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*354

(45 S.Ct.)

*Mr. Selden Bacon, of New York City, for Court of Appeals affirmed the order. 282 F. ing of fraud in fact. On appeal, the Circuit petitioner. 12. A writ of certiorari was granted by this

*355

*Mr. Louis S. Posner, of New York City, Court. 259 U. S. 579, 42 S. Ct. 591, 66 L. Ed. for respondent.

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

The Hub Carpet Company was adjudicated bankrupt by the federal court for Southern New York in involuntary proceedings commenced September 26, 1921. Benedict, who was appointed receiver and later trustee, collected the book accounts of the company. Ratner filed in that court a petition in equity praying that the amounts so collected be paid over to him. He claimed them under a writing given May 23, 1921four months and three days before the commencement of the bankruptcy proceedings. By it the company purported to assign to

him, as collateral for certain loans, all accounts present and future. Those collected

*358

by the receiver were, so far as *appears, all accounts which had arisen after the date of the assignment, and were enumerated in the monthly list of accounts outstanding which was delivered to Ratner September 23. Benedict resisted the petition on the ground that the original assignment was void under the law of New York as a fraudulent conveyance; that, for this reason, the delivery of the September list of accounts was inoperative to perfect a lien in Ratner; and that it was a preference under the Bankruptcy Act (Comp. St. §§ 9585-9656). He also filed a cross-petition in which he asked that Ratner be ordered to pay to the estate the proceeds of certain collections which had been made by the company after September 17 and turned over to Ratner pursuant to his request made on that day. The company was then insolvent and Ratner had reason to believe it to be so. These accounts also had apparently been acquired by the company after the date of the original assignment.

The District Judge decided both petitions in Ratner's favor. He ruled that the assignment executed in May was not fraudulent in law; that it created an equity in the future acquired accounts; that, because of this equity, Ratner was entitled to retain, as against the bankrupt's estate, the proceeds of the accounts which had been collected by the company in September and turned over to him; that by delivery of the list of the accounts outstanding on September, 23, this equity in them had ripened into a perfect title to the remaining accounts; and that the title so perfected was good as against the supervening bankruptcy. Accordingly, the District Court ordered that, to the extent of the balance remaining unpaid on his loans, there be paid Ratner all collections made from accounts enumerated in any of the lists delivered to Ratner; and that the cross-petition of Benedict be denied. There was no find

1073.

*359

*The rights of the parties depend primarily upon the law of New York. Hiscock v. Varick Bank of N. Y., 206 U. S. 28, 27 S. Ct. 681, 51 L. Ed. 945. It may be assumed that, because fraudulent in law, the original asunless the arrangement of May 23 was void signment of the future acquired accounts became operative under the state law, both as to those paid over to Ratner before the bankruptcy proceedings and as to those collected by the receiver; and that the assignment will be deemed to have taken effect as of May 23. Sexton v. Kessler, 225 U. S. 90, 99, 32 S. Ct. 657, 56 L. Ed. 995. That being so, it is clear that, if the original assignment was a valid one under the law of New York, the Bankruptcy Act did not invalidate the subsequent dealings of the parties. Thompson v. Fairbanks, 196 U. S. 516, 25 S. Ct. 306, 49 L. Ed. 577; Humphrey v. Tatman, 198 U. S. 91, 25 S. Ct. 567, 49 L. Ed. 956. The sole question for decision is, therefore, whether on the following undisputed facts the assignment of May 23 was in law fraudulent.

The Hub Carpet Company was, on May 23, a mercantile concern doing business in New York City and proposing to continue to do so. The assignment was made there to secure an existing loan of $15,000, and further advances not exceeding $15,000 which were in fact made July 1, 1921. It included all accounts receivable then outstanding and all which should thereafter accrue in the ordinary course of business. A list of the existing accounts was delivered at the time. Similar lists were to be delivered to Ratner on or about the 23d day of each succeeding month containing the accounts outstanding at such future dates. Those enumerated in each of the lists delivered prior to September aggregated between $100,000, and $120,000. The receivables were to be collected by the company. Ratner was given the right, at

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1 Williams v. Ingersoll, 89 N. Y. 508, 518-520; Coats tilling Co. v. Rasey, 142 N. Y. 570, 580, 37 N. E. 632, v. Donnell, 94 N. Y. 168, 177. See Rochester Dis40 Am. St. Rep. 635; MacDonell v. Buffalo Loan, etc., Co., 193 N. Y. 92, 104, 85 N. E. 801. Compare New York Security & Trust Co. v. Saratoga Gas, Zartman v. First National Bank, 189 N. Y. 267, 82 etc., Co., 159 N. Y. 137, 53 N. E. 758, 45 L. R. A. 132; N. E. 127, 12 L. R. A. (N. S.) 1083.

required to account in any way to Ratner. to a part thereof;10 and whether the in

strument of transfer be recorded or not.11

[2] If this rule applies to the assignment of book accounts, the arrangement of May 23 was clearly void; and the equity in the future acquired accounts, which it would otherwise have created,12 did not arise. Whether the rule applies to accounts does not appear to have been passed upon by the Court of Appeals of New York. But it would seem clear that whether the collateral consist of

It was at liberty to use the proceeds of all accounts collected as it might see fit. The existence of the assignment was to be kept secret. The business was to be conducted as theretofore. Indebtedness was to be incurred, as usual, for the purchase of merchandise and otherwise in the ordinary course of business. The amount of such indebted ness unpaid at the time of the commencement of the bankruptcy proceedings was large. Prior to September 17, the company collected from accounts so assigned about $150,000, all of which it applied to purposes other than the payment of Ratner's loan. The outstand-sition ing accounts enumerated in the list delivered void. Ratner asserts that the rule stated September 23 aggregated $90,000.

[1] Under the law of New York a transfer of property as security which reserves to the transferor the right to dispose of the same, or to apply the proceeds thereof, for his own uses, is, as to creditors, fraudulent

*361

in law and void.2 *This is true whether the right of disposition for the transferor's use be reserved in the instruments or by agreement in pais, oral or written; whether the right of disposition reserved be unlimited in times or be expressly terminable by the happening of an event; whether the transfer cover all the property of the debtor or only a part;s whether the right of disposition extends to all the property transferred or only

2 Griswold v. Sheldon, 4 N. Y. 581; Edgell v. Hart, 9 N. Y. 213, 59 Am. Dec. 532; Russell v. Winne, 37 N. Y. 591, 97 Am. Dec. 755; Southard v. Benner, 72 N. Y. 424; Potts v. Hart, 99 N. Y. 168, 1 N. E. 605; Hangen v. Hachemeister, 114 N. Y. 566, 21 N. E. 1046, 5 L. R. A. 137, 11 Am. St. Rep. 691; Mandeville

v. Avery, 124 N. Y. 376, 26 N. E. 951, 21 Am. St. Rep.

678; Skilton v. Codington, 185 N. Y. 80, 77 N. E. 790, 113 Am. St. Rep. 885; Zartman v. First National Bank, 189 N. Y. 267, 82 N. E. 127, 12 L. R. A. (N. S.) 1083; In re Marine Construction & Dry Docks Co. (D. C.) 135 F. 921; 144 F. 649, 75 C. C. A. 451; In re Davis (D. C.) 155 F. 671; In re Hartman (D. C.) 185 F. 196; In re Volence (D. C.) 197 F. 232; In re Purtell (D. C.) 215 F. 191; In re Leslie-Judge Co. (C. C. A.) 272 F. 886. Compare Frost v. Warren, 42 N. Y. 204; also, Lukins v. Aird, 6 Wall. 78, 18 L. Ed. 750; Robinson v. Elliot, 22 Wall. 513, 22 L. Ed. 758; Smith v. Craft, 123 U. S. 436, 8 S. Ct. 196, 31 L. Ed. 267; Means v. Dowd, 128 U. S. 273, 9 S. Ct. 65, 32 L. Ed. 429; Etheridge v. Sperry, 139 U. S. 266, .11 S. Ct. 565, 35 L. Ed. 171; Huntley v. Kingman, 152 U. S. 527, 14 S. Ct. 688, 38 L. Ed. 540; Knapp v. Milwaukee Trust Co., 216 U. S. 545, 30 S. Ct. 412, 54 L. Ed. 610.

*362

chattels *or of accounts, reservation of dominion inconsistent with the effective dispoof title must render the transaction

above rests upon ostensible ownership, and argues that the doctrine of ostensible ownership is not applicable to book accounts. That doctrine raises a presumption of fraud where chattels are mortgaged (or sold) and possession of the property is not delivered to the mortgagee (or vendee).13 The presumption may be avoided by recording the mortgage (or sale). It may be assumed, as Ratner contends, that the doctrine does not apply to the assignment of accounts. In their

10 Russell v. Winne, 37 N. Y. 591, 593, 97 Am. Dec. 755; In re Leslie-Judge Co. (C. C. A.) 272 F. 886, 888. 11 Potts v. Hart, 99 N. Y. 168, 171, 1 N. E. 605; N. Y. Personal Property Law (Consol. Laws, c. 41) § 45; Laws, 1911, c. 326, authorizes the creation of a general lien or floating charge upon a stock of merchandise, including after-acquired chattels, and upon accounts receivable resulting from the sale of such merchandise. It provides that this lien or charge shall be valid against creditors provided certain formalities are observed and detailed filing provisions are complied with. It is possible that, if its conditions are performed, the section does away with the rule "that retention of possession

by the mortgagor with power of sale for his own

benefit is fraudulent as to creditors."

12 Field v. Mayor, etc., of New York, 6 N. Y. 179, 57 Am. Dec. 435.

13 Smith v. Acker, 23 Wend. (N. Y.) 653; Griswold v. Sheldon, 4 N. Y. 581, 590; Edgell v. Hart, 9 N. Y. 213, 218, 59 Am. Dec. 532; Conkling v. Shelley, 28 N. Y. 360, 84 Am. Dec. 348. The statutes to this effect merely embody the common-law rule. But, in New York, an additional statute provides that unrecorded chattel mortgages under such circumstances are absolutely void as to creditors. New York Lien Law (Consol. Laws, c. 33) § 230; Laws 1909, c. 38, § 230, as amended Laws 1911, c. 326, and Laws 1916, c. 348. See Seidenbach v. Riley, 111 N. Y. 560, 19 N. E. 275; Karst v. Gane, 136 N. Y. 316, 32 N. E. 1073; Stephens v. Perrine, 143 N. Y. 476. 39 N. E. 11; Russell v. St. Mart, 180 N. Y. 355, 73 N. E. 31. Edgell v. Hart, 9 N. Y. 213, 216, 59 Am. Dec. 532; See Stewart v. Platt, 101 U. S. 731, 735, Zartman v. First National Bank, 189 N. Y. 267, 270, 25 L. Ed. 816. Compare Preston v. Southwick, 115 82 N. E. 127, 12 L. R. A. (N. S.) 1083. N. Y. 139, 21 N. E. 1031; Nash v. Ely, 19 Wend. (N. Y.) 523; Goodwin v. Kelly, 42 Barb. (N. Y.) 194. In the case of a transfer of personal property by sale, retention of possession creates a rebuttable presumption of fraud. See Kimball v. Cash, 107 Misc. Rep. 363, 176 N. Y. S. 541; also, New York Ice Co. v. Cousins, 23 App. Div. 560, 48 N. Y. S. 799; Rheinfeldt v. Dahlman, 43 N. Y. S. 281; Tuttle v. Hayes (Sup.) 107 N. Y. S. 22; Youngs v. Wedderspoon, 70 Misc.

3

.

Russell v. Winne, 37 N. Y. 591, 595, 97 Am. Dec. 755; Southard v. Benner, 72 N. Y. 424, 432; Potts v. Hart, 99 N. Y. 168, 172-173, 1 N. E. 605.

Southard v. Benner, 72 N. Y. 424, 430; Potts v. Hart, 99 N. Y. 168, 172, 1 N. E. 605.

Zartman v. First National Bank, 189 N. Y. 267, 270, 82 N. E. 127, 12 L. R. A. (N. S.) 1083.

Zartman v. First National Bank, 189 N. Y. 267, Rep. 171, 126 N. Y. S. 375; Sherry v. Janov (Sup.)

269, 82 N. E. 127, 12 L. R. A. (N. S.) 1083.

137 N. Y. S. 792; Gisnet v. Moeckel, 178 App. Div. 912, 165 N. Y. S. 82. In order to create a valid

Russell v. Winne, 37 N. Y. 591, 97 Am. Dec. 755; pledge of tangible personalty, there must be a de

Southard v. Benner, 72 N. Y. 424.

Potts v. Hart, 99 N. Y. 168, 172, 1 N. E. 605.

livery to the pledgee. In re P. J. Sullivan Co. (D. C.) 247 F. 139; 254 F. 660, 166 C. C. A. 158.

(45 S.Ct.)

transfer there is nothing which corresponds | the unrestricted dominion over the proceeds to the delivery of possession of chattels. is reserved to the mortgagor that the mortThe statutes which embody the doctrine and gage is void. This dominion is the differenprovide for recording as a substitute for de- tiating and deciding element. The distinclivery do not include accounts. A title to an tion was recognized in Sexton v. Kessler, account good against creditors may be trans- 225 U. S. 90, 98, 32 S. Ct. 657, 56 L. Ed. 995, ferred without notice to the debtor14 or rec- where a transfer of securities was sustain+363 ed.17 It was pointed out that a reservation of full control by the mortgagor might well prevent the effective creation of a lien in the mortgagee and that the New York cases holding such a mortgage void rest upon that doctrine.

ord of any kind.15 But it is *not true that the rule stated above and invoked by the receiver is either based upon or delimited by the doctrine of ostensible ownership. It rests not upon seeming ownership because of possession retained, but upon a lack of ownership because of dominion reserved. It does not raise a presumption of fraud. It imputes fraud conclusively because of the reservation of dominion inconsistent with the effective disposition of title and creation of a

lien.

limitations.

The nature of the rule is made clear by its Where the mortgagor of chattels agrees to apply the proceeds of their sale to the payment of the mortgage debt or to the purchase of other chattels which shall become subject to the lien, the mortgage is good as against creditors, if recorded.16 The mortgage is sustained in such cases "upon the ground that such sale and application of proceeds is the normal and proper purpose of a chattel mortgage, and within the precise boundaries of its lawful operation and effect. It does no more than to substitute the mortgagor as the agent of the mortgagee to do exactly what the latter had the right to do, and what it was his privilege and his duty to accomplish. It devotes, as it should, the mortgaged property to the payment of the mortgage debt." The permission to use the proceeds to furnish substitute collateral "provides only for a shifting of the lien from one piece of property to another taken in exchange." Brackett v. Harvey, 91

*364

N. Y. 214, 221, 223. *On the other hand, if the agreement is that the mortgagor may sell and use the proceeds for his own benefit, the mortgage is of no effect although recorded. Seeming ownership exists in both classes of cases because the mortgagor is permitted to remain in possession of the stock in trade and to sell it freely. But it is only where

14 Williams v. Ingersoll, 89 N. Y. 508, 522.

15 Niles v. Mathusa, 162 N. Y. 546, 57 N. E. 184; National Hudson River Bank v. Chaskin, 28 App Div. 311, 315, 51 N. Y. S. 64; Curtis v. Leavitt, 17 Barb. (N. Y.) 309, 364; Young v. Upson (C. C.) 115 F. 192. In 1916, section 230 of the New York Lien Law

The results which flow from reserving dominion inconsistent with the effective disposition of title must be the same whatever the trine which imputes fraud where full donature of the property transferred. The docminion is reserved must apply to assignments of accounts although the doctrine of ostensible ownership does not. There must also be the same distinction as to degrees of dominion. Thus, although an agreement that the assignor of accounts shall collect them and pay the proceeds to the assignee will not invalidate the assignment which it accompanies,18 the assignment must be deemed fraudulent in law if it is agreed that the assignor may use the proceeds as he sees fit.

[3] In the case at bar the arrangement for the unfettered use by the company of the

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proceeds of the accounts pre*cluded the effective creation of a lien19 and rendered the original assignment fraudulent in law. Consequently the payments to Ratner and the delivery of the September list of accounts were inoperative to perfect a lien in him, and were unlawful preferences. 20 On this ground, and also because the payment was fraudulent under the law of the State, the trustee was entitled to recover the amount.21

Stackhouse v. Holden, 66 App. Div. 423, 73 N. Y. S. 203, is relied upon by Ratner to establish the proposition that reservation of dominion does not invalidate an assignment of accounts. The decision was by an intermediate appellate court, and, although decided in 1901, appears never to have been

17 See note 18, infra.

18 Young v. Upson (C. C.) 115 F. 192. If it is agreed that the transferor may use the original collateral for his own purposes upon the substitution of other of equal value, the transfer is not thereby invalidated. Clark v. Iselin, 21 Wall. 360, 22 L. Ed. 568 (book accounts); Sexton v. Kessler, 225 U.. S. 90, 32 S. Ct. 657, 56 L. Ed. 995 (negotiable securities);

accounts). Compare Casey v. Cavaroc, 96 U. S. 467, 24 L. Ed. 779.

was amended to the effect that a mortgage, pledge, Chapman v. Hunt, 254 F. 768, 166 C. C. A. 214 (book or lien on stocks or bonds given to secure the repayment of a loan is, if not recorded, absolutely void against creditors unless such securities are delivered to the mortgagee or pledgee on the day the loan is made. See N. Y. Laws, 1916, c. 348.

16 Conkling v. Skelley, 28 N. Y. 360, 84 Am. Dec. 348; Brackett v. Harvey, 91 N. Y. 214; Spaulding v. Keyes, 125 N. Y. 113, 26 N. E. 15; Briggs v. Gelm, 122 App. Div. 102, 106 N. Y. S. 693. See Robinson v. Elliot, 22 Wall. 513, 524, 22 L. Ed. 758; People's Savings Bank v. Bates, 120 U. S. 556, 561, 7 S. Ct. 679, 30 L. Ed. 754.

19 Compare Mechanics' Bank v. Ernst, 231 U. S. 60, 67, 34 S. Ct. 22, 58 L. Ed. 121.

20 Schaupp v. Miller (D. C.) 206 F. 575; Grimes v. Clark, 234 F. 604, 148 C. C. A. 370; Gray v. Breslof (D. C.) 273 F. 526, 527.

21 Mandeville v. Avery, 124 N. Y. 376, 382, 26 N. E. 951, 21 Am. St. Rep. 678; Stimson v. Wrigley, 86 N. Y. 332, 338; Dutcher v. Swartwood, 15 Hun (N. Y.) 31.

*470

cited since in any court of that state.22 | preme Court of Porto Rico was reversed by There was a strong dissenting opinion. More- the Circuit Court of Appeals (295 F. 809), over, the case is perhaps distinguishable on and defendant brings certiorari. Affirmed. its facts, page 426. Greey v. Dockendorff, See, also, 265 U. S. 577, 44 S. Ct. 635, 68 L. 231 U. S. 513, 34 S. Ct. 166, 58 L. Ed. 339, Ed. 1188. upon which Ratner also relies, has no bearing on the case at bar. It involved assignment of accounts, but there was no retention of dominion by the bankrupt. The sole question was whether successive assignments of accounts by way of security, made in pursuance of a contract, were bad because the contract embraced all the accounts. The lien

acquired before knowledge by either party of insolvency was held good against the trustee.

Reversed.

(268 U. S. 469)

*Mr. E. B. Wilcox, of San Juan, Porto Rico, for petitioner.

Mr. Francis G. Caffey, of New York City, for respondent.

Mr. Justice HOLMES delivered the opinion of the Court.

tion of a tax imposed by a municipal ordi[1, 2] This is a suit to prevent the collecnance of Carolina, Porto Rico, on the ground that the ordinance is void. The Supreme Court of the Island upheld the tax, 30 P. R. 413, but the judgment was reversed by the

CAMI, Municipal Com'r of Finance, v. CEN- Circuit Court of Appeals, Central Victoria v. TRAL VICTORIA, Limited.

(Submitted April 30, 1925.

1925.)

No. 370.

Cami, 295 F. 809, following its decision on the same day in Successors of C. & J. FanDecided June 1, tanzzi v. Municipal Assembly of Arroyo (C.

1. Courts ~406(1)-Circuit Court of Ap

peals should defer to local interpretation of Porto Rican statutes.

The Circuit Court of Appeals should defer to local interpretation of Porto Rican stat

utes.

2. Courts 383(1) — Province of United States Supreme Court on certiorari to review the judgment of Supreme Court of Porto Rico upholding tax, stated.

The United States Supreme Court, on certiorari to review judgment of Circuit Court of Appeals reversing judgment of Supreme Court of Porto Rico upholding tax imposed by municipal ordinance of Porto Rico, will consider the case on the merits and will not reverse the decision, unless considered wrong, or there was such plausible ground for the judgment reversed by it that the local decision ought not to be disturbed.

3. Licenses ~6(1)—Porto Rican statute held not to authorize tax on other objects of taxation on which limit of taxation specified by previous act.

In view of Act Porto Rico No. 9, May 12, 1920, § 49 (d), providing that municipal revenues shall consist of license taxes provided by Act 26 of March 26, 1914, "hereby declared to be in force," section 49 (f), allowing "any other impost, excise or tax," did not authorize tax on object of taxation for which limit of taxation has been prescribed by such Act of 1914.

On a Writ of Certiorari to the United States Circuit Court of Appeals for the First

Circuit.

Suit by Central Victoria, Limited, against Juan Perez Cami, Municipal Commissioner of Finance. Decree for defendant by the Su

23 It was cited in Young v. Upson (C. C.) 115 F. 192; In re Michigan Furniture Co. (D. C.) 249 F. 978; and in the opinion here under review.

C. A.) 295 F. 803. A writ of certiorari was granted by this Court. 265 U. S. 577, 44 S. Ct. 635, 68 L. Ed. 1188. Had the Circuit

Court of Appeals deferred to the local interpretation of Porto Rican statutes, we should not have granted a writ. We repeatedly have stated the reason for such deference, and we believe that the appellate jurisdiction was granted with other ends in view than that of setting the local courts right in their interpretation of their own laws. But since the case has been decided the other way we cannot avoid dealing with the merits and we should not be warranted in reversing the decision under review unless we thought either that it was wrong or at least that there was such plausible ground for the judgment reversed by it, that the local decision ought not to be disturbed.

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[3] On February 17, 1921, the ordinance complained of was passed, and imposed a tax of ten cents on every hundredweight of sugar manufactured in the municipality. The statset out more fully in the principal opinion utes affecting the power to levy this tax are below. We give only those that immediately

determine the result. The Porto Rican Act No. 9 of May 12, 1920, § 49, provides that the municipal revenues shall consist of: (d) License taxes provided by Act No. 26, of March 28, 1914, "which is hereby declared to be in force." "(f) Any other impost, excise or tax that may be levied by two thirds of the mem

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

PIERCE v. SOCIETY OF THE SISTERS OF THE HOLY NAMES, ETC.
(45 S.Ct.)

bers of the municipal assembly, provided that, profitable business of private schools and di-
the object or matter of taxation is not also minishes in value their property.
the object or matter of any federal or insular
tax." The Act of 1914 included in its Group
C the business of sugar and molasses mills
among those that municipalities were em-
powered to tax, and proceeded:

"The rates of taxation for Group C are made as follows: For each $1,000 or fraction thereof in excess of the first $500 of volume of business transacted, up to $1,000,000 inclusive $0.25 a year," and over that, $0.125.

As the Act of 1914 is taken up into that of 1920, it is difficult for us to believe that in one paragraph the latter Act gave power to tax up to a specified maximum and in another a general power limited only by the other principles of taxation. Therefore when in section 49 (f) the later act allows "any other impost, excise or tax" we think it must be taken to mean any tax on other objects of taxation not any other tax on those for which a limit already definitely is prescribed.

*472

2. Constitutional law 82 Constitutional rights may not be abridged by legislation which has no reasonable relation to some pur. pose within competency of state.

Constitutional rights may not be abridged by legislation which has no reasonable relation to some purpose within the competency of the state.

3. Constitutional law 42-Corporations engaged in conducting private schools may complain of state's unwarranted interference with rights of parents and teachers.

Though corporations engaged in conducting private schools cannot claim for themselves the guaranteed to parents and children by Const. U. rights in the matter of selection of schools, S. Amend. 14, they can complain that their business and property is threatened with destruction through state's unwarranted interference with rights of parents and children. 4. Injunction 75-No person in any business may restrain exercise of proper power by state on ground that he will be deprived of patronage.

*The petitioner argues that the Circuit Court of Appeals was mistaken in assuming that the maximum allowed by the Act of 1914 interest in possible customers such as to enGenerally, no person in any business has an had been reached by a previous tax. The as-able him to restrain an exercise of proper powsumption is made however only for the purer by the state on the ground that he will be pose of admitting that an additional tax of deprived of patronage. the kind warranted by the Act of 1914 might be imposed within the limit of the maximum, and as it is not argued that this tax can be sustained as that which is authorized by the Act of 1914 it does not matter whether the

limit under that Act had been reached or not.

This is a different tax levied under an interpretation of the clause in the Act of 1920 authorizing other taxes, which in our opinion cannot be sustained. We think it unnecessary to add more to what has been said below.

Decree affirmed.

(268 U. S. 510)

PIERCE, Governor of Oregon, et al. v. SOCIE-
TY OF THE SISTERS OF THE HOLY
NAMES OF JESUS AND MARY.
SAME v. HILL MILITARY ACADEMY.
(Argued March 16 and 17, 1925. Decided
June 1, 1925.)

Nos. 583, 584.

1. Constitutional law 255, 274, 278(1) – Schools and school districts 160-Oregon Compulsory Education Act, requiring attendance at public schools, held unconstitutional as violative of Const. U. S. Amend. 14.

Oregon Compulsory Education Act 1922, which practically construed requires all normal children between ages of 8 and 16 years to attend public schools, held violation of Const. U. S. Amend. 14, in that it deprives parents and children of their rights in matter of selection of schools and in a measure destroys

5. Injunction 112-Suits brought before ef. fective date of unconstitutional act to enjoin its enforcement held not premature.

Suits brought to enjoin enforcement of unbefore effective date thereof, held not premaconstitutional Compulsory Education Act 1922,

ture.

Appeals from the District Court of the United States for the District of Oregon.

Two suits, one by the Society of the Sisters of the Holy Names of Jesus and Mary, the other by the Hill Military Academy, both against Walter M. Pierce as Governor of Oregon, and others, to enjoin enforcement of Compulsory Education Act 1922. From decrees for plaintiffs, denying motions to dismiss and granting a preliminary injunction (296 F. 928), defendants appeal. Affirmed.

Messrs. George E. Chamberlain, of Portland, Or., and Albert H. Putney, of Washington, D. C., for appellant Pierce.

Mr. Willis S. Moore, of Salem, Or., for other appellants.

Messrs. Wm. D. Guthrie, of New York. City, and J. P. Kavanaugh, of Portland, Or., for appellee Society of the Sisters of the Holy Names of Jesus and Mary.

Mr. John C. Veatch, of Portland, Or., for appellee Hill Military Academy.

*529

*Mr. Justice McREYNOLDS delivered the opinion of the Court.

These appeals are from decrees, based upon undenied allegations, which granted pre

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

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