UNITED STATES, Appt., V. ATCHISON, TOPEKA AND SANTA FÉ Mandate to Court of Claims. Where the mandate of this court was fully complied with by the Court of Claims, on the return to it of the case, its judgment entered in pursuance of the mandate will be affirmed. [No. 875.] St. Louis, Alton and Terre Haute Railroad Company, over and above any tangible property it owned and operated. But,, as heretofore shown, after the confirmation of the lease, the capital stock and franchise of that corporation were diminished in value to whatever extent their taxable value was represented by the leased lines of railroad. Technically, the assessment under the head of capital stock and franchise should have been upon the capital stock and franchise of the corporation created by the Act of March 11, 1869. But that corporation had no defined amount of capital stock separate from that of Submitted Feb. 20, 1878. Decided Apr. 8, 1878. the Indiana corporation of the same name. The State Board, therefore, made an assessment upon the capital stock of the lessor corporation, for that portion of the lines of railroad which passed from its control in virtue of the lease of 1867, and then distributed such assessment among the various counties on the lines of the leased railroads, in the proportion that the extent of track in the respective counties bore to the whole length of the leased lines in the State; the taxes due upon such assessment being charged to and to be collected from the Indianapolis and St. Louis Railroad Company, which, with the consent of the State of Illinois, as expressed in the Act of March 11. 1869, was entitled to have and did have exclusive control and management of such leased lines. The mode thus adopted by the State Board was, as we think, in substantial conformity to the laws of Illinois, and affords the complainant no just ground of objection. Appeal from the Court of Claims. Mr. Justice Field delivered the opinion of the court: The question originally involved in this case, and decided at the October Term of 1876 [93 U. S.. 442, 23 L. ed., 965], was, whether the provision contained in the land grant to the Company, that its road should be a public highway for the use of the Government of the United States, free from all toll or other charge for the transportation of its property and troops, not only entitled it to the free use of the road, but also to have the transportation made by the Company without charge. The Company claimed that the use of the road was all that could be required of it. The Government, insisting that it was also entitled to have such transportation without charge, refused compensation therefor, and referred the matter to the Court of Claims for determination. That court estimated the cost of the transportation according to the ordinary tariff rates of the road with other parties for similar services, after making a deduction of one third from the rates. This deduction had been deemed by the War Department, upon careful consideration, to be the equivalent of any toll or charge for the use of the road itself, and upon that basis the services had been ren dered. But the Judges of the Court of Claims, being equally divided upon the question of the liability of the United States to make any compensation, gave judgment pro forma in their favor against the Company. On appeal. this court reversed the judgment, holding that the Government was entitled only to the free use of the road. and that compensation must be made for the transportation, with a fair deduction for such use. The case was accordingly reWe perceive no error in the decree to the prej-manded, with directions to enter a new decree udice of the appellant, and the same is affirmed. The complainant sues as a corporation, created by the laws of Indiana, upon the ground that the assessment was upon its capital stock, and that the purpose of the county collectors was to seize its property. But the state officers deny that any assessment was made or intended to be made upon its capital stock. Clearly, the county collectors have no right to levy the 461] *warrants in their hands upon any prop. erty which belongs to the Indiana corporation, as distinguished from the Illinois corporation of the same name. But they have the right. for the reasons heretofore given, to subject to the payment of the taxes in question the property which the Corporation, created by the Act of 1869, is operating and managing in that State, as lessee of the St. Louis, Alton and Terre Haute Railroad Company. The assessment made by the State Board is, in every just sense, an assessment upon the capital stock and franchise of an Illinois corporation, to wit: the Indianapolis and St. Louis Railroad Company, lessee, under and by authority of the Act of March 11, 1869, of the St. Louis, Alton & Terre Haute Railroad Company. awarding compensation with such deduction. On the return of the case to the court below, the claimant moved for judgment for the amount previously found according to the ordinary tariff rates, less the deduction of one third, as established by the War Department. By agreement of the parties such judgment was entered, the Government reserving the right to show that a judgment for that amount was not required by the mandate of this court, and if it should be so decided, to try the question as to what was a fair deduction. On the subsequent hearing of the point reserved, which was had upon a motion to set aside the judgment, the opinions of eminent railroad experts were read, by stipulation of the parties, to show what would be a fair deduction from the ordinary tariff rates for the use of the road. There would seem to have been some difference of opinion among the experts, but their evidence failed to show, in the opinion of the court, that the reduction agreed upon between the parties and the War Department was not a fair one. On the trial of the case it was not pretended by the claimant that the amount was arbitrarily fixed, or that it was illegal or oppressive, or by the Government that any greater reduction should have been made. Nor was the authority of the War Department to make an arrangement of this kind questioned, if, under the law, the Government was liable for the transportation. If such authority do not now exist, as contended, under the subsequent legislation of Congress, and upon which point we express no opinion, there can be no doubt of its existence when the services were rendered for which compensation is claimed here. We are of opinion that the mandate of this court was fully complied with by the Court of Claims, and its judgment is therefore, affirmed. have to meet, in case they decide to exact the duties as estimated, notwithstanding the objection, and to expose the United States to the risk of litigation. Curtis v. Fiedler, 2 Black, 461, 17 L. ed., 273. Payment of the duties having been made under protest in writing, the importers brought assumpsit against the collector to recover back the amount which they allege was illegally exacted. Service was made; and both parties appeared, and, having waived a trial by jury, submitted the case to the court upon an agreed statement of facts. Hearing was had; and the court rendered judgment in favor of the defendant, and the plaintiffs sued out the present writ of error. Goods were imported by the plaintiffs from Liverpool into the Port of New York, a portion of which were described in the invoice as Ducape Eglington ties, which are manufactures of silk, and are used and known as neckties, and were valued in the invoice at a net valuation equivalent to $696 in gold coin. Another portion of the merchandise is described in the invoice as "twill silk cut up," and is valued in the invoice at a net valuation equivalent to $234.13, gold. Both parcels were part of the merchandise described in the invoice as the contents of a case marked and numbered: and the state 148] *JOHN M. DAVIES et al., Plffs. in ment is, that they were entered for con- [150 Err., V. CHIESTER A. ARTHUR, Collector of the Port of New York. (See S. C., Reporter's ed., 148-153.) Recovery of duties-protest. 1. An importer who has paid duties under protest must set forth in his protest distinctly and specifically, the grounds of the objection to the payment in order to maintain an action against the collector to recover back the amount so paid. 2. A recovery in such action can only be had on the grounds set forth in the protest. [No. 492.] Argued Mar. 28, 1878. Decided Apr. 8, 1878. In Error to the Circuit Court of the United States for the Southern District of New York. The case is stated by the court. Messrs. Edward Hartley and Walter H. Coleman, for plaintiffs in error. Mr. S. F. Phillips, Solicitor-Gen., for the defendant in error. Mr. Justice Clifford delivered the opinion of the court: Importers who have paid duties under protest in writing may, if the duties were illegally exacted and the protest sets forth, distinctly and specifically, the grounds of the objection to the payment, maintain an action of assumpsit against the collector to recover back the amount so paid. 5 Stat. at L., 727. Persons importing merchandise are required to make their protests distinct and specific, in order to apprise the collector of the nature of the objection, before it is too late to remove it, or to modify the exaction, and that the proper officers of the Treasury may know what they NOTE. Return of duties paid under protest; action to recover back-Protest, how made and its effect. See note to Greely v. Thompson, 13 L. ed. U. S., 397. sumption by the plaintiffs under the dutiable rate of sixty per cent. ad valorem, other portions of the merchandise being placed in the entry respectively under the dutiable rates of thirty. thirty-five and fifty per cent. ad valorem. Sufficient appears to indicate that the goods were appraised as the agreed statement shows; that the local appraiser reported the neckties to the Collector as silk scarfs, and the twill silk cut up as silk in pieces, and that both were subject to duty at the rate of sixty per cent, ad valorem. Pursuant to that report, the Collector liquidated the duties at that rate; and the plaintiffs paid that rate of duty on the neckties and the silk cut up, on the entered valuation of the same, as before explained. Custom duties are payable in gold; and the plaintiffs paid the amounts in that medium, and under protest in writing. Subsequent to the passage of the Act of the 3d of March, 1839, and before the passage of the Act of the 26th of February, 1845, such a suit against a collector to recover back duties as having been illegally exacted could not be maintained. unless it was brought before the collector placed the money to the credit of the Treasurer of the United States. 5 Stat. at L., 348; Cary v. Curtis, 3 How., 236. Hardship and injustice resulted from that rule of decision and Congress, by the later Act established a different rule and provided to the effect that the importer may in such a case have such a remedy against the collector to recover back such duties, if he protested in writing at or before the payment of the duties. and set forth distinctly and specifically the grounds of his objections to the payment of the same. 5 Stat. at L.. 727. Different forms of expression are employed in later enactments. but all which are applicable to the case before the court are, except as to time, substantially to the same effect. 13 Stat. at L., 214, sec. 14. What is required by that Act in respect to the matter in question is that the importer, if dissatisfied with the decision of the Collector, shall give notice in writing to him on each entry, setting forth therein, distinctly and specifically, the grounds of his objection thereto; which, certainly, is not different from what is required by the antecedent Act. Nor is there any substantial difference in the construction 151] given by the courts to the provision which contains that requirement. Instead of that, both Acts referred to make it necessary that the protest shall be in writing; and the requirement is that the importer shall set forth, distinctly and specifically, the grounds of his objections to the payment of the liquidated duty. Unless the protest is made in writing, and is signed by the claimant within ten days after the ascertainment and liquidation of the duties, setting forth distinctly and specifically the grounds of objection to the payment, no action of the kind against the Collector can be maintained to recover back the duties as having been illegally exacted. Nor is it sufficient to object to the payment of any particular duty or amount of duty, and to protest in writing against it; but the claimant must do more, as is evident from the words of the Act of Congress. He must set forth in his protest the grounds upon which he objects distinctly and specifically, the reason being, as ruled by Chief Justice Taney, that the words of the Act requiring the protest are too emphatic to be overlooked in the construction of the provision. Mason v. Kane, Taney, 177. Mistakes and oversights will sometimes lead to irregular assessment, and the object of the requirement is to prevent a party, if he suffers the mistake or oversight to pass without notice, from taking advantage of it when it is too late to make the correction, and to compel him to disclose the grounds of his objection at the time when he makes his protest. Merchandise entered as silk ties was imported by the plaintiffs into the Port of New York, on which the defendant exacted an ad valorem duty of sixty per cent. upon the assumption that the articles were properly classified as silk scarfs. 13 Stat. at L., 210. Prompt objection to that classification was made by the plaintiffs; and they protested against the payment of the liquidated duty, on the ground that the goods imported and entered should be classified as "articles of wearing apparel worn by men, women and children," and that they were subject only to a duty of thirtyfive per cent. ad valorem, as prescribed by two prior Tariff Acts. 12 Stat. at L., 186, 556. Properly construed, their protest is that the articles should only pay duty at thirty-five per cent. ad valorem, because the articles imported were wearing apparel worn by men, women and children, and were not scarfs, nor ready-made clothing in fact, nor as known in trade or commerce. Litigation ensued in consequence of that dif ference of opinion between the importers and the officers of the Government; but, when the case came to trial, both parties agreed that the merchandise imported should have been classified as a manufacture of silk not otherwise provided for, under the concluding clause of section 8 in the Act of the 30th of June, 1864, and that it was dutiable at fifty per cent. ad valorem, differing from the theory of each party as assumed at the time of the appraisement and liquidation of the duties. 13 Stat. at L., 210. Still, the plaintiffs claimed to recover the difference of ten per cent. between the proper duty and the duty exacted by the defendant as Collector; and the court below held that they could not do so under their protest, as they could only be heard to allege the objections distinctly and specifically stated in their protest, pursuant to the requirement contained in the Act of Congress. Judgment was given for the defendant; and the plaintiffs sued out the present writ of Protests of the kind must contain a distinct and clear specification of each substantive ground of objection to the payment of the du-error, to correct the ruling of the Circuit Court. ties. Technical precision is not required; but the objections must be so distinct and specific, as, when fairly construed, to show that the objection taken at the trial was at the time in the mind of the importer, and that it was sufficient to notify the Collector of its true nature and character, to the end that he might ascertain the precise facts, and have an opportunity to correct the mistake and cure the defect, if it was one which could be obviated. Burgess v. Converse, 2 Curt., 223. Two objects, says Judge Curtis, were intended to be accomplished by the provision in the Act of Congress requiring such a protest: (1) To apprise the Collector of the objections entertained by the importer, before it should be too 152] late to remove them, if capable of being removed. (2) To hold the importer to the objections which he then contemplated, and on which he really acted, and prevent him, or others in his behalf, from seeking out defects in the proceedings, after the business should be closed, by the payment of the money into the Treasury. Warren v. Peaslee, 2 Curt., 235; Thomson v. Maxwell, 2 Blatchf., 392. 96 U.S. (2) *Three points were ruled by the Circuit [153 Court: (1) That, unless the protest set forth distinctly and specifically the ground of the objection to the amount claimed, it fails to meet the requirement of the Act of Congress. That the office of the protest is to point out to the officers of the customs the precise errors of fact or of law which render the exaction of the duty unauthorized. (3) That the plaintiffs are precluded from insisting that their importation was a manufacture of silk not otherwise provided for, and subject to a duty of fifty per cent. instead of sixty, when, by their protest, they allege it to be wearing apparel, etc., subject to a duty of thirty-five per cent. Satisfactory reasons in support of these conclusions are given by the circuit judge, to which it will be sufficient to refer, without repetition. Davies v. Arthur, 13 Blatchf., 34; Norcross v. Greely. 1 Curt., 120. Apply these principles to the case before the court, and it is clear that there is no error in the record. Judgment affirmed. 759 WILLIAM C. MURRAY, Plff. in Err., V. CITY COUNCIL OF CHARLESTON. II. The tax is substantially a tax on income, as it is retained out of the interest at times and in a manner different from other taxes; and, inasmuch as the appellant neither resides in the City nor pursues any faculty, business or occu pation within the City, his income is not tax (See S. C., Reporter's ed., 432-449.) Jurisdiction over state judgments—promise of able by the City Council. municipality-city ordinance. 1. The true test of the jurisdiction of this court over state judgments is not whether the record exhibits an express statement that a federal question was presented, but whether such a question was decided, and decided adversely to the federal right. 2. No municipality of a State can, by its own or dinances, under the guise of taxation, relieve itself from performing to the letter all that it has expressly promised to its creditors. 3. An ordinance of a city, directing that a tax assessed by it on its stock shall be retained by its treasurer out of the interest due on it to its holders, is void, as impairing the obligation of the con tract. [No. 95.] III. 1. The tax is a tax upon a subsisting contract, and by reducing the amount of interest paid, alters and impairs that contract, and so violates the Constitution of the State and of the United States. 2. The relation of borrower and lender, of debtor and creditor, implies right on one side and corresponding obligation on the other; the right to demand a specific sum and the obligation to pay it. 3. Where a party takes upon himself a duty or charge by express contract, no implication or tacit reservation will be allowed to contra. vene it, and this principle applies to municipal Argued Nov. 16, 19, 20, 1877. Ordered for re- corporations as well as individuals. argument Dec. 3, 1877. Re-argued Feb. 5, 6, 1878. Decided Apr. 8, 1878. In Error to the Supreme Court of the State of South Carolina. The case is stated by the court. I. 1. The City Council has jurisdiction and can exercise the taxing power over such persons and property only as are within the limits of the City. 2. The appellant is a foreign resident, and his personal property has the same domicil as him self. 3. City stock is a chose in action; and coupon bonds, registered bonds and registered stock are all alike evidences of debt, and are in contemplation of law, in the possession of the owner, wherever he may reside. 4. Public securities have no more locality than private securities, whether individual of corporate; and the idea that they had, has long since been abandoned by the courts where it originated. 5. If these positions be sound, then neither the appellant nor his property were subject to taxation by the City Council. It is not the stock or certificate as such, that is taxable; that is only the evidence of debt; it is the right to the money that is taxable; the right to the money is the property, and that right must be and can only be where the owner is resident. It is taxable there, and cannot be taxed where it is not situated. These principles are sustained in the following cases: R. R. Co. v. Jackson, 7 Wall., 266, 19 L. ed., 89; Tappan v. Bk., 19 Wall., 499, 22 L. ed., 193; State Tax on Foreign-held Bonds, 15 Wall., 300, 21 L. ed., 179; Davenport v. R. R. Co., 12 Ia., 539; State v. Rose, 3 Zab., 317; Hunter v. Supervisors, 33 Ia., 379; Collins v. Miller, 43 Ga., 336; Johnson v. Oregon City, 3 Oreg., 13; Johnson v. Lexington, 14 B. Mon., 648. NOTE.-What the record must show respecting the presentation and decision of a federal question in order to confer jurisdiction on the Supreme Court of the United States of a writ of error to a state court -see note, 63 L. R. A., 471. The withholding, under any pretext, of any part of the principal or interest agreed to be paid, violates the obligation of the contract. Messrs. P. Phillips, Jas. B. Campbell, R. B. Carpenter and Wm. Seabrook, for defendant in error, Made the following points: 1. That no federal question has been raised on the record in Jenkins' case. made in Murray's case. 3. That the judicial power extends only to the enforcement of constitutional limitations, and that neither an Act of Congress nor a statute of the State can be set aside upon the ground that it is unjust or oppressive. 4. That the court has no jurisdiction to hold a state statute to be unconstitutional solely because it is extraterritorial in its effect. 5. That the taxing power is vital to the State, and exemption from taxation can never be claimed by mere implication, but only from clear and express declaration. 6. That it extends to every species of property which exists by authority of the State, or is introduced by its permission. the State, that the interest due to stockholders 7. That the decision of the Supreme Court of was personal property within the City is conclusive upon this court. 8. That the citizen stockholder in this case has no contract which excludes the State from levying the tax complained of. 9. That the non-resident holding precisely the same character of security, can claim no higher right arising therefrom than may be claimed by the citizen. 10. That the ordinance taxing the stock, while it affected its value, in nowise alters any of the conditions or terms of the contract by which the loan was made, and does not impair the obligation. 11. That this court cannot reverse the judgment of the state court without denying to it the right to construe its own local laws. As to jurisdiction, see Fisher v. Cockerell, 5 Pet., 252; Owings v. Speed, 5 Wheat., 420; League v. De Young, 11 How., 203; Knox v. Bk., 12 Wall., 382, 20 L. ed., 414; Bk. v. Billings, 4 Pet., 563; Mills v. St. Clair, 8 How., 585; Satterlee v. Matthewson, 2 Pet., 413; Loan As sociation v. Topeka, 20 Wall., 658, 22 L. ed., | assess for taxation. That decision we have no 459; Cooley, Const. Lim., 164; West River Bridge v. Dix, 6 How., 536; Bk. v. Fenno, 8 Wall., 548, 19 L. ed., 487; Green v. Van Buskirk, 7 Wall., 150, 19 L. ed., 113; Catlin v. Hull, 21 Vt., 152. On the merits, see Tappan v. Bk., 19 Wall., 503, 22 L. ed., 195; Bk. v. Smith, 7 Ohio St., 42; People v. Ins. Co., 29 Cal., 533. Mr. Justice Strong delivered the opinion of the court: authority to review. But neither the charter The plaintiff, a resident of Bonn, in Germany, was, prior to the first day of January, 1870, and he still is, the holder and owner of $35,262.35 of what is called stock of the City of Charleston. The stock is in reality a debt of the City, the evidence of which is certificates, whereby the City promises to pay to the owners thereof tried; and no judgment could have been given the sums of money therein mentioned, together with 6 per cent. interest, payable quarterly. One third of the interest due the plaintiff on the first days of April, July and October, 1870, and January and July, 1871, having been retained by the City, this suit was brought to recover the sums so retained; and the answer to the complaint admitted the retention charged, but attempted to justify it under city ordinances of March 20, 1870, and March 21, 1871. By these ordinances, set out in full in the answer, the city appraiser was directed to assess a tax of two cents upon the dollar of the value of all real and personal property in the City of Charleston, for the purpose of meeting the expenses of the City Government; and the third section of each ordinance declared that the taxes assessed on city stock should be retained by the City Treasurer out of the interest thereon, when the same is due and payable. On these pleadings, the case was submitted to the court for trial without a jury; and the court made a special finding of facts, substantially as set forth in the complaint and averred in the answer, upon 440 which judgment *was given for the defendant. This judgment was subsequently affirmed by the Supreme Court, and the record is now before us, brought here by writ of error. It is objected that we have no jurisdiction of the case, because, it is said, no federal question was raised of record, or decided in the Court of Common Pleas, where the suit was commenced. The City of Charleston was incorporated in 1783, before the adoption of the Federal Constitution. Among other powers conferred upon the City Council, was one to "make such assessments on the inhabitants of Charleston, or those who hold taxable property within the same, for the safety, convenience, benefit and advantage of the City as shall appear to them expedient." It was under this authority, repeated in subsequent legislation, the city ordinances of 1870 and 1871 were made. It may well be doubted whether the Acts of the Legislature were intended to empower the City to tax for its own benefit the debts it might owe to its creditors, especially to its non-resident creditors. Debts are not property. A non-resident creditor cannot be said to be, in virtue of a debt due to him, a holder of property within the City; and the City Council was authorized to make as sessments only upon the inhabitants of Charleston, or those holding taxable property within the same. To that extent, the Supreme Court of the State has decided the City has power to 96 U.S. U. S., Book 24. for the defendants without determining that the ordinances were laws of the State, not *im- [441 pairing the obligation of the contracts made by the City with the plaintiff. And when the case was removed into the Supreme Court of the State, that court understood a federal question to be before it. One of the grounds of the notice of the appeal was "That such a tax is a violation of good faith in the contract of loan, impairs the obligation of said contract and is, therefore, unconstitutional and void." It is plain, therefore, that both in the Common Pleas and in the Supreme Court of the State, a federal question was presented by the pleadings, and was decided-decided in favor of the state legislation and against a right the plaintiff claims he has under the Constitution of the United States. The city ordinances were in question on the ground of their repugnancy to the inhibition upon the States to make any law impairing the obligation of contracts; and the decision was in favor of their validity. Nothing else was presented for decision, unless it be the question whether the Acts of the State Legislature authorized the ordinances; and that was ruled affirmatively. The jurisdiction of this court over the judgments of the highest courts of the States is not to be avoided by the mere absence of express reference to some provision of the Federal Constitution. Wherever rights acknowledged and protected by that instrument are denied or invaded, under the shield of state legislation, this court is authorized to interfere. The form and mode in which the federal question is raised in the state court is of minor importance, if, in fact, it was raised and decided. The Act of Congress of 1867 gives jurisdiction to this court over final judgments in the highest courts of a State, in suits "where is drawn in question the validity of a statute of or an authority exercised under any State, on the ground of their being repugnant to the Constitution, treaties or laws of the United States, and the decision is in favor of their validity." Not a word is said respecting the mode in which it shall be made to appear that such a question was presented for decision. In the present case it was necessarily involved, without any formal reference to any clause in the Constitution, and it is difficult to see how any such reference could have been made to appear expressly. In questions relating to our jurisdiction, undue importance is often attributed to the in- [442 quiry whether the pleadings in the state court expressly assert a right under the Federal Con 48 761 |