preme court of South Carolina interpreted | this body was given the control of all the the dispensary act of 1896, as amended, and funds, assets, and property, other than real expressly held that "the offices and place of estate, of the state dispensary. It was made business of the dispensary stand precisely the duty of the commission to investigate in the same relation to the state as the all facts concerning outstanding claims state treasurer's office." And, speaking of against the state dispensary, and, for that dispensary system, it was said (p. 171): purpose, to employ counsel as might be approved by the attorney general, and such expert accountants and clerks as were necessary, and to make full report to the governor on the subject. The commission was also authorized, after investigation, to pay, from the proceeds of the dispensary assets which might come into its hands, such claims as were found to be valid, and to turn over the surplus to the state treasury.

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

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

The law of 1896, as amended, was repealed on February 16, 1907.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

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

On the same day that the foregoing act was approved there was also approved a statute entitled, "An Act to Provide for the Disposition of All Property Connected with the State Dispensary, and to Wind up Its Affairs." The text of this act is in the margin. Summarily stated, the act created 161]a commission to *consist of five members, to be appointed by the governor, who were required to give bond to the state for the faithful discharge of their duties. To †An Act to Provide for the Disposition of, several county dispensaries, by disposing of all Property Connected with the State all goods and property connected therewith, Dispensary, and to Wind Up Its Affairs. by collecting all debts due, and by paying Section 1. Be it enacted by the general assembly of the state of South Carolina, that immediately upon the approval of this act the governor shall appoint a commission of well-known business men, consisting of five members, none of whom shall be members of the general assembly, to be known as the state dispensary commission, who shall each give bond for the faithful performance of the duties required in the sum of $10,000.

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

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

sur

in the second suit, which was also against, valid claims against the same, including the members of the commission, both of those of the complainants, and otherwise ficially and individually, was the Fleisch- settling, under the direction of the court, mann Company, an Ohio corporation. the affairs of the state dispensary. Without detailing the proceedings by which 163]*other claimants were joined as co complainants in the Wilson suit, and by which relief sought in that case and in the Fleischmann Case-which was somewhat divergent in the earlier stage of the litigation -was made to harmonize, it suffices to say that, in their ultimate form, both bills of complaint rested the jurisdiction of the court upon diversity of citizenship, asserted the existence of a valid claim against the dispensary fund in favor of each complainant for liquor sold, and that each was entitled to be paid out of the fund in the hands of, and under the control of, the commission. The bills also proceeded upon the theory that the act of 1907 had placed the assets of the dispensary in the hands of the commission as a trust fund for the benefit of all creditors having valid claims against the fund, which they were entitled to enforce by judicial action against the commission, without the presence of the state as a necessary party. Upon this assumption, and upon the averment that the members of the commission were refusing to discharge the duty cast upon them by the state law, of ascertaining and paying the just claims against the trust fund, an injunction was prayed, restraining the commission from in any way disposing of the fund until the claims of the complainants were paid. A receiver was also asked for the purpose of taking charge of the assets, paying the any other person or persons the commission may deem necessary for the ascertainment of any fact or facts connected with said state dispensary and its management or control at any time in the past, and to take testimony, either within or without the state: Provided further, That all pay ments shall be made in gold and silver coin of the United States, in United States currency, or in national bank notes.

In both cases a temporary restraining order was allowed, and a rule was granted to show cause why an injunction pendente lite should not be made and a receiver appointed as prayed. Again omitting detail as to the form of the pleadings, it suffices to say that, by return to the rules to show cause and by answers, the commission, besides traversing most of the averments contained in the bills, set up in substance that each suit was against the state, and that the state had not consented to be sued, and could not be impleaded without violating the 11th Amendment to the Constitution. It was expressly averred that the assets and property in the hands of the commission belonged to *the state, were[164 held by the commission as its agent, and could not be administered without the presence of the state, which was an indispensable party to the cause. The claim was also made that the commission was a judicial tribunal, and was not subject to be restrained by an injunction from a Federal court.

After the allowance of the temporary restraining order in the Fleischmann Case, various banks in which the commission had deposited to its credit dispensary funds were made parties defendant, and enjoined from paying out such funds except upon the order of the court. Subsequently, in the same case, after a hearing on January 29, 1908, upon the rule to show cause, an order

Sec. 7. The said commission shall submit to the governor, at the earliest day practicable, a complete inventory of all property received by them, with a state ment of the liabilities of the state dispensary, and, as soon as the affairs are liqui dated, a report in full of their actings and doings.

Sec. 8. That said commission shall have full power and authority to investigate the Sec. 4. The compensation of each mem- past conduct of the affairs of the dispenber of said commission shall be $5 per sary, and all the power and authority con day for each day actually employed about ferred upon the committee appointed to in the business, and actual expenses for the vestigate the affairs of the dispensary, as time engaged: Provided, That they shall prescribed by an act to provide for the in receive no compensation for services ren-vestigation of the dispensary, approved dered on this commission after January 1, 1908.

Sec. 5. The said commission shall pay to the state treasurer, after deducting their compensation and other expenses allowed by this act, all surplus funds on hand after paying all liabilities.

Sec. 6. The said commission is hereby authorized to employ such bookkeepers, accountants, clerks, assistants, and employees as they may deem necessary, and to contract with them at the time of employment for their compensation.

24th January, A. D. 1906, be, and hereby 18, conferred upon the commission provided for under this act: Provided, That, for the purpose of the investigation of the affairs of the dispensary, as herein provided, ench and every member of said commission be. and hereby is, authorized and empowerel, separately and individually, or collectively, to exercise the power and authority her in conferred upon the whole commission.

Approved the 16th day of February, a. D. 1907.

was entered on March 2, 1908, continuing | the attorney general of the state began prothe temporary restraining order until the ceedings by mandamus in the supreme court final determination of the suit. The mo- of South Carolina to compel compliance tion for the appointment of a receiver was, with the act. The case was decided on however, continued without prejudice. The March 14, 1908. The court, in an elaborate, opinion of the court is reported in 161 Fed. careful, and perspicuous opinion, reviewed 152. A like order was also cotemporaneous- the dispensary legislation, expressly held ly entered in the Wilson Case, and in that that the statutes governing the same made case, likewise, an order was entered on the state the purchaser of the liquors March 5, 1908, making the banks who had bought for consumption, and, therefore, that the dispensary funds on deposit parties de- those who had sold the liquor to the state fendant, and restraining them from paying dispensary had contracted with the state, them out. In this connection it is to be and with the state alone; that all the asremarked that the banks who were thus sets and property of the dispensary berestrained in both cases, as security for the longed to the state, and that the commisdispensary funds placed with them by the sioners appointed to wind up and liquidate commission, had each delivered to that body its affairs were state officers, intrusted with bonds, stock, and other collaterals, and the a public duty on behalf of the state. As same had been by the commission deposited a result of these conclusions it was deterin the state treasury. mined that the circuit court of the United

After the submission, and before the court had decided the rules to show cause, the legislature of South Carolina passed two statutes concerning the state dispensary fund. By the first the winding-up act of 1907 was amended by increasing the compensation of the commission, by directing the sale of the dispensary real estate, etc., and the payment out of the fund of a certain judgment for damages. The 11th section of the act was amended so as to read as follows:

States was without jurisdiction to enjoin the commissioners, as state officers, from disposing of the state property as the state statute directed, *and therefore a right [166 existed to a peremptory mandamus. The issuing of the peremptory writ, however, was left in abeyance, the court-doubtless for the with the circuit court-saying that it would purpose of avoiding an unseemly conflict

not assume "that the construction which it has placed upon the state Constitution and the statutes in question will be disregarded "Sec. 11. That said commission is hereby by the Federal court." 79 S. C. 316, 60 S. declared to possess full power to pass upon, E. 928. A few days before this decision fix, and determine all claims against the was announced, and in consequence of repstate growing out of dealings with the dis-resentations made to the circuit court that 165] pensary, and to *pay for the state any and all just claims which have been submitted to and determined by it, and no other, out of the assets of the dispensary which have been, or may hereafter be, collected by said state dispensary commission: Provided, that each and every person, firm, or corporation presenting a claim or claims to said commission shall have the right to appeal to the supreme court as in cases at law: Provided further, that notice of intention to appeal shall be served upon said commission within ten days of rendition of judgment by the said commission, and the practice in taking all steps in perfecting the appeal shall conform to the practice in other appeals for the supreme court."

a bill had been introduced in the general assembly of South Carolina, directing the commission to turn into the state treasury the dispensary funds, the circuit court appointed the members of the commission temporary receivers of the fund, with directions to hold the same subject to the orders of the court. Subsequently, on March 9, 1909, the circuit court entered an order, consolidating the two causes, and appointing three persons receivers of the dispensary fund, two of those thus appointed being at that time, or having been, shortly prior thereto, members of the commission.

Following the decision of the supreme court of South Carolina in the case last referred to, and on March 27, 1908, the deBy the second act the commission was di- fendants in the consolidated causes filed a rected to pay $15,000 into the state treas- orders of the said court, granting an injuncmotion "for an order revoking the former ury, to be used for the expenses of crimition, and appointing receivers, on the nal prosecutions for violations of the laws ground that the supreme court of South relating to "the late institution called the Carolina has now construed the statutes of state dispensary." The commissioners reSouth Carolina and the Constitution of fused to pay out of the dispensary funds in the said state, under which the complaintheir hands the $15,000 directed by the last- ants claim their rights, and has construed mentioned statute, on the ground that they it differently from the said circuit court's were under an injunction from the circuit construction, which construction, if folcourt of the United States. Thereupon, lowed, ousts the jurisdiction of the circuit

See same case below, 79 C. C. A. 536, 148 en,-two in Great Britain, three in France, Fed. 1022.

the alleged contract by the state. The state, state and the sellers of liquor was that of
is not only the real party to the con- debtor and creditor, the general assembly
troversy, but the real party against which of South Carolina, in the winding-up act of
relief is sought by the suit; and the suit 1907, intended to and did alter that rela-
is, therefore, substantially within the pro- tion, because the state, by that act, renoun-
hibition of the 11th Amendment to the cing its control over the assets of the state
Constitution of the United States, which de- dispensary, vested the commission with the
clares that 'the judicial power of the Unit- title to such assets as trustees of an ex-
ed States shall not be construed to extend press trust, and constituted the creditors
to any suit in law or equity commenced or of the state who had furnished supplies for
prosecuted against one of the United States the use of the dispensary the beneficiaries of
by citizens of another state, or by citizens such trust. The argument being that hence
or subjects of any foreign state.""
the suits are not against the state, and
In the subsequent case of Christian v. therefore are not within the inhibition of
Atlantic & N. C. R. Co. 133 U. S. 233, 33 the 11th Amendment. It cannot be and is
L. ed. 589, 10 Sup. Ct. Rep. 260, by bill in not denied that the construction of the
equity, filed in a court of the United States, winding-up act, upon which the contention
it was attempted to reach dividends on the rests, is contrary to that entertained both
stock of the defendant railroad company, by the general assembly of South Carolina
and apply such dividends to the payment of and by the highest court of the state, but
the bonds issued by the state of North Caro- it is urged that the statutes of 1908, in
lina, and for the sale of stock owned and respect to the dispensary fund, and the
held by the state. It was contended for the opinion of the supreme court, were, the
complainants that the proceeding was in former enacted and the latter announced,
rem against the stock, to enforce a right in after this litigation was commenced. But
and to it resulting from an alleged contract if we assume that the legislation and deci-
by which the stock was pledged for the sion referred to are not controlling, yet
benefit of the complainants, although the they are persuasive. Aside from this,
stock was not actually delivered to the al- however, considering the text of the wind-
leged pledgee. It was held that the mere ing up act, we are of opinion that there is no
declaration by the state in a statute, that just ground for the conclusion that the
stock held by it was pledged, did not tech-state, in providing by that legislation for
nically operate to create a pledge. Upon the liquidation of the affairs *of the[171
the hypothesis that a mortgage of the stock state dispensary, intended to devest itself of
might have been effected, it was said (p. its right of property in the assets of that
243):
governmental agency, and to endow the com-
"The proceeding is a suit against the par-missioners with a right and title to the
ty to obtain, by decree of court, the benefit
of the mortgage right. But where the mort-
gagor in possession is a sovereign state, no
170] such proceeding *can be maintained.
The mortgagee's right against the state may
be just as good and valid, in a moral point
of view, as if it were against an individual.
But the state cannot be brought into court
or sued by a private party without its con-
sent. It was at first held by this court that,
under the Constitution of the United
States, a state might be sued in it by a
citizen of another state, or of a foreign
state; but it was declared by the 11th
Amendment that the judicial power of the
United States shall not be construed to ex-
tend to such suits. New Hampshire v.
Louisiana, 108 U. S. 76, 37 L. ed. 656, 2
Sup. Ct. Rep. 176; Louisiana v. Jumel, 107
U. S. 711, 27 L. ed. 448, 2 Sup. Ct. Rep.
128; Mayre v. Parsons, 114 U. S. 325, 29
L. ed. 205, 5 Sup. Ct. Rep. 932, 962; Hagood
v. Southern, 117 U. S. 52, 29 L. ed. 805, 6
Sup. Ct. Rep. 608; Re Ayers, 123 U. S. 443,
31 L. ed. 216, 8 Sup. Ct. Rep. 164."

property which placed it so beyond the
control of the state as to authorize a ju-
dicial tribunal to take the assets of the
state out of the hands of those selected to
manage the same, and, by means of a re-
ceiver, to administer such assets as prop-
erty affected by a trust, irrecoverable in its
nature, and thus to dispose of the same
without the presence of the state.

An interpretation of the act in question, producing such an abnormal and extraordinary result as that just stated, cannot be adopted merely because it might be sustained by strained implications. On the contrary, such interpretation could only be warranted if exacted by the most express language, or by such overwhelming implication from the text as would leave no room for any other reasonable construction. Coming to consider the act, it is patent that neither by express language nor by necessary implication does it convey the meaning which the proposition seeks to give to it. In form the winding-up statute is but an ordinary act of legislation, providing, in The complainants below, however, insist the interest of the state, for an examinathat, if it be conceded that, under the state tion and liquidation of the claims against dispensary statutes, the relation of the the dispensary, and their payment out of