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based are largely reduced by legislative action. In that way the consumer will be benefited by paying a reduced sum (although indirectly) for taxes.

We are also of opinion that it is not a case for a valuation of "good will." The master combined the franchise value with that of good will, and estimated the total value at $20,000,000.

The complainant has a monopoly in fact, and a consumer must take gas from it or go without. He will resort to the "old stand," because he cannot get gas anywhere else. The court below excluded that item, and we concur in that action.

The evidence shows that, to put a pressure such as is demanded by the acts upon the mains and other service pipes in their present condition would be to run a great risk of explosion, and consequent disaster. Before compliance with this provision would be safe, the mains and other pipes would have to be strengthened throughout their whole extent, and at an expenditure of many millions of dollars, from which no return could be obtained at the rates provided in the acts. This would take from the complainant the ability to secure the return to which it is entitled upon its property, used for supplying gas, and the provision as to the amount of pressure is therefore void. This particular duty imposed by the acts is, however, clearly separable from the enactments as to rates, and we have no doubt that the remainder of the statute would have been

And we concur with the court below in holding that the value of the property is to be determined as of the time when the inquiry is made regarding the rates. If the property which legally enters into the consideration of the question of rates has in-enacted, even with that provision omitted. creased in value since it was acquired, the company is entitled to the benefit of such increase. This is, at any rate, the general rule. We do not say there may not possibly be an exception to it where the property may have increased so enormously in value as to render a rate permitting a reasonable return upon such increased value unjust to the public. How such facts should be treated is not a question now before us, as this case does not present it. We refer to the matter only for the purpose of stating that the decision herein does not prevent an inquiry into the question when, if ever, it should be necessarily presented.

The obligation would remain upon the company to have a pressure sufficient to insure a light of 22 candle power, as provided in the acts.

The matter of the increased cost of the gas, resulting from the provisions of the acts as to making the gas equal to 22 candle power, is also alleged as a reason for inadequacy of rate.

It appears that the average candle power actually produced in the first six months of the year 1905 was 22, while but 20 candle power was exacted by law, and, for the last six months of that year, while 22 candle power was exacted, the average amount was 24.19. This expense was included in the operating expense of that year, which resulted in the net earnings above mentioned, while the company was complying with the requirements of the act in this particular.

It is unnecessary, therefore, to further inquire as to the additional expense caused by this requirement.

Again, it has been asserted that the laws are unconstitutional because of the provision as to pressure, and also by reason of the penalties which a violation of the acts may render a corporation liable to.

The acts provide that the pressure of the gas in the service mains at any distance from the place of manufacture shall not be less than 1 inch nor more than 21⁄2 inches.

We are of the same opinion as to the penalties provided for a violation of the acts. They are not a necessary or inseparable part of the acts, without which they would not have been passed. If these provisions as to penalties have been properly construed by the court below, they are undoubtedly void, within the principle decided in Ex parte Young, 209 U. S. 123, 52 L. ed. 714, 13 L.R.A. (N.S.) 932, 28 Sup. Ct. Rep. 441, and the cases there cited, because SO enormous and overwhelming in their amount.

When the objectionable part of a statute is eliminated, if the balance is valid and capable of being carried out, and if the court can conclude it would have been enacted if that portion which is illegal had been omitted, the remainder of the statute thus treated is good. Reagan v. Farmers' Loan & T. Co. 154 U. S. 362, 395, 38 L. ed. 1014, 1022, 4 Inters. Com. Rep. 560, 14 Sup. Ct. Rep. 1047; Berea College v. Kentucky, 211 U. S. 45-54, 53 L. ed. 29 Sup. Ct. Rep. 33. This is a familiar principle.

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Lastly, it is objected that there is an illegal discrimination as between the city and the consumers individually. We see no discrimination which is illegal or for which good reasons could not be given. But neither the city nor the consumers are finding any fault with it, and the only interest of the complainant in the question is to find out whether, by the reduced price to the city, the complainant is, upon the whole, unable to realize a return sufficient to comply with what it has the right to demand. What we have already said applies to the facts now in question.

We cannot see, from the whole evidence, that the price fixed for gas supplied to the city by wholesale, so to speak, would so reduce the profits from the total of the gas supplied as to thereby render such total profits insufficient as a return upon the property used by the complainant. So long as the total is enough to furnish such return, it is not important that, with relation to some customers, the price is not enough. Minneapolis & St. L. R. Co. v. Minnesota, 186 U. S. 257, 46 L. ed. 1151, 22 Sup. Ct. Rep. 900; Atlantic Coast Line R. Co. v. North Carolina Corp. Commission, 206 U. S. 1, 51 L. ed. 933, 27 Sup. Ct. Rep. 585. Upon a careful consideration of the case

before us we are of opinion that the complainant has failed to sustain the burden cast upon it of showing beyond any just or fair doubt that the acts of the legislature of the state of New York are in fact confiscatory.

It may possibly be, however, that a practical experience of the effect of the acts by actual operation under them might prevent the complainant from obtaining a fair return, as already described, and, in that event, complainant ought to have the opportunity of again presenting its case to the court. To that end we reverse the decree with directions to dismiss the bill without prejudice; and it is so ordered.

(211 U. S. 552)

*Mr. Justice Day delivered the opinion of

B. H. HARDAWAY and R. P. Prowell,
Doing Business as Hardaway & Prowell, the court:
Appts.,

V.

NATIONAL SURETY COMPANY.

UNITED STATES (8 67*) · PUBLIC CON-
TRACTOR BONDS SUBCONTRACTOR
SURETIES.

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This is an appeal from a decree of the circuit court of appeals for the sixth circuit, affirming a decree of the circuit court of the United States for the western district of Kentucky, whereby the appellants Hardaway and Prowell were denied the right to Surety Company, as surety for the faithful recover against the appellee, the National performance of a certain contract entered into on September 28, 1899, between the United States and a firm of contractors composed of James E. Willard, Charles L. Cornwell, and Joseph Coyne, doing business as Willard & Cornwell. The contract was for the construction of a lock and dam No.

1. Persons who, in view of the financial embarrassment of a public contractor, undertake to superintend the completion of public work and to furnish the necessary funds, for which they are to be paid by an assignment of the reserve fund in the hands of the government and by checks or payments under the original contract, are not subcontractors furnishing labor and materials for the fulfilment of such original contract, so as to be entitled to the pro-4, in the Black Warrior river, near Tuscatection of the bond executed pursuant to the act of August 13, 1894 (28 Stat. at L. 278, chap. 280, U. S. Comp. Stat. 1901, p. 2523), conditioned for the prompt payment by the original contractors to all persons supplying them with labor or materials in the prosecution of the work.

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2. A surety on the bond of a public contractor is not liable on a claim for labor and materials furnished by the assignees of the contract, where the contract of as

signment obligates the assignor only to assign the reserve fund in the hands of the government, and to turn over the checks or payments under the original contract.

[Ed. Note.-For other cases, see United States, Dec. Dig. § 67.*]

SUBROGATION (§ 7*)-RIGHT OF SURETY.

3. The right of a surety for a government contractor to be subrogated, in case of loss, to the contractor's right to the reserve fund in the hands of the government, representing work done prior to an assign ment of the contract, is superior to any rights of the assignees.

[Ed. Note. For other cases, see Subrogation, Dec. Dig. § 7.*] [No. 44.]

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Decided Janu

Argued December 8, 1908.
ary 4, 1909.
PPEAL from the United States Circuit
Court of Appeals for the Sixth Cir-
cuit to review a decree which affirmed a
decree of the Circuit Court for the Western
District of Kentucky, denying a recovery
against the surety on a bond to secure the
performance of a public contract. Affirmed.
See same case below, 80 C. C. A. 283,
150 Fed. 465.

The facts are stated in the opinion.
Messrs. Temple Bodley, John Brice
Baskin, J. Manly Foster, and W. B. Oliver
for appellants.

Messrs. William W. Watts, Henry Fitts, and William J. Griffin for appellee.

loosa, Alabama. Bond was given in accordance with the requirements of the act of Congress approved August 13, 1894 (28 Stat. at L. 278, chap. 280, U. S. Comp. Stat. 1901, p. 2523), in order to secure the faithful performance of the contract.

The contract has been kept so far as the United States is concerned, and the surety is relieved from obligation in that respect. The contention in this case involves the construction and application of that condition of the bond which requires the contractors to "promptly make full payments to all persons supplying them labor or materials in the prosecution of the work, provided for

in said contract."

The question for consideration here is, under the circumstances of the case, can Hardaway and Prowell recover upon the bond on their claim as for labor done and material furnished within the terms thereof? The record discloses that the original contractors carried on the work until February 5, 1901, when they made an agreement between themselves and Coyne, by which agreement Coyne was to pay the debts of the firm, to make all future purchases in his own name, and to receive all profits from the contract. After February 5, 1901, Coyne carried on the work. government made the checks payable to Willard and Cornwell as before, in accordance with the terms of the contract. On June 2, 1903, Coyne, having become financially unable to complete the contract, made a contract in writing with Hardaway and Prowell, which we shall hereinafter set out in full, concerning the work.

The

Owing to freshets and washouts, as is contended by appellants, it became necessary to do over much of the work, and after its completion appellants made a claim for $32,757.34 interest included to March 1, 1906, and included therein $7,556, being 15 per cent of the cost expended on the contract with Coyne.

For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

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On October 24, 1904, the National Surety Company, appellee, filed a bill in the United States court at Louisville, averring the insolvency of the contractors, and that there would be a loss for labor and material which it would be compelled to pay as surety on the bond, asking for an injunction and the appointment of a receiver. On November 8, 1904, an order was made, referring the case to a special master, and providing that parties having claims for labor and materials might prove the same, with the right to contest them, and to take the proofs thereof as in equity cases. The order provided that appellee, the surety company, should pay into court, in satisfaction of the claims and costs of action, such a sum as might be required after the government payments were exhausted.

The claim of Hardaway and Prowell was filed. A special master allowed the claim. Upon error, the circuit court disallowed the same, and, upon appeal to the circuit court of appeals for the sixth circuit, the decree was affirmed. 80 C. C. A. 283, 150 Fed. 465. The case then came here.

The case turns upon the construction of the contract between Coyne and Hardaway and Prowell. The contract reads as fol

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That, whereas, Willard & Cornwell, a firm composed of J. E. Willard, C. R. Cornwell, and the said Joseph Coyne, did, heretofore, on, to wit, the day of, 1899, enter into a contract with the United States for the construction of lock No. 4 in the Black Warrior river above Tuscaloosa, Alabama, and whereas, shortly after the beginning of the work upon said lock the said Joseph Coyne, by an arrangement between him and his copartners, undertook to complete and finish said lock according to the specifications of the contract of said firm with the United States, and, in consideration of such an undertaking, acquired the beneficial interest of said firm in said contract, and was to receive all amounts paid by the United States in consideration of such contract, and whereas said lock is still uncompleted, and the said Joseph Coyne cannot, on account of his inability to procure the necessary financial aid, and on account of the disorganization of his labor forces, and for various and sundry other reasons, complete

and finish the said work in accordance with the said contract, and whereas said contract is a valued asset to the said Joseph Coyne if the said work can be prosecuted to its completion under the terms of said contract, there being held in reserve by the government, under the terms of said contract, about $8,300, which has already been earned by said Coyne, and whereas, by reason of his said inability to finish said work, the said contract is about to be forfeited, and the said Coyne is in imminent danger of losing, not only what profits may be made upon the completion of the work, but the entire reserve fund also retained by the government, and whereas the said Joseph Coyne, for the purpose of preventing the forfeiture of said contract, has made overtures to the said Hardaway & Prowell to take up said work and complete it, and the said Hardaway & Prowell have agreed to do so upon the terms and stipulations hereinafter set forth; now, therefore,

1. The said Hardaway & Prowell do hereby undertake and agree with the said Joseph Coyne to superintend the completion of the said lock and dam No. 4 and to furnish the necessary finances for the completion thereof, and to put in charge of said work a competent superintendent, and to properly organize the work for an energetic prose cution thereof to completion, for which services they are to receive an agreed compensation of 15 per cent upon the total cost of completing said contract, which total cost shall be construed to include all amounts necessarily expended and expenses incurred by Hardaway & Prowell in the completion of said work and all amounts necessarily paid and expenses incurred by them to effect a settlement with and an aeceptance of said lock and dam by the United States.

2. The said Joseph Coyne agrees to the above compensation for Hardaway & Prowell, and further agrees to turn over to them entire charge of the completion of said work, and not to interfere with them in any way in the prosecution of said work to completion, and further agrees to turn over to the said Hardaway & Prowell the entire outfit of machinery, tools, etc., which he now has at said lock and dam and the quarries where he is getting stones, and to give the use of the same to them for the completion of said work, free of any charge. *3. The said Joseph Coyne further agrees to have all checks for each estimate upon said work forwarded by the government to the said Hardaway & Prowell, and to properly indorse such checks, so that they may be collected by Hardaway & Prowell.

4. It is further agreed by all parties here

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to that, out of the proceeds of the checks | shall have a claim against the said Joseph referred to in the next foregoing paragraph, Coyne for all moneys furnished by them and the obligations shall be paid preferentially in the following order:

1. The compensation of the said Hardaway & Prowell, as herein agreed, for their services.

2. All moneys advanced by Hardaway & Prowell, and used in the prosecution of said work.

3. All debts necessarily incurred by the said Hardaway & Prowell for the prosecution of said work, other than debts for labor and material.

4. All debts incurred by said Hardaway & Prowell for labor and material or moneys advanced by them in payment for labor or material debts.

5. The said Joseph Coyne, for the completion of said work and for the securing to the said Hardaway & Prowell all amounts that they shall have to pay, on whatever account, for the completion of said lock and dam, and for a settlement with the United States and acceptance of said lock and dam by the proper authorities of the government, does hereby assign and set over to the said Hardaway & Prowell all his interest in the amount, aggregating, as aforesaid, about $8,300, retained and now held in reserve by the government under the said contract for the building of said lock and dam, which shall be applied by the said Hardaway & Prowell in the following order:

1. To the payment of all debts for labor and material incurred in the building of said lock and dam.

2. Any balance that may be due to said Hardaway & Prowell for their compensation under this contract.

expenses incurred by them upon any account whatsoever in the prosecution of said work, and which shall not have been repaid to them, and for all compensation earned under this contract, and not paid to them, and such claim shall be due and payable at once upon their termination of the contract.

In witness whereof the said parties of the first and second parts have hereunder set their hands and seals in duplicate this, the day and year first above written.

Attest: C. B. Verner.

B. H. Hardaway.

R. P. Prowell.
Joseph Coyne.

It is said that the master sustained the claim of Hardaway and Prowell upon authority of the case of United States use of Hill v. American Surety Co. 200 U. S. 197, 50 L. ed. 437, 26 Sup. Ct. Rep. 166. In that case this court held that the obligation of a bond similar to the one here in suit, when construed in the light of the statute requiring its execution, and looking to the protection of those who supply labor and materials provided for in the original contract, was broad enough to include laborers who had performed work for a subcontractor who furnished labor or material which the original contractor had obligated himself to furnish. It was held that, in such a case, the original contractor, who employed a subcontractor, who bought materials or hired labor with which to carry out and fulfil the engagement of the original contract for the construction of a public building, was thereby supplied with materials and labor for the fulfilment of his contract as effectually as if he had directly hired the labor or bought the materials. We are unable to see how that case controls the one at bar; nor can we reach the conclusion that Hardaway and Prowell were subcontractors furnishing labor or materials to the original contractor, or furnishing such labor or materials to subcontractors which enabled the original contract to be fulfilled, thereby bringing themselves within the principles of 6. It is understood and agreed by all the Hill Case. As we read this contract, parties hereto that if the said Joseph Coyne Hardaway and Prowell, in view of Coyne's should, at any time, fail or be unable to financial and other difficulties, undertook to turn over to the said Hardaway & Prowell do certain things in relation thereto. They the checks for estimates on said work, prop- undertook to superintend the completion of erly indorsed, so that Hardaway & Prowell the lock and dam, and, to that end, to furcan collect them, or should fail to secure the nish the necessary finances for the complecollection of them by the said Hardaway tion of the work; for this they were to re& Prowell, then the said Hardaway & Prow-ceive an agreed percentage upon the total ell shall, in that event, have the option of cost upon the completion of the contract. annulling said contract, and stopping work without notice to the said Joseph Coyne, or to any other parties whomsoever; but, in said event, the said Hardaway & Prowell'

3. All other necessary debts incurred in the prosecution of the said work by Hardaway & Prowell, and all amounts, including expenses, which they shall have to pay in order to effect a settlement with the government, and acceptance by it of said lock and dam.

4. Any balance to be paid to the said Joseph Coyne.

Coyne, on his part, agreed that such compensation should be paid, and agreed to turn over the charge of the work to Hardaway and Prowell, and not to interfere there

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