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consumer of its real character, free from any coloring matter or other ingredient causing it to look like or appear to be but ter, as above defined." This statute is compiled in Bates's Annotated Statutes of Ohio, $4200-13-14.

On May 16, 1894, it was further enacted that "no person shall manufacture, offer, or expose for sale, sell, or deliver, or have in his possession with intent to sell or deliver, any oleomargarine which contains any methly (methyl), orange, butter yellow, annotto aniline dye, or any other coloring matter. Bates's Anno. Stat. § 4200-16.

Under this charter the corporation there after carried on its business in the state of Ohio.

any such product had been offered for sale as an imitation of butter, and without being plainly marked in conformity with the laws of the state of Ohio and the laws of the United States. It denied that the corporation had refused to deliver samples of its products to the duly qualified inspector and agent of the state, as alleged in the fourth charge of the petition, and averred that the entire matter alleged in the fourth charge was based upon a personal difficulty which happened on one isolated occasion tween an officer of the corporation and one of the agents of the dairy and food commissioners "who was not an assistant commissioner."

be

On January 27, 1893, the plaintiff in error was incorporated under the general laws of the state of Ohio "for the purpose of The answer admitted that for a brief manufacturing, selling, and dealing in oleo-period between January 1, 1898, and March margarine and the materials and utensils 1, 1898, the corporation had manufactured employed in the manufacture, storage, and oleomargarine and colored it with a coloring transportation thereof, and all things inci- matter known as annotto, which was entire dent thereto." ly harmless; that this was done in midwinter; that the effect of such use was to give the oleomargarine a yellow color; that the butter made at that period of the year was On April 12, 1898, proceedings in quo not naturally yellow, and that therefore the warranto were begun in the supreme court use of the coloring matter did not cause the of the state of Ohio by the attorney general oleomargarine to look like natural butter; of that state to forfeit the franchise of said on the contrary, it was averred that oleocorporation, and for the appointment of margarine cannot be made so as to look untrustees to wind up its affairs. The relief like butter unless the manufacturer is aldemanded was based on the charge: That lowed to color it; that all the oleomargarine the corporation had "continuously, since thus manufactured during the period stated about the time of its creation, up to the was made, not for sale in the state of Ohio, present day, within this state, of- but for sale in other states, and was wholly fended against the laws of this state, mis- sent out of the state of Ohio to such other used its corporate authority, franchise, and states; that the statutes of the state of privileges, and assumed franchises and privi- Ohio enacted in 1890 and 1894, above referred leges not granted to it, and has assumed to, did not forbid the use in the manufacture and exercised rights, privileges, and fran- of oleomargarine of a harmless coloring matchises specially inhibited by law," in ter, but that if they did they were repug enumerated particulars. The specifications nant to the Constitution of the state of of the petition are reproduced in the mar- Ohio and to 8 8 of article 1 of the Congin.t. stitution of the United States and § 1 of the 14th Amendment of that Constitution.

'The defendant answered, its defenses being reiterated under seven different headings. It suffices for the purposes of the issues now before us to summarize the answer as follows:

It traversed all the facts alleged in the petition except as admitted in the answer. It expressly denied that the corporation had abused or misused its corporate powers. It admitted that the corporation had been engaged under its charter in the manufacture and sale of oleomargarine. It denied that

†First charge. Sald defendant corporation | has, during the times and at the places aforesaid, manufactured and sold an article in imitation and semblance of natural butter; which said article was made out of animal and vegetable oils, and compounded with milk or cream and both; which said article was not then and there in separate and distinct form and in such a manner as would advise consumers of its real character, and was not free from coloring matter or other ingredients causing it to look like and appear to be butter; and said article was not butter, but was an article made in Imitation and semblance thereof.

Second charge. The defendant corporation has, at the times and places above mentioned, manufactured, and has offered and exposed for

The answer additionally alleged that as the statutes which it was alleged had been violated imposed criminal penalties, the proceeding in quo warranto to forfeit the charter was unauthorized, at least until a previous criminal conviction for the acts complained of had been obtained. The portion of the answer setting up this defense concluded as follows: "And that this proceeding is in contravention of the Constitution of the United States."

sale and has sold and delivered, and had in its possession with the intent to sell and deliver, oleomargarine in large quantities as your relator is informed, in quantities from 10,000 to 20,000 pounds thereof daily; which said oleomargarine contained coloring matter, to wit, annotto and other coloring matter unknown to relator.

Third charge. The said defendant corporation, during the times and at the places above stated, has manufactured and sold a substance purported and appearing to be butter and having the semblance of butter, but which substance was not butter, but was oleomargarine; but the packages, rolls, and parcels thereof were not distinctly and durably stamped, or painted, or stenciled, or marked in the true name thereof

an

A demurrer was filed to the defenses, | essary to notice a motion of the defendant which asserted the repugnancy to the Con- in error to dismiss. It is predicated upon stitution of the state and of the United the ground that as the court below found States of certain of the statutes charged the defendant had violated the statute in. to have been violated, but no action seems refusing to furnish samples as required by to have been taken upon such demurrer. the law of 1884, this affords adequate sup-2 A reply was filed in which the state sub-port for the judgment of ouster, irrespecstantially reiterated the allegations of the tive of any substantial Federal question. It petition, taking issue with the claim that is true, in the pleadings it was not asserted the company had used only a harmless col- that the provision of the Ohio law requiroring matter for a short period, and in oleo- ing the delivery of samples was repugnant margarine intended solely for sale outside to the Constitution of the United States, but of the state of Ohio. The reply also took in the certificate made by the supreme court issue with the claim that the natural color of Ohio on the day its opinion was of oleomargarine was a light yellow, and it nounced, it is certified that for the purposes was also denied that oleomargarine "can of the decision of the case it became necesnot be made to look 'unlike' butter, unless sary to determine whether the act of 1884, the manufacturer is allowed to color it." providing for the delivery of such samples, The case was heard "upon the petition was repugnant to the Constitution of the and answer, testimony, and arguments of United States. Conceding that the certifi counsel." The supreme court of Ohio found cate can only serve to aid in elucidating the averments of the petition to be true, and whether a Federal question was presented entered a decree ousting the corporation by the record, and that such certificate from its corporate rights, privileges, and cannot, independently in and of itself, imfranchise, adjudging that it be dissolved, port into the record such a question when and appointing two trustees for the credit- not otherwise properly inferable from the ors and stockholders of the corporation, to record, we do not think the motion to diswind up its affairs. 62 Ohio St. 350, 57 miss is well taken. We cannot, from an inN. E. 62. The court, on the day this opin- spection of the opinion of the supreme court ion was announced, entered an order, which of the state of Ohio, conclude that the judgit declared was made a "part of the record ment of ouster which that court rendered of this case," in which it was stated that was predicated alone upon the fact that the at the request of the defendant it was certi- defendant had failed to deliver samples as fied that in deciding the case the court had required by the statute. On the contrary, found it necessary to consider whether the we think the context of the opinion of the Ohio act of 1884 providing for the furnish- court demonstrates that the judgment ing of samples, that of 1886, as amended against the corporation was based upon, not in 1887, requiring all oleomargarine to be alone the mere failure to deliver the sammarked in a specific manner, the act of 1890 ples, but because of that failure, as conforbidding the manufacture and sale of any nected with and explained by the acts of the oleomargarine colored to look like butter, corporation, in continuously, and, as deas well as the act of 1894 forbidding the clared by the court, flagrantly, violating, not use of coloring matter in oleomargarine,-one, but most of the other statutes relied were not repugnant to the 3d clause of § 8 on. In other words, we think that the judg of article 1 of the Constitution of the Unit- ment of the state court was based upon the ed States conferring upon Congress the pow- consideration given by it to all the asserted er to regulate commerce, and to the 5th and violations of the statutes jointly, and hence 14th Amendments of that instrument; and no one of the particular violations can be that the court had sustained the validity of said, when considered independently, to be the statutes, although their unconsitutional-alone adequate to sustain the conclusions ity had been asserted by the defendant. A of the court below that the judgment of writ of error was allowed by the Chief ouster should be entered. We come, then, Justice of the supreme court of Ohio. to the principal contention which the record Before disposing of the controversies pre- presents, the asserted repugnancy of the sented by the assignment of errors, it is nec-before-mentioned statutes of the state of

In the ordinary bold-faced capital letters required by the act of May 17, 1886, entitled "An Act to Prevent the Adulteration of and Deception in the Sale of Dairy Products, etc." 83 0. L. 178.

Fourth charge. Sald defendant corporation has refused and still refuses to deliver and furnish to the duly appointed, qualified, and acting inspector and agent of the dairy and food commissioner of this state any sample or quantity of the oleomargarine manufactured by it, although duly demanded by him, and the value of the same for a ten-pound package thereof, or any other reasonable quantity thereof, was tendered it for the analysis thereof, contrary to 4 of the act of March 20, 1884, entitled "An Act to Provide Against the Adulteration of Food and Drugs" (81 O. L. 67); and said defendant has refused and still refuses to permit said in

|spector and agent to enter into its factory for any purpose whatsoever, and has refused and still refuses to permit him to examine or cause to be examined any of the products manufac tured by it.

Fifth charge. All of sald violations of the laws of this state, as set forth in the first, sec ond, third, and fourth charges, have been made and done by said defendant corporation with full knowledge of the said violations of law, and for the expressed purpose and intent of violating said laws and evading the same, and for the purpose of deceiving the people of this state and other states as to the real character of its said product, contrary to the act of March 7, 1890, entitled "An Act to Prevent Deception in the Sale of Dairy Products and to Preserve Pub. lic Health." 87 0. L. 61.

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Ohio to the Constitution of the United | held that oleomargarine was an article States.

which might easily be manufactured so as At the outset it is apparent that all the to be hurtful, and thus result in fraud upon statute assailed, except the act of May 16, and injury to the public, and that the in1894, were on the statute books of the state hibition of the use of coloring matter in at the date when the provisions of the gen- oleomargarine was a reasonable police regueral incorporation law of the state were lation tending to insure the public against taken advantage of. The question thus at fraud and injury. The purpose of the legis once arises whether the corporation can be lature in permitting the use of harmless colheard to assail the validity of the statutes oring matter in butter, and requiring that which were in force when it voluntarily oleomargarine be sold in its natural state, caused itself to be incorporated. We do not, was declared not to be for the purpose of however, pursue this thought further, since discriminating in favor of butter, but to it is impossible to separate, for the purposes provide a ready means by which the pubof the questions here arising, the laws ex-lic might know that an article offered for isting at the time of the charter from the sale was butter, and not oleomargarine. act of 1894, which was enacted after the in- It cannot in reason be said, as a mere corporation. matter of judicial inference, that such reguThe contention that the statutes in ques-lations for such purpose were a mere arbition are repugnant to the commerce clause trary interference with rights of property, of the Constitution is manifestly without denying the equal protection of the laws, or merit. All the acts of the corporation that they amounted to a taking of property which were complained of related to oleo without due process of law. It follows that margarine manufactured by it in the state the legislature of Ohio had the lawful power of Ohio, in violation of the laws of that to enact the regulations. Gundling v. Chistate, and therefore operated on the corpo-cago, 177 U. S. 183, 44 L. ed. 725, 20 Sup. ration within the state, and affected the Ct. Rep. 633. Indeed, the controversy is product manufactured by it before it had governed by the decisions in Powell v. Pennbecome a subject of interstate commerce.sylvania, 127 U. S. 678, 32 L. ed. 253, 8 Kidd v. Pearson, 128 U. S. 1, 32 L. ed. 346, Sup. Ct. Rep. 992, 1257; and Plumley v. 2 Inters. Com. Rep. 232, 9 Sup. Ct. Rep. 6; Massachusetts, 155 U. S. 461, 39 L. ed. 223, United States v. E. C. Knight Co. 156 U. S. 5 Inters. Com. Rep. 590, 15 Sup. Ct. Rep. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 249. It 154. In the Powell Case a statute absoresults that the plaintiff in error is not in a lutely forbidding the manufacture and sale position to assail the validity of the stat- in the state of Pennsylvania of oleomargautes because of their supposed operation up-rine was held valid, because designed to on interstate commerce, and we are not called upon to express an opinion respecting the constitutionality of the statutes upon this assumption.

prevent fraud. Speaking of the case in Schollenberger v. Pennsylvania, 171 U. S. 1, 43 L. ed. 49, 18 Sup. Ct. Rep. 757, this court said (p. 15, L. ed. p. 54, Sup. Ct. Rep. p. 762):

"That case did not involve rights arising under the commerce clause of the Federal Constitution. The article was manufactured and sold within the state, and the question was one as to the police power of the state acting upon a subject always within its jurisdiction."

The contention that the statutes in question violate the 5th Amendment to the Constitution of the United States need not be dwelt upon, as it is elementary that that amendment operates solely on the national government, and not on the states. Brown v. New Jersey, 175 U. S. 172, 174, 44 L. ed. 119, 20 Sup. Ct. Rep. 77, and cases cited. The inquiry, then, is this: Do the proIn the Plumley Case the power of the visions of the Ohio statutes, which, although state, in legislating for the prevention of deallowing the manufacture and sale of oleo- ception in the manufacture and sale of*imimargarine when free from any coloring mat-tation butter, was held to extend to the proter or other ingredient causing it to look like or to appear to be butter as defined in the statute, and which, moreover, expressly forbid the manufacture or sale within the state of any oleomargarine which contains and methyl, orange, butter yellow, annotto, aniline dye, or any other coloring matter, contravene the Constitution of the United States?

The proposition is that, as by the Ohio statutes harmless coloring matter is permitted to be used in butter, the effect of prohibiting the use of such harmless ingredients in oleomargarine is to deprive the manufacturer of oleomargarine of the equal protection of the laws, and to take from him his property without due process of law.

The supreme court of Ohio, however, having before it the evidence introduced upon the issues of fact made in the pleadings,

hibition of the sale of oleomargarine artificially colored so as to look like yellow butter, although brought into Massachusetts from another state.

Applying the principles enunciated in the cases to which we have just referred, it results that the Ohio statutes under consideration, in so far as they relate to the manufacture and sale of oleomargarine within the state of Ohio by a corporation created by the laws of Ohio, were not repugnant to the Constitution of the United States.

We have previously stated that in the answer of the defendant it was asserted that the remedy for the alleged violations of the Ohio statutes whose constitutionality were assailed was by a criminal proceeding, and not by an action in quo warranto for the purpose of forfeiting the charter of the defendant; and that in said pleading it was

First. That as the acts done by the corporation which are complained of were by the statutes of Ohio made the subject of criminal penalties, such acts could not be availed of as the basis of civil proceedings in quo warranto, until in any event prior thereto there had been criminal conviction, without denying to the defendant the equaling. protection of the laws or taking its property without due process of law contrary to the 14th Amendment.

averred in general terms that "this proceed- | relief by quo warranto would be repugnant ing" was "in violation of the Constitution to that Constitution; nor is there anything of the United States." Under the assump- in the record which could give rise even to tion that the general reference to the Con- a remote inference that the mind of the stitution just adverted authorizes this court state court was directed to or considered to pass upon them, two Federal questions this question. On the contrary, it is apparare elaborately pressed upon our attention. ent from the record that such a contention they are: was not raised in the state court. Thus, although at the request of the defendant below, the plaintiff in error here, the state court certified to the existence of the Federal questions which had been called to its attention and which had been called to its erence was made in the certificate to the claim of Federal right we are now consider

In

The foregoing considerations are equally, applicable to the proposition that the obligations of the contract engendered by the Second. That the appointment of trustees charter were impaired by the appointment to wind up the affairs of the corporation by the court of liquidating trustees. as a consequence of the judgment of ouster deed, though the appointment of such trusproduced, not only like results, but also tees was expressly prayed in the petition, violated the contract clause of the Consti- the record does not even suggest that a contution of the United States, because amount-stitutional question in respect to such aping to an impairment of the obligations of pointment was raised or called to the attenthe contract which the charter of the corpo- tion of the court below. ration had engendered. It is conceded that Judgment affirmed. the Ohio statute which authorized the proceedings in quo warranto for any abuse or misuse of corporate powers, and which empowered the court, if it decreed against the defendant, to appoint trustees to liquidate the affairs of the corporation, was a part of the general law of Ohio at the time the defendant corporation was organized. The contentions then reduce themselves to this, that the contract rights of the corporation arising from the charter were denied, and

the 14th Amendment to the Constitution was violated, because the corporation was subjected to the general laws of Ohio, which became impliedly a part of the charter. While thus to bring the propositions to their ultimate analysis may be wholly adequate to dispose of them, we do not pass upon them, since they do not properly arise for decision on this record.

It is settled that this court, on error to a state court, cannot consider an alleged Federal question, when it appears that the Federal right thus relied upon had not been by adequate specification called to the attention of the state court, and had not been by it considered, not being necessarily involved in the determination of the cause. Green Bay & M. Canal Co. v. Patten Paper Co. 172 U. S. 62, 67, 43 L. ed. 365, 368, 9 Sup. Ct. Rep. 97; F. G. Oxley Stave Co. v. Butler County, 166 U. S. 648, 654, 655, 41 L. ed. 1149, 1151, 17 Sup. Ct. Rep. 709, and cases cited. Now, the only possible support to the claim that a Federal question on the subject under consideration raised below was the general statement in the answer to which we have already adverted, that "this proceeding is in violation of the Constitution of the United States." Nowhere does it appear that at any time was any specification made as to the particular clause of the Constitution relied upon to establish that the granting of

was

(183 U. S. 402) COMPANY OF NORTH AMERICA, Petitioner,

GUARANTEE

v.

MECHANICS' SAVINGS BANK & TRUST
COMPANY, for the Use of J. J. Pryor,
Assignee.

Surety companies-construction of employ-
ee's bond-duty of employer to notify
company of speculation by employee-
misrepresentations in employer's declara

1.

2.

3.

tion.

The rule that of two constructions of a bond executed by a guarantee company to secure a bank against defalcation by an employee, the one favorable to the bank, if consistent with the objects for which the bond was given, must be adopted, cannot be availed of to refine away terms of a contract expressed with sufficient clearness to convey the plain meaning of the parties, and embodying require ments, compliance with which is made the condition to liability thereon.

The failure of a bank, upon its officers being told that its teller was speculating, to notify at once the guarantee company which was on the teller's bond, of such information as it had, will defeat a recovery on such bond for defalcation after the information was received by such officers, where such bond provided that the bank should at once notify the company on its "becoming aware" that the tel ler was engaged in speculation or gambling. Negative answers by the president of a bank to the questions in a statement or declaration, In reliance on which a guarantee company executed a bond insuring the bank against defalcation by its cashier, "Have you known or heard anything unfavorable as to his habits or associations, past or present?" "Or of any matters concerning him about which you deem it advisable to make inquiry ?"—when he had heard that such employee had been speculat

Argued April 23, 24, 1901. Decided January, 1893, when it issued a bond on Schardt