decree and leaving the property in the hands the state Legislature for such an action in of the special administrator. The state of the federal courts. The individual defendIowa has not become a party to these pro- ants objected on the grounds that the Iowa ceedings. administrator was the proper party plaintiff ; that he was in any event a necessary party and joining him would oust the court of jurisdiction; that the relief sought would deny to the action of the Minnesota court full faith and credit; and that plaintiff had an adequate remedy at law. The original jurisdiction of the court to entertain a bill of this character was also questioned. Only one of these objections need be considered, for it presents a conclusive reason why leave to file the bill of complaint should be denied.

(4) Under the laws of Iowa, omissions to list and assess property may be corrected and the taxes collected within five years from the date of such omission. But the amount properly payable for taxes by Slimmer's estate cannot be *collected without assessment and levy thereof against his personal representatives, and such assessment and levy must be made within the state of

Iowa.

M

(5) On January 7, 1918, the district court of Dubuque county, Iowa (in a proceeding begun apparently on or about that day), decreed, at the instance of the treasurer of that state, that Slimmer, Sr., was domiciled therein and granted to one Mullany letters of administration of his estate. About the same date the state, learning that Slimmer, Jr., and Bechhoefer were about to come into it for the purpose of taking testimony in the Minnesota probate proceedings, obtained from said district court an injunction restraining the witness from testifying and the designated officers from taking their depositions. Slimmer, Jr., and Bechhoefer

have not been served in the Iowa suit and

have declared their purpose to avoid service

G.

within that state.

The bill prays that it be adjudged and decreed: (a) That Slimmer, Sr., had for more than five years prior to his death been domiciled in Iowa; (b) that his estate consisted of evidences of indebtedness to him and that no part of his estate was, at his death, in Minnesota; (c) that Iowa has and Minnesota has not jurisdiction to administer upon his estate; and prays also (d) that such order be entered as will insure the dismissal of the Minnesota probate proceedings and the administration of the estate in Iowa; and (e) that, pending this suit, an injunction issue restraining the prosecution of the Minnesota probate proceedings.

Substantially the whole of decedent's estate consisted of notes and bonds. Under an arrangement which had been in force for five years or more, these securities were, at the time of his death, in Minnesota in the custody and possession of an agent resident there. Minnesota imposes inheritance taxes; and its statutes provide (G. S. Minn. 1913, § 2281) that no transfer of the property of a nonresident decedent shall be made until the taxes due thereon shall have been paid. Regardless of the domicile of the decedent, these notes and bonds were subject to probate proceedings in that state and likewise subject, at least, to inheritance taxes. S. Minn. 1913, §§ 7205, 2271; Bristol v. Washington County, 177 U. S. 133, 20 Sup. Ct. 585, 44 L. Ed. 701; Wheeler v. New York, 233 U. S. 434, 34 Sup. Ct. 607, 58 L. Ed. 1030. Furthermore, so far as concerns the property of the decedent, located at his death in Minnesota, the probate courts of *that state had jurisdiction to determine the domicile. Overby v. Gordon, 177 U. S. 214, 20 Sup. Ct. 603, 44 L. Ed. 741. But even if decedent was not domiciled in Minnesota, its court had the power either to distribute property located there according to the terms of the will applicable thereto, or to direct that it be transmitted to the personal representative of the decedent at the place of his domicile to be disposed of by him. G. S. Minn. 1913, § 7278; Harvey v. Richards, 1 Mason, 381, Fed. Cas. No. 6,184. See Wilkins v. Ellett, 108 U. S.

The motion for leave to file the bill was submitted ex parte. In view of doubt entertained as to the propriety of granting it, consideration of the application was post-256, 258, 2 Sup. Ct. 641, 27 L. Ed. 718. poned (as in Minnesota v. Northern Securi- On or about August 21, 1917, Slimmer's exties Co., 184 U. S. 199, 22 Sup. Ct. 308, 46 ecutors filed their petition in the probate L. Ed. 499, and Washington v. Northern Se- court for Ramsey county, Minn.; and the curities Co., 185 U. S. 254, 22 Sup. Ct. 623, court, in the exercise of its jurisdiction, ap46 L. Ed. 897), so that the parties might be pointed the defendant Bechhoefer special heard; and the motion was fully argued administrator. As such, he took and now orally and upon briefs. Both the state of holds, pending an appeal to the state district Minnesota and the individual defendants, court, possession of the whole of decedent's other than Lipman, objected to the granting estate, consisting of the notes and Liberty of leave to file the bill. The state objected Bonds as well as the personal effects. The on the grounds that the only effective relief only effective relief sought here is to enjoin sought was an injunction against a proceed- the further administration of the estate of ing in a state court; that the Minnesota the deceased by the courts of Minnesota. It probate court had exclusive jurisdiction to is clear that the state of Iowa is not entitled administer assets of a decedent within its to such relief. borders, regardless of his domicile; and also that there was no authority granted by complaint is, therefore, denied.

The motion for leave to file the bill of

.

(248 U. S. 71)
GULF OIL CORPORATION v. LEWELLYN,
Collector of Internal Revenue.

alone, the change being effected by entries
upon the respective companies' books. The
earnings thus transferred had been accumu-

(Argued Nov. 4, 1918. Decided Dec. 9, 1918.) lated and had been used as capital before the No. 310. taxing year. Lynch v. Turrish, 247 U. S. INTERNAL REVENUE I INCOME TAX 221, 228, 38 Sup. Ct. 537, 62 L. Ed. 1087. DIVIDEND-ORDINARY Course.

A transaction effected by entries on the respective companies' books whereby plaintiff corporation, owning the stock, except directors' shares, of subsidiary corporations, took over their earnings and surplus, accumulated and used as capital before the taxing year, and their debts inter se, the corporations being related as one enterprise, held bookkeeping, rather than "dividends declared and paid in the ordinary course by a corporation," within Act Oct. 3, 1913, § 2, and so not subject to income

tax.

We are of opinion that the decision of the District Court was right. It is true that the petitioner and its subsidiaries were distinct beings in contemplation of law, but the facts that they were related as parts of one enterprise, all owned by the petitioner, that the debts were all enterprise debts due to members, and that the dividends represented earnings that had been made in former years and that practically had been converted into capital, unite to convince us that the transaction should be regarded as bookkeeping rather than as "dividends declared and paid Lynch v. Hornby, 247 U. S. 339, 346, 38 Sup. in the ordinary course by a corporation." Ct. 543, 62 L. Ed. 1149. The petitioner did not itself do the business of its subsidiaries and have *possession of their property as in Southern Pacific Co. v. Lowe, 247 U. S. 330, 38 Sup. Ct. 540, 62 L. Ed. 1142, but the principle of that case must be taken to cover this. By section II, G, (c), 38 Stat. 174, and S, 38 Stat. 202, the tax from January 1 to February 28, 1913, is levied as a special excise tax, but in view of our decision that the dividends here concerned were not income it is unnecessary to discuss the further question that has been raised under the latter clause as to the effect of the fact that excise taxes upon the subsidiary corporations had been paid. Judgment reversed.

On Writ of Certiorari to the United States Circuit Court of Appeals for the Third Cir

cuit.

Action by the Gulf Oil Corporation against C. G. Lewellyn, Collector of Internal Revenue for the Twenty-Third District of Pennsylvania. Judgment for plaintiff (242 Fed. 709) was reversed by the Circuit Court of Appeals (245 Fed. 1, 158 C. C. A. 1), and plaintiff brings certiorari. Reversed.

Messrs. William A. Seifert and James H. Beal, both of Pittsburgh, Pa., for plaintiff. Mr. William C. Herron, of Washington, D. C., for respondent.

Mr. Justice HOLMES delivered the opinlon of the Court.

This is a suit to recover a tax levied upon certain dividends as income, under the Act of October 3, 1913, c. 16, section II, 38 Stat. 114, 166. The District Court gave judgment for the plaintiff, 242 Fed. 709, but this judg ment was reversed by the Circuit Court of Appeals. 245 Fed. 1, 158 C. C. A. 1.

The facts may be abridged from the findings below as follows: The petitioner was a holding company owning *all the stock in the other corporations concerned except the qualifying shares held by directors. These companies with others constituted a single enterprise, carried on by the petitioner, of producing, buying, transporting, refining and selling oil. The subsidiary companies had retained their earnings, although making 'some loans inter se, and all their funds were invested in properties or actually required to carry on the business, so that the debtor companies had no money available to pay their debts. In January, 1913, the petitioner decided to take over the previously accumulated earnings and surplus and did so in that year by votes of the companies that it controlled. But, disregarding the forms gone through, the result was merely that the petitioner became the holder of the debts previously due from one of its companies to another. It was no richer than before, but its property now was represented by stock in 3. and debts due frora its subsidiaries, whereas In determining whether fees for inspection formerly it was represented by the stock of oils and gasoline exacted by state of Minneso

Discretion of state Legislature in determining amount of fee for inspection of oils and gasoline, prima facie reasonable, will not be lightly disturbed by federal courts in determining whether exaction for inspection of such products, moving in interstate commerce, constitutes burden thereon, on account of excessive character of charge, rendering state act a revenue, instead of an inspection, measure.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

(248 U. S. 158)

PURE OIL CO. v. STATE OF MINNESOTA.
(Argued Nov. 21 and 22, 1918. Decided Dec.
9, 1918.)
No. 74.

51-INTERSTATE COMMERCE

1. COMMERCE
INSPECTION LAWS-OILS.

A state, under its police power, may enact laws for inspection of oils and gasoline, tending from frauds, and may charge a fee reasonably to promote public safety, or to protect public sufficient to pay cost of inspection, though property may be moving in interstate commerce; but, if charge is obviously and largely in excess of cost of inspection, act will be declared void as burden on interstate commerce.

2. CONSTITUTIONAL LAW 48-INSPECTION FEE DISCRETION OF LEGISLATURE — JUDICIAL INQUIRY.

EVIDENCE 28-JUDICIAL NOTICE-STATE
STATUTES INSPECTION FEES.

ta are so much in excess of cost of inspection as, ed for by the act, or which will ignite at a to constitute law a revenue measure, invalid as burden on interstate commerce, Supreme Court of United States takes judicial notice that inspection fee on oil and gasoline in tank cars was twice reduced by the Legislature.

temperature below 120° Fahrenheit. A method is prescribed for making this "fire test" and for determining the gravity of such oils, and the results must be stenciled on each container of oil.

4. CONSTITUTIONAL LAW 48-OIL INSPECTION FEE-VALIDITY OF LAW-JUDICIAL INQUIRY.

In view of rapid increase in use of gasoline, and action of Legislature of Minnesota in reducing fee for inspection of oils and gasoline in tank cars, the federal Supreme Court will not impute a purpose other than to conform to requirements of federal Constitution in enactment of Gen. St. Minn. 1913, §§ 3619-3632, exacting fees for inspection of oils and gasoline, claimed to be invalid as revenue measure and burden on interstate commerce.

5. COURTS 399(2)-ERROR TO STATE COURT -FINDING OF FACT-CONCLUSIVENESS.

In suit attacking constitutionality of state statute whereunder fees for inspection of oils and gasoline were exacted, claim being that act was revenue measure, and burden on interstate commerce, finding of fact by trial court of state, approved by its Supreme Court, is accepted as conclusive by Supreme Court of United States.

In Error to the Supreme Court of the

State of Minnesota.

Section 3625 deals with gasoline, and requires that it shall be subject to the same inspection and control as is prescribed for illuminating oils, "except that the inspectors are not required to test it other than to ascertain its gravity."

All containers of gasoline must be labeled conspicuously with the word "Gasoline," the gravity must be stenciled thereon, and it is made unlawful to sell or offer it for sale until inspected and approved. Provision is also made (section 3626) for the inspection of gasoline "receptacles" to keep them "free from water and all other foreign substances" and the sale of "adulterated" gasoline is prohibited (section 3627). viously this is, in form, a not unusual type of inspection law.

Ob

The findings of fact by the trial court inIclude the following:

During the period under discussion the state inspected 9.914 barrels of oil and 81.998 barrels of gasoline owned by the plaintiff in error, all of which were brought info Minnesota from other states by common carriers in tank cars, which were held at the place of business of the plaintiff in error until inspected, and all were unloaded from the cars in which they arrived and were held for general sale and distribution. And this in terms:

*

"That the testing of gasoline in the manner provided by the statute * indicates to the public the degree of safety of such gasoline, and has a fair relation to the quality and value thereof. That such inspection protects the community, as applied to sales of gasoline in Minnesota, from frauds and impositions, and advises, informs, and warns the public of the volatile character of said gasoline and the relative degree of care to be exercised in handling, storing, and using the same."

On the case thus stated it is claimed that the Supreme Court of Minnesota erred in refusing to hold:

First, that the inspection fees imposed were so excessive in amount as to render the act a revenue rather than an inspection measure and that as such it offends against section 8, article 1, of the federal Constitution, as an attempt by the state to regulate interstate commerce; and

"An act relating to the inspection of petroleum products, the appointment of chief inspector of oils and deputy inspectors, manner of inspection, establishing fees for inspection and salaries of inspectors, prohibiting the sale of adulterated oils, and providing penalties for violation thereof" -and the title of the chapter in which the original act is embodied in the General Statutes of the State is "Inspection of Oils" (General Statutes of Minnesota 1913, c. 20). Section 3622 provides that no person shall sell or offer for sale in the state illuminating oil which has not been inspected as provid

Second, that to the extent that the act applies to gasoline it is not a valid exercise of the police powers of the state, because it does not serve to protect or safeguard the health, morals or convenience of the public, and therefore offends against the Fourteenth Amendment to the federal Constitution, by depriving the plaintiff in error of its property without due process of law to the extent of the fees which it in terms exacts.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

The principles of law applicable to the de- | rendered." Foote v. Maryland, 232 U. S. cision of the case thus before us are few, and they are perfectly settled by the decisions of this court.

494, 505, 34 Sup. Ct. 377, 379 (58 L. Ed. 698); Western Union Telegraph Co. v. New Hope, 187 U. S. 419, 23 Sup. Ct. 204, 47 L. Ed. 240.

[1] In the exercise of its police power a state may enact inspection laws, which are valid if they tend in a direct and substantial manner to promote the public safety and *welfare or to protect the public from frauds and imposition when dealing in articles of general use, as to which Congress has not made any conflicting regulation, and a fee reasonably sufficient to pay the cost of such inspection may constitutionally be charged, even though the property may be moving in interstate commerce when inspected. Patapsco Guano Co. v. North Carolina Board of 1909 Agriculture, 171 U. S. 345, 357, 358, 361, 18 1910 Sup. Ct. 862, 43 L. Ed. 191; New Mexico v. 1912 Denver & Rio Grande R. R. Co., 203 U. S. 38, 27 Sup. Ct. 1, 51 L. Ed. 78; Asbell v. State of Kansas, 209 U. S. 251, 28 Sup. Ct. 485, 52 L. Ed. 778, 14 Ann. Cas. 1101; Patterson v. Kentucky, 97 U. S. 501, 504, 24 L. Ed. 1115; Savage v. Jones, 225 U. S. 501, 525, 32 Sup. Ct. 715, 56 L. Ed. 1182.

1911

1913

1914

Specifically, state laws providing for the inspection of oils and gasoline have several times been recognized as valid by this court. Patterson v. Kentucky, 97 U. S. 501, 24 L. Ed. 1115; Red "C" Oil Mfg. Co. v. Board of Agriculture of North Carolina, 222 U. S. 380, 32 Sup. Ct. 152, 56 L. Ed. 240; Waters-Pierce Oil Co. v. Deselms, 212 U. S. 159, 29 Sup. Ct. 270, 53 L. Ed. 453.

But, if such inspection charge should be obviously and largely in excess of the cost of inspection, the act will be declared void, because constituting, in its operation, an obstruction to and burden upon, that commerce among the states the exclusive regulation of which is committed to Congress by the Constitution. Postal Telegraph-Cable Co. v. Taylor, 192 U. S. 64, 24 Sup. Ct. 208, 48 L. Ed. 342; Foote v. Stanley, Comptroller of Maryland, 232 U. S. 494, 504, 508, 34 Sup. Ct. 377, 58 L. Ed. 698.

The findings of fact give the following statement of receipts and expenses under the law assailed, from and including the year 1909, in which it was passed, to April 30, 1915, which includes the last day covered by the claim in suit, viz.:

YEAR.

July 31, 1914 to

Apr. 30, 1915

[3, 4] This statement of expenses, however, does not include any charge for offices for the Oil Department, which were in the state capitol, for the services of the state auditor and treasurer in keeping accounts and making collections, for legal counsel, and for services of chemists, or for the Public Examiner's Department, these not being susceptible of exact determination. The reduced percentage of expenses to receipts in several of the years was obviously due to the rapid expansion in the use of gasoline without a corresponding increase in the expenses of administration. This percentage, however, was rising in 1915 and doubtless has increased greatly since, under war conditions. We take judicial notice also of the fact: that in 1915 the inspection *fee on oil and gasoline in tank cars was reduced by the Legislature from 10 to 7 cents and in 1917 from 7 to 5 cents. It was obviously impossible for the state Legislature to determine accurately in advance either what the receipts from or the cost of inspection would be, and having regard to the period of rapid increase in the use of gasoline, through which the country was passing in the years under consideration and to the action of the Legislature in reducing the fee, we cannot consent to impute to that body a purpose other than to conform to the requirements

[2] Plainly the application of the principles thus stated leaves open for consideration only the question as to whether the inspection charge is so excessive as to render the act a revenue measure, as the plaintiff in error claims that it is, and not an inspection law enacted in good faith to promote the public safety and prevent fraud and of the Constitution when enacting this legisimposition upon the users of oil and gaso-lation.

line. In the consideration of this question The conclusion thus arrived at sustains the discretion of the Legislature in determin- the validity of the state law as an inspecing the amount of the inspection fee will tion measure and renders it unnecessary to not lightly be disturbed. Its determination consider the much argued question as to is prima facie reasonable, and the courts whether or not the oil and gasoline in queswill not "enter into any nice *calculation as tion were in interstate transit when inspectto the difference between cost and collection; ed. As an inspection law, under the decinor will they declare the fees to be exces- sions cited, the act is validly applicable, sive unless it is made clearly to appear that alike whether the property was in intra or they are obviously and largely beyond what in inter state commerce when inspected. is needled to pay for the inspection services | [5] Neither is it necessary to consider

whether the evidence sustains the contention | 7. MONOPOLIES 28- VIOLATION OF ANTIthat the inspection of gasoline provided for TRUST ACT - PRIVATE ACTION · MOTIVE OF PLAINTIFF'S ORGANIZATION - INSTRUCTIONS. by the act was of a character such that it Instruction, in action under Sherman Antidid not serve to promote the public safety or Trust Act, § 7 (Comp. St. 1916, § 8829), for prito protect the community against fraud and vate injury for breach of the statute, construed imposition. The finding of fact by the trial as stating correctly that, on the question whethcourt, approved by the Supreme Court of the pression or to plaintiff's incapacity, the jury in er plaintiff's failure was due to defendant's opstate, is accepted as conclusive by this court. estimating the evidence and finding what the Northern Pacific Railway Co. v. State of facts were might consider the motive of plainNorth Dakota, 236 U. S. 585, 593, 35 Sup. tiff's organizer if they should find it to have been, what defendant alleged, to organize it Ct. 429, 59 L. Ed. 735, L. R. A. 1917F, 1148, merely to sell it out to defendant without any Ann. Cas. 1916A, 1. real intent to compete.

8. EVIDENCE 269(1) STATEMENTS OF THIRD PERSONS FACTS RECITED AS FURNISHING MOTIVE.

Statements of third persons of their reasons for refusing or ceasing to do business with plaintiff are inadmissible as evidence of the facts recited as furnishing the motives, as distinguished from evidence of their motives.

It results that the judgment of the Supreme Court of Minnesota must be affirmed.

(248 U. S. 55)
BUCKEYE POWDER CO. v. E. I. DUPONT
DE NEMOURS POWDER CO. et al.
(Argued April 30 and May 1, 1917. Ordered
for Reargument June 10, 1918. Reargued
Nov. 13, 1918. Decided Dec. 9, 1918.)

No. 7.

1. APPEAL AND ERROR 1039(9)-HARMLESS ERROR-ELECTION BETWEEN CAUSES OF AC

TION.

Plaintiff, in an action for damages under Sherman Anti-Trust Act, § 7 (Comp. St. 1916, § 8829), cannot complain of the granting of motion at the end of the trial that it elect whether to rely on section 1 or section 2 of the act (Comp. St. 1916, 88 8820, 8821); it, in then going through the form of electing to rely on acts done contrary to section 2, simply adhering to the interpretation of its declaration it had accepted, when a motion to strike it out as duplicitous was made and overruled and had endeavored to main-ion of the court. tain throughout the trial.

2. APPEAL AND ERROR 1033(5)—HARMLESS ERROR-FAVORABLE INSTRUCTION.

Plaintiff may not complain of instruction allowing it to recover for injury from unsuccessful as well as successful attempt to monopolize. 3. APPEAL AND ERROR 1061(4)-HARMLESS ERROR-DIRECTING VERDICT.

Directing verdict for certain defendants was harmless; no acts aimed at plaintiff having been done by them, and the jury having exonerated the other defendant with whom they were alleged to have conspired. 4. MONOPOLIES -EVIDENCE.

28-ACTION FOR DAMAGES

Decrees in a proceeding by the government finding a company guilty under the Sherman Anti-Trust Act were not, prior to Clayton Act Oct. 15, 1914, § 5 (Comp. St. 1916, § 8835e), admissible in an action by an individual against the company for damages from attempt to monopolize.

5. MONOPOLIES 10-ACTION FOR DAMAGES LIMITATIONS STATUTES RETROACTIVE EFFECT.

In Error to the United States Circuit Court of Appeals for the Third Circuit.

Action by the Buckeye Powder Company against the E. I. Dupont de Nemours Powder Company and others. Judgment for defendants was affirmed by the Court of Civil Appeals (223 Fed. 881, 139 C. C. A. 319), and plaintiff brings error. Affirmed.

Mr. Twyman O. Abbott, of New York City, for plaintiff in error.

Messrs. Frank S. Katzenbach, Jr., of Trenton, N. J., and William H. Button, of New York City, for defendants in error.

*Mr. Justice HOLMES delivered the opin

This is an action brought by the plaintiff ` in error to recover triple damages under the Sherman Act, July 2, 1890, c. 647, § 7, 26 Stat. 209, 210 (Comp. St. 1916. § 8829): which the facts were shown at great length, There was a trial that lasted five months, in and after a very full and fair charge by the presiding judge the jury found a verdict in favor of the principal defendant, the E. I. Dupont de Nemours Powder Company, on the merits and for the other two by direction of the Court. Elaborate exceptions were taken but they were overruled by the Circuit Court of Appeals. 223 Fed. 881, 139 C. C.

A. 319.

[1, 2] The first one that we shall deal with complains of the Court's sustaining a motion at the end of the trial that the plaintiff should elect whether it would rely upon the *first or the second section of the Sherman

Act (Comp. St. 1916, §§ 8820, 8821). If the case were different the question presented might be grave. In the one before the Court the only error was in the use of the word election and the implied admission that the trial possibly could be taken not to have proceeded upon the second section of the Act, coupled of course with section 7, giving a private action to persons injured by breach of the statute. The first section deals with contracts in restraint of trade, the second

Clayton Act Oct. 15, 1914, § 5 (Comp. St. 1916, § 8835e), suspending the running of the statute of limitations against a private right of action pending proceedings by the government for violation of the anti-trust laws, has no application to prior proceedings and a cause of action already barred. 6. MONOPOLIES 28- VIOLATION OF ANTITRUST ACT-PRIVATE RIGHT OF ACTION. Mere existence of defendant's power as it was when plaintiff was created does not avail plaintiff under Sherman Anti-Trust Act, § 7 Comp. St. 1916, § 8829), giving a private action to persons injured by breach of the statute.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

09.

e