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by any of the provisions of this act, or the laws of this state, for the collection of the public revenues, such collector, assessor or clerk shall be allowed and paid out of the county treasury reasonable fees of counsel and other expenses for defending such action or suit, and the amount of any damages or costs adjudged against him."
As the state board, in assessing railroad property, is in fact acting as the county assessor for every county in which railroad property is situated, there is no reason to doubt but that the provisions of this statute apply to it, and authorize it to employ special counsel without calling on the Attorney General for his services.
The Supreme Court of Indiana, in C., C., C. & St. L. R. Co. v. Backus, 133 Ind. 513, 33 N. E. 421, 18 L. R. A. 729, held that a statute conferring upon a state board the power to assess certain kinds of property --all other property being assessed by county officers-clothed the state board with all the powers of the county boards of assessors.
There being no statute authorizing the Attorney General to appear for the state in a trial court unless expressly requested to do so, and there being no statute authorizing him to enter the appearance of the state for the purpose of having it made a party defendant to an action pending, by what authority can he do so? The Constitution of the state expressly prohibits the state from ever being made a party desendant in any of her courts (article 5, § 19, Const.), and the eleventh amendment to the Constitution of the United State: prohibits those courts from assuming jurisdiction of any action against the state. may be that the state may waive this privilege so far as the courts of the United States are concerned, but it certainly cannot permit itself, in the face of the constitutional provision hereinbefore cited, to be sued as a defendant in its own courts.
But even if it be conceded that when there is a fund in court, or property in the custody of the court, to which the state claims title, it may for that purpose make itself a party to the action, as was done in Clark v. Barnard, 108 U. S. 436, 2 Sup. Ct. 878, 27 L. Ed. 780, still, before the Attorney General can take such a step, he must first be authorized by a statute of the state to do so; and, in the absence of such a statute, neither the Attorney General, nor any other state officer, can waive that privilege-one of the highest appertaining to a sovereign state. This was expressly decided by the Supreme Court of the United States in Stanley v. Schwalby, 162 U. S. 255-270, 16 Sup. Ct. 754, 40 L. Ed. 960, where it was held that to make the United States a party defendant in any court is in excess of any power vested by law in the Attorney General of the United States.
A case very much in point was decided by the Supreme Court of South Carolina, in Ex parte Dunn, 8 S. C. 207. In that case the Comptroller General of the state instituted an action to sequester the Savannah & Charleston Railroad to enforce a lien claimed by the state of South Carolina for bonds loaned to the railroad company, the interest of which was to be paid by the railroad company, but which it failed to do. Among other defenses, the defendants pleaded in bar that, in a former foreclosure proceeding against the same railroad company, the state, by its Attorney General, had made itself a party defendant to that suit, and submitted itself to the jurisdiction of the court; and
for this reason it was claimed it was bound by all the proceedings therein, and more especially the decree of the court. But the court, in overruling this plea, said:
"Unless the Constitution of a state recognizes its liability to suit in its own courts, it is protected by reason of its sovereign capacity from process issued by judicial authority, except as provided by the Constitution of the United States. The mere consent of an officer of the state, by appearing and answering in its name, cannot bind it by the judgment or decree which may be the result of the suit. The Attorney General, although a law officer of the state, in fact properly belongs to its executive department, and has no more power to control the state by his action in court than the Governor or Comptroller General. Indeed, when a state can be made a party in the Supreme Court of the United States, the process to that end must be served on the Governor. The legislative power, where, in its opinion, the interest of the state demands that it should be protected by a proper representation in a legal proceeding. may authorize any of its officers, or, indeed, any person in its behalf, and bind it by his action."
For these reasons, the petition for leave to intervene and make the state a party defendant must be denied.
This having been disposed of, the court would undoubtedly be justified in permitting the parties to the record to agree to a consent decree; but, in view of the importance to the people of the state of the issues involved in these cases, and the earnest and able argument of the learned Attorney General, made in the very commendable effort to discharge what he deems to be his duty as a public official, we deem it proper to dispose of the other matters submitted to the court by the parties.
It is claimed by the Attorney General that, when the board had made the assessments in 1903 and 1904, its powers as a board were exhausted, and, as a board, it became functus officio; that for this reason the action at the meeting held on March 29, 1905, was without warrant of law, and therefore absolutely void. In view of the fact that the statute provides that the Board of Railroad Commissioners shall hold their annual meetings on the first Monday in June in each year, and further provides that the Governor shall have the right to convene said board in special session at any time (section 6954, Kirby's Dig.), we are inclined to the opinion that making the assessment at the meeting held in June of each year does not exhaust its power, but that it is a continuous body, subject at all times to the call of the Governor for the transaction of such matters as are by law intrusted to it. If they cease to be a board after having made the assessment annually, why the necessity of providing that the Governor shall have the right to convene said board in special meetings at any time? The Legislature must have had some object in view when it enacted that provision. It may happen that the board had failed at its regular meeting to assess some railroad company, or by a mistake omitted a part of the property subject to taxation of one or more of the railroad companies; would not the Governor, under this provision of the law, have the power to reconvene the board in special meeting for the purpose of making such assessment? Or if it should appear that a great injustice had been done to some of the railroad companies, could not the board rectify it? Or supposing the assessment had been too low, or it was discovered that there was other prop
erty belonging to a railroad company which should have been assessed, hut by an oversight was omitted, would the board be powerless to correct that? Or if, upon final hearing, this court should dissolve the temporary injunctions granted in these cases, or if it should hold that the assessments were violative of some rights guarantied to these companies by the Constitution of the United States or the state of Arkansas, and for that reason the assessments should be reduced to a lower figure, would not the board be compelled to reconvene in special session, upon call of the Governor, for the purpose of certifying the assessments to the county clerks of the various counties, in order that they may be placed on the taxbooks, and the taxes thereon collected ? Unless they possess this power, who could make the assessments? Certainly not the court.
In the case of Hubbard v. Garfield, 102 Mass. 75, the facts were these: The board of assessors for a given year struck off certain articles of property, and several years thereafter the board, composed of different individual members, restored these articles of property to the tax list. The contention was made that the board had exhausted its power during the year for which the property was listed originally, and that another board, composed of different members, had no power to reconvene and change that action. The court said:
"The intention of the law is to be judged of with reference to the nature of the proceedings which it affects, and the character given to them by previous legislation; and, with the aid thus derived, it is apparent that the assessors may add new names to the collector's list, as at least one legal mode of making the reassessment. The mode would be less open to objection when the addition is made during the year by the same assessors, and before the expiration of the collector's term of office. But the assessors constitute a tribunal with powers which imply a continued and uinterrupted existence, not limited to the individuals who at any given time compose it. And if this were otherwise, the law in question expressly gives the power of reassessment to the assessors for the time being. By these steps we arrive at the conclusion that tbe assessment made to the plaintiff was within the jurisdiction of the assessors of 1867, and that the warrant for its collection in the defendant's hands was regular on its face. If it be said that this construction gives to this class of town officers great power over the person and property of the citizen, the answer is that it is no more than must necessarily be had for the discharge of the important and difficult duties connected with taxation, and no more than has been exercised from the earliest times under existing laws. The security is to be found in the integrity of these officers, and not in a too strict construction of the statutes under which they act.”
The same question was before the court in Lemly v. Commissioners, 85 N. C. 379, and the same conclusion reached.
Counsel for the board, in their petition, call upon the court for approval of the action of the board in making this compromise, but the court does not feel that it possesses such power. The lawmaking power of the state has seen proper to invest this board with the exclusive authority to assess the railroad property in the state. Every member of the board is elected by the people, and is responsible to them for the discharge of his duties. The grave questions involved in these suits, some of which have never been passed upon by any court of last resort, while as to others there is a great conflict between the various courts of last resort, no doubt make these actions proper ones for compromise. The fact that the members of the board are more familiar with the real
value of the property than any court can be, with no evidence before it, enables them to act intelligently on this subject; and as their actions in the premises have not been impugned by any one—there being no charge of fraud or other misconduct—we feel that the action of the board is conclusive on the courts, and for this reason we do not feel authorized to express any opinion as to the wisdom of the board's action. The presumption in which courts indulge is that every sworn officer will discharge his duty in conformity with his oath of office.
We are therefore of the opinion that decrees by consent of all the parties to the record in these cases, based upon the action of the board had on the 29th day of March, 1905, should be granted.
Similar case pending in the chancery court of Pulaski county, state of Arkansas, Hon. Jesse C. Hart, the chancellor of that court, sat with the District Judge; all cases pending in the two courts being heard at the same time. The conclusions reached in the foregoing opinion, as well as the reasons therefor, met the approval of the chancellor, and the opinion was by him adopted as the opinion of the chancery court.
BROWNSVILLE GLASS CO. V. APPERT GLASS CO. et al.
Where a holding corporation was organized to control the patents and business of all the wire glass manufacturing companies, including defendant, and the latter received its proportion of the stock of the holding company as its share of the consideration for a transfer of patents, etc., and was entitled to be represented on the holding company's board of directors, the organization of such company, etc., constituted a "combination” within a contract by which plaintiff gave defendant a license to use certain patents in the manufacture of such glass, providing that if de fendant should enter any trust, pool, combination, or trade arrangement with other manufacturers to control the output or regulate the prices of wire glass, plaintiff should be deemed beneficiary under such contract,
combination, or trade arrangement. In Equity. John McCleave and Arthur O. Fording, for complainant.
Arthur J. Baldwin and Jas. R. Macfarlane, for Appert Glass Co. and Mississippi Glass Co.
BUFFINGTON, District Judge. This is a bill in equity, filed by the Brownsville Glass Company against the Appert Glass Company for an accounting under a contract. The Mississippi Wire Glass Company and the Mississippi Glass Company are also made parties respondent, but the controversy is wholly between the two companies first named. Prior to September 30, 1899, these two companies were competing in the manufacture and sale of wire glass. This article was made by imbedding a wire netting between two sheets of plate glass by patented processes. On that day the Brownsville Company by written contract executed by itself and all its stockholders, gave an exclusive license under
its patents, gave an option on all its stock, sold its plant and good will to the Appert Company, and stipulated, as did also all of its stockholders, that it and they would not engage in the manufacture of wire glass for five years. In consideration the Appert Company paid a present consideration of $12,500, and bound itself to pay a semiannual percentage royalty on the gross value of all the Appert Company's sales of skylight, figured-rolled, and wire glass, in the manufacture of all of which it was then engaged. In pursuance of this contract the Brownsville Company went out of business, its plant was dismantled, and its stockholders and other skilled workmen went into the employ of the Appert Company. The Appert Company continued its operations, and in pursuance of the contract paid royalty to the Brownsville Company as follows: For the first half year, ending April 9, 1900, $3,295.10; for the second half year, ending October 9, 1900, $4,027.56; for the third half year, ending April 9, 1901, $9,335.37. In addition to the Appert Company, three others, the Besto Glass Company, of Latrobe, Pa., the Mississippi Glass Company, of St. Louis, and the American Wire Glass Manufacturing Company, of Philadelphia, were in the spring of 1900 engaged in the manufacture of wire glass under patents. At that time, the Appert Company having given notice to the Besto Company it was infringing its patent, Mr. Dilworth, the president of the latter company, conceived the idea of getting the manufacturers together. The plan by which they did so was, as the latter says, an evolution. No written agreement was made between the parties, but their discussion finally culminated in the creation of a common holding company, which took assignments or control of all the patents of the consenting companies, to whom it issued stock in payment. The agreement, its purpose and effect, are stated by witnesses. Thus Mr. Dil
“The general plan of a deal of this kind is evolution.
It would be impossible for me now to go back and pick out step by step as it went along. * * I was first brought in contact with Mr. Dulles by being notified that we had infringed a patent of the Appert Company.
The organization of such a company as the Mississippi Glass Company (the holding one) was first suggested some time in the late fall of 1900.
There were a great many meetings. There was a general plan upon which the negotiations were then agreed, the ownership of the patents absolutely by the new company for a stock consideration, and the stock to be issued to the parties owning the patents who sold them.
The final result of this series of negotiations was the formation of the Mississippi Wire Glass Company."
He was asked as to the reasons leading to such action and the purpose in view.
"We found that the business could be conducted to better advantage and more economically with one company than with several companies. We had no fixed purpose except for the companies to own those patents, and the future of the business was an unsettled problem. It was the purpose to have the wire glass trade in the hands of the proposed wire glass company so far as we could by the ownership of these patents.”
The purpose of the agreement he thus sums up:
“The purpose of the proposed deal was to form a company to purchase the patents of the wire glass companies; for the purpose of making money that way, by the sale of wire glass.”