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C. C. A. - ,

43LRA (NS) 984, 33 Şup. Cet Rep: ONS WRIT of certiorari to the United

.. . Ann. Cas. 1915A, 39. But agree with the state [46] court that the Eighth Circuit to review a judgthere is nothing in this statute which ment which affirmed an order of the prevents enforcement of the revenue act District Court for the District of North in question. It is true that the pro- Dakota, requiring an assignee for credvisions regulating the sale, dispensation, itors to pay over to the trustee in bankand disposition of the prohibited drugs ruptcy moneys claimed by him as fees are somewhat different in the two acts., and disbursements under the assignThe prohibitory measures of the Fed- ment. Reversed. eral statute do not apply to the disposi- See same case below, tion and dispensation of drugs by physi- 261 Fed. 670. cians registered under the act in the The facts are stated in the opinion. regular course of professional practice,

Mr. Fred B. Dodge argued the cause, provided records are kept for official in- and, with Messrs. Kay Todd, Walter spection. Under the state law physi- Fosnes, and Charles W. Sterling, filed a cians can only furnish prescriptions to brief for petitioner. addicts, and may not dispense the drugs to such persons at pleasure from stocks

No brief was filed for the respondent. of their own.

Mr. Justice Day delivered the opinion There is certainly nothing in this of the court: state enactment, as construed by the

This is a writ of certiorari to review supreme court of Minnesota, which in

a decision of the circuit court of apterferes with the enforcement of the Federal revenue law, and we agree with peals for the eighth circuit, affirming an the state court that there is no conflict order of the district judge for the disbetween the enactments such as will trict of North Dakota in a bankruptcy prevent the state from enforcing its own

proceeding The pertinent facts are: law upon the subject.

On August 15, 1917, one Conrad C. ReisIt follows that the judgment of the wig executed a trust deed for the benSupreme Court of Minnesota must be efit of his creditors to John P. Galaffirmed.

braith, assignee and the petitioner herein. The assigned stock of merchandise was sold. Various proceedings

and meetings of creditors were had, not JOHN P. GALBRAITH, Petitioner, necessary to recite. On December 22,

1917, upon the petition of creditors, JOHN VALLELY, Trustee in Bankruptcy Reiswig was duly adjudged a bankrupt, of Conrad C. Reiswig, Bankrupt. and Vallely, respondent herein, is his

trustee in bankruptcy. Galbraith ap(See S. C. Reporter's ed. 46-50.) peared in the bankruptcy proceedings

and filed an account, claiming therein Bankruptcy jurisdiction adverse

the right to retain a certain sum for claim summary proceedings.

A court of bankruptcy is without fees and disbursements under the asjurisdiction to adjudicate in a summary signment; and paid over to the trustee proceeding, over a protest, the merits of in bankruptcy the other moneys which the claim of an assignee for creditors of he had acquired. Thereupon the trustee the bankrupt to retain out of the bank-in bankruptcy filed a petition with the rupt's estate his fees and disbursements referee in bankruptcy, asking, in a sumunder the assignment for administering the estate prior to the bankruptcy proceedings. Galbraith to show cause why he should

mary proceeding, for an order upon As to these moneys the assignee is an adverse claimant.

not pay over the sum of $1,174.10, re(For other cases, see Bankruptcy, II. b, in tained as fees and expenses [18] as trusDigest Sup. Ct. 1908.)

tee under the assignment. The referee in

bankruptcy made an order that Gal[No. 234.]

braith forthwith pay over that sum to

the trustee in bankruptcy, or show Argued March 18, 1921. Decided April 11, 1921.

Galcause why he should not do so.

braith appeared and set up that the Note.- As to what amounts to an ad-order of the referee in the summary verse holding by third persons of prop- proceeding was without authority, as le erty acquired from bankrupt-see note was an adverse claimant to the moneys to Morning Telegraph Pub. Co. v. S. B. referred to in the order, and that the Hutchinson Co. 8 L.R.A.(N.S.) 1232. court had no jurisdiction in a summary

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proceeding to hear and determine the reference to the Comingor_Case, and questions involved. Without waiving held the case was ruled by Randolph v. objection, and subject to the right of Scruggs, 190_U. S. 533, 47 L. ed. 1165, Galbraith to assert his objection to the 23 Sup. Ct. Rep. 740; but that case did proceedings, testimony was taken con- not present the question here involved. cerning the money expended and re- In that case there had been an assigntained by the assignee prior to the ment prior to the bankruptcy proceedbankruptcy proceedings, for adminis- ings, and the question presented was tering the estate. Among other things, whether a claim for professional servit was stipulated that, as to the partic- ices, rendered in the course of a general ular money expended by the assignee, assignment, before the bankruptcy, was he was an adverse claimant. The ref. entitled to be paid as a preferential eree delivered an opinion passing upon claim out of the estate in the hands of the amount of the expenditures and the trustee in bankruptcy when the adcompensation, but held that Galbraith judication of bankruptcy had been made was an adverse claimant within the rule within four months after the making of declared by this court in Louisville the assignment, and the assignment set Trust Co. v. Comingor, 184 U. S. 18, 46 aside as in contravention of the bankL. ed. 413, 22 Sup. Ct. Rep. 293, and ruptcy law. It was held that the claim that, therefore, the bankruptcy court for compensation could be allowed so was without jurisdiction to proceed in a far as the services were shown to be summary manner, and discharged the beneficial to the estate. order. The decision of the referee was In Babbit v. Dutcher, 216 U. S. 102, reversed by the district judge. 253 54 L. ed. 402, 30 Sup. Ct. Rep. 372, 17 Fel. 390. The circuit court of appeals Ann. Cas. 969, also cited in the opinion affirmed the order of the district court of the circuit court of appeals, it was (- C. C. A. —, 261 Fed. 670), and the held that books and records of a corcase is here upon writ of certiorari. poration, upon adjudication in bank

We think the referee was right in ruptcy, passed to the trustee, and beholding that the case was governed by longed in the custody of the bankruptcy Louisville Trust Co. Comingor, court, there being no adverse claim to supra. In that case a general assign- them. Upon that state of facts it was ment for the benefit of creditors was [50] held that, on a rule to show cause, made within four months of the bank- the court could properly make an order ruptcy proceeding; the assignment was compelling the delivery of the books to therefore an act of bankruptcy. A re- the trustee. In the opinion in that case. ceiver was appointed in the bankruptcy Louisville Trust Co. v. Comingor, supra, court. The assignee turned over the and other cases, are cited for the purproceeds of sale of the property, retain pose of showing that a different rule ing his fees as assignee and his dis would prevail when an adverse claimant bursements to counsel. A summary set up a right to be heard in other than proceeding was begun in the district a summary proceeding. court, ordering the assignee to show It may be, as suggested by the circause [49] why he should not pay to the cuit court of appeals, that a sumniary receiver the amounts retained. This or- proceeding at the instance of the trusder was made against the objection of the tee would afford a more speedy and assignee that the court had no authority economical administration of the estate to proceed in that manner. This court in bankruptcy. But the right to reheld that the assignee was an adverse cover in such instances only in suits of claimant as to these amounts, and that the ordinary character, with the rights the district court was without jurisdic- and remedies incident thereto, has been tion to determine the controversy in a consistently maintained by this court. summary proceeding. This case has The principle of the Comingor Case has been repeatedly cited as determinative never been departed from in this court. of the law and practice in similar cases. 1 | It establishes the right of an assignee Tue circuit court of appeals made no for the benefit of creditors, to the ex

tent that he asserts rights to expenses 1 See full consideration of the subject by incurred and compensation earned under the circuit court of appeals of the eighth circuit, Judges Sanborn, Van Devanter, and

an assignment in good faith, before the Reed, in Re Rathman, 106 C. C. A. 253, 183 | bankruptcy proceedings, to have the Fed. 913; Collier, Bankr. 11th ed. 525, 528. merits of his claim determined in a juand cases cited in notes; Black, Bankr. 974; dicial proceeding suitable to that pur2 Remington, Bankr. 2d ed. § 1612; 1 pose, and not by summary proceedings Loveland, Bankr. 2d ed. 129.

where punishment for contempt is the 82 1

256 U. S.

was

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means of enforcing the order.

We see

Assistant Attorney General Nebeker no occasion to depart from this prac- argued the cause, and, with Special Astice. There no waiver by the sistant to the Attorney General Underassignee of his rights in this respect. wood, filed a brief for appellant: He made no attempt to retain the body No rights to lands within the indemof the estate as against the trustee in nity limits attach until an application to bankruptcy. As to his disbursements select is filed. and compensation while acting as as- Ryan v. Central P. R. Co. 99 U. S. signee, he asserted an adverse claim. 382, 25 L. ed. 305; St. Paul & S. C. R. Under the settled rule of this court he Co. v. Winona & St. P. R. Co. 112 U. S. could not be proceeded against sum- 720, 28 L. ed. 872, 5 Sup. Ct. Rep. 334; marily for such disbursements and com- Oregon & C. R. Co. v. United States, 189 pensation over his protest, duly made, U. S. 103, 112, 113, 47 L. ed. 726, 730, against that method of procedure. 731, 23 Sup. Ct. Rep. 615; Osborn v.

In our view the courts below erred in Froyseth, 216 U. S. 571, 577, 578, 54 L. deciding otherwise, and the order of the ed. 619, 623, 624, 30 Sup. Ct. Rep. 420; Circuit Court of Appeals is, according- United States v. Southern P. R. Co. 233 ly, reversed.

U. S. 565, 56 L. ed. 553, 32 Sup. Ct. Rep. 326.

As the lands involved were, at the date

of filing of the selection list, already (51) UNITED STATES, Appt., withdrawn for forestry purposes, they

were not subject to selection. NORTHERN PACIFIC RAILWAY COM- United States v. Midwest Oil Co. 236 PANY.

U. S. 459, 59 L. ed. 673, 35 Sup. Ct. Rep. (See S. C. Reporter's ed. 51–70.) 309; Chicago, M. & St. P. R. Co. v.

United States, 244 U. S. 351, 356, 61 Public lands railroad land grants L. ed. 1181, 1193, 37 Sup. Ct. Rep. 625. indemnity selections withdrawal. There is no obligation upon the part

The temporary Executive withdrawal of the United States to preserve lands before survey, for possible addition to an existing forest reserve, of lands within the within indemnity limits for the benefit of indemnity limits of the land grant to the

the company. Northern Pacific Railroad Company, made

Hewitt v. Schultz, 180 U. S. 139, 45 by the Act of July 2, 1864, as modified | L. ed. 463, 21 Sup. Ct. Rep. 309; Northand supplemented by the Joint Resolution ern P. R. Co. v. Miller, 7 Land Dec. 120; of May 31, 1870, could not cut off the rail. Northern P. R. Co. v. Davis, 19 Land road company's right, earned by the con- Dec. 90; Wisconsin C. R. Có. v. Price struction of the road, to select such lands County, 133 U. S. 496, 512, 33 L. ed. as indemnity, where the losses in the place 687, 695, 10 Sup. Ct. Rep. 311; Southlimits at the time of such withdrawal exceeded the available lands in the indemnity ern P. R. Co. v. Bell, 183 U. S. 675, 689, limits, and the company's purpose to claim 46 L. ed. 383, 390, 22 Sup. Ct. Rep. 232; the latter was asserted at the earliest op. Humbird v. Avery, 195. U. S. 480, 508, portunity.

49 L. ed. 286, 298, 25 Sup. Ct. Rep. 123. (For other cases, see Public Lands, I. c, 2, f, in

The failure of the government to have Digest Sup. Ct. 1908.)

che lands sooner surveyed is not material. [No. 325.]

Oregon & C. R. Co. v. United States, Argued October 7, 1920. Decided April 11, 189 U. S. 116, 118, 47 L. ed. 732, 733, 1921.

23 Sup. Ct. Rep. 620; United States v.

Missouri, K. & T. R. Co. 141 U. S. 358, Appeals to review a decree which affirmed a decree Mfr. Charles Donnelly argued the of the District Court for the District of cause, and, with Mr. Charles W. Buun, Montana in favor of defendant in a

filed a brief for appellee: suit to cancel a patent for public lands.

The Act of 1864 and the Resolution of Reversed and remanded for further 1870 constituted a contract between the hearing.

government and the railroad company. See same case below, C. C. A.

Burke v. Southern P. R. Co. 234 U. S. 264 Fed. 898. The facts are stated in the opinion. Ct. Rep. 907.

669, 679, 58 L. ed. 1527, 1544, 34 Sup. Note.—As to land grant to railroads It was the intention of Congress that -see note to Kansas P. R. Co. v. Atchi- the grantee should get the full quantity son, T. & S. F. R. Co. 28 L. ed. U. S. 794. / of lands granted; at least, so far as it

A PPEAL from the Sirenit circuit 46 35 L. ed. 766, 12 Sup. Ct

. Rep. 13,

It was

ex

was possible to get it within the limits of appeals (- C. C. A. - , 264 Fed. 898), the grant.

and the United States brought the case Wisconsin C. R. Co. v. Forsythe, 159 here. U. S. 46, 60, 40 L. ed. 71, 75, 15 Sup. The lands in question are within the Ct. Rep. 1020; Hewitt v. Schultz, 180 indemnity limits of the land grant made U. S. 139, 157, 45 L. ed. 463, 472, 21 to the Northern Pacific Railroad ComSup. Ct. Rep. 309; Southern P. R. Co. pany by the Act of July 2, 1864, chap. 1. Bell, 183 U. S. 675, 689, 46 L. ed. 383, 217, 13 Stat. at L. 365, as modified and 390, 22 Sup. Ct. Rep. 232; Oregon & supplemented by the joint resolution of C. R. Co. v. United States, 189 U. S. May 31, 1870, 16 Stat. at L. 378, and 103, 115, 47 L. ed. 726, 732, 23 Sup. were selected and patented as indemniCt. Rep. 615; Humbird v. Avery, 195 ty for lands lost within the place limU. S. 480, 508, 49 L. ed. 286, 298, 25 its. The rights and obligations of the Sup. Ct. Rep. 123.

original railroad company arising out of The general rule as to indemnity lands the grant have long since passed to the is that, until they are selected by the present railway company, and there is grantee, the government has complete no need here for distinguishing one control over them; but this rule rests up- company from the other. on an assumption that where one indem- The grant was made for the declared nity section is disposed of, another is purpose of "aiding in the construction" available. The rule does not obtain of a proposed line of railroad from where this assumption is shown to be un- Lake Superior to Puget sound and Portwarranted.

land, Oregon, [59] and "to secure the St. Paul & P. R. Co. v. Northern P. safe and speedy transportation of the R. Co. 139 U. S. 1, 35 L. ed. 77, 11 Sup. mails, troops, munitions of war, and pubCt. Rep. 389; United States v. South- lic stores" over such line. ern P. R. Co. 146 U. S. 615, 616, 36 L. pressed in present terms,—"there be, and ed. 1104, 1105, 13 Sup. Ct. Rep. 163; hereby is granted,”—and was of "every Southern P. R. Co. v. Bell, 183 U. S. alternate section of public land, not 675, 682, 46 L. ed. 383, 387, 22 Sup. Ct. mineral, designated by odd numbers" Rep. 232; Southern P. R. Co. v. Groeck, within prescribed place limits on each 31 C. C. A. 334, 59 U. S. App. 366, 87 side of the line, excepting such sections Fed. 973; Hewitt v. Schultz, 180 U. S. or parts of sections as should be found 139, 157, 45 L. ed. 463, 472, 21 Sup. Ct. to have been otherwise disposed of, apRep. 309; Oregon & C. R. Co. v. United propriated, or claimed, or occupied by States, 189 U. S. 103, 47 L. ed. 726, 23 homestead settlers, or pre-empted, prior Sup. Ct. Rep. 615; Weyerhaeuser v. to the definite location of the line. Hoyt, 219 U. S. 380, 387, 55 L. ed. 258, Nelson v. Northern P. R. Co. 188 U. S. 261, 31 Sup. Ct. Rep. 300; Daniels v. 108, 47 L. ed. 406, 23 Sup. Ct. Rep. 302. Wagner, 125 C. C. A. 93, 205 Fed. 237 As indemnity for any lands so excepted,

Either the lands in question, in view as also for any excluded as mineral. of the admitted facts in this case, were other lands were to be "selected by said not public lands within the meaning of company,” under the direction of the the Act of March 3, 1891, and therefore Secretary of the Interior, from unocenthe withdrawal order was unauthorized pied, unappropriated, nonmineral lands and inoperative, or they are public lands, in odd-numbered sections within preand then the act authorizing their with- scribed indemnity limits. The line of drawal was a direct invasion of the con- the road was to be definitely located by stitutional rights which the railway com- filing a map or maps thereof in the pany had in them; and such legislation General Land Office; and the road, when cannot stand.

constructed, was to be “subject to the Sinking Fund Cases, 99 U. S. 700, 718, use of the United States, for postal, 25 L. ed. 196, 501.

military, naval, and all government

service, and also subject to such regulaMr. Justice Van Devanter delivered tions as Congress may impose restrictthe opinion of the court:

ing the charges for such government This is a suit by the United States transportation.". As each consecutive to cancel a patent issued to the railway 25 miles of road was constructed and company for 5,681.75 acres of land in made ready for the service contemMontana, the asserted ground for such plated, the same was to be examined by relief being that the land officers issued commissioners selected by the Presi. the patent through inadvertence and dent, and, if they reported that the mistake. The company prevailed in the same was completed in all respects as district court and in the circuit court of | required, patents were to be issued to 826

256 U. S.

was

the company for the lands opposite to, acres. To supply these losses it was and coterminous with the completed sec- necessary to resort to the indemnity tion. The President was to cause the limits, as was contemplated and prolands along "the entire line” to be sur- vided in the granting act and resoluveyed for 40 miles in width on both tion. In the asserted exercise [61] of sides “after the general route shall be this right the company selected the lands fixed, and as fast as shall be required in question. The particular losses on by the construction of said road;" the account of which the selection granted sections within the place limits made were such as to support it, the were to be withheld from sale, entry, selection was made in conformity with and pre-emption, except as against pre- the directions given by the Secretary of emption and [60] homestead occupants the Interior, and the lands selected whose settlement preceded the definite lo- were subject to selection unless rencation of the line; all lands within the in- dered otherwise by a temporary Execudemnity limits were to be and remain sub- tive withdrawal made about a year beject to the operation of the Pre-emption fore. The local land officers accepted and Homestead Laws, save as the odd- and approved the selection list, and, in numbered sections should be taken out transmitting it to the General Land Of. of the operation of those laws by in- fice, called attention to the withdrawal. demnity selections made to supply But when the Commissioner and the losses within the place limits (Hewitt Secretary approved the selection and v. Shultz, 180 U. S. 139, 147-149, 155, caused the patent to issue, they over156, 45 L. ed. 463. 468, 169, 21 Sup. Ct. looked the withdrawal, and so did not Rep. 309; Weyerhaeuser v. Hoyt, 219 consider or pass on its bearing on the U. S. 380, 387, 388, 55 L. ed. 258, 261, company's right to select the lands. 202, 31 Sup. Ct. Rep. 300); and the Five years later the matter was called price of the even-numbered sections re- to their attention and they caused this tained by the United States in the place suit to be brought. limits was to be increased to double the The lands in question were not surusual minimum. If the company ac-veyed in the field until near 1905, and cepted the terms on which the grant the plat of survey was not filed in the was made, it was required to signify its local land office until April 5, 1905. acceptance in writing under its cor- This indemnity selection was made later porate seal within two years.

in the same day. On several occasions The company duly accepted the terms prior to 1904 the company had endeavof the grant, filed appropriate maps of ored to select lands in the indemnity the general route, afterwards definitely limits while they were as yet unsurveyed, located the line in the mode prescribed, or before the plat of the survey was and constructed and completed the road filed in the local land oslice; but the from Ashland, Wisconsin, on Lake Sü- Secretary of the Interior had refused perior, to Tacoma, Washington, on Pu-j to consider such selections, and had diget sound, and thence to Portland, Ore-rected that none be received until after gon, its full length being more than 2,- the land was surveyed and the plat 000 miles. The definite location was filed. Thus this selection was made as completed in 1884 and the construction soon as was admissible under the Secin 1887. The road as completed was retary's directions. The temporary Exexamined and favorably reported by ecutive withdrawal of the lands was the commissioners and accepted by the made January 29, 1904, before they President. Reports of Commissioner of were surveyed, and was intended to Railroads—for 1885, p. 22; 1886, p. 36; prevent the acquisition of any claim to 1887, p. 24; 1888, p. 24; Doherty v. them pending an inquiry into the desirNorthern P. R. Co. 177 U. S. 421, 44 ability of adding them, along with other L. ed. 830, 20 Sup. Ct. Rep. 677; United lands, to an existing forest reserve. On States v. Northern P. R. Co. 37 C. C. A. March 7, 1906, they were added to the 290, 95 Fed. 864, s. c. 177 U. S. 435, 44 reserve by an Executive proclamation. L. ed. 836, 20 Sup. Ct. Rep. 706; United

In its defense to the suit the comStates v. Northern P. R. Co. 193 U. S. pany takes the position [62] that the 1, 48 L. ed. 593, 24 Sup. Ct. Rep. 330. temporary withdrawal did not affect its

The losses to the grant in the place right to select the lands, and therefore limits through other disposals, home that the United States was not prejustead settlements, and the like, prior to diced by the fact that the Commissioner the definite location of the line, and and the Secretary overlooked the withthrough the exclusion of lands found to drawal when the selection was approved be mineral, amounted to several million and the patent issued. In support of

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