21 F.(2d) 333 be entitled to recover interest at the legal rate of 7 per cent., which is the ordinary rate by law in this state, in the absence of express contract. Section 32, as has been pointed out more than once, is a copy of section 512 of the Code of 1922 (the same being section 461 of the Code of 1912 and section 413 of the Code of 1902). In the case of Paris Mountain Water Co. v. Woodside, 133 S. C. 383, 131 S. E. 37, it was held by the Supreme Court of South Carolina that, in an action under section 461 of the Code of 1912 for the recovery of taxes wrongfully collected, the party would be entitled to interest at 7 per cent. from the date on which the taxes were paid. The plaintiff claims, however, that this point was not decided by the Supreme Court. The case as reported shows that the Supreme Court adopted the decree of the circuit court. The decree of the circuit court, after considering the various questions for decision, ruled in favor of the plaintiffs and against the defendants and held that the plaintiffs were entitled to judgment for the amount claimed, together with interest at 7 per cent. from the date of the payment of the taxes in question. It is true that the circuit court did not state the matter of interest as one of the questions to be decided nor enter into any discussion as to allowing interest. But it did allow interest for a long period of time, ten or twelve years, at 7 per cent., and the question of interest must have been considered and was decided by the circuit court. That decree was adopted by the Supreme Court, and the point must be therefore considered as adjudicated. In view, however, of the importance of that case in its effect upon the question involved here, we have obtained a copy of the record and the briefs of the parties therein, to ascertain whether the question of interest was properly presented to the Supreme Court. Under the practice in the Supreme Court of South Carolina (section 6 of rule 5, of Rules published in volume 1, Code 1922, p. 688), questions intended to be presented in that court are required to appear at the end of the case in the form of exceptions (corresponding to assignments of error in the federal courts), and each exception must contain a concise statement of one proposition of law which the court is asked to review. The record shows that the seventh exception alleges that the circuit court was in "error in allowing plaintiff interest on the amounts alleged to be due by virtue of excessive or wrongful taxes, section 461, under which the actions were brought, making no provision for recovery of interest in such cases." The brief for the appellant (the county officers) has a short argument to show that interest could not be allowed because the section of the Code referred to made no express provision therefor. The brief for the appellee (Paris Mountain Water Company) contains an extensive argument in support of its right to interest and cites a number of decisions, including among them several decisions of the Supreme Court of the United States. The Constitution of South Carolina of 1895, art. 5, § 8, requires the Supreme Court, in reversing or affirming a judgment or decree, to consider and decide every point made and distinctly stated in the cause and fairly arising upon the record of the case. An exception which distinctly states the point of law involved comes within this constitutional provision, and a point so presented fairly arises upon the record. Garrett v. Weinberg, 59 S. C. 162, 192, 37 S. E. 51; State v. Meares, 60 S. C. 527, 530, 39 S. E. 245. In Paris Mountain Water Co. v. Woodside, supra, the question of interest was distinctly presented by an exception and therefore arose squarely before the Supreme Court upon the record. The Supreme Court affirmed the circuit court's decree which permitted interest, and the question therefore must have been considered and decided by the Supreme Court. It is true that neither the circuit Judge nor the Supreme Court entered into any discussion of the question of interest, but that may have been because it was thought too plain for argument. It is true also that that decision was under section 461 of the Code of 1912, but section 32 of the Tax Act of 1926 is in that respect an exact copy of that section. We cannot doubt, therefore, that any court of law, federal or state, in passing upon the question as to whether the plaintiff, in suing to recover these taxes which it alleges have been illegally assessed in this case, would unhesitatingly hold that the decision in Paris Mountain Water Co. v. Woodside, supra, is binding law and give judgment for interest accordingly. While therefore the application for the interlocutory injunction must be denied, our refusal to grant it is based solely on the ground that in our opinion the plaintiff has a plain, adequate, and complete remedy at law, and that consequently this court has no power to award an injunction. At the hearing upon this application we understood that, in case the court decided to refuse the interlocutory injunction and the plaintiff desired to appeal, the defendants conceded that it would be proper, to preserve the status quo, that the temporary restraining order should be continued in force pending the appeal to the Supreme Court, or at least that they did not object to its being so continued. While the motion for an interlocutory injunction will therefore be denied, the restraining order will not be dissolved for the present, and, if the plaintiff appeals to the Supreme Court, it will be continued in force pending the appeal, provided the plaintiff file a good and sufficient bond conditioned in the usual form for the payment to the defendants of the sum of $400,000 for all damages they may sustain by reason of the restraining order, or its continuance pending the appeal in case it should finally be adjudged that the restraining order ought not to have been granted or ought not to have been continued pending the appeal, and such bond when given shall be deemed a substitute for the bond heretofore given upon the granting of the restraining order, and the plaintiff may then apply for an order canceling the last-mentioned bond. S. 481, 486, 33 S. Ct. 942, 57 L. Ed. 1288, and Chicago, B. & Q. R. Co. v. Osborne, 265 U. S. 14, 16, 44 S. Ct. 431, 68 L. Ed. 878. The precise question therefore presented upon the rehearing is whether the remedy provided by section 32 of the Tax Act of 1928 is a suit against the state, restricted to the state courts, and therefore not available in the federal courts. [19] There can be no doubt but that the remedy provided by section 32 is a suit against the state. The object of the suit is to compel the state to perform its obligation to repay from the state treasury taxes illegally collected, and under the decisions of the Supreme Court of the United States, such a suit is a suit against the state. Smith v. Reeves, 178 U. S. 436, 20 S. Ct. 919, 44 L. Ed. 1140; Ex parte New York, 256 U. S. 490, 500, 501, 41 S. Ct. 588, 65 L. Ed. 1057; Murray v. Wilson Distilling Co., 213 U. S. 151, 168, 169, 29 S. Ct. 458, 53 L. Ed. 742. [20] The Eleventh Amendment to the Constitution of the United States forbids a suit against a state, but the state may waive its immunity from suit, and, when it does waive PARKER, Circuit Judge, and WAT. its immunity and consents to be sued in its KINS, District Judge, concur. On Rehearing. ERNEST F. COCHRAN, District Judge. In the former opinion this court held that section 32 of the South Carolina Tax Act of 1926 provided an adequate remedy at law by payment under protest and recovery of the alleged illegal taxes by an action which was available in the federal courts, and therefore denied the interlocutory injunction. The plaintiff presented a petition for a rehearing upon a ground which was not considered by the court nor indeed presented at the first hearing, and a rehearing was ordered, and the court has heard the arguments of the parties thereon. [18] The new point presented is that the remedy provided by section 32 of the South Carolina Tax Act of 1926 is a suit against the state, and such suit is confined to the court of common pleas, and is therefore not available in the federal courts. The plaintiff concedes, as was decided in the former opinion, that, if a state provides a remedy by ordinary action against individuals, and the proper requisites of federal jurisdiction exist, such action is available in the federal courts and would therefore be an adequate remedy, under the decisions of the Supreme Court in Singer Sewing Machine v. Benedict, 229 U. own courts, this does not constitute a consent to be sued in a federal court. Smith v. Reeves, 178 U. S. 436, 20 S. Ct. 919, 44 L. Ed. 1140; Chandler v. Dix, 194 U. S. 590, 24 S. Ct. 766, 48 L. Ed. 1129; Murray v. Wilson Distilling Co., 213 U. S. 151, 168, 172, 29 S. Ct. 458, 53 L. Ed. 742. In Murray v. Wilson Distilling Co., supra, the Supreme Court used the following language: "And it is elementary that, even if a state has consented to be sued in its own courts by one of its creditors, a right would not exist in such creditor to sue the state in a court of the United States," citing Smith v. Reeves, supra, Chandler v. Dix, supra. Section 32 of the Tax Act of 1926 provides for payment under protest, and that the aggrieved taxpayer may "bring an action against the South Carolina tax commission for the recovery thereof in the court of common pleas for any county having jurisdiction." The court of common pleas is a court of the state of South Carolina, provided for in its Constitution and laws, and by this provision in section 32 the state consented to be sued in that court, and that consent cannot be extended by implication into a consent to be sued in any other court. From the principles hereinbefore stated, it is clear that, if the plaintiff in this case should pay this tax under protest and bring an action at law in a federal court, such action would 21 F.(2d) 333 be defeated by a plea to the jurisdiction on the ground that the state had never consented to a suit in that court. [21] While these principles are firmly established, it is, however, equally well-settled that the test of equity jurisdiction in a federal court is the inadequacy of the remedy on the law side of that court and not the inadequacy of the remedies afforded by the state courts. In other words, if a suitor has sufficient ground to invoke the jurisdiction of a federal court of equity, a remedy at law in the state court which is not available in a federal court is not sufficient to deprive a federal equity court of jurisdiction. Smythe v. Ames, 169 U. S. 466, 516, 18 S. Ct. 418, 42 L. Ed. 819; Chicago, B. & Q. R. Co. v. Osborne, 265 U. S. 14, 16, 44 S. Ct. 431, 68 L. Ed. 878; Risty v. C., R. I. & P. R. Co., 270 U. S. 378, 388, 46 S. Ct. 236, 70 L. Ed. 641. From the principles announced in these cases, we think it logically and inescapably follows that in the case at bar the suit authorized by section 32, being against the state and restricted to the state court, is not available in the federal courts, and therefore the plaintiff has no adequate remedy at law in the federal court, and equity should assume jurisdiction. Numerous cases have been cited which, it is asserted, are inconsistent with the decisions cited above. It is unnecessary to enter into any extended discussion of those cases. It is sufficient to say that we have examined them all very carefully, and in our opinion they are distinguishable, and are not inconsistent with the principles set forth in the cases cited above. [22] It is true, as stated in our former opinion, that a state cannot directly confer jurisdiction upon a federal court, but the question now presented is not a question of conferring jurisdiction, but of consenting to a suit against the state, and we perceive no reason why a state cannot waive its immunity and consent to be sued in a federal court as well as in its own courts. While we think that it is plain that the remedy provided by section 32 is a suit against the state and not available in the federal courts, nevertheless, even if we assume that it is not plain, it must be conceded that it is at least doubtful whether the remedy afforded by that section is available in a federal court at law, and, wherever the remedy is doubtful at law, equity will assume jurisdiction. Davis v. Wakelee, 156 U. S. 680, 15 S. Ct. 555, 39 L. Ed. 578; Union Pac. R. Co. v. Weld County, 247 U. S. 282, 38 S. Ct. 510, 62 L. Ed. 1110; Atlan tic Coast Line R. Co. v. Daughton, 262 U. S. 413, 426, 43 S. Ct. 620, 67 L. Ed. 1051, and cases cited therein. At the rehearing, the defendants' counsel made the point that, aside from the remedy afforded by section 32, the plaintiff would have the right under the common law to pay the taxes under protest and sue the members of the tax commission individually and obtain personal judgment against them, and that this would constitute an adequate remedy at law. The defendants' theory is that, even in the absence of a statute authorizing payment under protest and recovery by suit against the officer making the collection, if the tax is paid under protest, the collecting officer would thereby be put on notice, and, if the tax is illegal, then his act of retaining it would be tortious, and he would be liable personally at the common law, even though he had paid it into the state treasury. We are not prepared to hold that, even if under the South Carolina law such a remedy against the commission personally existed, it would prevent equity interfering by injunction to prevent the tortious act in the first instance. If the defendants' contention is correct, then all of those cases, federal and state (including South Carolina), where officers have been enjoined from collecting illegal taxes, were incorrectly decided; for under the defendants' theory in all cases, by the principles of the common law, a payment under protest would not be voluntary and would give a right of action against the officer and thereby provide an adequate remedy at law. But in none of those cases (and their name is legion) is there any hint or suggestion that a mere payment under protest in the absence of statutory authority, would give such a right of action against the collecting officer as would oust the equitable jurisdiction. The defendants have cited a number of decisions in support of their proposition that by payment under protest the aggrieved taxpayer might sue the collecting officer personally; but they have not cited any South Carolina decision which holds such to be the law in South Carolina, nor have they cited any decision anywhere that, in the absence of statute, a payment under protest would give the taxpayer a right to sue the collecting officer personally and thereby prevent equity from interfering by way of injunction to prevent the illegal act. The South Carolina decisions certainly give no hint or indication that such a remedy exists, or, even if it did, that it would prevent the equity jurisdiction. See Ware Shoals Mfg. Co. v. Jones, 78 S. C. 211, 58 S. E. 811; Santee Mills v. Query, 122 S. C. 158, 115 S. E. 202; Crescent Mfg. Co. v. South Carolina Tax Commission, 129 S. C. 480, 124 S. E. 761; Lancaster Cotton Mills v. South Carolina Tax Commission, 132 S. C. 466, 129 S. E. 429. [23] But, even if it be assumed that prior to the enactment of section 32 of the Tax Act of 1926 the aggrieved taxpayer would have a right of action after payment under protest against the members of the tax commission individually and personally, although there is no South Carolina decision to that effect, it is clear that since the enactment of section 32 of that act there no longer exists any remedy against the tax commission personally; for that section expressly provides a remedy by the payment of illegal taxes under protest and a suit against the tax commission (not personally or as individuals) and a repayment from the state treasury if such suit be successful; and, furthermore, that section expressly says that there shall be no other remedy. It is clear that section 32 does not intend to create a personal remedy against the tax commission, and, if any such remedy existed before that section was enacted, it has been abolished by the express words of that section. The state certainly has a right to relieve the tax commission from personal responsibility by providing a remedy against the state, backed by the responsibility of the state. Burrill, Treas., v. Locomobile Co., 258 U. S. 34, 38, 42 S. Ct. 256, 66 L. Ed. 450. When the act says in express terms that there shall be no other remedy, it is difficult to see how the defendants can claim that there is another remedy. There is no decision of the Supreme Court of South Carolina which holds that under this statute the plaintiff can still maintain an action individually against the members of the tax commission and recover a personal judgment against them for money that has been paid into the state treasury. In the absense of such decision, there is, to say the least, a substantial doubt or plausible ground for controversy respecting the interpretation or meaning of this statute, and in such case, under the decisions of the Supreme Court of the United States, that we have cited above, the plaintiff is not bound to speculate and take his chances at law, but may invoke the jurisdiction of a federal court of equity. The interlocutory injunction must therefore be granted. PARKER, Circuit Judge, and WATKINS, District Judge, concur. UNIVERSAL RIM CO. v. SCOTT. District Court, N. D. Ohio, E. D. March 16, 1922, No. 674. 1. Patents211(3)-Licensee, who has paid royalties for years, is estopped to claim that article made was not within patent. A licensee, who has manufactured an article pursuant to the license agreement and has regularly paid royalties during a number of years, is thereafter estopped to set up as defense to a demand for royalties that the article as made was not within the claims of the patent. 2. Patents 129(3) -Licensee is estopped to show invalidity as defense to action for royalties while relation continues. Licensee is estopped to show invalidity as defense to action for royalties only so long as relation of licensor and licensee continues. 3. Patents 129(3)-Licensee may, after notice, defend against payment of royalties accruing after patent has been adjudged invalid. Licensee, if evicted from use of patent by judgment of court declaring patent invalid, may, after notice to licensor defend against payment of royalties subsequently accruing. 4. Patents 129(3)-Licensee under invalid patent may renounce license, and, after notice, may defend against action for royalties as stranger to patent. Licensee, if patent is in fact invalid, may renounce license, and, after notice, may defend against action for royalties with same freedom as may stranger to patent, and licensor is remitted to infringement suit. 5. Receivers 90-Receiver is not bound by executory license contract unless he adopts it. Receiver is not bound by executory license contract made by defendant unless he adopts it, and is entitled to reasonable time for election. 6. Receivers 90-Rights and liabilities of receiver respecting adoption or renunciation of executory contract are determined by equitable principles. Principles governing adoption or renunciation by receiver of executory contract are equitable in their nature and are equitably applied to facts of each case. 7. Receivers 90-Receiver held entitled, with approval of court, to renounce license contract, but liable for royalties accruing thereunder since his appointment. Receiver who continued to manufacture and sell articles covered by a license contract made by defendant for more than a year after his appointment, but without either adopting or renouncing the contract or payment of royalties thereunder, held entitled to renounce the contract at his election, with leave of court, but liable for royalties on the articles he has made and sold up to the time of his renunciation. In Equity. Suit for injunction by the Universal Rim Company against Frank A. 21 F.(2d) 346 Scott, receiver of the Standard Parts Company. Injunction withheld subject to election by defendant. Henderson, Quail, Siddall & Morgan, of Cleveland, Ohio, for plaintiff. A. V. Cannon (of White, Cannon & Speith), of Cleveland, Ohio (B. M. Kent, of Cleveland, Ohio, of counsel), for defendant. WESTENHAVER, District Judge. Plaintiff's bill, filed by leave of court duly given, seeks an injunction restraining the defendant from manufacturing or selling certain demountable rim constructions alleged to be covered by the terms of the license agreement dated May 25, 1916, for the nonexclusive use of certain patents. The defendant has answered. The cause was heard upon application for a preliminary injunction and supporting and opposing affidavits. At the conclusion of the hearing, parties by consent submitted the cause as upon a final hear ing for a decision and decree upon the merits. The receiver was appointed September 1, 1920. The license agreement contains no provision permitting its cancellation earlier than May 25, 1926. It provides, in article 15, that the only form of split demountable rims which the licensee contemplates putting out is that of the type known as No. 71, and also certain Baker types, and these rims, the licensee admits for the purposes of the agreement, are covered by the patents therein recited. These rims are also described as transversely split rims. The Standard Parts Company, the licensee, manufactured and sold rims of this type continuously until the appointment of the receiver. It had also furnished statements and paid royalties in the manner and on the terms provided by article 4, except only for the month of August, 1920, immediately preceding the receiver's appointment, which accounting was not due until the 15th of September following. The receiver since his appointment has continued to manufacture and sell split demountable rims of the type known as No. 71, or transversely split demountable rims. He is also making and selling another type known as the Hayes rim, as to which a question is made whether or not it is within the terms of the license and of the kind described in article 15. The receiver has not rendered any statements nor made any payments as required by article 4, and as had previously been done by the Standard Parts Company. Frequent demands therefor have been made from time to time without success. A con. ference was had about December 14, 1920, between plaintiff's president and defendant's patent counsel, Bert N. Kent, and the two witnesses disagree in part as to what then transpired. This difference is not very material. In all other respects there is no substantial conflict in the evidence. Nothing further was done after this conference by plaintiff except to continue writing letters from time to time, making demands for statements and payment of royalties, until October, 1921. At this time the defendant receiver notified plaintiff's counsel in writing that no royalties had been or would be paid unless the court decided that payment should be made, and that there were many reasons on both sides why the contract should be adjudicated. Neither party prior thereto had brought this controversy to the attention of the court. The receiver had not asked for leave to renounce the license agreement, and the plaintiff had not, as was its privilege, applied to the court to compel an election by the receiver. Shortly after receipt of this last letter, plaintiff applied for and obtained leave and filed, pursuant thereto, the present bill. The question mainly discussed is whether the receiver, after his appointment, has adopted the license agreement or has renounced and repudiated it, and if, in the latter contingency, he may continue to manufacture split demountable rims of the type agreed to be covered by the license in violation of the terms thereof. In the answer defendant relies mainly upon the proposition that the receiver is not bound to adopt an executory contract of the Standard Parts Company, that, in point of fact, he has not adopted or elected to be bound by this particular contract, but that, on the contrary, he has renounced the same after a delay such as was reasonable to permit adequate inquiry as to the advisability of so doing. In addition thereto, the answer asserts that the plaintiff has not prosecuted infringers vigorously and in good faith, as is required by article 8 of the license agreement, and, as a result of such failure and neglect, unlicensed competitors are making and selling the same type of transversely split demountable rim in such active competition that no benefit has or will result to the receiver from an adoption of the license agreement. This last contention will be first disposed of. Article 8 is probably an independent, and not a dependent, covenant. Courcier v. Graham, 1 Ohio, 331, 340; Gould v. Brown, 6 Ohio St. 538, 540; Belfast, etc., Ry. v. Moore, 60 Me. 561; Milldam F'dry Co. v. Hovey, 21 Pick. (38 Mass.) 417, 437. This |