v. Thompson and Board of Public Works Rep. 548; Cunningham v. Macon & B. R. v. Gannt, supra.

Bachtel v. Wilson, 204 U. S. 36, 51 L. ed. 822; Ribon v. Chicago, R. I. & P. R. Co. 357, 27 Sup. Ct. Rep. 243.

Mr. W. F. Stevenson also argued the cause, and, with Mr. D. S. Matheson, filed a brief for petitioners:

Cas. No. 17,008; Ford v. Delta & P. Lan! Co. 164 U. S. 662, 675, 41 L. ed. 590, 595, 17 Sup. Ct. Rep. 230; Baring v. Dabney, No decree can be rendered on any claim 19 Wall. 1, 22 L. ed. 90; Clews v. Jamieson, in suit that will not affect directly the 182 U. S. 461, 479, 480, 45 L. ed. 1183, pecuniary interest of South Carolina by 1192, 1193, 21 Sup. Ct. Rep. 845; McKee either increasing or diminishing the amount v. Lamon, 159 U. S. 317, 40 L. ed. 165, 16 of the surplus going to her. This brings Sup. Ct. Rep. 11; Gibbs v. Green, 54 Miss. the case squarely within the case of Reagan | 592; Maenhaut v. New Orleans, 2 Woods, v. Farmers' Loan & T. Co. 154 U. S. 388, 108, Fed. Cas. No. 8,939.

38 L. ed. 1020, 4 Inters. Com. Rep. 560, 14 Sup. Ct. Rep. 1047.

The action is essentially against the state, and will result in the enforcement of the performance by the state of an alleged contract, which makes it a suit against the state.

This case is not within the rule which requires this court to follow state decisions in the construction of state statutes.

Pease v. Peck, 18 How. 595, 15 L. ed. 518; Burgess v. Seligman, 107 U. S. 20, 33, 27 L. ed. 359, 365, 2 Sup. Ct. Rep. 10; Carroll County v. Smith, 111 U. S. 556, 28

Hagood v. Southern, 117 U. S. 67, 68, 29 L. ed. 517, 4 Sup. Ct. Rep. 539; Anderson L. ed. 810, 6 Sup. Ct. Rep. 608.

If the trust theory is correct, respondents are claiming under the trust, suing to enforce it, and represent an interest antagonistic to the state, which is also a cestui que trust, entitled to be heard as to any judgment for respondents which will af fect the amount of its judgment.

Vetterlein v. Barnes, 124 U. S. 172, 31 L. ed. 401, 8 Sup. Ct. Rep. 441; Sears v. Hardy, 120 Mass. 529.

v. Santa Anna Twp. 116 U. S. 356, 29 L. ed. 633, 6 Sup. Ct. Rep. 413; Pleasant Twp. v. Ætna L. Ins. Co. 138 U. S. 67, 34 L. ed. 864, 11 Sup. Ct. Rep. 215; Great Southern Fire Proof Hotel Co. v. Jones, 193 U. S. 533, 48 L. ed. 778, 24 Sup. Ct. Rep. 576; Wicomico County v. Bancroft, 203 U. S. 112, 51 L. ed. 112, 27 Sup. Ct. Rep. 21.

This is not a suit against the state. Rolston v. Missouri Fund Comrs. (Rolston v. Crittenden) 120 U. S. 390, 30 L. ed. The state of South Carolina is a neces- 721, 7 Sup. Ct. Rep. 599; Osborn v. Bank sary party.

Gregory v. Stetson, 133 U. S. 586, 33 L. ed. 794, 10 Sup. Ct. Rep. 422; 1 Dan. Ch. Pl. & Pr. 246; Shields v. Barrow, 17 How. 130, 141, 142, 15 L. ed. 158, 161; Coiron v. Millaudon, 19 How. 114, 115, 15 L. ed. 575, 576; California v. Southern P. Co. 157 U. S. 249, 39 L. ed. 690, 15 Sup. Ct. Rep. 591; 1 Dan. Ch. Pl. & Pr. 4th Am. ed. 190; West v. Randall, 2 Mason, 181, Fed. Cas. No. 17.424; Wormley v. Wormley, 8 Wheat. 451, note, 5 L. ed. 659, note; Mallow v. Hinde, 12 Wheat. 198, 6 L. ed. 600.

Mr. A. S. Barnard argued the cause, and, with Mr. George B. Lester, filed a brief for respondent the Fleischmann Com

pany:

The act of February 16, 1907, providing for the disposition of all the property connected with the South Carolina state dispensary, and to wind up its affairs, created a trust, and the funds in the hands of the commission are a trust fund, held by them for the benefit of the creditors of the state dispensary.

of United States, 9 Wheat. 738, 6 L. ed. 204; Davis v. Gray, 16 Wall. 220, 21 L. ed. 453; United States v. Lee, 106 U. S. 196, 27 L. ed. 171, 1 Sup. Ct. Rep. 240; Board of Liquidation v. McComb, 92 U. S. 531, 541, 23 L. ed. 623, 628; Louisiana v. Jumel, 107 U. S. 711, 27 L. ed. 448, 2 Sup. Ct. Rep. 128; Cunningham v. Macon & B. R. Co. 109 U. S. 455, 27 L. ed. 995, 3 Sup. Ct. Rep. 292, 609; Re Ayers, 123 U. S. 492, 31 L. ed. 225, 8 Sup. Ct. Rep. 164; Pennoyer v. McConnaughy, 140 U. S. 1, 35 L ed. 363, 11 Sup. Ct. Rep. 699; Swasey v. North Carolina R. Co. and Chaffraix v. Board of Liquidation, supra; Tindal v. Wesley, 167 U. S. 220, 42 L. ed. 142, 17 Sup. Ct. Rep. 770; Christian v. Atlantic & N. C. R. Co. 133 U. S. 233, 33 L. ed. 589, 10 Sup. Ct. Rep. 260; Ex parte Young, 209 U. S. 158, 52 L. ed. 728, 13 L.R.A. (N.S.) 932, 28 Sup. Ct. Rep. 441; Western U. Teleg. Co. v. Myatt, 98 Fed. 335; Prentis v. Atlantic Coast Line R. Co. 211 U. S. 210, ante, 150, 29 Sup. Ct. Rep. 67; Hagood v. Southern, 117 U. S. 70, 29 L. ed. 811, 6 Sup. Ct. Rep. 608.

Perry, Tr. 5th ed. § 30; Beach, Trusts &
Trustees, 1897 ed. § 3; Sinking Fund
Comrs. v. Walker, 6 How. (Miss.) 143, 38
Am. Dec. 433; Board of Liquidation v. Me-3
Comb, 92 U. S. 541, 23 L. ed. 628; Chaffraix
V. Board of Liquidation, 11 Fed. 638;
Swasey v. North Carolina R. Co. 1 Hughes,
17, Fed. Cas. No. 13.679; Vose v. Interna
tional Improv. Fund, 2 Woods, 647, Fed.

Is the state an indispensable party?

United States v. Peters, 5 Cranch, 136, L. ed. 59; Louisville, C. & C. R. Co. v. Leston, 2 How. 551, 11 L. ed. 375; Bank of United States v. Planters' Bank, 9 Wheat. 904, 6 L. ed. 244; Tindal, v. Wesley, supra; Gunter v. Atlantic Coast Line R. Co. 200 U. S. 273, 50 L. ed. 477, 26 Sup. Ct. Rep.

252; Horn v. Lockhart, 17 Wall. 579, 21, Wade v. Travis County, 174 U. S. 499, 43 L. ed. 660; Elmendorf v. Taylor, 10 Wheat. L. ed. 1060, 19 Sup. Ct. Rep. 715; Warbur152, 166, 167, 6 L. ed. 289, 294; Dandridge ton v. White, 176 U. S. 495, 44 L. ed. 559, v. Washington, 2 Pet. 370, 7 L. ed. 454; 20 Sup. Ct. Rep. 404; Flanigan v. Sierra Murray v. Wilson Distilling Co. 164 Fed. County, 196 U. S. 553, 49 L. ed. 597, 25 22; Payne v. Pook, 7 Wall. 425, 19 L. ed. Sup. Ct. Rep. 314; Yazoo & M. Valley R 260; Omaha hotel Co. v. Wade, 97 U. S. Co. v. Adams, 181 U. S. 580, 45 L. ed. 1011, 13, 24 L. ed. 917. 21 Sup. Ct. Rep. 729.

Mr. T. Moultrie Mordecai also argued the cause, and, with Messrs. Frank Carter, Simeon Hyde, and H. C. Chedester, filed a brief for respondent the Wilson Distilling Company:

These are not suits against the state. Louisiana v. Jumel, 107 U. S. 711, 27 L. ed. 448, 2 Sup. Ct. Rep. 128; Rolston v. Missouri Fund Comrs. (Rolston v. Critten den) 120 U. S. 390, 30 L. ed. 721, 7 Sup. Ct. Rep. 599; Osborn v. Bank of United States, 9 Wheat. 739, 6 L. ed. 204; Board of Liquidation v. McComb, 92 U. S. 531, 23 L. ed. 623; Pennoyer v. McConnaughy, 140 U. S. 1, 35 L. ed. 363, 11 Sup. Ct. Rep. 699; Davis v. Gray, 16 Wall. 203, 21 L. ed. 447; Tomlinson v. Branch, 15 Wall. 460, 21 L. ed. 189; Litchfield v. Webster County, 101 U. S. 773, 25 L. ed. 925; Allen v. Baltimore & O. R. Co. 114 U. S. 311, 29 L. ed. 200, 5 Sup. Ct. Rep. 925, 962; Poindexter v. Greenhow, 114 U. S. 270, 29 L. ed. 185, 5

Sup. Ct. Rep. 903, 962; Tindal v. Wesley, 167 U. S. 204, 42 L. ed. 137, 17 Sup. Ct. Rep. 770; United States v. Lee, 106 U. S. 218, 27 L. ed. 181, 1 Sup. Ct. Rep. 240; Ex parte Young, 209 U. S. 158, 52 L. ed. 728, 13 L.R.A. (N.S.) 932, 28 Sup. Ct. Rep.

441.

The United States courts are not bound

in this proceeding to follow the decision of the state supreme court, rendered in a case instituted after this proceeding was begun, and after the question involved had been passed upon by the United States circuit court in such proceeding.

Burgess v. Seligman, 107 U. S. 33, 27 L. ed. 365, 2 Sup. Ct. Rep. 10; Pease v. Peck, 18 How. 599, 15 L. ed. 520; Louisville & N.

The state is not a necessary or indispensable party.

Cunningham v. Maine & B. R. Co. 109 U. S. 446, 27 L. ed. 992, 3 Sup. Ct. Rep. 292, 609; Barney v. Baltimore, 6 Wall. 280, 18 L. ed. 825; Shields v. Barrow, 17 How.

130, 15 L. ed. 158; Davis v. Gray, supra;

Columbia Water Power Co. v. Columbia

Electric Street R. Light & P. Co. 43 S. C. 154, 20 S. E. 1002; Re Ayers, 123 U. S. 500, 31 L. ed. 228, 8 Sup. Ct. Rep. 164; Lord v. Bates, 48 S. C. 95, 26 S. E. 213; Arthur v. Hughes, 4 Beav. 506; Christian V. Atlantic & N. C. R. Co. 133 U. S. 233, 33 L. ed. 589, 10 Sup. Ct. Rep 260; Williams v. Bankhead, 19 Wall. 571, 22 L. ed. 187; Chadbourn v. Coe, 45 Fed. 822; Ribon V. Chicago, R. I. & P. R. Co. 16 Wall. 450,

21 L. ed. 368.

When a government becomes a partner in any trading company it devests itself, so far as concerns the transactions of that

company, of its sovereign character, and takes that of a private citizen.

Bank of United States v. Planters' Bank,

9 Wheat. 904, 6 L. ed. 244. See also South 50 L. ed. 261, 26 Sup. Ct. Rep. 110, 4 A. & Carolina v. United States, 199 U. S. 437, E. Ann. Cas. 737.

The circuit court had jurisdiction of the subject-matter and of the parties to these

suits.

The fund in the commissioners' hands constitutes a trust fund.

McKee v. Lamon, 159 U. S. 317, 40 L.

R. Co. v. Palmes, 109 U. S. 244, 27 L. ed. ed. 165, 16 Sup. Ct. Rep. 11; Clews v. 922, 3 Sup. Ct. Rep. 193; Buncombe County Jamieson, 182 U. S. 461, 45 L. ed. 1183, v. Tommey, 115 U. S. 122, 29 L. ed. 305, 519 Wall. 1, 22 L. ed. 90; Maenhaut v. New 21 Sup. Ct. Rep. 845; Baring v. Dabney, Sup. Ct. Rep. 626, 1186; Gibson v. Lyon, Orleans, 2 Woods, 108, Fed. Cas. No. 8,939; 115 U. S. 439, 29 L. ed. 440, 6 Sup. Ct. Rep. Case v. Beauregard (Case v. New Orleans 129; Carroll County v. Smith, 111 U. S. 557, 28 L. ed. 518, 4 Sup. Ct. Rep. 539;& C. R. Co.) 101 U. S. 688, 25 L. ed. 1004; Board of Liquidation v. McComb, supra; Anderson v. Santa Anna Twp. 116 U. S. 1 Dan. Ch. Pl. & Pr. p. 243. See also Piqua 356. 29 L. ed. 633, 6 Sup. Ct. Rep. 413; Bolles v. Brimfield, 120 U. S. 759, 30 L. Branch of State Bank v. Knoop, 16 How. 369, 14 L. ed. 977; Osborn v. Bank of ed. 786, 7 Sup. Ct. Rep. 736; Bucher v. Cheshire R. Co. 125 U. S. 555, 31 L. ed. United States, 9 Wheat. 738, 6 L. ed. 204; Davis v. Gray, supra. 795, 8 Sup. Ct. Rep. 974; German Sav. Bank v. Franklin County, 128 U. S. 526, 32 L. ed. 519, 9 Sup. Ct. Rep. 159; Barber Mr. Justice White delivered the opinion v. Pittsburgh, Ft. W. & C. R. Co. 166 U. S. of the court: 83, 41 L. ed. 925, 17 Sup. Ct. Rep. 488; The state of South Carolina, in the year 53 L. ed.

Article 11, § 12, Constitution, 1895. "All the net income to be derived by the state from the sale or license for the sale of spirituous, malt, vinous, and intoxicant liquors and beverages, not including so much thereof as is now or may hereafter be allowed by law to go to the counties and municipal corporations of the state, shall be applied annually in aid of the supplementary taxes provided for in the sixth section of this article; and if, after said application, there should be a surplus, it shall be devoted to public school purposes, and apportioned as the general assembly may determine: Provided, however, that the said supplementary taxes shall only be levied when the net income aforesaid from the sale or license for the sale of alcoholic liquors or beverages are not sufficient to meet and equalize the deficiencies for which the said supplementary taxes are provided."

1892, assumed the exclusive management, sembly shall not delegate to any municipal of all traffic in liquor. To carry out this corporation the power to issue licenses to purpose a board of control was created, sell the same." composed of the governor, the comptroller general, and the attorney general, clothed with power to supervise the system of liquor traffic which the act embodied, and to adopt general rules and regulations pertaining to the subject. All liquor intended for consumption was required to be bought by an officer styled a commissioner, upon whom was cast the duty of distributing the liquor to local officials, known as dispensers. The funds to initiate the business were drawn from the state treasury. The general features of the act of 1892 were preserved in a statute approved January 2, 1895. S. C. Acts 1895, p. 721. This lastmentioned act is set out in full in a marginal note to the opinion in Scott v. Donald, 165 U. S. 58, 41 L. ed. 632, 17 Sup. Ct. Rep. 265. In that case it was recognized that the act of 1895 provided for the purchase by the state, through its of ficers or agents, of all liquor to be sold in South Carolina, and although the act was held to be repugnant to the Constitution of the United States, the ruling was not based upon the conception that there was a want of governmental power in the state to become the sole purchaser and seller within its borders of liquor, but exclusively upon the ground that particular provisions contained in the statute discriminated against the products of other states. A new state Constitution was ratified, which went into effect from and after December 31, 1895. Therein it was provided as follows:

*Under these provisions, in 1896 (S.[159 C. Acts 1986, p. 123) a new law concerning the liquor traffic was enacted. The statute provided for the election by the general assembly of a state board of control, clothed with power to purchase all liquors for use in the state. A state commissioner, to be appointed by such board, was empowered to furnish liquors to the various local dispensaries provided for in the statute, which were under the immediate authority of county boards having power to appoint officers, known as dispensers, to sell liquors direct to consumers. The act of 1896 was 158] *Article 8, § 11, Constitution, 1895. amended in particulars not necessary to "In the exercise of the police power the be detailed, in March, 1897. In Vance v. general assembly shall have the right to W. A. Vandercook Co. 170 U. S. 438, 42 prohibit the manufacture and sale and re- L. ed. 1100, 18 Sup. Ct. Rep. 674, the contail of alcoholic liquors or beverages with- tention that the act of 1896, as amended by in the state. The general assembly may the act of 1897, was repugnant to the license persons or corporations to manu- commerce clause of the Constitution, of the facture and sell and retail alcoholic liquors United States, was passed upon. The or beverages within the state, under such limited ruling made in Scott v. Donald was rules and restrictions as it deems proper; stated. It was expressly held that the act or the general assembly may prohibit the in question was a manifestation of the manufacture and sale and retail of alco police power of the state, and therefore was holic liquors and beverages within the within the purview of the provisions of the state, and may authorize and empower act of Congress commonly referred to as the state, county, and municipal officers, all or Wilson act. [26 Stat. at L. 313, chap. 728, either, under the authority and in the name U. S. Comp. Stat. 1901, p. 3177.] It was of the state, to buy in any market and re- decided that, as the provisions in the prior tail within the state liquors and beverages act, which were held in Scott v. Donald to in such packages and quantities, under such be discriminatory, had been eliminated, the rules and regulations, as it deems expedi-act was not repugnant to the commerce ent: Provided, that no license shall be clause of the Constitution in so far as it granted to sell alcohol beverages in less exerted the absolute control of the state quantities than one-half pint, or to sell over the purchase and sale of liquor within them between sundown and sunrise, or to the state. sell them to be drunk on the premises: And provided, further, that the general as

In State ex rel. Hay v. Farnum. 73 S. C. 165, 53 S. E. 83, decided in 1905, the su

preme court of South Carolina interpreted the dispensary act of 1896, as amended, and expressly held that "the offices and place of business of the dispensary stand precisely in the same relation to the state as the state treasurer's office." And, speaking of dispensary system, it was said (p. 171):

“The state has undertaken to take charge of the entire liquor business of the state, and to prohibit any private person or corporation from dealing in liquor, except as they may find warrant in the Constitution and laws of the United States."

this body was given the control of all the funds, assets, and property, other than real estate, of the state dispensary. It was made the duty of the commission to investigate all facts concerning outstanding claims against the state dispensary, and, for that purpose, to employ counsel as might be approved by the attorney general, and such expert accountants and clerks as were necessary, and to make full report to the governor on the subject. The commission was also authorized, after investigation, to pay, from the proceeds of the dispensary assets which might come into its hands, such claims as were found to be valid, and to turn over the surplus to the state treasury.

The commission thus authorized was appointed and began the discharge of its duties. To this end a list of the outstanding claims asserted to be due was made up, and a hearing concerning their amount and validity was commenced. For the purpose *of this hearing a call was made by the[162 commission for the production by the parties asserting claims of original books of entry, showing the previous transactions with the

The law of 1896, as amended, was repealed on February 16, 1907. S. C. Acts 1907, p. 463. The repealing act did away 160]*with the general control of the traffic by means of a state board, and therefore abolished that board. Instead of the system previously existing, a more local one was substituted. The question whether liquor should be sold in a particular county was left to the voters of the county. If, as the result of an election, it was determined that the traffic in liquor should exist in the county, it was provided that such traffic should be exclusively carried on by means of coun-state from which the claims arose, and the ty boards, appointed by the governor. Conformably to the Constitution, these boards were authorized to buy, "in the name of the state," liquors to be sold within the county, with a proviso, however, restricting the liability of the state to the sum of the assets of the local dispensary.

production for oral examination of certain witnesses. The right of the commission to enter upon this investigation was disputed by some of the claimants, and they refused to comply with the call made for books and papers and the production of witnesses. Thereupon certain of such claimants invoked the authority of the circuit court of the United States for the district of South Carolina by the commencement of the suits which are now before us. The first was brought against the members of the commission by the Wilson Distilling Company, a New Jersey corporation, having its principal place of business in the city of Baltimore, the bill being filed not only on its own account but on behalf of all others who might join in the cause. The complainant

On the same day that the foregoing act was approved there was also approved a statute entitled, "An Act to Provide for the Disposition of All Property Connected with the State Dispensary, and to Wind up Its Affairs." The text of this act is in the margin.† Summarily stated, the act created 161]a commission to consist of five members, to be appointed by the governor, who were required to give bond to the state for the faithful discharge of their duties. To †An Act to Provide for the Disposition of, several county dispensaries, by disposing of all Property Connected with the State all goods and property connected therewith, Dispensary, and to Wind Up Its Affairs. Section 1. Be it enacted by the general assembly of the state of South Carolina, that immediately upon the approval of this act the governor shall appoint a commis sion of well-known business men, consisting of five members, none of whom shall be members of the general assembly, to be known as the state dispensary commission, who shall each give bond for the faithful performance of the duties required in the sum of $10.000.

by collecting all debts due, and by paying from the proceeds thereof all just liabil ities at the earliest date practicable. Said commission shall be at liberty to make such disposition upon such terms, times, and conditions as their judgment may dictate: Provided, that no alcoholic liquors or beers shall be disposed of within this state except to county dispensary boards, and all liquors illegally bought by the present management may be returned to the persons, firms, or corporations from whom purchased, and, for determining the legality of said purchases, they are hereby authorized and directed to investigate fully the circumstances Sec. 3. It shall be the duty of said rounding all contracts for liquors, and to commission to close out the entire business employ such assistant counsel as may be and property of the state dispensary ex-approved by the attorney general, and such cept real estate, and including stock, in the expert accountants and stenographers and

Sec. 2. Said commission shall immediately organize by the election of a chairman and secretary from their number.

sur