amount set aside for the gross-production tax and a further sum to cover remaining receivership expenses, have been drawn and are ready for transmission, save in exceptional instances where conflicting claims need to be adjusted or determined.

The state now presents a supplemental petition asking that the instructions given on the original petition be so modified as to require that payments of the gross-production tax be computed on the full production, and also to require payment of another tax not mentioned before.

The gross-production tax is prescribed by article 7383 of the Revised Civil Statutes of Texas and an amendment adopted in 1923. Chapter 45, 2d Called Sess. It is denominated an "occupation tax" and is laid on all who engage in producing crude oil from wells within the state. Up to April 1, 1923, the tax was 12 per cent. of the market value of the oil, and since that date it has been 2 per cent. The other tax is prescribed by section 11 of an act passed in 1917 to regulate common carrier pipe lines engaged in transporting crude oil. Chapter 30, Laws 1917 (Vernon's Ann. Civ. St. Supp. 1918, art. 7321⁄2 j). It is laid on the same persons and in the same manner as the gross-production tax and is to be used in paying salaries and expenses incident to the enforcement of the pipe-line regulations. The tax is onetwentieth of 1 per cent. of the market value of the oil produced.

This is an interstate boundary suit and has been entertained in virtue of the original jurisdiction which the Constitution confers on this court in respect of controversies between states. The appointment of the receiver and the conduct of the receivership, like the other proceedings, have been in virtue of that jurisdiction. In all that the receiver has done he has been the court's agent and representative. In operating the oil wells in the area in dispute, he was not engaged in a business or pursuing an occupation in the ordinary acceptation of those terms, but as an officer of the court was con

*302

tion of the taxes by other means would be attended with embarrassment, and in some instances be impossible.

[1, 2] As to the gross-production tax, we think the state is equitably entitled to the relief sought, and that the amounts to be paid should be computed on the full production. Sufficient money has been set aside, and the payments can be made without material inconvenience or appreciable interruption of other work. In a few instances the tax already has been paid by parties in interest; and of course it should not be paid again. There are also instances where a part only of the proceeds was impounded and the net balance in the receiver's hands is not sufficient to pay the full tax. In such cases the payment necessarily will be limited to the net balance in hand. Because of the difference in ownership each well should be treated as a separate unit in computing the tax and making the payments. As between owners and lessees the amounts paid should be charged against the lessees, on whom as between the two the tax would fall.

[3] As to the other tax, we think the state's request should be denied. It comes so late that the weight of equitable considerations is against its allowance. To grant it would require a readjustment of many of the

*303

receiver's accounts, *would delay the distribu-
tion of the proceeds, which in the aggregate
reach large figures, and would be distinctly
Other ob-
prejudicial to many claimants.
jections to it have been suggested, but they
need not be considered.

An order will be entered in accordance with this opinion.

On consideration of the supplemental petition of the state of Texas for a modification of paragraph 4 of the order of June 9, last, it is ordered that the petition be denied in so far as it relates to the tax prescribed in section 11 of the Texas statute of February 20, 1917, regulating pipe lines-the denial to be without prejudice to such right as the state may have to collect this tax from persons other than the receiver-and that paraserving the property within *that area for the graph 4 of the said order of June 9, last, rebenefit of those to whom it ultimately might|lating to the payment of the gross-production prove to belong. The state recognizes that all this is true, and so does not seek to subject the receiver to the taxes described, but only to have them paid out of the proceeds of the oil production which are in his hands and ready to be paid over to those for whose ultimate benefit the wells have been operated. In other words, the state seeks, through the equitable aid of the court, to have the taxes paid out of these proceeds before they are turned over to the beneficiaries on whom the taxes otherwise would fall. This aid is in voked on the ground that during the receivership many of the beneficiaries have become insolvent or left the state, so that the collec

tax prescribed by article 7383 of the Revised Civil Statutes of Texas, as amended by an act of June 2, 1923, be so modified as to require (a) that the amounts to be paid by the receiver be computed on the full production of each well; (b) that the payment in respect of any well be not in excess of the net proceeds from that well remaining in the receiver's hands; (c) that the payments be only of such part of the tax as has not been paid by parties in interest; and (d) that as between owners and *lessees the payments by the receiver be charged against the lessees, they being the ones on whom as between the two the tax would fall.

*304

(266 U. S. 310)

WHITE v. STUMP.

(45 S.Ct.)

It "must" be executed and acknowledged like a conveyance of real property and "must" be filed for record in the office of the county re

(Submitted Feb. 18, 1924. Decided Nov. 24, corder. The exemption arises when the dec

1924.) No. 20.

Bankruptcy 396 (5) - Land not declared homestead in manner required by statute of state in which located when petition was filed held not exempt.

Land on which bankrupt and his family resided when voluntary petition was filed, but which had not been declared his homestead under Comp. St. Idaho 1919, §§ 5441, 54625465, held not exempt under Bankruptcy Act, § 6, section 7, cl. 8, section 17, section 47a, cl. 11, and sections 63, 70a (U. S. Comp. St. §§ 9590, 9591, 9601, 9631, 9647, 9654), since right of

exemption must have existed, and conditions essential thereto must have been complied with, when petition was filed.

On Writ of Certiorari to the United States Circuit Court of Appeals for the Ninth Circuit.

In the matter of Peter Stump, bankrupt. Order of District Court setting aside referee's order disallowing claim of the United States from homestead exemption, claimed by Veta Stump, was affirmed by the Circuit Court of Appeals (284 F. 199), and Samuel D. White, trustee, brings certiorari. Reversed. Mr. James E. Babb, of Lewiston, Idaho (Tannahill & Leeper, of Lewiston, Idaho, on the brief), for petitioner.

laration is filed, and not before. Up to that time the land is subject to execution and attachment like other land; and where a levy is affected while the land is in that condition the subsequent making and filing of a declaration neither avoids the levy nor prevents a sale under it. Comp. Stat. Idaho 1919, §§ 5441, 5462-5465; Smith v. Richards, 2 Idaho (Hasb.) 498, 21 P. 419; Wright v. Westheimer, 3 Idaho, (Hasb.) 232, 28 P. 430, 35 Am. St. Rep. 269; Law v. Spence, 5 Idaho, 244, 48 P. 282; Burbank v. Kirby, 6 Idaho, 210, 55 P. 295, 96 Am. St. Rep. 260.

Here no declaration was made and filed for record until a month after Stump's petition in bankruptcy was filed and he was adjudged a bankrupt. A declaration was then made and filed by his wife for their joint Whether in these circumstances benefit. there was such a right to a homestead exIemption as could be recognized and allowed in the bankruptcy proceeding is the question

for decision.

The District Court gave an affirmative answer in deference to the decision of the Cir*312 cuit Court of Appeals for *that circuit in Brandt v. Mayhew, 218 F. 422, 134 C. C. A. 210, a case arising in California, in which it was held, one judge dissenting, that a bankrupt is not precluded from claiming a home

Mr. Harve H. Phipps, of Spokane, Wash., stead as exempt merely because, when the for respondent.

petition in bankruptcy is filed, he has not done all that is required by the state law to

Mr. Justice VAN DEVANTER delivered entitle him to the exemption, but may rightthe opinion of the Court.

Peter Stump was adjudged a bankrupt on his voluntary petition, which was accompanied by the usual schedules. Among the assets listed was a quarter section of land on which he and his family had been and were

*311

fully demand that the exemption be allowed where he has met the requirements of the state law within a reasonable time after the filing of the petition. The Circuit Court of Appeals adhered to that decision, and therefore sustained the action of the District Court. Other courts in which the question has arisen have regarded the bankruptcy law as meaning that the right to such an exemption must be tested by the situation existing when the petition in bankruptcy is filed, and have held that where the land is not then exempt under the state law it passes to the trustee for the benefit of the cred

residing; but *nothing was said at the time about a homestead exemption. Two months later the bankrupt's wife, with his assent, asked that the land be set apart as an exempt homestead for their joint benefit. The trustee objected and on a hearing the exemption was disallowed by the referee. On review that ruling was reversed by the Dis-itors. In re Youngstrom, 153 F. 98, 82 C. C. trict Court, and on petition for revision the reversal was sustained by the Circuit Court of Appeals. 284 F. 199. The case is here on certiorari.

A. 232; Edgington v. Taylor (C. C. A.) 270
F. 48; In re Lehfeldt (D. C.) 225 F. 681.

The Bankruptcy Law does not directly grant or define any exemptions, but directs, The laws of the state of Idaho, where the in section 6 (Comp. St. § 9590), that the bankland is situate, provide for a homestead ex- rupt be allowed the exemptions "prescribed emption, but only where a declaration that by the state laws in force at the time of the the land is both occupied and claimed as a filing of the petition"; in other words, it homestead is made and filed for record as makes the state laws existing when the petitherein prescribed. If the family consist of tion is filed the measure of the right to exhusband and wife, whether with or without emptions. It further provides that a volunchildren, either may make the declaration. tary bankrupt shall claim the exemptions to For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

which he is entitled in a schedule filed "with the petition," and an involuntary bankrupt shall claim his in a schedule filed within 10 days after the adjudication, unless further time be granted (section 7, cl. 8 [Comp. St. § 9591]; that the trustee shall set apart the exempt property and report the same to the court as soon as practicable after his appointment (section 47a, cl. 11 [Comp. St. § 9631]); that the trustee shall be vested by operation of law with the title of the bank. rupt to all property, in so far as it is not exempt, which "prior to the filing of the pe

*313

tition" he could by any means have trans* ferred or which might have levied upon and sold under judicial process (section 70a [Comp. St. § 9654]); and that the bankrupt shall be given a discharge releasing him from debts owing "at the time of the filing of the petition," (sections 17 and 63 [Comp. St. §§ 9601, 9647]).

*314

*The land in question here was not in that situation when the petition was filed. It was not then exempt under the state law, but was subject to levy and sale. One of the conditions on which it might have been rendered exempt had not been performed. Under the state law the fact that the other conditions were present did not suffice. The concurring presence of all was necessary to create a homestead exemption. Decree reversed.

(266 U. S. 314)

DAVIS, Agent, v. O'HARA. (Argued Oct. 10-13, 1924. Decided Nov. 24, 1924.) No. 63.

1. Railroads 5/2, New, vol. 6A Key-No. Series-General orders of Director General valid; "orders of the President."

General Orders of Director General of Railroads under Federal Control Act, § 10 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 31153⁄4j), are in legal effect "orders of the President," and are valid.

2. Railroads 52, New, vol. 6A Key-No. Series-United States, in operation of railroads, did not waive any sovereign right.

3. Railroads 5/2, New, vol. 6A Key-No. Series-United States' immunity in operation of railroads was waived only to extent indicated by statute and Director General's orders.

These and other provisions of the Bankruptcy Law show that the point of time which is to separate the old situation from the new in the bankrupt's affairs is the date when the petition is filed. This has been recognized in our decisions. Thus we have said that the law discloses a purpose "to fix the line of cleavage" with special regard to the conditions existing when the petition is filed (Everett v. Judson, 228 U. S. 474, 479, 32 S. The United States took over and operated Ct. 568, 57 L. Ed. 927, 46 L. R. A. [N. S.] railroads, under Federal Control Act (Comp. 154), and that “it is then that the bankrupt- St. 1918, Comp. St. Ann. Supp. 1919, §8 cy proceeding is initiated, that the hands of and will not be held to have waived any sov31154a-3115p), in its sovereign capacity, the bankrupt and of his creditors are stay-ereign right or privilege, unless it has plainly ed and that his estate passes actually or done so. potentially into the control of the bankruptcy court" (Bailey v. Baker Ice Machine Co., 239 U. S. 268, 275, 36 S. Ct. 50, 54, 60 L. Ed. 275; Acme Harvester Co. v. Beekman Lumber Co., 222 U. S. 300, 307, 32 S. Ct. 96, 56 L. Ed. 208). When the law speaks of property which is exempt and of rights to exemptions, it of course refers to some point of time. In our opinion this point of time is the one as of which the general estate passes out of the bankrupt's control, and with respect to which the status and rights of the bankrupt, the creditors and the trustee in other particulars are fixed. The provisions before cited show—some expressly and others impliedly-that one common point of time is intended and that it is the date of the filing of the petition. The bankrupt's right to control and dispose of the estate terminates as of that time, save only as to "property which is exempt." Section 70a. The exception, as its words and the context show, is not of property which would or might be exempt if some condition not performed were performed, but of property to which there is under the state law a present right of exemption-one which withdraws the property from levy and sale under judicial process.

Immunity of United States, operating railroads under Federal Control Act (Comp. St. 1918, Comp. St. Ann. Supp. 1919, §§ 3115a311534p), from suit, was waived only to the extent indicated by statute and orders of Director General.

4. Railroads 52, New, vol. 6A Key-No. Series-Director General not suable in court of state in which plaintiff did not live and injury did not occur.

Under Federal Control Act, § 10 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 31154j), and General Orders of Director General of Railroads, Nos. 18, 18-A, 18-B, 50, 50-A, the Director General of Railroads, against his objection, could not be sued in court of state in which plaintiff did not live and injury did not occur.

5. Courts

394 (25) — Supreme Court not bound by state court's decision that Director General waived right to be sued in county of plaintiff's residence, or where cause of action accrued.

The United States Supreme Court is not bound by state court's decision that Director

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

(45 S.Ct.)

General waived right, under Federal Control Action by John O'Hara against James C. Act, 10 (Comp. St. 1918, Comp. St. Ann. Davis, Agent, etc. Judgment for plaintiff Supp. 1919, § 31154a), and Director General's was affirmed on condition by the Supreme Orders Nos. 18, 18-A, 18-B, 50, 50-A, to be Court of Nebraska (109 Neb. 615, 192 N. W. sued in county or district where plaintiff re- 215), and defendant brings certiorari. sided, or where the cause of action accrued, and may determine for itself whether he sufficiently asserted and insisted on such right.

6. Courts 39-Director General's special appearance and motion to quash summons held not objection to jurisdiction over subject-matter.

Director General's special appearance for purpose of objecting to jurisdiction of court "over the person of the defendant and over the subject-matter of this action," and motion to quash summons on the ground "that General Orders Nos. 18, 18-A, 18-B, 50, 50-A, issued by the Director General, * * * providing that all suits against Director General of Railroads as authorized by General Order 50-A must be brought in the county or district where the plaintiff resided at the time of the accrual of the cause of action, or in the county or district where the cause of action arose," held not an objection to the court's jurisdiction over the subject-matter, so as to raise question of whether court had power to adjudicate concerning the subject-matter of the class of cases to which plaintiff's claim belonged, but merely an objection to jurisdiction because suit was not brought where plaintiff resided, or where cause of action accrued.

versed.

*315

Re

*Messrs. C. A. Magaw and Nelson H. Loomis, both of Omaha, Neb., and A. A. McLaughlin, of Washington, D. C., for petitioner.

Messrs. John O. Yeiser, John C. Travis, and Benjamin S. Baker, all of Omaha, Neb., for respondent.

Mr. Justice BUTLER delivered the opinion of the Court.

September 13, 1919, while employed by the Director General of Railroads in the operation of a railroad under federal control, plaintiff was injured by explosion of a blasting cap. The injury occurred at Council Bluffs, Iowa, where he then resided. He brought this action in the district court of Douglas county, Nebraska, to recover damages for his

*316

injuries. His petition did not show *where the injury occurred or where he lived when injured. The Director General appeared specially for the purpose of objecting to the jurisdiction of the court "over the person of the defendant and over the subject matter of this action," and moved to quash the summons; the grounds alleged were "that General Orders Nos. 50, 50-A, 18, 18-A, and 18-B,1 issued by the Director General, provide that all suits against the In determining nature of objection to juris- Director General of Railroads, as authorized diction on special appearance, the substance of the objection stated and the grounds alleged by General Order No. 50-A, must be brought should control, rather than the declaration of in the county or district where the plaintiff resided at the time of the accrual of the cause of action, or in the county or district where the cause of action arose"; that

7. Courts 39-Substance of objection stated and grounds alleged should control rather than declaration of purpose in ascertaining nature of objection to jurisdiction.

purpose.

8. Appearance

19(3)—Unfounded objection to jurisdiction over subject-matter does not waive objection to jurisdiction over person in

Nebraska in view of statute.

Under Comp. St. Neb. 1922, § 8612, an unfounded objection to jurisdiction over subjectmatter on special appearance and motion to quash summons, does not waive objection to jurisdiction over person in such state.

9. New trial 172-Defense pleaded, but not urged at earlier trial, may be insisted on at

new trial.

A defense pleaded, but not urged at an earlier trial, may be insisted on at a new trial. 10. Courts 394 (25)-State Supreme Court's decision that holding on prior appeal as to waiver by Director General was law of case did not conclude federal Supreme Court. State Supreme Court's decision that former decision of the court that Director General of Railroads waived right to be tried in county or district in which plaintiff resided, or that in which cause of action accrued, became law of case, does not deprive United States Supreme Court of power to re-examine question.

*

*

*

plaintiff, at the time of the accrual of the
cause of action, did not reside in Douglas
county, Nebraska, and that the cause of ac-
tion, did not arise there. Plaintiff did not
deny the allegations on which the motion was
based. The district court overruled the mo-
tion without more. The defendant answered
setting up the same objection to jurisdiction
and his defenses on the merits. Later, plain-
tiff filed an amended petition; and to that
defendant filed answer, in which he again
asserted his objection to jurisdiction.
the trial, after the evidence was heard, the
court upon its own motion instructed the
jury to return a verdict for defendant; and
judgment was entered in his favor.
new trial
plaintiff made a motion for a
which was denied. He then appealed to the
Supreme Court. Defendant's objection to
the jurisdiction was urged by brief filed by
leave of court specially given. But the ques-
tion was not decided, because defendant had

At

The

1 See Bulletin No. 4, United States Railroad AdCertiorari to the Supreme Court of Ne- 334 (No. 50). Supplement to Bulletin No. 4, Revised, ministration, p. 186 (No. 18), p. 187 (No. 18-A), p. braska. p. 55 (No. 18-B), p. 58 (No. 50-A).

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

2 Proclamation of the President, March 29, 1918. Bulletin No. 4, United States Railroad Administra- rule that objections to jurisdiction over the tion, p. 20.