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(46 S.Ct.)

as a case in which the construction of a law | essary is the power and so usual is it that the of the United States is drawn in question.

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The board is composed of members appointed by the President by and with the advice and consent of the Senate, with a chairman appointed by the board. It is charged with the duty of hearing and determining appeals from the Commissioner of Internal Revenue on questions of tax assessments for deficiencies in returns of taxpayers. Notice and opportunity to be heard is to be given to the taxpayer. Hearings before the board are to be open to the public. The board may subpoena witnesses, compel the production of papers and documents, and administer oaths. The duty of the board and each of its divisions into which it may be divided is to make a report in writing of its findings of fact and decision in each case. In any subsequent suit in court by the taxpayer to recover amounts paid under its decision, its findings of fact shall be prima facie evidence. It is further provided by the act that "the proceedings of the board and its divisions shall be conducted in accordance with such rules of evidence and procedure as the board may prescribe." The last sentence in the title providing for the board is: "The board shall be an independent agency in the executive branch of the government."

general words by which the board is vested with the authority to prescribe the procedure in accordance with which its business shall be conducted include as part of the procedure rules of practice for the admission of attorneys. It would be a very curious situation if such power did not exist in the Board of Tax Appeals when in the Treasury Department and the office of the Commissioner of Internal Revenue there is a list of attorneys enrolled for practice in the very cases which are to be appealed to the board.

Our conclusion in this case is sustained by the decision of the Supreme Judicial Court of Massachusetts in Manning v. French, 21 N. E. 945, 149 Mass. 391, 4 L. R. A. 339. That was a suit for tort against members of the Court of Commissioners of Alabama Claims for unjustly depriving an attorney of the privilege of practicing before it. The court was given by statute power to make rules for regulating the forms and mode of procedure for the court, and this was held to include the power to make rules for the admission of persons to prosecute claims before the court as agents or attorneys for the claimants. It was pointed out in support of the construction that claimants were not compelled to appear in person to present their claims as the taxpayers are not before the Board of Tax Appeals. The fact that in the Manning Case the body was called a court, and that here the board was an executive tribunal, does not make the decision inapplicable. The Court of Alabama Claims was

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*certainly not a United States court under the third article of the Constitution. It was rather a commission to aid the fulfillment of an international award with judicial powers.

We think that the character of the work to be done by the board, the quasi judicial nature of its duties, the magnitude of the in[2] It is next objected that no opportunity terests to be affected by its decisions, all rewas given to the petitioner to be heard in quire that those who represent the taxpayers reference to the charges upon which the comin the hearings should be persons whose qual-mittee acted in denying him admission to ities as lawyers or accountants will secure proper service to their clients and to help the board in the discharge of its important duties. In most of the executive departments in which interests of individuals as claimants or taxpayers are to be passed on by executive officers or boards, authority is exercised to limit those who act for them as attorneys to persons of proper character and qualification

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to do so. Not in*frequently, statutory provision is made for requiring a list of enrolled attorneys to which a practitioner must be admitted by the executive officer or tribunal. Act July 7, 1884, 23 Stat. 236, 258, c. 334 (Comp. St. § 385); Act July 4, 1884, 23 Stat. 98, 101, c. 181, § 5 (Comp. St. § 684); Act June 10, 1921, 42 Stat. 25, c. 18, § 311 (Comp. St. Ann. Supp. 1923, § 400%f). In view of these express provisions, it is urged that the absence of such authority in case of the Board of Tax Appeals should indicate that it was not intended by Congress to give it the power. Our view, on the contrary, is that so nec

practice. We think that the petitioner having shown by his application that being a citizen of the United States and a certified public accountant under the laws of a state, he was within the class of those entitled to be admitted to practice under the board's rules, he should not have been rejected upon charges of his unfitness without giving him an opportunity by notice for hearing and answer. The rules adopted by the board provide that "the board may in its discretion deny admission, suspend or disbar any person." But this must be construed to mean the exercise of a discretion to be exercised after fair investigation, with such a notice, hearing and opportunity to answer for the applicant as would constitute due process. Garfield v. United States, ex rel. Spalding, 32 App. D. C. 153, 158; United States ex rel. Wedderburn v. Bliss, 12 App. D. C. 485; Phillips v. Ballinger, 37 App. D. C. 46, 51.

[3] The petitioner as an applicant for admission to practice was, therefore, entitled

to demand from the board the right to be On August 12, 1907, the Midland Land & heard on the charges against him upon which Improvement Company agreed with the Unitthe board has denied him admission. But he ed States to dredge and dispose of 4,177,110 made no demand of this kind. Instead of do- cubic yards of material in Newark Bay and ing so, he filed this petition in mandamus in Passaic river at 164 cents per yard, payable which he asked for a writ to compel the board as the work progressed. The contract providsummarily to enroll him in the list of prac-ed that the work should be prosecuted with titioners, and to enjoin it from interfering "faithfulness and energy," and that the rate with his representing clients before it. He of work "will be at least 50,000 cubic yards was not entitled to this on his petition. Un- per month." On September 24, 1912, the comtil he had sought a hearing from the board, pany stopped work, leaving much unperand been denied it, he could not appeal to formed. In 1913, the government declared the courts for any remedy and certainly not the contract "annulled," and had the uncomfor mandamus to compell enrollment. Nor pleted part of the work done by another contractor, who was paid 26.7 cents per yard. was there anything in the *answer, reply or See United States v. O'Brien, 31 S. Ct. 406, demurrer which placed him in any more fa220 U. S. 321, 328, 55 L. Ed. 481. The addivorable attitude for asking the writ. This conclusion leads us to affirm the judg- The Midland contract provided that the govtional cost to the government was $141,127.31. ment of the Court of Appeals.

Affirmed.

(270 U. S. 251)

124

ernment would reserve from each payment 10 per cent. until half the work was completed, and that the amount reserved might be applied toward reimbursing it for any additional cost resulting from the contractor's default. The sum of $33,998.15,

MIDLAND LAND & IMPROVEMENT CO. v. which had been reserved, was so applied. In

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on elaborate findings *of fact that court entered judgment for the United States. 58 Ct. Cl. 671. The case is here on appeal, taken May 15, 1924, under section 242 of the Judicial Code (Comp. St. § 1219).

[1, 2] It is contended that, at the time when the government annulled the contract, the amount of work done had exceeded the

Where dredging contractor abandoned government contract and refused to complete performance, there was anticipatory breach, justifying reletting, regardless of whether contrac-aggregate of the monthly requirements, and tor was then in default as related to amount of work done.

2. United States 73-Government, applying reserve due contractor on loss occasioned by abandonment of work, held to have shown

that loss exceeded reserve.

Government, applying reserve due dredging contractor when he abandoned work to loss occasioned by the abandonment, held to have sufficiently shown that the loss exceeded the amount of the reserve.

Appeal from the Court of Claims.

Action by the Midland Land & Improvement Company against the United States. From a judgment for the United States (58 Ct. Cl. 671), plaintiff appeals. Affirmed.

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hence that the company was not in default. This question we have no occasion to consider. The correspondence between the parties and other facts found warranted the conclusion that the company had abandoned the work and refused to complete the contract. There was thus an anticipatory breach by the company, which entitled the government to relet the uncompleted part of the work. Compare Smoot's Case, 15 Wall. 36, 48, 21 L. Ed. 107; Dingley v. Oler, 6 S. Ct. 850, 117 U. S. 490, 503, 29 L. Ed. 984. It is also contended that the judgment is erroneous, because it that the uncompleted work done under the was incumbent upon the government to show later contract did not materially depart from that described in the repudiated contract, and that this was not shown. See United

*Mr. C. C. Calhoun, of Washington, D. C., States v. Axman, 34 S. Ct. 736, 234 U. S. 36, 53 for appellant.

Mr. Assistant Attorney General Galloway, for the United States.

L. Ed. 1198. The lower court concluded that the uncompleted part of the work was relet on the same specifications. Enough appears to show that the loss to the government resulting from the plaintiff's repudiation of the

Mr. Justice BRANDEIS delivered the opin- contract far exceeded the amount reserved. ion of the Court.

Affirmed.

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

(270 U. S. 65)

(46 S.Ct.)

INTEROCEAN OIL CO. v. UNITED

STATES.

(Argued and Submitted Jan. 12, 1926. Decided March 1, 1926.)

No. 115.

1. Courts 463-Allegation of contract by government to pay cost of moving oil storage tanks and losses resulting therefrom held insufficient (Rev. St. § 3744 [Comp. St. 6895]).

Allegations that oil-refining company mov ed large storage tanks from one place to another, thereby incurring expense, and losing business and franchise at place from which removal was made, all on demand of officer of Quartermaster's Department, who represented that he had authority to make contract which would be confirmed in writing by his superior, and promised that government would pay therefor, held insufficient to show binding contract, in view of Rev. St. § 3744 (Comp. St. § 6895).

2. United States 69-No implied contract of government to pay for moving of oil storage tanks to provide storage for army transport

fuel oil.

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ing the War, the corporation was represent-
ed in Baltimore by Harold F. Brown in the
sale of oil to the Shipping Board and the
United States Navy. Brown made arrange-
ments with Maj. Ross of the Quartermaster's
Department of the United States Army, act-
ing under the direction of Col. Kimball, in
charge, for the purchase by that department
After ex-
of fuel oil for army transports.
periments made under the direction of Maj.
Ross, a satisfactory grade of fuel oil was
obtained by mixing the heavy gravity oil of
this oil company with the light gravity oil of
the Standard Oil Company. Maj. Ross then
directed Brown to be prepared to furnish the
full quantity of fuel oil required by the Quar-
termaster's Department. Ross complained
that there was not enough storage for fuel
oil at Baltimore. Brown advised him that
the steel plates with which to erect the tanks
could not be obtained on account of the War.
Ross, finding that the company owned stor-
age facilities at Carteret, demanded that they
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be removed to *Baltimore. In a conversation
in April, 1918, Ross advised the officers of
the company that the Quartermaster's De-
partment was short of fuel oil and that there
must be additional tankage, and that unless
the tankage at Carteret was removed to Bal-
timore, the department would seize it and
remove it itself as an exigency of war, but
that, if the claimant was willing itself to
transfer the tanks, it would be satisfactory
to the department, and that all expense in-
curred and all losses sustained would be paid
by the government. The company's officers
advised Ross that the removal of the tanks

would mean the destruction of its business at
New York, but Ross said it would be com-
pensated for all its loss and damage and

that failure to remove the tanks would result in the department itself doing the work. The officers of the company were convinced that Ross was acting within the scope of his authority, because theretofore when he had givhad always been followed in due time by conen verbal orders to Brown for fuel oil, they firmatory written orders, and thereafter prompt payment had been made for the oil purchased. Indeed so accustomed was Brown

Mr. Chief Justice TAFT delivered the opin- to this that he had complied without quesion of the Court.

This is an appeal from a judgment of the Court of Claims entered May 26, 1924, sustaining a demurrer filed by the United States, and dismissing the petition upon the ground that it does not state a cause of action. The facts stated in the petition are as follows: The appellant, the Interocean Oil Company, was in 1918 and before, engaged in re fining, transporting and dealing in petroleum and petroleum products, chiefly fuel oil, at Carteret, N. J., where it owned and operated a refinery and storage tanks. It also had a refinery at Baltimore, Md. Dur

tion with every order, depending upon the future confirmation of it. In respect to the movement of the tanks, Ross said that he was authorized to act for the War Department, and that written official confirmation thereof would be forthcoming from that Department. When Ross' attention was called to the fact that these confirmatory orders had not come, he said it was an oversight and promised they would be forthcoming at once from Col. Kimball. Later he said he had made out the orders and delivered them to Col. Kimball, who would sign them as evidence that proper official authority was being

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

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exercised. They were never signed or delivered, however, and Col. Kimball left the service and went abroad because of ill health, and later died. The removal of the tanks was begun by the com*pany with all dispatch, and it was far advanced when the Armistice was signed November 11, 1918. This made their use unnecessary for the purpose of the War Department. They were not re-erected and in condition for use at Baltimore until February, 1919.

ing it from Carteret to Baltimore, and when the tanks were removed to Baltimore, they still belonged to the company for use by it not only in storing oil for the government but for any one else. There was no enrichment of the government to its knowledge, no benefit in the form of property given to it or of service rendered to it from which the contract by it to pay could be implied. The Court of Claims was right in sustaining the demurrer, and the judgment is

Affirmed.

(270 U. S. 260)

CHESAPEAKE & O. RY. CO. v. WESTING-
HOUSE, CHURCH, KERR & CO., Inc.
MELLON, Director General of Railroads, v.
SAME.

The petition averred that the removal of the tanks from Carteret resulted in the claimant's losing its right to re-erect them at Carteret because of action of the Legislature of New Jersey and the local authorities. The items of damage included the actual expense incurred in taking down the plant at Carteret and its freight to Baltimore, and its re-erection there, which amounted to about $54,000. The claim made also included an item for the depreciation in the plant at Carteret of $220,000 and one for the loss of fran-1. chise to conduct business at Carteret and the profit on the probable sales of oil at Carteret for five years from April, 1918, to October, 1923, which was put at $2,300,000.

[1] It is contended on behalf of the claimant that the government got the benefit of the contract made between Ross and it, that it had the right to rely on Ross' authority, and that performance of the contract saved the necessity of a written agreement as required by Rev. St. § 3744 (Comp. St. § 6895). The petition set forth no facts upon which the United States can be said to have made any contract, whether oral or written, with the claimant company. There is no averment that Maj. Ross was authorized to make the contract upon which suit is brought. averments are only that Ross told the officers of the company that he had the authority to make the contract, and that there would be a written confirmation by his chief, Col. Kimball. It is expressly admitted that no such written confirmation by Col. Kimball was ever signed or delivered to the company. The necessary effect of the lengthy averments of the petition is that Ross did not have authority to make a contract for the

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The

(Argued Jan. 25, 1926. Decided March 1, 1926.)

Nos. 170, 171.

Carriers 188 - Abnormal conditions may relieve carrier from liability for failure to perform usual services, but does not justify extra charge therefor.

Abnormal conditions may relieve carrier from liability for failure to perform usual transportation services, but does not justify extra charge for performing them.

2. Carriers 35-Contract to pay additional amount for performing spotting service by special engine and crew, which service is covered by tariff, is both without consideration and illegal (Interstate Commerce Act, § 6[7], as amended [Comp. St. Supp. 1925, § 8569]). Contract for compensation in excess of tariff rate for performing spotting service by special engine and crew is without consideration and illegal, in view of Interstate Commerce Act § 6(7), as amended (Comp. St. Supp. 1925, § 8569); such service being covered by line haul charge under tariffs.

3.

Carriers 35-Contract assuring performance of transportation service constitutes undue preference, and is illegal and void.

Assuring performance to shipper of a transportation service, which otherwise might not have been promptly rendered, constitutes an undue preference, and contract therefor would be illegal and void.

On Writs of Certiorari to the Supreme Court of Appeals of the State of Virginia.

Separate actions by the Chesapeake & Ohio Railway Company and by Andrew W. Mellon, Director General of Railroads, against Westinghouse, Church, Kerr & Co., Inc. Judgment for defendant was affirmed by the Supreme Court of Appeals of the state of Virginia (123 S. E. 352, 138 Va. 647), and plaintiffs bring certiorari. Affirmed.

government such as that *sued on, but that
the authority was vested in Col. Kimball and
that until Col. Kimball signed the contract,
it did not bind the government.
All the
statements of the petition united together
are no more than to say that the company
relied on the promise of Maj. Ross that Col.
Kimball would confirm the contract which
Ross proposed to make and said that he had
authority subject to Kimball's confirmation
to make. But Kimball never confirmed it.
[2] Nor is there any implied contract bind-
ing upon the government. The Oil Company
was dealing with its own property in mov- ers.

Messrs. Sherlock Bronson and David H. Leake, both of Richmond, Va., for petition

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

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but they do not justify an extra charge for performing them. The carrier is here seeking compensation in excess of the tariff rate for having performed a service covered by the tariff. This is expressly prohibited by

*Mr. Justice BRANDEIS delivered the the Interstate Commerce Act. Act of Februopinion of the Court.

These actions were brought in a state court of Virginia to recover amounts alleged to be due for the use of an engine and crew rented or assigned by the Chesapeake & Ohio Railway Company to Westinghouse, Church, Kerr & Co., Inc., under a contract made in September, 1917. The latter corporation was

ary 4, 1887, c. 104, § 6 (7), 24 Stat. 379, 381 as amended (Comp. St. Supp. 1925, § 8569). A contract to pay this additional amount is both without consideration and illegal.

It

is no answer that by virtue of the contract the shipper secured the assurance of due performance of a transportation service which otherwise might not have been promptly ren

engaged in construction work for the govern- dered, that ordinarily rental of engine and ment on premises at Newport News connect- crew is not a common carrier service, and ed by industrial tracks with the railway's that such rental may be charged without Compare main line. Owing to war conditions, there filing a tariff providing therefor. was then serious congestion of traffic at New. Chicago, Rock Island & Pacific Ry. Co. v. port News, and the railway failed duly to Maucher, 39 S. Ct. 108, 248 U. S. 359, 63 L. Ed. 294. To so assure performance to a perform spotting service for the company. Hence To remedy this condition the engine and shipper was an undue preference. crew were assigned to the exclusive use of the contract would be equally void for ilits traffic, payment to be made therefor as legality on this ground. Davis v. Cornwell, prescribed in the contract. The use contin- 44 S. Ct. 410, 264 U. S. 560, 68 L. Ed. 848. ued from that date until April, 1918. The railway sued for the period prior to December 28, 1917; the Director General for that later. The defenses were want of considera

Affirmed.

(270 U. S. 107)

APOLIS UNION RY. CO. et al. (Argued Nov. 25, 1925. Decided March 1,

1926.)

Nos. 328, 329.

1. Courts 264(2)-Suit, by purchaser on foreclosure proceedings in federal court, to be relieved from attempted election under decree, held ancillary, giving federal court jurisdiction, notwithstanding want of diversity of citizenship.

tion and that the contract was void, because CINCINNATI, I. & W. R. Co. v. INDIANit violated the Interstate Commerce Act (Comp. St. § 8563 et seq.) and a similar law of the state. A judgment for the defendant, entered in each case by the trial court, was affirmed by the Supreme Court of Appeals on the ground of want of consideration. 123 S. E. 352, 138 Va. 647. This court granted writs of certiorari. 45 S. Ct. 98, 266 U. S. 598, 69 L. Ed. 460. No question under the state law is before us. [1-3] The service of spotting cars was included in the line haul charge under both Where purchaser at railway foreclosure interstate and state tariffs. sales, in federal court, attempted to elect unThe railway der the decree, reserving questions not disposed contends that under the tariffs no obligation of for future adjudication, to be bound by only rested upon the carrier either to furnish one of two contracts, and it was subsequently spotting service solely for the convenience of adjudged that such election was void, and pura shipper or to furnish him special facilities chaser was bound by both, petition seeking to to meet abnormal and unprecedented condi- be relieved from obligation as to both, as purtions; that the contract was, therefore, not chaser might originally have elected, on ground without consideration; and that, being for of mistake, held ancillary to foreclosure prorental of equipment, it was not for a com-ceedings, so that federal court had jurisdiction, mon carrier service and, hence, a contract notwithstanding there was no diversity of citizenship. therefor was legal under the Interstate Com

*266

merce Act, although no tariff provided for the charges. The service by special engine and crew contracted for and given was not spotting solely for the convenience of the shipper. It was the spotting service covered by the tariff. Compare Car Spotting Charges, 34 Interst. Com. Com'n. R. 609; Downey Ship-Building Corp. v. Staten Island Rapid Transit Ry. Co., 60 Interst. Com. Com'n R. 543. It is true that abnormal conditions may relieve a carrier from liability for failure to perform the usual transportation services,

2. Courts 264 (2)—Bill to construe or correct decree of federal court may be entertained by court entering decree, irrespective of want of diversity of citizenship of parties interested.

Bill in quity to construe, explain, enforce, or correct order or decree of federal court may be entertained by court entering decree, even citizenship, could not be entitled to original bill though parties interested, for want of diverse in federal court.

Appeals from United States District Court for the Southern District of Ohio.

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

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