*154 "It would be wholly unnecessary and improper, in order to prove complainant's cause of action, to go into any matters of defense which the defendants might possibly set up, and then attempt to reply to such defense, and thus, if possible, to show that a Federal question might or probably would arise in the course of the trial of the case. To allege such defense and then make an answer to it before the defendant has the opportunity to itself plead or prove its own defense is inconsistent with any known rule of pleading, so far as we are aware, and is improper. defense certain laws of the United States., Arlington Hotel Co. 168 U. S. 430, 436, 42 The cause was held to be beyond the juris- L. ed. 531, 533, 18 Sup. Ct. Rep. 109; Gal· diction of the circuit court, the court say- veston, H. & S. A. R. Co. v. Texas, 170 U. ing, by Mr. Justice Peckham (pp. 638, S. 226, 236, 42 L. ed. 1017, 1020, 18 Sup. 639): Ct. Rep. 603; Third Street & Suburban R. Co. v. Lewis, 173 U. S. 457, 460, 43 L. ed. 766, 767, 19 Sup. Ct. Rep. 451; Florida C. & P. R. Co. v. Bell, 176 U. S. 321, 327, 44 L. ed. 486, 489, 20 Sup. Ct. Rep. 399; Houston & T. C. R. Co. v. Texas, 177 U. S. 66, 78, 44 L. ed. 673, 680, 20 Sup. Ct. Rep. 545; Arkansas v. Kansas & T. Coal Co. 183 U. S. 185, 188, 46 L. ed. 144, 146, 22 Sup. Ct. Rep. 47; Vicksburg Waterworks Co. V. Vicksburg, 185 U. S. 65, 68, 46 L. ed. 808, 809, 22 Sup. Ct. Rep. 585; Boston & M. Consol. Copper & S. Min. Co. v. Montana Ore Purchasing Co. 188 U. S. 632, 639, 47 L. ed. 626, 631, 23 Sup. Ct. Rep. 434; Minnesota v. Northern Securities Co. 194 U. S. 48, 63, 48 L. ed. 870, 877, 24 Sup. Ct. Rep. 598; Joy v. St. Louis, 201 U. S. 332, 340, 50 L. ed. 776, 780, 26 Sup. Ct. Rep. 478; Devine v. Los Angeles, 202 U. S. 313, 334, 50 L. ed. 1046, 1053, 26 Sup. Ct. Rep. 652. The application of this rule to the case at bar is decisive against the jurisdiction of the circuit court. "The rule is a reasonable and just one that the complainant in the first instance shall be confined to a statement of its cause of action, leaving to the defendant to set up in his answer what his defense is, and, if anything more than a denial of complainant's cause of action, imposing upon the defendant the burden of proving such defense. "Conforming itself to that rule, the complainant would not, in the assertion or proof of its cause of action, bring up a single Federal question. The presentation of its cause of action would not show that it was one arising under the Constitution or laws of the United States. It is ordered that the judgment be reversed and the case remitted to the circuit court with instructions to dismiss the suit for want of jurisdiction. (211 U. S. 137) HONOLULU RAPID TRANSIT & LAND COMPANY, Appt., V. "The only way in which it might be claimed that a Federal question was preCHARLES T. WILDER, Assessor. sented would be in the complainant's statement of what the defense of defendants TAXATION (§ 19*)-FEDERAL AGENCIES. 1. Franchises granted by the Hawaiian would be, and complainant's answer to such defense. Under these circumstances the case tember 28, 1899, were not made acts of Congovernment between July 7, 1898, and Sepis brought within the rule laid down in Ten-gress by adoption, so as to be exempt from nessee v. Union & Planters' Bank, supra. territorial taxation, by the provision of the That case has been cited and approved many organic act of April 30, 1900 (31 Stat. at times since." L. 141, 154, chap. 339), § 73, ratifying and affirming such franchises. [Ed. Note.-For other cases, see Taxation, Dec. Dig. § 19.*] TAXATION (§ 231*)-EXEMPTION. The interpretation of the act which we have stated was first announced in Metcalf v. Watertown, 128 U. S. 586, 32 L. ed. 543, 9 Sup. Ct. Rep. 173, and has since been re2. An intention to exempt from a franchise peated and applied in Colorado Cent. Consol. tax cannot be gathered from the provisions Min. Co. v. Turck, 150 U. S. 138, 142, 37 of a railway charter that its income is lawL. ed. 1030, 1031, 14 Sup. Ct. Rep. 35; Ten- fully chargeable with certain specified exnessee v. Union & Planters' Bank, 152 U. S. penses and with "every other cost and 454, 459, 38 L. ed. 511, 513, 14 Sup. Ct. charge properly or necessarily connected Rep. 654; Chappell v. Waterworth, 155 U. with the maintenance and operation of said S. 102, 107, 39 L. ed. 85, 87, 15 Sup. Ct. railway," with dividends and with a sinkRep. 34; Postal Teleg. Cable Co. v. Uniteding fund, and that the excess of income shall be divided equally between the government States (Postal Teleg. Cable Co. v. Alabama) and the stockholders, where a subsequent 155 U. S. 482, 487, 39 L. ed. 231, 232, 15 provision exempts the property from taxaSup. Ct. Rep. 192; Oregon Short Line & U. tion while under construction, "provided N. R. Co. v. Skottowe, 162 U. S. 490, 494, that, as fast as completed and equipped, 40 L. ed. 1048, 1049, 16 Sup. Ct. Rep. 869; become liable to such taxation," although, the completed and equipped portion shall Walker v. Collins, 167 U. S. 57, 59, 42 L. when the charter was granted, real and pered. 76, 77, 17 Sup. Ct. Rep. 738; Muse v. sonal property were, under Haw. Rev. Laws For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes 1905, 1216, assessed for taxation "sepa- | nothing in the words just quoted from 8 73 rately as to each item thereof for its full value." [Ed. Note. For other cases, see Taxation, Cent. Dig. §§ 371-378; Dec. Dig. § 231.*] [No. 23.] to indicate that Congress had this particular franchise in view, or meant to adopt it and give it a superior source, or to do anything more than to supply the power that by accident might have been wanting. See Argued October 28, 29, 1908. Decided No- Miners' Bank v. Iowa, 12 How. 1, 8, 13 L. A vember 16, 1908. PPEAL from the Supreme Court of the Territory of Hawaii to review a judgment which affirmed a decision of the Tax Appeal Court of the First Judicial Circuit of that territory, imposing a franchise tax. Affirmed. ed. 867, 870; Murphy v. Utter, 186 U. S. 95, 106, 46 L. ed. 1070, 1077, 22 Sup. Ct. Rep. 776. We need not pursue further this part of the objection to the tax, except to remark that, in view of obvious purpose, it properly was admitted that July 7 was not excluded from the ratification by the word "between." See Taylor v. Brown, 147 U. S. 640, 37 L. ed. 313, 13 Sup. Ct. Rep. 549. For it also was admitted at the argument before us that, if there was no exemption in the charter, the appellant had Messrs. Charles R. Hemenway and no case, and we are of opinion that there Mason F. Prosser for appellee. See same case below, 18 Haw. 15. *Mr. Justice Holmes delivered the opin ion of the court: This is an appeal from a judgment affirming a decision of the tax appeal court and sustaining a tax upon the appellant. The appellant objected to the tax on the grounds that its franchise was derived from an act of Congress, and therefore was exempt from taxation, and that its charter also exempted it in terms. These objections, taken below, were argued at length before us. The charter was granted by the Republic of Hawaii on July 7, 1898, the day on which Congress passed the resolution of annexation [30 Stat. at L. 750], and doubts having been felt as to the right of the Hawaiian leg islature to grant a charter at that time (see 22 Ops. Atty. Gen. 574; Id. 627), the or ganic act declared that "subject to the approval of the President all franchises granted by the Hawaiian government in conformity with the laws of Hawaii, between the seventh day of July, eighteen hundred and ninety-eight, and the twentyeighth day of September, eighteen hundred and ninety-nine, are hereby ratified and confirmed." Act of April 30, 1900, chap. 339, 73, 31 Stat. at L. 141, 154. It is contended that the effect of this section was to make the charter an act of Congress by was none. the effect of the decision is to uphold a valThe tax in question is a property tax, and uation of the whole property as a going concern, and as more than a mere congeries of items; or, in other words, an addition of half a million dollars to the appellant's valuation, for the franchise of the company. The appellant says that this was contrary to 8 17 of its charter, construed in the light of the scheme disclosed. That section be lawful upon the income of said railway: provides that "the following charges shall 1st. The expense of operating, repairs, recost and charge properly or necessarily connewals, extensions, interest, and every other of said railway. 2d. Dividends may be paid nected with the maintenance and operation to the stockholders not to exceed 8 per cent on the par value of the stock issued. 3d. demption of any bond which may be issued, A sinking fund may be created for the reor other record debt, and the capital upon the expiration of the franchise. Provided 4th. The excess of income shall be divided [that the amount is limited as set forth]. equally between the government of the Republic of Hawaii and the stockholders of said corporation." It is said that here is a complete plan for the division of the income, declaring what charges shall be lawfall under the words, "other charge propful, and that only such taxes are allowed as erly connected with the maintenance and operation of the road." The taxes authorized as such charges are thought to be limited to a license tax not to exceed $10 on each passenger car used, imposed by § 31, and to the provisions of $ 30. The latter section exempts from duty material produced in and imported from the United States, and goes on to say that "the property of said association and others shall not be liable to internal taxation while said For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes [Ed. Note.-For other cases, see Courts, Dec. Dig. § 387.*] COURTS (§ 387*)-Error TO HAWAIIAN SU- 2. The failure of the record to show that railway is under construction, provided that, | Court of the United States to the Hawaiian as fast as completed and equipped, the supreme court, to review a judgment suscompleted and equipped portion shall be- taining an assessment for taxation, will not come liable to such taxation." It is said lie under the act of March 3, 1905 (33 that, when the charter was granted, real Stat. at L. 1035, chap. 1465), § 3, where and personal property were assessed for tax- the amount of the tax assessed is less than the jurisdictional amount prescribed by ation "separately as to each item thereof that section. for its full cash value," with provisos deemed not to be material (Rev. Laws, Hawaii, 1905, § 1216); that § 30 contemplates a taxation of this kind, and that a taxation of the franchise would be double any Federal question was raised or sugtaxation, and was excluded. It is true that gested before the assignment of error in the one of the provisos in § 1216 taxes going Federal Supreme Court precludes the mainconcerns as wholes, but § 30 is thought to tenance of a writ of error from that court show a choice of the other method. It is under the act of April 30, 1900 (31 Stat. at contended that the charter, by fair impli-L. 141, chap. 339), § 86, to review a judg ment of the Hawaiian supreme court. cation, contracts against any other charges, [Ed. Note.-For other cases, see Courts, Dec. especially in view of the ultimate division Dig. 387.1 of the excess of income, after the payment [No. 22.] of 8 per cent dividend. If the dividends do not exceed 8 per cent, the tax will fall wholly on the stockholders, contrary to the fair understanding of what the charter holds out. 25 unmen The argument, of which we have given a summary outline, is far from establishing such a clear renunciation of the right to tax as the cases require. New York ex rel. Metropolitan Street R. Co. v. New York State Tax Comrs. 199 U. S. 1, 50 L. ed. 65, Sup. Ct. Rep. 705. It appears to us very questionable whether the phrase, “charges properly or necessarily connected with the maintenance and operation of the road," has any reference to taxes. It points in another direction. Taxes are left tioned in § 17, and the liability to them is assumed. The language of § 30 does not import the imposition of a tax that otherwise would be excluded. It takes the liability for granted, and relieves the company from the burden for a certain time. The drift of the section cannot be made clearer by lengthy restatement. It starts with exoneration and merely saves the right to tax the portions completed by a proviso which, in this case, fulfils the proper function of that much-abused term. If any doubt were raised by § 17, which does not seem to us to be the case, it would be relieved by this further section of the same act. Nothing else seems to us to need mention in the present posture of the case. Judgment affirmed. (211 U. S. 144) Argued October 28, 29, 1908. Decided No vember 16, 1908. IN ERROR to the Supreme Court of the ment which affirmed a decision of the Tax Appeal Court of the First Judicial Circuit See same case below, 18 Haw. 15. tiff in error. Messrs. Charles R. Hemenway and Mason F. Prosser for defendant in error. *Mr. Justice Holmes delivered the opinion of the court: This case is intended to bring up a question of deductions from gross income in assessing the income tax of the appellant, as well as that of the liability of the plaintiff in error to the tax. The liability to taxes not mentioned in the charter has been disposed of by the preceding case. As to the former question, the plaintiff in error says that it has no net income liable to taxation. But the whole tax assessed was $588.20, and therefore the case cannot be brought here under the act of March 3, 1905, chap. 1465, § 3, 33 Stat. at L. 1035. On the other hand, the record does not show that any Federal question was raised or suggested before the assignment of error in this court, and therefore the plaintiff in error has no standing under the act of April 30, 1900, chap. 339, § 86, 31 Stat. at L. 141. HONOLULU RAPID TRANSIT & LAND It is true that, in the decision of the tax apCOMPANY, Plff. in Err., CHARLES T. WILDER, Assessor. COURTS (§ 387*)—Error to HAWAIIAN SUPREME COURT-JURISDICTIONAL AMOUNT. 1. A writ of error from the Supreme peal court, it is said that the appellant claims, under § 17 of its charter, a right to charge certain amounts against income. But it does not appear there or elsewhere that the appellant set up that the charter was a statute of the United States, or that it re *For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes 145 *128 lied upon article 1, § 10, or any other clause, within the jurisdiction of the United States, of the Constitution of the United States. Writ dismissed. (211 U. S. 127) to a point due west and opposite the middle of the north ship channel of the Columbia river; thence easterly, to and up the middle channel of said river, and where it is di STATE OF WASHINGTON, Complainant, vided by islands, up the middle of the widest V. STATE OF OREGON. STATES (§ 12*) BOUNDARY BETWEEN The middle of the north ship channel of the Columbia river, described as the boundary between Oregon and Washington in the act of February 14, 1859 (11 Stat. at L. 383, chap. 33), admitting Oregon into the Union, remains the boundary, subject to the changes in it which come by accretion, and is not moved to the other channel because the latter, in the course of years, becomes the more important and is properly called the main channel of the river. [Ed. Note-For other cases, see States, Cent. Dig. 8; Dec. Dig. § 12.*] [No. 3, Original.] channel thereof, to a point near Fort WallaWalla." On February 22, 1889, an act was passed providing for the admission of Washington. 25 Stat. at L. 676, chap. 180. On November 11, 1889, the President, as authorized by 8 8 of the statute last referred to, issued his proclamation, declaring Washington duly admitted into the Union. 26 Stat. at L. 1552. The material part of the boundary described in the Constitution of that state is "Beginning at a point in the Pacific ocean one marine league due west of and opposite the middle of the mouth of the north ship channel of the Columbia river, thence running easterly to and up the middle channel Argued January 8, 9, 1908. Decided No- of said river, and where it is divided by is OR vember 16, 1908. RIGINAL BILL in equity filed by the State of Washington against the State of Oregon to determine the boundary line between those states. Boundary adjudged to be the center of the north channel of the Columbia river, changed only as it may be from time to time by accretions. Statement by Mr. Justice Brewer: This is an original suit, commenced in this court on February 26, 1906, by the state of Washington against the state of Oregon, to determine their boundary line. Pleadings were filed, testimony taken before a commissioner by consent of the parties, and on these pleadings and proofs the case has been argued and submitted. The maps or charts accompanying this opinion have been prepared from exhibits filed by the parties, and will aid to an understanding of the case. lands up the middle of the widest channel thereof to where the forty-sixth parallel of north latitude crosses said river, near the mouth of the Walla Walla river." Art. 24, 1; 2 Hill's Anno. Statutes & Codes (Wash.) p. 851. Messrs. E. C. Macdonald, John D. Atkinson, Samuel H. Piles, A. J. Falknor, and J. B. Alexander for complainant. Messrs. A. M. Crawford, I. H. Van Winkle, Harrison Allen, C. W. Fulton, and A. M. Smith for defendant. Mr. Justice Brewer delivered the opinion of the court: The northern boundary of the state of Oregon was established prior to that of the state of Washington, and it is not within the power of the national government to change that boundary without the consent of Oregon. Nor, indeed, was there any attempt to change it. The same description is found in both the act admitting Oregon and in the Constitution of Washington, under which that state was admitted. It will be perceived that the starting point in the line running up the Columbia river is a point "due west and opposite the middle of the north ship channel of the Columbia A brief chronological statement is that on August 14, 1848, the territory of Oregon was established (9 Stat. at L. 323, chap. 177), and on March 2, 1853, the territory of Washington, including all that portion of Oregon territory lying north of the middle of the main channel of the Columbia river (10 Stat. at L. 172, chap. 90). On Feb-river." This language implies that there ruary 14, 1859, Oregon was admitted into the Union. The boundary, so far as is important in this controversy, is as follows (11 Stat. at L. 383, chap. 33): "Beginning one marine league at sea due west from the point where the forty-second parallel of north latitude intersects the same; thence northerly, at the same distance from the line of the coast, lying west and opposite the state, including all islands was more than one channel, and the middle of the north channel was named. There were at that time two channels, and the northerly one ran to the north of what is called "Sand island." This is shown by abundant testimony, and is admitted by counsel for complainant. At that time the north channel was perhaps the better one,at least, one quite generally used by vessels passing in and out of the river, although the For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes 133 $132 On October 21, 1864, Oregon passed an act granting to the United States"all right and interest of the state of Oregon, in and to the land in front of Fort Stevens and Point Adams, situate in this state, and subject to overflow between high and low tide, and also to Sand island, situate at the mouth of the Columbia river in this state; the said island being subject to overflow between high and low tide. "Sec. 2. The governor of this state shall cause two copies of this act to be prepared and certified under the seal of this state, and forward one of such copies to the Secretary of War of the United States, and the other of such copies to the commanding officer of this district of the military department of the Pacific coast." Laws of Oregon, 1864, p. 72. Special quantity and direction of the wind was an, north of it is made more clear by this fact: important factor. It is true there has been no little variation in the channels at and near the entrance, as might be expected considering the great width of the mouth and the sandy character of the soil underneath a large part of the river. The earliest known chart is a sketch made in 1792 by Admiral Vancouver, which does not show Sand island, but discloses two inside channels uniting and crossing the bar into the ocean with a depth of 27 feet. Chart "A," made by the United States authorities in 1851, shows the condition of the mouth of the river as it then existed. The two channels are plainly disclosed. The brown color indicates land above low-water mark; the yellor, water of 18 feet in depth or less, and the white, water over 18 feet in depth. See notation at the upper left-hand corner. The existence of the two channels clearly opened the way for a selection of one as the boundary, and the north one was adopted. Sand island appears as a small body of land surrounded by shoal water. Another chart was prepared in 1854, which of all the charts and maps is the nearest in point of time to the admission of Oregon. On this, as in Chart "A," Sand island is shown, and the two channels, one north and the other south of the island. It is called an island, but it was little more than a sand bar. By the action of the waters it had been gradually moving northward, but the general configuration of the mouth of the river was unchanged. Since then the movement of Sand island has continued, the north channel has been growing more shallow, and the south ern channel has become the one most used. The movements of Sand island and the changes in the entrance are shown in chart "B." Now this act was passed shortly after the admission of Oregon, and indicates the understanding both of the state of Oregon and the United States, that the boundary was through the channel north of Sand island. It is a recognition of Oregon's title to that island and an acceptance by the United States of a grant from that state. While all this is not in terms admitted by counsel for complainant, yet the burden of their principal contention impliedly does so, for they say: commences at a point which is alleged to have been the middle of the north ship channel of the river as it existed in 1859 (the year in which Oregon was admitted into the Union), and follows certain channels supposed to exist in that year throughout the portion of the river in controversy." "The proof will disclose the fact that there have been various channels in the Columbia river which have gradually, imperceptibly, and continuously changed and shifted. There has been at no time such a change as to come within the definition of avulsion. The contention of the complainant is that the true boundary line is the varying center or middle of that channel of the river which is best constituted and orLooking only at the description of the dinarily used for the purposes of navigation. boundary in the act, one might think that. . . The line claimed by the defendant there were three channels, north, south, and middle; but it is quite apparent from the testimony that there were but the two. The meaning would be more clear if the language was "easterly to and up the middle of said channel," and that that was the intent of Congress is, we think, obvious; first, because there were only two channels; second, to locate a starting point on the west line in the ocean, opposite the middle of one channel, and thence run the boundary up the middle of another channel, would hardly be expected. If the middle of the northern channel was intended to be the dividing line between Oregon and the territory north, it would be natural to fix the point of starting in the ocean west of the center of that channel. Further, that the channel north of Sand island was the one intended as the boundary between Oregon and the territory In support of their contention counsel refer to: Nebraska v. Iowa, 143 U. S. 359, 36 L. ed. 186, 12 Sup. Ct. Rep. 396; Iowa v. Illinois, 147 U. S. 1, 37 L. ed. 55, 13 Sup. Ct. Rep. 239; Louisiana v. Mississippi, 202 U. S. 1, 50 L. ed. 913, 26 Sup. Ct. Rep. 408, 571. To these may be added Missouri v. Nebraska, 196 U. S. 23, 35, 49 L. ed. 372, 374, 25 Sup. Ct. Rep. 155. But in these cases the boundary named was "the middle of the main channel of the river," or "the middle of the river," and it was upon such a description that it was |