assessors had a fixed purpose, generally known to all persons interested, that no deduction for debts would be made in the valuation of bank shares for taxation. It is, therefore, not now essential to show such an offer, when it is established that there were debts to be deducted, and when the matter is still in fieri, the tax being unpaid." In regard to all of the shareholders claiming this deduction, except Barnett, Chamberlain, and Parmalee, the court finds that the allegations of the bill are true, but that as to them they are untrue. It therefore granted relief by the injunction as to all of them except these three, as to which it was denied. It is to be observed, however, that the bank takes no appeal from the part of the decree denying relief to these three shareholders.

These principles require the affirmance of the decree of the circuit court; and, while there will be found in them a sufficient answer to the questions certified by the judges of that court, we do not think it necessary to make a more specific answer to each of them. The decree is affirmed.

PEORIA & P. U. Ry. Co. v. CHICAGO, P. & S. W. R. Co.1

(April 23, 1888.)

RAILROAD COMPANIES-RENT OF LINE-USE AND OCCUPATION.

In an action by a railroad company to recover for the use of its tracks, where there was no definite agreement as to the amount to be paid, the amount paid it by other roads, which in fact owned it, does not furnish the measure of damages, and, in the absence of proof that the use was worth more than had been paid, the plaintiff cannot recover.

Appeal from the Circuit Court of the United States for the Northern District of Illinois.

Wager Swayne, for appellant. G. S. McClelland, for appellee.

GRAY, J. Pending a suit in equity by the Farmers' Loan & Trust Company against the Chicago, Pekin & South western Railroad Company, to foreclose a mortgage of its road, the Peoria & Pekin Union Railway Company filed this intervening petition to compel the receiver of the defendant company, appointed in that suit, to pay to the petitioner the sum of $16,231.55 for rent of tracks and terminal facilities at Peoria from February 1, 1881, to March 1, 1882. From the documents in the record, and the very argumentative and somewhat conflicting affidavits of Cohr, the vice-president and general counsel of the petitioner, and of Hinckley, formerly the president and now the receiver of the defendant, the material facts appear to be as follows: Peoria and Pekin are 10 miles apart, on opposite sides of the Illinois river, and connected by two lines of railway tracks,-that of the Peoria & Springfield Railroad Company on the east side of the river, and that of the Peoria, Pekin & Jacksonville Railroad Company on the west side of the river, and each crossing the river on a bridge. Connecting with these at Peoria or at Pekin are the lines of four other railroad companies,-the Wabash, St. Louis & Pacific Railway Company, the Indiana, Bloomington & Western Railway Company, the Peoria, Decatur & Evansville Railway Company, and the Peoria & Jacksonville Railroad Company. The petitioner was organized in 1880; its whole capital stock being owned by these four companies, one quarter by each. On February 1, 1881, the petitioner, having obtained a lease of the Peoria & Springfield Railroad, and acquired by purchase the Peoria, Pekin & Jacksonville Railroad, and having improved the terminal accommodations and facilities at Peoria, entered into a contract in writing with the four companies aforesaid, by which it leased to them for 50 years the tracks between Pekin and Peoria, with the use of its terminal accommodations and facilities at Peoria; and

1 Affirming 18 Fed. Rep. 484.

each of the four companies agreed to pay a yearly rent of $22,500, and a proportionate share of the expenses of maintaining the terminal accommodations at Peoria and of terminal services, according to the business done by each; and it was further agreed as follows: "Eighth. Any other railroad company, whose road shall now or hereafter run into said city of Peoria, or that shall desire to procure an entrance into said city, shall be allowed to acquire the same rights and privileges as the said several lessees, but no other, and upon no less rental, upon entering into a like contract hereto with the party of the first part, except as to representation in the board of directors of the party of the first part and ownership in its capital stock." Before February 1, 1881, the trains of the defendant company had been run over the road of the Peoria & Springfield Railroad Company, at a rate of compensation fixed by agreement between the receivers of those two companies. On February 1, 1881, Cohr, in behalf of the petitioner, demanded of Reed, then the receiver of the defendant company, that he should enter into or contract to pay, during his receivership, the same rent and other charges as the four companies, and insisted that he had no authority to allow the use of the petitioner's tracks on any other terms. Reed objected that the terms demanded were exorbitant and oppressive, and that he had no authority to assent to them without an order of the court; and it was thereupon agreed that the defendant company should enjoy the use of the tracks and the terminal facilities, and should pay the like terminal charges as the four companies, and should also pay such rent from February 1, 1881, as should be determined by Judge DRUMMOND, upon an application to be forthwith made by Reed, and that until such determination the defendant company should pay at the same rate as formerly paid to the receiver of the Peoria & Springfield Railroad Company, and should pay the residue, if any, when the judge should so determine. Pursuant to this agreement, Reed made an application in writing to Judge DRUMMOND, who, as Cohr testifies, in December, 1881, or early in 1882, informed him that he declined to decide upon it, and that, unless the defendant settled with the petitioner by March 1, 1882, the petitioner might shut out the defendant from its tracks. Upon notice to that effect, Reed declined to pay, and on March 1, 1882, ceased to use the tracks of the petitioner. The defendant paid the petitioner, for the use of its tracks and terminal facilities from February 1, 1881, to March 1, 1882, at the same rate as previously paid to the receiver of the Peoria & Springfield Railroad Company, amounting to $17,537.83. The petitioner claimed for the same period the sum of $9,394.38 for terminal expenses, and the sum of $24,375 for rent, and applied the sum received from the defendant to the payment in full of the first of these claims, and in part of the second, leaving $16,231.55, which the petitioner now sought to recover. The master to whom the petition was referred, reported that there was nothing before him which enabled him "to report the amount of compensation which the petitioner should have, except as the result of the conditions upon which the receiver continued to use the property after the attempted making of a contract between the parties resulting in the notice referred to;" but found "from their relations, and the implied understanding upon the part of the receiver arising from them," that the sum claimed was due from the defendant to the petitioner. The circuit court sustained exceptions taken by the defendant to the master's report, and dismissed the petition. Its opinion, which is not made part of the record, is reported in 18 Fed. Rep. 484. The petitioner appealed to this court.

The only matter in dispute is whether the defendant is liable to the petitioner, by way of rent, from February 1, 1881, to March 1, 1882, for anything more than has already been paid. There is no more ground for implying an assent by the defendant to the claim of the petitioner than for implying an assent of the petitioner to the position of the defendant. When the petitioner demanded of the receiver of the defendant the like rent, as well as the like rate for

terminal expenses, as was to be paid by the four companies, the receiver of the defendant declined to assent to the demand without an order of the court whose officer he was. The parties thereupon came to a temporary arrangement, by which the defendant agreed to pay the terminal expenses demanded, and the parties submitted the question of rent to the circuit judge as an arbitrator, and it was agreed that until his determination the defendant should continue to pay the same charges that it had paid before February 1, 1881. By the terms of that agreement, then, the amount of rent to be paid by the defendant was left uncertain, and dependent upon the award of the judge. The affidavit of the petitioner's own witness shows that the judge, after some delay, declined to act as an arbitrator. The judge's view upon the subject appears in the opinion afterwards delivered by him in the circuit court, in which he said: "On looking into the question at the time, the judge was of the opinion that the contract which was demanded of the receiver by the Peoria & Pekin Union Company was oppressive in its terms, and doubted whether the receiver could afford to pay the prices then demanded; but at the same time, admitting that the Peoria & Pekin Company was the owner of the property, and that it had the right to prescribe on what terms the receiver should do his railroad business between Pekin and Peoria, and in the latter city, stated that, if the receiver would not accept the terms, he could not be permitted to have the use of the property of the Peoria & Pekin Union Company." The judge, while he recognized the right of the petitioner, as owner of the property, to exclude the defendant from its use, if the defendant would not accept the petitioner's terms, in no way intimated that upon the facts of the case the defendant could be held to have accepted those terms. There is no evidence tending to show that the sum paid by the defendant is not all that its use of the property was fairly worth. The rent which each of the four companies, who owned all the stock of the petitioner company, agreed by express contract to pay that company, affords no test of what is a reasonable rent as between the petitioner and a stranger, like this defendant, who had no interest in its stock and was no party to that contract. As observed in the opinion of the circuit court: "The Peoria & Pekin Union Company was really owned by the other companies which made the agreement with it, and consequently they were substantially owners of the property of the Peoria & Pekin Company. It was substantially a contract, therefore, made by one party with itself, which it was insisted should be the test of payment by the receiver." Decree affirmed.

RATTERMAN, Treasurer, v. WESTERN UNION TEL. Co.

WESTERN UNION TEL. Co. v. RATTERMAN, Treasurer.

(May 14, 1888.)

1. CONSTITUTIONAL LAW-TAXATION-INTERSTATE COMMERCE-PARTIAL VALIDITY. A single tax assessed under the laws of Ohio upon the receipts of a telegraph company, which were derived partly from interstate commerce and partly from commerce within the state of Ohio, but which were returned and assessed in gross, and without separation or apportionment, is not wholly invalid, but is invalid only in proportion to the extent that such receipts were derived from interstate com

merce.

2. TELEGRAPH COMPANIES-TAXATION-EXEMPTION.

Rev. St. U. S. §§ 5263-5269, which allow telegraph companies that accept the obligations and restrictions required by law to construct and maintain their lines over and along any military or post road of the United States, do not exempt a telegraph company from state taxation because it has accepted the said obligations and restrictions, when it does not appear that in fact any part of its line in the state levying the tax was built over or along a military or post road.

Appeals from the Circuit Court of the United States for the Southern District of Ohio.

Thos. McDougall, David K. Watson, and Wm. A. Davidson, for RatterLawrence Maxwell, Jr., Wm. M. Ramsey, Willard Brown, and Chas.

W. Wells, for the telegraph company.

MILLER, J. These are cross-appeals from a decree of the circuit court for the Southern district of Ohio, Western division. The suit was begun by a bill of complaint filed by the Western Union Telegraph Company against Frank Ratterman, treasurer of Hamilton county, in the state of Ohio. As the bill is not very long, it is here presented in full:

"To the Judges of the Circuit Court of the United States for the Southern District of Ohio, Western Division: The Western Union Telegraph Company, a corporation duly organized and existing under the laws of the state of New York, and a citizen of said state, brings this its bill against Frank Ratterman, treasurer of Hamilton county, Ohio, and a citizen of the state of Ohio. And thereupon your orator complains and says that its principal office is, and during the times hereinafter mentioned was, in the city of New York; that during said time it had been and now is engaged in the business of receiving and transmitting for hire telegraph messages between different points in the United States, and in the carrying on of said business has offices in the city of Cincinnati, and at other points in the county of Hamilton, and in the state of Ohio, and has been engaged in the transmission of messages between said offices and other points both within and without the state of Ohio; that prior to 1869 your orator accepted in writing the provisions of the act of congress of July 24, 1866, (14 U. S. St. 221;) that your orator's wires, poles, batteries, office furniture, and other property in the state of Ohio have been and are taxed like other property in said state; that your orator's telegragh lines cross nearly all of the states of the Union, and occupy portions of British America, and that a large amount of the commercial transactions, business, and intercourse of the people is carried on by means of their wires; that in the month of May, 1887, your orator, under protest, delivered to the auditor of said county a statement, as required by Rev. St. Ohio, § 2778, showing the entire receipts of your orator in said county for the year next preceding, which said gross receipts amounted to the sum of $175,210.88, and were principally for business between points in the state of Ohio and points outside the state of Ohio,-that is to say, the receipts of your orator for messages and business pertaining to commerce between the states, and not for messages between different points within the state of Ohio; that thereupon said auditor assessed a tax thereon amounting to five thousand two hundred and six and 90-100 dollars. Your orator says that said tax is illegal and void, and in violation of the constitution of the United States. Your orator has offered to the defendant, and is ready and willing to pay to him, the taxes chargeable against its personal property within said county, but the defendant refuses to accept payment thereof unless your orator also at the same time pays said total assessment for all of said gross receipts; and unless restrained, the defendant will impose and enforce the penalties for non-payment of said tax provided for by Rev. St. Ohio, § 2843, to the interference, stoppage, and destruction of your orator's business. Wherefore your orator prays that the defendant may be required to accept payment of so much of said tax assessment as covers the property of your orator in the said county, and that he may be enjoined by preliminary injunction and by final decree from levying or collecting the balance of said assessment. Your orator prays that a writ of subpoena may issue against the defendant, and that your orator may have such other and further relief as it is in equity and good conscience entitled to."

To this bill a general demurrer was filed, which was overruled by the court. The record then proceeds as follows: "And thereupon it was agreed by and between the complainant and the defendant that the cause be submitted to the court on the bill without further pleading to the same by the defendant, upon

the following facts: That of the entire receipts mentioned in the bill $142,154.18 were for business done by the plaintiff between its offices in said county and points outside of the state of Ohio,—that is, for messages and business pertaining to commerce between the states, and not for messages between different points within the state of Ohio,-and that the balance of said receipts, to-wit, $33,056.70, was for business between the offices of the plaintiff in said county and other points within the state of Ohio; and that, if said receipts had been so separated and apportioned, and said tax had been separately assessed on the basis of such separation and apportionment, the amount of said total tax of $5,206.90, apportionable to said receipts for interstate commerce, would be $3,931.51, and the amount apportionable to said receipts for business between the offices of the complainant in said county and other points within the state of Ohio would have been $910.40, and that the remainder of said sum of $5,206.90, viz., $364.99, was for tax assessed upon the personal property of the said complainant within the said county of Hamilton aforesaid, namely, upon its instruments, wires, poles, and other chattel property which were returned by said complaint to the auditor of said county at a valuation of $18,059. That Exhibit A, hereto annexed, and made a part of this stipulation, is a copy of the return made by complainant to the auditor of said county in pursuance of the law of the state of Ohio, and that said complainant made no other return, and furnished no other information to said auditor at the time of said return, save what is contained in said return. That Exhibit B, hereto annexed, and made a part hereof, is a copy of the return of the chattel property of said complainant made at the same time to said auditor. It is further agreed that the auditor of said county placed on the tax duplicate of said county said sums of $175,210.88 and $18,059 as the personal property of said complainant, to be assessed for taxation in said county of Hamilton, and that the rate of taxation assessed thereupon was the same as was assessed against the personal property listed for taxation by the citizens of said county. It is further agreed that complainant, prior to December 20, 1887, offered to pay the tax properly assessable against said return of $18,059 for personal property, but the defendant refused to accept payment of said assessment of $5,206.90 unless the whole were paid. The plaintiff did not disclose to said auditor at the time it made said return what portion, if any, of the gross receipts of its said offices in said county was for interstate commerce. It is further agreed that neither said auditor nor said treasurer had any actual knowledge that any portion of the returns of said gross receipts was for interstate commerce business, but said officers knew that plaintiff's said business included interstate commerce. And the only knowledge said auditor and said treasurer had of the business of said company, and what said receipts were derived from, was from the returns hereto annexed, marked Exhibit A,' and from their knowledge as aforesaid of the plaintiff's business. The cause being thus submitted to the court on the foregoing stipulation of facts and the argument of counsel, the court is of the opinion that said receipts and tax may be separated and apportioned, and that said tax, so far as so separated and apportioned to said receipts derived from the interstate commerce, is unconstitutional and void, but valid apportionable to said receipts derived from state business. It is thereupon ordered by the court, adjudged, and decreed that the defendant is hereby forever enjoined from collecting on said assessment of $5,206.90 more than the sum of $1,275.39, and an injunction is refused as to the balance of said tax. It is further ordered that the defendant pay the costs of this suit."

The judges of the circuit court, upon this state of facts, made the following certificate of a difference of opinion.

"This is to certify that at the hearing of the above-entitled cause before Hon. HOWELL E. JACKSON, circuit judge, and GEORGE R. SAGE, district judge, said judges differed in opinion upon the following questions of law, to-wit: