under existing law, for the reason that such exemption as its predecessor in interest, the Sante Fe and Grand Canyon Railway Company, may have had, did not pass to the plaintiff under and by virtue of its purchase of the latter's property. Memphis Railroad Co. v. Commissioners, 112 U. S. 617; Chesapeake & Ohio Railway Co. v. Miller, 114 U. S. 176. The Supreme Court held otherwise.

The rule that in case of doubt regarding the meaning of a territorial statute, this court will lean to the construction placed upon the same by the Supreme Court of the Territory has no application to this case, as it cannot be reasonably claimed that any doubt exists of the legislative intent to deny exemption from taxation to companies purchasing railroad property and franchises at judicial sale. But should doubt be suggested, and the claim be made that it is such as should incline the court to lean to the construction given by the court below, then under the settled rule that doubt must be resolved against the exemption, the effect is the same as though the legislative intent to deny the exemption were unmistakable, and the ruling of the court below resolving the doubt in favor of the exemption was clearly wrong.

Mr. Robert Dunlap, with whom Mr. T. J. Norton and Mr. Gardiner Lathrop were on the brief, for appellee.

MR. JUSTICE HOLMES delivered the opinion of the

court.

This is a bill brought by the Railway Company, the appellee, to restrain the collection of taxes from which it says that it is exempt. The facts in brief are these: A predecessor of the appellee, the Santa Fe and Grand Canyon Railroad Company, between August, 1899, and October, 1900, built over fifty-six miles of the road concerned. In July, 1901, this road was sold on foreclosure sale to pur

chasers who organized the appellee and in August conveyed the road to it. The new company finished the road to the edge of the Grand Canyon and laid out stations and hotel grounds at the end. In 1906 the Territorial Board undertook to levy the tax complained of. The Supreme Court held that the appellee was exempt. 12 Arizona, 69; 95 Pac. Rep. 187; 12 Arizona, 117; 100 Pac. Rep. 438.

The railroad company was organized under Act No. 3, February 8, 1897, of the Territory (Laws 1897, p. 5) which authorized such corporations to be formed for the purpose of buying the property of railroads sold on foreclosure, and to buy and exercise "all the rights, privileges, franchises, immunities and powers" of their predecessors. By § 7 such corporations were to have all rights, immunities, &c., then or thereafter given to any railroad organized under the general laws; but by § 8 it was provided that the act should not be construed "to give to any corporation created under it, any exemption from taxation created by any existing or future exemption laws of the Territory of Arizona." The question does not stand on this act alone, however, and the cases discussed in Rochester Railway Co. v. Rochester, 205 U. S. 236, for by a later statute of March 16, 1899, No. 68 (Laws 1899, p. 79) "for the purpose of inducing and encouraging the construction of railroads" it was provided that the "property used or necessary in the construction and operation of railroads," of roads thereafter constructed, "whether owned or operated by a person or persons, association or railway corporation, his their or its successors or assigns," should be exempt from all manner of taxation for ten years from the date of the act. The Supreme Court held that this exemption was in rem, so to speak, went with the land, and extended to the assigns of the first road.

No doubt a strong argument can be made and was made for a different view, based on the passage before and on the date of the act of 1897 of statutes like that of 1899.

But the considerations that prevailed also are cogent and so obvious as not to need statement. Moreover, the question is not whether the later statute constituted a contract, Damon v. Hawaii, 194 U. S. 154, 160; Wisconsin & Michigan Ry. Co. v. Powers, 191 U. S. 379. The courts of the Territory have given to the railroad the rights that it claims, as against the territorial authorities seeking to levy the tax. The only question is whether any sufficient reason appears for not following the construction given to a local statute by the territorial court, when that construction is inherently reasonable, is at least the first to strike the mind, and is one that protects private rights. It is enough to answer that, on the principle followed so far as may be by this court, there is no such manifest error as to warrant us in reversing the decision below. Fox v. Haarstick, 156 U. S. 674, 679. English v. Arizona, 214 U. S. 359, 361, 363.

Judgment affirmed.

GANDIA v. PETTINGILL.

ERROR TO THE DISTRICT COURT OF THE UNITED STATES FOR PORTO RICO.

No. 97. Argued December 14, 1911.-Decided January 9, 1912.

In the absence of express malice or excess, publication of actual facts is not libellous, and in case of mere excess without express malice the only liability is for damages attributable to the excess; and refusal of the trial court to charge to this effect is error. Quare: whether attributing to a person conduct that is lawful can be libellous.

The stricter practice is to note the exceptions before the jury retires; but if all the exceptions are noted in open court after jury returns and no wrong is suffered, an exception will not be sustained on that ground.

4 Porto Rico Fed. Rep. 383, reversed.

222 U. S.

Argument for Plaintiffs in Error.

THE facts are stated in the opinion.

Mr. Frederic D. McKenney, with whom Mr. John Spalding Flannery, Mr. William Hitz and Mr. H. H. Scoville were on the brief, for plaintiffs in error:

It was error in law on the part of the trial judge to refuse to permit counsel for defendant below to state, while the jury was yet at the bar, his exceptions to such portions of the court's instructions to the jury as seemed to him to be objectionable either in matter of law or in matter of fact. Phelps v. Mayer, 15 How. 160; United States v. Breitling, 20 How. 252; Dredge v. Forsyth, 2 Black, 563, 564; Bram v. United States, 168 U. S. 532, 571.

The rule has been frequently reiterated and followed in the inferior Federal courts. Stone v. United States, 64 Fed. Rep. 667, 677; Little Rock Granite Co. v. Dallas Co., 66 Fed. Rep. 522; Johnson v. Garber, 73 Fed. Rep. 523; Merchants' Bank v. McGraw, 76 Fed. Rep. 930, 935; New England Co. v. Cathicolicon Co., 79 Fed. Rep. 294, 295; West. Un. Tel. Co. v. Baker, 85 Fed. Rep. 690; Greene v. United States, 154 Fed. Rep. 401, 412; Accident Assn. v. Fulton, 79 Fed. Rep. 423; Dalton v. Moore, 141 Fed. Rep. 311, 314; Mining Co. v. Firment, 170 Fed. Rep. 151; Mann v. Dempster, 179 Fed. Rep. 837.

In Perez v. Fernandez, 202 U. S. 80, 91, this court spoke of the difficulty of undertaking to establish a common-law court and system of jurisprudence in a country hitherto governed by codes having their origin in the civil law, where the bar and the people know little of any other system of jurisprudence.

In the case at bar, however, the Porto Rican legislature by statutory enactment had "established" the civil action to recover damages for libel and slander and had carefully defined each of such offenses, had established certain rules for the guidance of the courts in the administration of such actions, and had declared in precise phrase

Argument for Plaintiffs in Error.

222 U.S.

when the existence of malice might or might not be presumed, and had provided by § VI, that if the plaintiff be a public employé, and the libel refers to acts connected with his office, judgment shall be rendered for the defendant if he prove the truth of his charges.

Under the generally established American law in every instance of slander, either verbal or written, malice is an essential ingredient, and whenever substantially averred and the language, either written or spoken, is proved as laid, its existence will be inferred by the law until, in the event of denial, the proofs be overthrown or the language itself be satisfactorily explained.

Under the Porto Rican law publications or communications of certain specified classes (see § 4) are expressly excluded from any presumption or inference of malice— an exception to the law of inference being (see § 5) cases of injurious communications or writings "made without justifiable motive and addressed to persons other than to a relative within the third degree or other persons specifically identified."

Under the American law words prejudicial in a pecuniary sense, e. g., implying unfitness of a person in office, or improper conduct on his part in connection therewith, are said to be actionable per se, whereas, under the Porto Rican law (see § 6), if the plaintiff be a public employé and the alleged libel refers to acts connected with the conduct of his office, judgment shall be rendered for the defendant if he prove the truth of his charges.

Under the American law, in a criminal prosecution for libel, the truth of the charges made constitutes no defense: White v. Nichols, 3 How. 266; Dorr v. United States, 195 U. S. 138; although it is otherwise in the civil action to recover damages for libel.

Under the Porto Rican law the truth of the matters, written or spoken, of any public employé, is a complete defense to an action of libel and would equally seem to