Lumber Co. v. Town of Hayward (C. C.) 20 Fed. 422. An examination of the bills before us in the light of the law governing the matters complained of discloses the fact that no such multiplicity of suits and no such irreparable injury as is contemplated in law or in equity is threatened, or is possible.

But we do not concede that, even in the Pollock Case, the supreme court holds that the plaintiff, as a matter of course, had the right to enjoin the defendant from paying the tax alleged to be unconstitutional. The chief justice, in passing upon this feature of the case, uses this language:

"The objection of adequate remedy at law was not raised below, nor is it now raised by appellees, if it could be entertained at all at this stage of the proceedings; and, so far as it was within the power of the government to do so, the question of jurisdiction, for the purposes of this case, was explicitly waived on the argument."

The court was induced to some extent, no doubt, to hear the case upon its merits on the ground of public policy. At least Asst. Atty. Gen. Whitney was constrained to waive all objection to the form of action on that ground, as is evidenced by the following language used by him in his argument of the case:

"The method by which the questions are presented in the Pollock and Hyde Cases was not chosen with the consent of the government. The corporations have ample remedy at law, either by standing on the defensive or by paying the tax under protest, and suing to recover the amount paid. Plaintiffs would be sufficiently protected by decree restraining the corporations from voluntary payment. Yet the bills do not allege that the corporations intend to pay voluntarily. No injunction, it is believed, has ever been granted against the payment of a tax to the United States government, or against the execution of a law of the United States, on the ground that the law was unconstitutional. It is believed that in no case can such an injunction properly be granted, and it is regarded as important not to break the chain of precedent against such relief. These objections, however, are not jurisdictional in the strictest sense. * In view of the great public interest aroused, and of the fact that no cases in proper form are now pending, these objections are waived on behalf of the government, so far as it is in the power of its officers to waive them."

It can avail nothing for me to here quote from the very able dissenting opinion of Justices White and Harlan on this branch of the Pollock Case. Their opinion, with authorities cited, leads me to the conclusion that, had the question of jurisdiction been raised in the court below, and insisted upon in the supreme court, the case would not have been heard upon its merits. And in the cases at bar the district attorney, so far as he had the right to do so, the government not being a party to the suits, raised not only the question of the jurisdiction of the court because the plaintiffs had a plain, speedy, and adequate remedy at law, but insisted that the suits were of a friendly nature, collusive in character, and brought for the sole purpose of conferring jurisdiction upon the court, to the end that the defendants might escape paying the license fee imposed by law. And when all the facts are taken together, as disclosed by the record, some color is lent to the latter contention. Take the case of Corbus against the Treadwell Company. The bill was filed July 17th, the subpoena served July 19th, commanding the defendant to answer the bill within 20 days. No appearance

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was made by defendant, however, and no pleading filed until November 15th, nearly four months after the filing of the bill, and not until about the time the matter was called up for hearing, when a demurrer was interposed. Counsel for defendant did not contend for his demurrer, made no argument, and filed no brief in support of the same. And, in the very nature of the case, the interests of the plaintiff and defendant are identical. Then, if the object and purpose of the suit is solely to test the constitutionality of the law without first paying into the United States treasury the amount of the license tax (and there can be no other object), and if the court will sustain the plaintiff and enjoin the defendant as prayed, how is the private citizen to avail himself of a similar remedy? Who shall enjoin him, and save him from paying his tax, until the constitutionality of the law is determined? And, if he cannot avail himself of this manner of suit, why should corporations or co-partnerships be permitted to do so? Why should not corporations and individuals have and be permitted to exercise identically the same legal rights and remedies under the law? It is admitted in all the bills and protests now being considered that the respective plaintiffs have a plain remedy at law by resisting the enforcement of the statute in question. But they contend that the fines and penalties imposed are so severe they dare not pursue that course. When the congress passed the law in question, they also passed and made a part of this very chapter 44 the following provision, found in section 481:

"That in any case where a conviction occurs, except in a case of murder or rape, the court may, when in its opinion the facts and circumstances are such as to make the minimum penalty provided in this act manifestly too severe, impose a less penalty, either of fine or imprisonment, or both: provided, that in any such case the court shall cause the reasons for its action to be set forth at large on the record in the case."

It would seem the congress had in view the provisions in this very chapter, for the minimum penalty in all other criminal cases is extremely low; and, while it is not a part of the record of this. case, it is a fact well known to every attorney appearing in these cases that the court has repeatedly exercised the power by that section vested in it, and has imposed a minimum fine of but one dollar in many cases arising under the provisions of this chapter. In view of the existence of this law, the plaintiffs can have nothing to fear from the severe penalties imposed if they are acting in good faith, and with an honest purpose to test the constitutionality of the law, intending, if the same shall be sustained, to then comply with its provisions.

As to those persons appearing by protests only, it is the anomalous contention that the papers on file are both applications for and protests against the issuance of licenses; that is to say, they are applications for license if the court shall determine that the businesses engaged in by the plaintiffs, respectively, subject them to the payment of a tax; and they are protests on the ground that the several lines of business engaged in by protestants are not subject to license and taxation, principally because the law attempting to

impose the tax is unconstitutional and void. It is further contended by them that in passing upon all applications for license under this law the court acts judicially, and therefore has the right to and must pass upon the constitutionality of the law itself. It is not necessary to determine whether, in passing upon applications for license, the court acts judicially; for, if we concede that it does so act, it is nevertheless perfectly clear that the petitioner can only allege in his petition those things required by the act itself to be set up, showing the applicant to be entitled to the license prayed for, and, if extrinsic matter is pleaded, such as denying the constitutionality of the law itself, the court is not required, nor, in our judgment, permitted, to take judicial notice of such extrinsic matter. An officer authorized to issue marriage licenses may be said to act judicially in determining whether the facts set up by the applicant for such license entitle him to receive the same, but it would hardly be contended that the applicant could deny the constitutionality of the law governing such matters, and require the officer to determine that question. If this were a court of last resort, we might feel constrained to seek some means by which the constitutionality of the law might be passed upon. The issue should be settled at the earliest possible moment. But we are powerless to finally settle it, even if we would, and we do not believe the question is legally before us. The giving to every one who may feel himself aggrieved the right to enjoin payment of a tax imposed upon him by the congress is fraught with so much danger, and it is so at variance with the policy of our government and the decisions of our courts, that we do not feel warranted in seeking for reasons to justify the taking of jurisdiction in these cases, even if any could be found. The demurrers to the three bills will be sustained; and as to the protests, in so far as they can be construed as an application for license for the respective businesses named, they will be sustained. The protests will be ignored, and, unless an appeal shall be taken from the decree rendered in conformity with this opinion within the time prescribed by law, the clerk will be directed and ordered to pay into the United States treasury the several sums of money paid into the registry of this court by the respective complainants and protestants. Let a decree be entered in conformity herewith.

SOUTHERN COTTON-OIL CO. v. HEFLIN.

(Circuit Court of Appeals, Fifth Circuit. January 23, 1900.)

No. 843.

SALE-BREACH OF CONTRACT-MEASURE OF DAMAGES.

Plaintiff, who was manufacturing out of cotton seed, by the same process, oil, meal, cake, hulls, and lint, all marketable products, sold to defendant, at a fixed price per ton, all the cake and meal to be produced by the mill during the year. After receiving part of it, defendant gave notice that he would not accept any more, but plaintiff continued to manufacture it, and tendered the balance, which defendant refused. Held, that the measure of damages was the difference between the market value and the contract price.

In Error to the Circuit Court of the United States for the Eastern District of Texas.

This suit was instituted in the district court of Waller county, Tex., on April 31, 1895, from which it was removed to the United States circuit court for the Eastern district of Texas, sitting at Galveston, in August, 1895. The plaintiff in error was a corporation chartered in the state of New Jersey, and owning a cotton-seed oil mill situated at Houston, Tex., at which mill it made the products of cotton seed from year to year. This was a suit instituted against the defendant in error upon the following contract:

"Philadelphia, April 12, 1894.

"R. L. Heflin, Esq.-Dear Sir: We have this day sold you all the prime cotton-seed cake and meal made at our Houston (Texas) mill during the season commencing September 1, 1894, and ending March 31, 1895; we guarantying a minimum quantity of six thousand (6,000) tons, and you not being required to receive a maximum quantity of more than ten thousand (10,000) tons. Any excess of ten thousand tons to be at your option. All at the price of eighteen dollars ($18) per ton of two thousand pounds, free on board cars at our Houston (Texas) mill. Same to be packed in good, merchantable sacks, and marked or branded as ordered. Terms, sight draft bill of lading attached. Shipments as fast as made and ordered. It is distinctly understood that we are to have the privilege at all times during the season above stated of supplying our local demands for cattle feeding at Houston, Texas, and our jobbing trade for consumption at that and other Texas points. It is also a condition of this contract that, in case of accident to said mill by fire or act of God, such as may prevent our making the quantity guarantied by us during the season above stated, this contract shall be void as to any part unfilled in consequence of such accident. It is further agreed and made part of this contract that we shall not be required to furnish more than three-quarters of the total quantity delivered in meal, unless at our option. The Southern Cotton-Oil Company. "By Henry C. Butcher, Prest. R. L. Heflin."

"Yours, truly,

"I hereby accept the above. When Heflin signed and returned the contract, he wrote, on April 15, 1894, to the president of the Southern Cotton-Oil Company as follows:

"Yours of the 12th inst., inclosing contracts, received. Same are in order, except as to shipments. After the words, 'shipments as fast as made,' I have added, and ordered,' and I now here agree that the mill shall not be without shipping orders at any time longer than ten days maximum, and for any excess I will pay both interest and insurance to date I give such orders. This is only fair, for, without any such stipulation last year, this mill had shipping orders always ahead of its production, except twice, and then not a whole week was it without them.

The declaration alleges that the plaintiff, in pursuance of its contract, delivered 2,084 tons of meal in September, for which the defendant paid in full; that the plaintiff delivered 1,904 tons in October, for which the defendant paid $15 a ton, leaving $3 a ton unpaid; and that the plaintiff tendered the balance, 6,012 tons, in pursuance of the terms of the contract, which the defendant refused to accept and pay for. This suit was brought to recover $5,712, being $3 a ton due on the 1,904 tons, with interest from October 31, 1894; and for $39,047.94, the difference between the market price, $11.50, at which the plaintiff was compelled to sell the 6,012 tons, and the contract price, $18, which the defendant refused to pay. These, together with some expenses for insurance and for storage and handling the meal, aggregating about $2,000, constituted the cause of action on the part of the plaintiff. The defendant defended on the ground that the 1,904 tons were not "prime cotton-seed cake or meal"; that $15 was the full value thereof; and that the defendant was not compelled to take the 6,012 tons, because the defendant, on October 31, 1894, being thereunto justified by the failure of the plaintiff to deliver meal according to the standard of the contract, gave notice to the plaintiff that he revoked and canceled the contract, and would not abide by its terms any longer. The case was tried before the court and a jury at the March term of the circuit court at Galves

ton, and there was a verdict for the plaintiff, on March 7, 1899, for the sum of $5,712, being $3 a ton on 1,904 tons, with 6 per cent. interest from November 1, 1894. The following extract from the charge of the court recites the facts necessary to be stated, and also shows the material question of law in the case: "This case was brought by the plaintiff, the Southern Cotton-Oil Company, against R. L. Heflin, charging, substantially, that in April, 1894, plaintiff and defendant entered into a contract by which defendant purchased from plaintiff its output of meal for the season of 1894-1895, commencing September 1, 1894, and ending March 31, 1895, for not less than 6,000 tons of meal, and not more than 10,000 tons, and any overplus of 10,000 tons being at the option of the defendant at the contract price of $18 per ton free on board cars at Houston. The defendant has alleged a specific agreement between himself and the plaintiff in regard to the quality of this meal and putting in these meshes. That should have been determined by your special findings against the defendant. Under the undisputed evidence in this case there are two thousand and eighty-four tons of the meal that were contracted for that were received and paid for by the defendant. It is true that some complaint was made by the defendant that it was found, after the meal had gone abroad, there was some complaint in regard to it, and it was settled for thereafter. That is out of this case. There were one thousand nine hundred and four tons of meal received by the defendant, who refused to receive it under the contract, at the contract price, because he said it was not the kind of meal contracted for. Thereupon the plaintiff and the defendant agreed that the defendant should take the meal and pay $15 a ton, which he did, and the question between them of the $3 a ton should be thereafter determined; and, if it was determined that the meal was up to the quality called for in the contract, which was prime cotton-seed meal, the defendant would owe them $3 a ton, and, if not up to the standard contracted for, he would not owe them $3 a ton. That was substantially the understanding between the parties. Thereafter, my recollection is that on October 31st the defendant, Heflin, gave the plaintiff notice that he would not take any more of the meal; that it was not up to the standard, and could not be made up to the standard, with the appliances they had. That is my understanding of the effect of that letter. The plaintiff claims that it made all the meal up to ten thousand tons, and it sues for $3 a ton on one thousand nine hundred and four tons, and it sues for $6.50 a ton on six thousand and twelve tons, and sues for interest and insurance, basing it upon a contract or letter not embraced in the contract, but a letter written by Mr. Heflin, stating if the meal was not shipped out as fast as made on the 10-day clause about shipping orders, that he would pay the insurance and interest. Therefore the determining question in this case is the question of the measure of damages in the event the contract was breached. It is a very doubtful question, but my judgment of the matter is that the plaintiff in this action has mistaken his remedy on the measure of damages. The plaintiff sold this meal for $11.50 a ton, and charged the defendant with the difference between that and the contract price. A notice that he would not take any more of this meal would not comply with the contract. The defendant did not escape liability, provided the plaintiff, in its action, asserted the right measure of damages. But when it was notified by the defendant that he would not take any more of the meal, then, in that case, the subsequent making of the meal was a matter which the plaintiff was making for its own account,had a right to sell it to whom it wanted. But at the expiration of March 31st it had a right to bring its action against the defendant for such profits as it would have made by the defendant complying with the contract and taking the meal at $18 a ton. But it does not assert any such measure of damages here. It claims the right to enforce the contract whether the defendant wants it enforced or not, and it claims the right to sell the article, charging the defendant with the difference in price realized on the sale of the six thousand and twelve tons and the contract price. I do not think that is the measure of damages. Therefore you will not regard the six thousand and twelve tons in this case, and all that is left for you to consider is the one thousand nine hundred and four tons." The plaintiff duly excepted to that part of the charge relating to the 6,012 tons and the measure of damages, and also excepted to the refusal to give special charges presenting the theory contended for by