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(266 U. S. 85)

TWIN FALLS SALMON RIVER LAND &
WATER CO. et al. v. CALDWELL

et al.

(Argued March 3, 1924. Decided Oct. 27,
1924.)
No. 8.

1. Appeal and error 1185-Circuit Court of
Appeals held to have properly changed de-
cision without granting rehearing.

Where discussion set forth in record disclosed substance and purpose of petition to enjoin a suit in state court and tacit consent of parties that matter be dealt with, it was permissible for Circuit Court of Appeals, which had reversed decree, because adjudicating matters not before the court, to change its first decision during term and correct mistake by disposing of merits, without granting rehearing, though application for rehearing was accompanied by supplemental transcript containing petition for injunction not shown in record. 2. Waters and water courses

222-Decree moneys collected on assessment should be repaid to settlers held not encroachment on province of state land board under Carey Act. Under Sess. Laws Idaho, 1917, c. 14, state land board's tentative approval of assessment under the Carey Act to permit it to be collected, pending its determination of question whether work was maintenance or construction work, was of no effect, and collection of the assessment was without right, and decree adjudging that moneys collected should be repaid was not an encroachment on the board's province.

Appeal from the United States Circuit Court of Appeals for the Ninth Circuit.

Suit in equity by A. E. Caldwell and others against the Twin Falls Salmon River Land & Water Company and others. From a decree of the Circuit Court of Appeals (272 F. 356), affirming a decree for plaintiff, defendants appeal. Affirmed.

*86

*Oliver O. Haga and James H. Richards,

both of Boise, Idaho, for appellants.

*87

§ 4, 28 Stat. 422 (Comp. St. § 4685), and its amendments. The principal defendant was the company which had contracted with the state to construct the irrigation works and to sell necessary water rights to settlers, and another was the company which was to operate and maintain the works when completed, but which was as yet under the control of the construction company. The early proceedings in the suit are reported in 225 F. 584, and 242 F. 177, 155 C. C. A. 17.

In 1919, while that suit was still pending, the two companies-one still under the control of the other-made and sought to collect from the settlers an assessment of 50 cents per acre to defray the cost of work about to be done on a section of the irrigation works called the check basin. The assessment was made as part of an annual maintenance charge which the settlers were to bear; but they refused to pay because they regarded the work as construction work the cost of which was to be borne by the construction company. The companies threatened to shut off the water if payment was not made; and one of the plaintiffs in the equity suit, for himself and all other settlers,

*88

brought an action in a court of the state *to have the assessment annulled and to enforce delivery of the water.

During a subsequent hearing in the equity suit the defendants therein, who were also defendants in the action brought in the state court, presented to the District Court a petition setting forth the institution of that action, alleging there was such relation between the two proceedings that their prosecution in distinct tribunals would embarrass

the parties and lead to possible conflicts of authority, and praying for an injunction against the prosecution of the proceeding in the state court. An informal, but extended, discussion followed, in which counsel on both sides recognized the propriety of drawing the

whole matter into the District Court. Counsel for the plaintiffs took the position that, *James R. Bothwell, of Twin Falls, Idaho, if the injunction was granted, there should for appellees.

be some provision assuring prompt repayment to the settlers if the assessment was

Mr. Justice VAN DEVANTER delivered collected and their objection to it afterwards the opinion of the Court.

This appeal presents a controversy over an assessment for operation and maintenance of the Salmon River irrigation project in the state of Idaho.

In 1914 eight settlers under the project, for themselves and all others similarly situated, brought a suit in equity in the United States District Court to obtain a comprehensive adjudication of various disputes which had arisen respecting the relative rights and obligations of the parties interested in the project; the court's jurisdiction being invoked because of the involution of the construction and application of Carey Act, c. 301,

was sustained by the court. Counsel for the defendants assented to this and indicated that the defendants or some of them stood ready to give a bond of that character. Accordingly the court, with the full acquiescence of the parties, entered an interlocutory order (a) enjoining the prosecution of the action in the state court, (b) requiring the construction company within a limited time to execute a bond to repay within 30 days all moneys collected on the assessment if the court determined it was a construction charge to be borne by that company rather than a maintenance charge to be collected from the settlers, and (c) enjoining the

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

(45 S. Ct.)

collection of the assessment if the bond so assessment and a tacit consent of the parrequired was not given. The bond was giv-ies that the matter be dealt with on the en and the settlers paid the assessment. Sub-lines followed in the interlocutory order and sequently, after a due hearing, the court ren- bond. The ultimate decree recited that it dered a decree determining that the work was rendered after a hearing had under the was construction work the cost of which was order and bond. In short, the original tranto be borne by the construction company, script showed such a submission of the conand requiring that company to repay to the troversy that the absence from the record settlers within thirty days the amounts col- of the petition for an injunction was not lected from them. material.

*89

*The defendants appealed to the Circuit the circumstances for the Circuit Court of In our opinion it was quite admissible in Court of Appeals, which at first reversed the Appeals to change its first decision and cordecree, but later in the same term, on find-rect the mistake therein by disposing of the ing that it had proceeded on a mistaken un- merits without granting a rehearing. The derstanding of the circumstances in which the District Court came to adjudicate the parties had been fully heard in the begincontroversy, changed the reversal into a decree of affirmance. 272 F. 356. The appeal

to this court is from that decree.

[1] 1. The defendants complain that the Circuit Court of Appeals, in changing its decision, acted on an application for rehearing and evidence submitted therewith without granting a rehearing.

It is true that the change in decision was prompted by an application for rehearing, but not that any evidence was submitted with the application. What the defendants

refer to as evidence was not such, but was a

ning.

[2] 2. The defendants further complain

that, in adjudging that the moneys collected on the assessment should be repaid to the settlers, the court failed to give proper effect to what the state land board had done in the matter and encroached on the board's province.

By the laws of the state the board is invested with authority to supervise the fulfilment of contracts for the construction of irrigation works under the Carey Act and to accept the work when completed. But One of the state laws, Sess. Laws 1917, c. there was no acceptance in this instance. 14, requires that assessments for the operation and maintenance of such works, where the operating company has not come under the control of the settlers, which was the case here, shall be submitted to and receive the approval of the board before payment is exacted. This assessment was submitted to the board, and the settlers objected that it was not for operation or maintenance but for construction. A hearing resulted in the adoption by the board of a resolution declar

supplemental transcript containing their petition for an injunction against the prosecution in the state court of the action relating to the assessment. The petition had not been included in the original transcript sent to the Circuit Court of Appeals, and that court, finding no pleading relating to the controversy over the assessment, held that the District Court had no occasion to adjudicate the controversy, and accordingly reversed its decree. When that decision was announced, the plaintiffs obtained the supplemental transcript, and, under a prior stipulation permitting omissions in the record to be supplied, filed it in the Circuit Courting that it was not then prepared to pass defiof Appeals with an application for rehearing.

The court then recalled its first decision and

substituted another, dealing with the merits of the controversy and affirming the decree. The second decision was given at the same term as the first, and therefore while the matter was still within the court's control. An examination of the two transcripts shows that the supplemental one served only to bring sharply to the court's attention what already appeared in the original-that the controversy was laid before the District

.90

*91

nitely on the matter, and would secure further data during the approaching irrigation but that it would temporarily approve the season on which to rest a definite conclusion, assessment as one for maintenance, in order

that the money might be collected and the
work proceed, and, if it ultimately concluded
that the work was construction work, it
would require the amounts collected to be
applied as credits on the settlers' contracts
for water rights or to be repaid in cash.
This was not satisfactory to the settlers, so
the matter was taken into court as before
shown.

Court in circum*stances which made it ad-
missible and appropriate for the court to
proceed to its adjudication. Among other
things, the original transcript set forth at
length the discussion had when the defend-effect what the board did was to say:
ants presented the petition for an injunction,
and also contained the interlocutory order
made at the time and the bond given under
that order. The discussion, as set forth, dis-
closed the substance and purpose of the pe-
tition, the nature of the controversy over the

It is not necessary to consider what effect should be given to an unqualified approval by the board, for there was none here. In

"We cannot determine from the data before assessment is made, is construction work which us whether the work, to pay for which the the construction company is bound to do, or is maintenance the cost of which is to be collected from the settlers, so we reserve that ques

tion for future investigation and determination; but to tide the matter over we now give the assessment a merely tentative approval, and if we ultimately determine that the work is construction work we shall see that the settlers receive credit on their water-right contracts for the amounts collected or that they are repaid."

The state law makes it a condition to giving an approval that the board be "satisfied" that the proposed expenditures "are necessary for the operation and maintenance" of the irrigation works and "are proper charges against" the settlers. This prerequisite was plainly wanting, as is affirmatively shown by the board's resolution, and therefore the tentative approval, only formally given, was in contravention of the statute and of no

effect. The law also makes the board's approval a condition to the right to collect an as

*92

Action by George D. Henderson against James C. Davis. From a judgment of the Supreme Court of Arkansas (157 Ark. 43, 247 S. W. 1070), affirming a judgment for plaintiff, defendant brings error and petitions for certiorari. Writ of error dismissed, writ of certiorari granted, and judgment reversed.

Messrs. A. A. McLaughlin, of Washington, D. C., Thomas B. Pryor and Vincent M. Miles, both of Ft. Smith, Ark., and Sidney F. Andrews, of Washington, D. C., for plaintiff in error and petitioner.

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*Mr. Justice BRANDEIS, delivered the opinion of the Court.

Henderson, a shipper of cattle, brought this suit in a state court of Arkansas

against an interstate carrier then under federal control. The cause of action alleged

was failure to furnish a car within a rea-
The carrier de-

sonable time after notice.
fended on the ground that the shipper had
not complied with a rule, approved by the
Interstate Commerce Commission, and con-
tained in its tariff, which provided that or-
ders for cars must be placed with the local
agent in writing. Written notice was not
given. The plaintiff was permitted to testi-

sessment, and of course, where the board
does not approve, it can give no authority to
collect. As the collection was made without
the prescribed approval, and therefore with-
out right, the settlers were entitled to repay-
ment. The state law does not purport, nor
has it been construed, to vest the board with
power to adjudicate rights to repayment of
moneys thus wrongfully collected; so their
adjudication in the courts is not an encroach-fy
ment on the province of the board.

3. It is also complained that the findings of fact on which the decree rests are not in accord with the evidence. Of this it suffices

to say that the courts below concurred in the findings, and we think there was sufficient evidence to sustain them.

Decree affirmed.

(266 U. S. 92)

DAVIS v. HENDERSON. (Submitted Oct. 8, 1924. Decided Oct. 27, 1924.) No. 44.

Carriers 209-Rule approved by Interstate Commerce Commission, requiring orders for cars to be in writing, cannot be waived.

Rule of carrier, approved by Interstate Commerce Commission, that orders for cars must be placed with local agent in writing, cannot be waived by acceptance of oral order by agent, or otherwise; rule being part of tariff.

On Writ of Error and Petition for Writ of Certiorari to the Supreme Court of Arkan

sas.

that he had notified the station agent orally and that the latter had accepted his oral notice. The trial court refused to in

struct the jury that the shipper could not recover without proving a notice in writing. Exceptions were duly taken. The plaintiff got the verdict; and the judgment entered thereon was affirmed by the highest court of the state. 157 Ark. 43, 247 S. W. 1070. The carrier brought this writ of error, and also filed a petition for a writ of certiorari, consideration of which was postponed until the hearing on the writ of error. The former must be dismissed. Act Sept. 6, 1916, c. 448, § 2, 39 Stat. 726 (Comp. St. § 1214). The writ of certiorari is now granted.

There is no claim that the rule requiring written notice was void. The contention is that the rule was waived. It could not be.

The transportation service to be performed
was that of common carrier under published
tariffs. The rule was a part of the tariff.
Georgia, Florida & Alabama Ry. Co. v. Blish
Milling Co., 241 U. S. 190, 197, 36 S. Ct. 541,
60 L. Ed. 948; Missouri, Kansas & Texas
Ry. Co. v. Ward, 244 U. S..383, 388, 37 S. Ct.
617, 61 L. Ed. 1213; Davis v. Cornwell, 264
U. S. 560, 562, 44 S. Ct. 410, 68 L. Ed. 848.
Writ of error dismissed.
Writ of certiorari granted.
Judgment reversed.

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

(45 S. Ct.)

(266 U. S. 101)
NASSAU SMELTING & REFINING WORKS,
Limited, v. UNITED STATES.

(Argued and Submitted Oct. 7, 1924. Decided
Nov. 17, 1924.)

1. Courts

No. 37.

385 (4)-Where Jurisdiction of court to consider counterclaim in suit by United States was involved, case could be brought directly to Supreme Court from District Court on certificate.

Where United States brought action and defendant filed counterclaim on claim arising under Dent Act (Comp. St. Ann. Supp. 1919, §§ 311514/15a to 311514/15e), and question involved was whether District Court had jurisdiction of counterclaim, case could be brought directly to Supreme Court from District Court on certificate under Judicial Code, § 238 (Comp. St. § 1215).

2. United States 131-Jurisdiction of suit against United States does not exist in direct action or by counterclaim, without specific congressional authority.

es due from the United States to it of $6,023.81 for one delivery of copper bands, an

*105

other of $5,836.42, and a third of *$2,576.09.
The averment in the answer is, as to each of
these claims, that the agreement upon which
the bands were furnished was not executed
in the manner prescribed by law, and so was
embraced within the saving provisions of
section 1 of the Act approved March 2, 1919,
entitled "An act to provide relief in cases of
contracts connected with the prosecution of
the war and for other purposes," and known
as the Dent Act (chapter 94, 40 Stat. 1272.
[Comp. St. Ann. Supp. 1919, §§ 311514/158
to 311511/15e]). The defendant's contention
was that, as each counterclaim was for less
than $10,000, subdivision 20 of section 24 of
the Judicial Code of the United States
(Comp. St. § 991) gave the District Court
jurisdiction to find and award, by way of
counterclaims herein, a fair and just com-
pensation to the defendant from the United
States. The United States moved for judg-
ment on the pleadings for the full amount
claimed in the petition, without deduction of
the counterclaims, and this motion

was

Jurisdiction of suit against United States, whether in form of direct action or by counter claim, does not exist without specific congres-granted; the court holding it had no jurissional authority.

3. Courts 518-Court of Claims has exclusive jurisdiction of claims against United States under Dent Act, and they cannot be set up as counterclaim in District Court.

Court of Claims has exclusive jurisdiction of claims against United States arising under Dent Act (Comp. St. Ann. Supp. 1919, §§ 311514/15a to 311514/15e), in view of section 2, and in action by United States in District Court, defendant cannot set up claims arising under such act as counterclaims, notwithstanding Judicial Code, § 24, par. 20 (Comp. St. § 991).

Error to the District Court of the United States for the Southern District of New York.

Suit by the United States against the Nassau Smelting & Refining Works, Limited. Judgment for the United States, and defendant brings error. Affirmed.

*102

diction of suits against the United States under the Dent Act, like those presented as counterclaims herein, either as original actions or set-offs or counterclaims. Judgment was accordingly entered on the complaint for the United States in the sum of $15,286.72. Proceedings in error were prosecuted, and the Circuit Judge, acting as a District Judge, certified, conformably to Judicial Code, § 238 (Comp. St. § 1215), that the jurisdiction of the court was in issue and that the order dismissing the set-offs or counterclaims was based solely upon the ground that the court had no jurisdiction to determine them.

[1, 2] It was suggested at the hearing in this court that, as there was unquestioned jurisdiction of the suit by the United States under the first paragraph of section 24 of the Judicial Code, the case could not be brought directly from the District Court to this court on a certificate under section 238 of

*Mr. A. S. Gilbert, of New York City, for the Code as to the jurisdiction of the counterplaintiff in error.

*104

*The Attorney General and Mr. Alfred A. Wheat, of New York City, for the United States.

claim. But we think that unquestioned jurisdiction over the complaint does not pre

*106

vent a certificate as to jurisdiction of the new suit attempted in the form of a counterclaim. The question is not one as to the in

Mr. Chief Justice TAFT delivered the troduction of counterclaims as a mere matopinion of the Court.

ter of procedure. The objection to a suit This suit was brought by the United against the United States is fundamental, States against the Nassau Smelting & Refin- whether it be in the form of an original acing Works in the United States District tion, or a set-off, or a counterclaim. JurisCourt for the Southern District of New diction in either case does not exist, unless York, to recover $15,000, with interest at 6 there is specific congressional authority for per cent., for copper bands and pig lead sold it. Nor is there doubt that the question is and delivered. By its amended answer the one which involves the jurisdiction of the defendant did not deny its obligation as District Court as a federal court under the claimed, but set up, as counterclaims, balanc-statutes of the United States, for the juris

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

diction of the District Court in this regard is | was the Dent Act. It is true that the queswholly dependent on such statutes.

[3] The second question is whether such counterclaims as are averred in the answer are authorized by paragraph 26 of section 24 of the Judicial Code. That paragraph provides that the District Court of the United States shall have jurisdiction, concurrent with the Court of Claims, of all claims not exceeding $10,000 founded upon the Constitution of the United States or any law of Congress, or upon any regulation of an executive department, or upon any contract, express or implied, with the government of the United States, or for damages, liquidated or unliquidated, in cases not sounding in tort, in respect to which claims the party would be entitled to redress against the United States, either in a court of law, equity, or admiralty, if the United States were suable. It is argued that these counterclaims are each less than $10,000 in amount, and are founded on a law of Congress and upon a contract, express or implied, with the United States, and do not sound in tort, and therefore are within the power of the District Court to enforce them. The fatal objection to this argument is that these claims are based exclusively on the Dent Act (Act March 2, 1919, c. 94, 40 Stat. 1272, 1273). This act was passed to allow the Secretary of War to adjust and discharge any agreement entered into by any officer or agent acting under his

107

tion as to the operation of the Dent Act was
not involved in the case. But the opinion, in
throwing light upon the effect of section 10
of the Lever Act (Act Aug. 10, 1917, c. 53,
40 Stat. 276, 279 [Comp. St. 1918, Comp. St.
Ann. Supp. 1919, § 3115ii]), providing for
suits in the District Courts in controversies
arising thereunder, made a careful compar-
ison of all the acts of the kind and a classi-
fication of them.
We see no reason to
change our opinion as to the construction
of the Dent Act in this regard. The defend-
ant below placed itself squarely within the
requirements of the Dent Act, and sought
adjudication of its

*108

claims on the ground that the agreements under which recovery was sought had not been executed in the manner prescribed by law. In this way it put itself outside the field covered by paragraph 20 of section 24 of the Judicial Code, and by its own admission limited itself to the remedy possible under the Dent Act. It is unnecessary for us to consider therefore whether but for the Dent Act it might have brought suit under the general language contained in paragraph 20 of section 24. The effect of the Dent Act was to limit it to the Court of Claims. The District Court, therefore, was right in holding that it had no jurisdiction of the counterclaims and in giving judgment on the pleadings for the government. Affirmed.

(266 U. S. 152)

*authority or that of the President, during the emergency of the war, and prior to November 12, 1918, with any person, firm or corporation for the production, manufacture, or sale of equipment, materials, or supplies, COMMONWEALTH TRUST COMPANY OF or services connected with the prosecution of the war, when the agreement had been performed in whole or in part, or expenditures (Argued and Submitted Feb. 29, 1924.

had been made or obligations incurred upon the faith of the same by such person, firm, or corporation prior to November 12th, and such agreement had not been executed in the manner prescribed by law. By section 2 of the act the Court of Claims is given jurisdiction on the petition of the claimant described in section 1 of the act to find and award fair and just compensation in such cases, if the claimant is not willing to accept the compensation offered by the Secretary of War. There is no other provision in the act for judicial action than this. This must be held to be an exclusive jurisdiction conferred upon the Court of Claims. This was the view of this court as shown in United States v. Pfitsch, 256 U. S. 547, 553, 41 S. Ct. 569, 65 L. Ed. 1084. In that case all the statutes which had been passed during the war giving jurisdiction to various courts of the United States for judicial settlement of controversies with the government, were considered and commented on, and among the four instances in which jurisdiction was said to be conferred only on the Court of Claims

PITTSBURG v. SMITH et al.

cided Nov. 17, 1924.)
No. 7.

De

1. Parties 32-Persons having such interest that controversy could not be determined without affecting it necessary parties.

Persons who have such interest in matter in controversy that it could not be determined without either affecting that interest or leaving interests of those before court in situation that might be embarrassing and inconsistent with equity are necessary parties.

2. Waters and water courses 222-All contract holders necessary parties in suit to foreclose contractor's lien on water rights and land segregated under Carey Act.

Where by contract for irrigation of desert lands segregated from public domain in Idaho under Carey Act (Comp. St. § 4685), contractor was to have lien given by acts of Congress, and there was a shortage of water, so that all contract holders could not receive water, all contract holders within limits of project held necessary parties to suit to foreclose lien on water rights and privileges and land appurtenant of particular purchasers.

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

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