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just compensation. Kohl v. U. S., 91 U. S. 367, 374. In that view, we are of opinion that the United States, having, by its agents, proceeding under the authority of congress, taken the property of the claimant for public use, are, under an obligation imposed by the constitution, to make compensation. The law will imply a promise to make the required compensation where property, to which the government asserts no title, is taken, pursuant to an act of congress, as private property to be applied for public uses. Such an implication being consistent with the constitutional duty of the government, as well as with common justice, the claimant's cause of action is one that arises out of implied contract within the meaning of the statute which confers jurisdiction upon the court of claims of actions founded upon any contract, express or implied, with the government of the United States." In Great Falls Manuf'g Co. v. Attorney General, 124 U. S. 581, 597, 598, 8 Sup. Ct. 631, it appeared that the secretary of war was authorized by an act of congress to take possession of premises that might be covered by a survey and map directed to be made. He took possession of property and water rights that were alleged not to be embraced in such survey and map, and it was contended that in so doing he was guilty of trespass. This court said: "If the secretary of war, who was invested with large discretion in determining what land was actually required to accomplish in the best manner the object congress had in view, found it necessary to take, and has taken and used, and still holds, lands of the plaintiff for the proposed dam, which happened not to be covered by the survey and map, the United States are as much bound to make just compensation therefor as if such lands had been actually embraced in that survey and map." After observing that it must not be understood as holding that the secretary could bind the United States to pay for lands taken by him which manifestly had no substantial connection with the improvement under his charge, the court said: "It is sufficient to say that the record discloses nothing showing that he has taken more land than was reasonably necessary for the purposes described in the act of congress. or that he did not honestly and reasonably exercise the discretion with which he was invested; and consequently the gov ernment is under a constitutional obligation to make compensation for any property or property right taken, used, and held by him for the purposes indicated in the act of congress, whether it is embraced or described in said survey or map or not. U. S. v. Great Falls Manuf'g Co., 112 U. S. 645,646,5 Sup. Ct. 306. * Ewn if the secretary's survey and map and the publication of the attorney general's notice did not, in strict law, justify the former in taking possession of the land and water rights in question, it was competent for the company to waive the tort, and

proceed against the United States, as upor an implied contract, it appearing, as it does here, that the government recognizes and retains the possession taken in its behalf for the public purposes indicated in the act under which its officers have proceeded."

In Hollister v. Manufacturing Co., 113 U. S. 59, 67, 5 Sup. Ct. 717, the principles laid down in James v. Campbell and in U. S. v. Great Falls Manuf'g Co., above cited, were recognized and approved. And in U. S. v. Palmer, 128 U. S. 262, 269, 9 Sup. Ct. 104, the decision was that the United States was liable to suit in the court of claims, as upon Implied contract, for the value of the use of an invention which was used with the consent of the patentee.

It may therefore be regarded as settled. that the government may be sued in the court of claims, as upon implied contract, not* only for the value of specific property taken for public use by an officer acting under the authority of the government, even if the tak ing was originally without the consent of the owner and without legal proceedings for condemnation, but for the value of the use of a patented invention, when such use was with the consent of the patentee.

It seems to me-looking at the case from the standpoint of mere contract-that these principles control the present inquiry, and sustain the right of the claimant to sue the government for the value of the use of his alleged invention. Congress made an appropriation of $200,000 "for improvement of capitol grounds according to the plans and under the general direction of Frederick Law Olmsted, to be expended by the architect of the capitol" 18 Stat. 214. The architect invited proposals for laying concrete pavement required for the proposed improvement according to those plans and specifications, and one Cook was the lowest bidder. His bid was accepted. Schillinger protested against the contract being awarded to Cook, the latter having no right to use the Schillinger patent. He gave notice to the architect of his patented rights. It was found by the court of claims that "at the time the bids were opened plaintiff protested to the architect against the award being made to any one but his associate, Roberts [who was entitled to use the Schillinger invention]; but the architect and his advising engineers decided they would award the contract to the lowest bidder, on the ground that, as the validity of the Schillinger patent had not been tested at law or in equity, they could not decide whether it was valid or not, and that the interest of the government, in their judg ment, would be best subserved by giving the contract to the lowest bidder, taking a bond to protect the government from the suit threatened by claimant." In the contract be tween the government, represented by the architect of the capitol, and Cook, for a concrete pavement, according to the Olmsted plans and specifications, it was provided

"that in the event of any legal proceedings being taken by other parties against the contractor of the United States for the infringement of any patent or claimed patent during execution of the work, the contractor shall hold the United States harmless."

All this shows that the architect of the capitol was aware of the existence of the Schillinger patent. He did not dispute Schillinger's rights under the patent, nor did he, as the representative of the government, claim that the patent was invalid, nor, if valid, that the government could get the ben. efit of it in the contemplated improvement without compensating the patentee. On the contrary, he in effect recognized a right to such compensation, if the patent was valid, and took a bond from the contractor for the protection of the government in the event of a suit against the contractor that would interfere with the use of the Schillinger invention in the pavement in the public grounds. But no such suit appears to have been brought. The patentee had the right to waive any suit against the contractor or the architect that would interfere with the prosecution of the work, and look to the obligation of the government to make him just compensation for the use of his invention. It was so ruled in the Great Falls Case. The authority of that case is not here disputed. As the government had granted the patent, the purpose to commit a tort cannot be imputed to the architect as the agent of the United States. His action meant no more than that he would leave the question of the obligation of the United States to make compensation for the use of the Schillinger patent to depend upon a decision by the courts as to its validity.

Under the authority given by congress to expend the money appropriated in improving the capitol grounds according to specified plans, the architect of the capitol had a large discretion, and was authorized, so far as the government was concerned, to use in such improvement any patented invention that those plans would require, or that would best subserve the public interests, subject, of course, to the constitutional obligation to make just compensation to the inventor. The constitution imposing that obligation is a covenant between the government and every citizen whose property is appropriated by it for public use. If Schillinger's patent was valid, then the government is bound by an obligation of the highest character to compensate him for the use of his invention, and its use by the government cannot be said to arise out of mere tort, at least when its representative did not himself dispute, nor assume to decide, the validity of the patent. If the act of congress under which the architect proceeded had, in express terms, directed him to use Schillinger's invention in any pavement laid down in the public grounds, then such use, according to the decision in U. S. v. Great Falls Manuf'g Co., would have made a case

of implied contract based on the constitutional obligation to make just compensation for private property taken for public use. But such a case is not distinguishable, in principle, from the present one, where the architect, proceeding under a general authority to expend the public money according to specified plans, uses, or knowingly permits to be used, a particular patented invention, not disputing the rights of the patentee, but leaving the question of the validity of the patent, and the consequent liability of the government for its use, to judicial determination.

I do not stop to discuss the question whether Schillinger's patent was valid, nor whether it was infringed by the mode in which the pavement in question was constructed. Those questions would have been here for determination if the court below had assumed jurisdiction, and decided the case upon its merits. That court dismissed the petition for want of jurisdiction, on the ground simply that there was no contract, express or implied, between the owner of the patent and the government. It held that the appropriation or use of the Schillinger invention was in the nature of a tort, and this conclusion rested upon the ground that the architect of the capitol denied that any private right existed under the alleged patent. But this was an error. There is no finding by the court showing a denial of that character, even if it be assumed that such a denial could be deemed of any consequence in view of the constitutional obligation to make just compensation for private property taken for public use.

I am of opinion that when the government, by its agent, knowingly uses or permits to be used for its benefit a valid patented invention, it is liable to suit in the court of claims for the value of such use, and that its liability arises out of contract based upon the constitutional requirement that private property shall not be taken for public use without just compensation.

It is proper to say that the claimant in his petition does not place the claim for compensation as distinctly upon the basis of contract as he might have done. But, as the opinion of the court may be interpreted as proceeding upon the broad ground that the government could not be sued as upon contract, express or implied, unless its agent at the time the invention was used for its benefit recognized or admitted the validity of the patent, I have thought it appropriate to state my view of that question.

2. There is another view of the case which is independent of mere contract. The act of March 3, 1887, for the first time gives the court of claims jurisdiction, to hear and determine "all claims founded upon the constitution of the United States." If the Schillinger patent be valid, and if the invention described in it has been used or appropriated by the government through its agent charged with the improvement of the capitol grounds, then the patentee, or those entitled to enjoy

the exclusive rights granted by it, are entitled to be compensated by the government. And the claim to have just compensation for such an appropriation of private property to the public use is "founded upon the constitution of the United States." It is none the less a claim of that character even if the appropriation had its origin in tort. The constitutional obligation cannot be evaded by showing that the original appropriation was without the express direction of the government, nor by simply interposing a denial of the title of the claimant to the property or property rights alleged to have been appropriated. The questions of title and appropriation are for judicial determination. Those being decided in favor of the claimant, the constitution requires a judgment in his favor. If the claim here made to be compensated for the use of a patented invention is not founded upon the constitution of the United States, it would be difficult to imagine one that would be of that character.

*As the agent of the government was moved to use the Schillinger invention because the patent had not then been established by the decision of any court, it may be stated that it was subsequently sustained, as the findings below show, in numerous cases; the earliest being Paving Co. v. Perine, 8 Fed. 821 (1881, Sawyer, J.), and the latest being Hurlbut v. Schillinger, 130 U. S. 456, 9 Sup. Ct. 584.

I am authorized by Mr. Justice SHIRAS to say that he concurs in this opinion.

(155 U. S. 283)

MASSACHUSETTS & S. CONST. CO. v.
TOWNSHIP OF CANE CREEK.
(December 3, 1894.)
No. 112.

UNITED STATES CIRCUIT COURT JURISDICTIONDIVERSE CITIZENSHIP.

A trust company, to which bonds are de livered merely to be held by it until the performance of a condition by the payee entitling it to possession, is a necessary, and not merely a formal, party to an action by such payee against it and the maker of the bonds to obtain their possession; and the United States circuit court of the state of which such maker is a resident has no jurisdiction of such action, where plaintiff and such trust company are both nonresidents of such state, but residents of the same state.

Appeal from the Circuit Court of the United States for the District of South Carolina.

This was a suit commenced by the appellant, a citizen of the state of Massachusetts, in the circuit court of the United States for the district of South Carolina, to recover the possession of certain bonds. The defendants were the township of Cane Creek, Lancaster county, S. C., a citizen of that state, and the Boston Safe-Deposit & Trust Company, a corporation created by, and a citizen of, the state of Massachusetts,-the state of which the plaintiff was a citizen.

The facts, as alleged in the bill, were that $19,000 of the bonds of the township of Cane Creek, one of the defendants, had been, by

agreement, deposited with the deposit and trust company, the other defendant, to be delivered to the plaintiff when a certain railroad in the township was completed and ready for operation, as shown by the certificate of the engineer of a railroad company and a majority of the board of county commissioners of Lancaster county, the corporate agent of said township; that the road had been fully completed, but that the commissioners wrongfully refused to sign the required certificate; that the deposit and trust company had no interest in the bonds, and claimed none, and was ready and willing to deliver the bonds whenever it was protected in so doing. The prayer was-First, for process; "second, that pending said suit, and until further order of the court, the said trust company be ordered to deliver and pay over said bonds to the complainant; third, that the said defendant township may be required to specifically perform its aforesaid agreements, by assenting to the delivery of said bonds, now in the hands of said defendant trust company, to the complainant; fourth, that said defendant trust company be ordered to pay over and deliver said bonds to the complainant"; fifth, for further relief. The township defended by a motion to set aside the service of process; by a plea to the jurisdiction of the court, on the ground that one of the defendants was a citizen of the same state as the plaintiff, and a necessary party to the controversy; and by an answer to the merits. The deposit and trust company also filed an answer, which set forth that it had no interest in the bonds, or the debt represented thereby,-made no claim for any services in connection therewith; that it was a mere stakeholder, and ready, to deliver the bonds whenever protected in so doing. It was agreed by counsel*"that" the motion to set aside service and the pleas to the jurisdiction should be heard when the case was tried on its merits without prejudice, the motion not to be deemed as waived or overruled by the pleas and answer, and the pleas not to be deemed waived or overruled by the answer, and for the sake of convenience this agreement shall continue of force for the purposes of this appeal and hearing in the supreme court."

The motion to set aside service and the plea were overruled, but upon the merits a decree was entered in favor of the defendants. To reverse this decree the plaintiff appealed to this court, the bond on appeal running only to the township.

Samuel Lord, for appellant. Ira B. Jones, for appellee.

Mr. Justice BREWER, after stating the facts in the foregoing language, delivered the opinion of the court.

The plea to the jurisdiction should have been sustained. The substantial object of the suit was to obtain possession of the bonds. The deposit and trust company was

the party in possession, and, although it claimed no interest in the bonds, as against the plaintiff and its codefendant, yet possession could not be enforced in favor of the plaintiff except by a decree against it. Where the object of an action or suit is to recover the possession of real or personal property, the one in possession is a necessary and indispensable, and not a formal, party. The case of Wilson v. Oswego Tp., 151 U. S. 6, 14 Sup. Ct. 259, is decisive on this point. In that case a suit was commenced in a state court in Missouri to recover possession of certain bonds in the custody of the Union Savings Association. There were several defendants (among them, one Montague) and an intervener, Oswego township, who, claiming the bonds, removed the case, on the ground of diverse citizenship, to the federal court. Such removal was adjudged to be erroneous, this court holding that "the Union Savings Association, being the bailee or trustee of the bonds, was a necessary and indispensable party to the relief sought by the petition, and that,*defendant being a citizen of the same state with the plaintiff, there was no right of removal on the part of Montague or of the intervening defendant, the Oswego township, on the ground that the Union Savings Association was a formal, unnecessary, or nominal party."

Further comment is not required. The decree of the circuit court must be reversed and the case remanded, with instructions to sustain the plea and to dismiss the bill for want of jurisdiction.

1. In an action by an importer against a collector to recover an excess of duty exacted by defendant on certain importations, where it was not claimed in the protest under which the duty was paid that any reappraisal was called for and refused, evidence as to what plaintiff's manager said to an assistant appraiser as to the production of evidence of value of the goods, and of his conversation with the collector about a reappraisal or a call for reappraisal had after the appraisement, is incompetent.

2. In such action, evidence that the general and merchant appraisers agreed to apply the valuation of one case of goods in each invoice to the entire importation of which it was a part, is immaterial, it being conceded that all the cases were not opened and examined.

3. In such case, evidence as to whether or not the goods in the several cases were all of the same character as to value is immaterial, where it appears that the appraisers examined one case of each importation.

4. Where a question to a witness does not clearly admit of an answer favorable to the party asking it, on a matter manifestly relevant to the issue, and no offer of proof is made, nor reason given for excluding the answer, the su

preme court cannot say that the exclusion of the answer was error.

5. Rev. St. § 2900, authorizing a 20 per cent. additional duty as therein provided, is not unconstitutional. Passavant v. U. S., 13 Sup. Ct. 572, 148 U. S. 214, followed.

6. An importer is not entitled to be present during proceedings on appraisement, to hear or examine all the testimony, and to cross-examine the witnesses; and where he is invited by the appraisers to present his views in regard to the reappraisement, and to suggest questions to be put to the witnesses, he has no ground for complaint.

7. Where the merchant appraiser examines the goods in one case out of each importation sufficiently to satisfy him that they are the same order of goods that his firm imports, the reappraisement is not open to the objection that his examination of the goods was not sufficient to qualify him to act.

8. The mere fact that all the cases of an importation "were by the collector ordered to the public store, and that they were there at the time of the reappraisement," does not show a specific direction by the collector that all should be examined, and render void a reappraisement made without examining all the cases, though, under Rev. St. §§ 2901, 2939, such reappraisement would be void if the collector directed an examination of all the cases, and it was not made.

In Error to the Circuit Court of the United States for the Southern District of New York.

*This was an action seasonably brought by Arthur Origet against Edward L. Hedden, then collector of the port of New York, in the circuit court of the United States for the Southern district of New York, to recover an alleged excess of duty exacted by the collector upon goods imported by plaintiff on February 8, 9, 17, and 23, 1886 (the last two importations being by steamships Oregon and Chicago, respectively), and paid under protest.

The invoice and entered value of each of the four importations were raised by the appraisers to an amount exceeding 10 per cent. thereof, and the collector liquidated and exacted duty upon the value so increased, and the additional duty of 20 per cent. thereon, mentioned in section 2900 of the Revised Statutes.

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Upon the two entries of the 8th and 9th of February, plaintiff did not call for any reappraisement, but protested against the assessment of duty upon any values higher than those declared on the entry, the protest stating that "said valuations are correct, and that said goods are liable to no more duty than would accrue upon said valuations, and that the additional values were not legally ascertained; that the appraiser made no proper or legal examination or appraisement→ of said goods; that he arbitrarily added to the values upon an arbitrary and assumed basis of the cost thereof; that in so doing he acted under instructions from special agents of the treasury, and not upon his own knowledge or judgment; and we specially protest against the additional duty of 20%, claiming, for the reasons aforesaid, that it did not accrue, and said goods are not datiable as charged."

ས

On the trial, plaintiff's New York manager testified that he saw Brown, the assistant appraiser, regarding the appraisal of these importations, and was then asked, "State whether or not you said anything to Mr. Brown (and, if so, what) as to the production of evidence as to the value of these goods." The question was objected to on the ground that the importer's remedy was to call for a reappraisement. The court thereupon excluded the question, and plaintiff excepted. The witness then testified that he had conversed with the collector as to a reappraisal, or a call for a reappraisal, of these first two entries, and was asked what the conversation was. To this the defendant objected because it was not claimed in the protest that any reappraisal was called for and refused. The question was excluded, and plaintiff excepted.

The record thus proceeded: "Upon the two later importations, of February 17th and 23d, per the Oregon and the City of Chicago, reappraisements were called for and had. The Oregon importation consisted of four cases, and the other of three cases, all of which (both importations) were by the collector ordered to the public store, and were there at the time of the reappraisements."

The merchant appraiser was then called as a witness by plaintiff, and testified: "I did not examine one case. I merely looked over the goods. Q. You did not examine any case? A. Not specially; not to appraise it." But he explained on cross-examination that he examined the goods in one case out of each importation sufficiently to satisfy himself that the goods were of the same order as those imported by the firm of which he was a member; that the average of the different valuations of the witnesses was made up in his office by another person, at his direction; "that the report of the appraisal was based upon that computation and the witnesses' reports"; and that the general appraiser sat with the witness "in the reappraisal,-in the writing up of the reappraisal."

The following question was then propounded by plaintiff's counsel: "What I ask you is, Mr. Brower being the general appraiser, and sitting with you on the reappraisal, was there or not any agreement (and, if any, what) as to the application of the valuation of one case on each invoice to the entire importation?" This was objected to, the question excluded, and plaintiff excepted.

The witness also testified that the general appraiser, in examining the goods "simply passed and looked at them to see that they were woolens,-he was not competent to judge of their value,-to see that they corresponded with the invoices." He further said that the general appraiser generally went with him in examining the goods, but what he did when witness was not present he did not know; that after the computations were made the general ap

praiser and himself had a joint session, in which they made up their reports.

Plaintiff's manager was asked in reference to the goods reappraised, "State whether or not those goods in the several cases were all of the same character as to value." The witness testified to the presence of a treasury agent at the reappraisement, and was asked, "Did you hear any of the questions put to the witness?" The witness was also asked if the treasury agent did not himself put questions to him on that examination. These questions were severally objected to as immaterial, and were excluded by the court, and plaintiff excepted, but only the exception to the first was argued.

When the reappraisement was about to take place, plaintiff's counsel, Mr. Clarke, was present, and made application to the appraisers "to be present to examine the schedules of the different witnesses,-to ask them questions, or to suggest questions to you to be asked them, and hear and know the testimony which you have or may receive,”— and that, if this request be denied, plaintiff and his associate in business "be present when the witnesses are examined in the case of Origet, and that one of them be allowed to see the schedules of the witnesses." *To which the general and merchant appraisers responded that they denied the application of the attorney to be present, but desired to hear the importers in regard to their reappraisements, and that they would be glad to have any suggestions that they might have to make as to asking questions of witnesses.

The record then gives the following statement by the general appraiser: "Mr. Clarke further asks that they may be permitted to examine the various affidavits made by the experts, importers, merchants, and others, and also to be present at the taking of any testimony herein, and to cross-examine all such witnesses as may be produced here on this reappraisement, or to suggest questions to the general appraiser.

"The general appraiser and the merchant appraiser say, in regard to that, they cannot permit the importers to be present during the taking of the testimony or the examination of the affidavits, but they will be glad to receive suggestions from the importers in asking any questions of any and all who may be called."

The request was then renewed so that plaintiff might "be enabled to suggest questions," and disposed of by the same ruling.

Plaintiff protested against the assessment and exaction of duties upon the values ascertained by the reappraisements upon the grounds: That the goods were "liable to no greater amount of duty than that accruing upon the invoice or entered value thereof." That the appraiser's return "was made contrary to law, and without legal or proper examination of the goods." That plaintiff "was entitled to a reappraisement of said

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