construction is in harmony with the rule of subrogation that a surety, liable only for part of the debt, does not become subrogated to remedies available to the creditor, unless he pays the whole debt or it is otherwise satisfied. On Writs of Certiorari to the United States Fed. 62. The case comes here on writ of certiorari. 252 U. S. 577, 40 Sup. Ct. 396, 64 L. Ed. 724. The single question presented is whether in the distribution of the bankrupt's estate the United States has priority over the Surety Company. Circuit Court of Appeals for the Eighth Cir- of the law of subrogation, Lidderdale v. RobSection 3468 applying an cstablished rule cuit. * inson, 12 Wheat. 594, 596, 6 L. Ed. 740, de- Claims by the United States and by the Na- 74 *Messrs. Assistant Attorney General Spellacy and Leonard B. Zeisler, of Chicago, Ill., for the United States. Messrs. S. W. Fordyce, Jr., and Thomas W. White, both of St. Louis, Mo., for respondent. * as is secured to the United States." Section 3466, embodying the common-law rule by which the sovereign has priority over other creditors of an insolvent, United States v. State Bank of North Carolina, 6 Pet. 29, 35, 8 L. Ed. 308, declares that "the debts due to the United States shall be first satisfied." There is no conflict between the two sections, which are substantially a reenactment and extension of the provisions of 76 section 65 of the Act of March 2, *1799, c. 22, Mr. Justice BRANDEIS delivered the opin- 1 Stat. 627, 676 (Comp. St. §§ 6372, 6374). The ion of the Court. priority secured to the United States by secThe National Surety Company executed as tion 3466 is priority over all other creditors; surety two bonds given to secure contracts that is, private persons and other public bodentered into with the United States. The ies. This priority the surety obtains upon contractor defaulted, and was later adjudicat- discharging its obligation. But what the ed a bankrupt. The loss to the government surety asks here is not to enjoy like priority was about $13,000. The Surety Company over such other creditors, but equality with paid to it on account of this loss $3,150, the the United States, a creditor whose debt it full amount of the liability on the bonds. partly secured. To accord such equality Thereupon the government proved its claim would abridge the priority expressly conferin bankruptcy for the balance, claiming, un-red upon the government. While the priority der Revised Statutes, § 3466 (Comp. St. given the surety by the statute attaches as soon as the obligation upon the bond is discharged, it cannot ripen into enjoyment unless or until the whole debt due the United States is satisfied. This result is in harmony with a familiar rule of the law of subrogation under which a surety liable only for part of the debt does not become subrogated to collateral or to remedies available to the creditor unless he pays the whole debt or it is otherwise satisfied.3 $75 6372),1 priority therefore over all other *creditors. The Surety Company proved for the $3,150, and claimed that under Revised Statutes, § 3468 (Comp. St. § 6374),2 it was entitled to a share in the distribution of the estate pro rata on an equality with the government. The net assets of the estate were less than the amount of the government's claim. The referee sustained the contention of the Surety Company, and his order was affirmed both by the District Judge and by the Circuit Court of Appeals for the Eighth Circuit, 262 1 Sec. 3466. Whenever any person indebteded to the United States is insolvent, or whenever the estate of any deceased debtor, in the hands of the executors or administrators, is insufficient to pay all the debts due from the deceased, the debts due as to the United States shall be first satisfied; and Sec. 3468. Whenever the principal in any bond given to the United States is insolvent, or whenever, such principal being deceased, his estate and -effects which come to the hands of his executor, -administrator, or assignee, are insufficient for the The judgment of the Circuit Court of Appeals is Reversed. payment of his debts, and, in either of such cases, of such insolvent or deceased principal as is se- Sheldon on Subrogation (2d Ed.) § 127; Pomeroy, Equity Jurisdiction (4th Ed.) § 2350; 25 R. C. L. 1318; Peoples v. Peoples Bros. (D. C.) 254 Fed. 489, 491, 492; United States Fidelity & Guaranty Co. v. Union Bank & Trust Co., 228 Fed. 448, 455, 143 C. C. A. 30; National Bank of Commerce Rockefeller, 174 Fed. 22, 28, 98 C. C. A. & (41 Sup. Ct.) (254 U. S. 88) (Argued April 26, 1920. Decided Nov. 8, 1920.) No. 278. Bureau to prohibit the transportation of liquor from one residence to another. 6. Intoxicating liquors 139-Volstead Act permits storage of liquors in warehouse for private use. Under Volstead Act, tit. II, § 33, which permits the possession of liquor lawfully acquired before the Eighteenth Amendment took 1. Intoxicating liquors 13-Purpose of Vol-effect for the personal use of the owner and stead Act was to prohibit transactions in liquors, not to confiscate. The purpose of Volstead Act, tit. II, was to enforce the Eighteenth Amendment to the Constitution, section 1 of which prohibits the manufacture, sale, and transportation of intoxicating liquors for beverage purposes, but not to confiscate liquors lawfully owned at the time the amendment became effective, and which the owner intended to use in a lawful manner, and such purpose is of importance in determining the meaning of the act. 2. Intoxicating liquors 139-Prohibition of possession for unlawful use does not prohibit storing in warehouse. Volstead Act, tit. II, § 25, making it unlawful to possess liquor intended for use in violating that act, does not make unlawful possession in a storage warehouse by one who intends to use the liquor in his own home for his family and guests, which is permitted by section 33 of the title. 3. Intoxicating liquors 143-Prohibition against keeping liquors applies to liquors for sale. Volstead Act, tit. II, § 21, declaring any place where intoxicating liquor is manufactured or kept in violation of the title, and all liquor kept and used in maintaining it, a common nuisance, applies to the keeping of liquor only when it is kept for sale or barter, or other commercial purpose, not to the keeping of intoxicating liquor in a storage warehouse for private consumption by the owner. 139-Ware4. Intoxicating liquors 138, houseman does not "possess" or "deliver" liquors. Within Volstead Act, tit. II, § 3, providing that no person shall deliver or possess intoxicating liquor, except as authorized in the act, a storage warehouseman, who merely leased a room in which the owner of liquor stored it, does not "possess" the liquor, nor does he "deliver" it to the owner, by permitting the owner to remove it from the warehouse. [Ed. Note. For other definitions, see Words and Phrases, First and Second Series, Deliver; Possess.] his family and guests, and provides that the to An intention to confiscate private property, even in intoxicating liquors, will not be raised by inference and construction from provisions of law having an ample field for operation in effecting a purpose clearly indicated and declared. Appeal from the District Court of the United States for the Southern District of New York. Suit by William G. Street against the Lincoln Safe Deposit Company and another. From a decree dismissing the bill (267 Fed. 706), complainant appeals. Reversed. *89 *Messrs. Joseph S. Auerbach and Charles H. Tuttle, both of New York City, for appellant. Mr. Assistant Attorney General Frierson, for appellees. Mr. Justice CLARKE delivered the opinion of the court. By the motion to dismiss the bill filled in this suit it is admitted: that the defendant Lincoln Safe Deposit Company is a corporation, organized under the laws of the state of New York, and authorized to engage in the warehousing business; that prior to the effective date of the National Prohibition (Volstead) Act (41 Stat. 305) the appellant was the lessee of a room in the warehouse of the defendant Deposit Company, in which he had stored wines and liquors lawfully acquired by him which "are in his exclusive possession and control and are intended to be and will be used only for personal consumption by the plaintiff and the members of his family or bona fide guests"; that the defendant Daniel L. Porter is an agent of the Commissioner The prohibition of Volstead Act, tit. II, of Internal Revenue, charged with the § 3. against transporting intoxicating liquor, duty of enforcing the Volstead Act, who in except as authorized by the act, does not pro- his official capacity has publicly declared and hibit transportation of liquor from a storage threatened that such storage of liquor by the warehouse, where it was stored by the owner, to his residence, for the private use of him- defendant Deposit Company would be unlawself and his family and guests, which is a useful after the Volstead Act became effective, permitted by the act, especially since it has and would expose plaintiff and the Deposit not been construed by the Internal Revenue Company to the penalties of that act, which 5. Intoxicating liquors 138-Transportation of privately owned liquor from warehouse to residence not prohibited. For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes *90 (and auch liquor need not be reported, prowould be enforced against them; that the vide such liquors are for use only for the appellant desired to continue to store his personal consumption of the owner thereof liquors in said rented room after the Vol- and his family residing in such dwelling and of stead Act should become effective, and in- his bona fide guests when entertained by him tended to report the same to the Commission- therein." er of Internal Revenue, as therein required; and that the Deposit Company, moved wholly by the notices and threats of defendant Porter, had notified plaintiff that he must remove his liquors from its warehouse, or that it would remove and deliver them to Porter as outlawed property, to be dealt with under the Volstead Act after it became ef to this court. The admissions of fact under which this case is considered bring the liquors here involved precisely within these immunity provisions of section 33, except that they are stored in a public warehouse instead of in a private dwelling. They were lawfully ac quired and were intended for a lawful use and thus the question is narrowed to, whether such custody by the warehouse company as is shown by the admissions was forbidden by the act. Coming now to the sections relied upon as rendering the custody or possession of the liquors by the warehouse company unlawful: [2] Section 25 declares that "It shall be unlawful to have or possess any intended for use in violating liquor this title. But since section 33 declares that the uses *92 Thus is presented for decision the question: May a warehousing corporation lawfully to which it is admitted the plaintiff intends permit to be stored in its warehouse, after to devote his liquors are not unlawful, obthe effective date of the Volstead Act, liquors viously this section does not apply to the admitted to have been lawfully acquired be- case, *for the unlawfulness declared by it is fore that date and which are so stored, sole- conditioned upon the intended use in violatly and in good faith, for the purpose of pre- ing the act. serving and protecting them until they shall be consumed by the owner and his family or bona fide guests? Since the Volstead Act has been held by this court to be a valid law, the answer to this question must be found in its provisions, and the sections of it which it is argued sustain the negative anwer to the question given by the court below, are 3, 21, and 25 of title II. [1] Since here, as always, the purpose of Congress in enacting a law is of importance in determining the meaning of it, it is noteworthy that title II of the Volstead Act was passed under the grant of power to enforce *91 the first section of the Eighteenth Amendment to the Constitution of the United States, which prohibits the manufacture, sale, and transportation of intoxicating liquors for beverage purposes, but does not indicate any purpose to confiscate liquors lawfully owned at the time the amendment should become effective and which the owner intended to use in a lawful manner. Section 33 of the act is the only one which deals specifically with liquors lawfully ac quired before it should take effect and it is therefore of first importance in the consideration of the case before us. That section de clares: "It shall not be unlawful to possess liquors in one's private dwelling while the same is occupied and used by him as his dwelling only [3] Section 21 declares that or "Any room, house, building place where intoxicating liquor is manufactured, sold, kept, or bartered in violation of this title, and all intoxicating liquor and property kept and used in maintaining the same, is hereby declared to be a common nuisance," and for the maintaining of such a place penalties are provided. The word "kept" in this section is the only one of possible application to the case at bar, and the words with which it is immediately associated are such that, as here used, it plainly means kept for sale or barter or other commercial purpose. Its inapplicability to this case is apparent. Noscitur a sociis. United States v. Louisville & Nashville R. R. Co., 236 U. S. 318, 334, 35 Sup. Ct. 363, 59 L. Ed. 598. [4] Section 3, which is the omnibus section of the act, provides that— "No person shall on or after the date when the Eighteenth Amendment to the Constitution of the United States goes into effect, manufacture, sell, barter, transport, import, export, deliver, furnish or possess any intoxicating liquor except as authorized in this act, and all the provisions of this act shall be liberally construed to the end that the use of intoxicating liquor as a beverage may be prevented." It is argued that the declaration herein that no person shall "possess," "transport" or "deliver" intoxicating liquors is appli (41 Sup.Ct.) cable to this case, because the warehouse | sion of section 33, than the one quoted above, company is not "authorized" by the act to confirms this conclusion. It reads: "possess" them, and because they cannot be used, even lawfully, by the plaintiff unless delivered and taken away from the ware house. By the admissions the appellant is lessee of the room in which the liquors are stored and he "is in the exclusive possession and control of them." Thereby the relation of the warehouse company to the liquors is re *93 stricted to the *public function of furnishing such police, fire, and other protection to its buildings and their contents as the law or its lease requires on the part of such company and to allowing the plaintiff to have access to his property in order that he may remove it for an admittedly lawful purpose. The company could not sell, give away or other wise transfer the liquors to any one other than in this limited way to the plaintiff owner. The purpose of the Eighteenth Amendment and of this act considered, we cannot bring ourselves to the conclusion that such a relation to the liquors on the part of the storage company as is here disclosed constitutes a possession of them within the meaning of this section of the act. It is equally clear that to permit the owner to have access to the liquors to take them to his dwelling for lawful use is not a delivery of them within the meaning of this third sec tion. [5] That transportation of the liquors to the home of appellant, under the admitted circumstances, is not such as is prohibited by the section is too apparent to justify detailed consideration of the many provisions of the act inconsistent with a construction which would render such removal unlawful, and that the act is understood by the officers charged with its execution as permitted such transportation is shown by the provision of the regulations of the Bureau of Internal Revenue authorizing permits for the transportation of liquors from one permanent residence of an owner to another in case of his removal, although no such transfer is in terms provided for by the act. Clearly there is like administrative power under the act to so regulate the transfer of such stored liquors from a warehouse to the dwelling of the owner as to prevent their being used to evade the prohibitions of the act or to substantially interfere with its effective enforcement. Thus it is plain that in the sections of the *94 act relied upon *there is no specific prohibition against the storage of liquors, under the circumstances admitted to exist in this case, and we find no other provisions by which such a custody is rendered unlawful. [6] The implication from another provi41 SUP.CT.-3 "After February, 1, 1920, the possession of liquors by any person not legally permitted under this title to possess liquor shall be prima facie evidence that such liquor is kept for the purpose of being sold, bartered, exchanged, given away, furnished, or otherwise disposed of in violation of the provisions of this title." Assuming that the unexplained presence of the liquors in the company's warehouse would give rise to the prescribed presumption, yet, if that presumption should be rebutted by appropriate testimony (as it is in this case by admissions) that the liquor to which it is applied is not being kept for the purpose of sale, barter, exchange, furnishing, or otherwise disposing of it in violation of the provisions of the title, the implication is plain that the possession should be considered not unlawful, even though it be by a person "not legally permitted"—that is by a person not holding a technical permit to possess it, such as is provided for in the act. Without saying that there may not be other cases, the one at bar seems to be fairly within the scope of this obvious implication of section 33. It may be that the custody of liquors by a warehouse company was thus not declared to be unlawful because the writers of the act did not have such a case in mind, but it was more probably because Congress would not consent to allow lawful possession and use of liquors in dwellings having storage facilities for them, while denying the only possible means of preserving and protecting such liquors to persons with less commodious homes. The Congress was concerned with the great problem of preventing the manu*facture and sale of intoxicating liquors for beverage purposes in the future, and it seems to have given but slight attention to the consumption of such relatively small amounts of such liquors as might be in existence in private ownership and intended for consumption by the owner, his family or his guests, when the amendment and the act should take effect. *95 [7] An intention to confiscate private property, even in intoxicating liquors, will not be raised by inference and construction from provisions of law which have ample field for other operation in effecting a purpose clearly indicated and declared. It results that the decree of the District Court must be Reversed. Mr. Justice McREYNOLDS concurring. I concur in the judgment of the court, but do not assent to the reasoning advanced to support it. I think the Volstead Act was properly interpreted by the court below (267 Fed. 706); but to enforce it as thus construed would result in virtual confiscation of lawfully acquired liquors by preventing or un duly interfering with their consumption by | stated, that a change was contemplated in the owner. The Eighteenth Amendment gave no such power to Congress. Manufacture, sale and transportation are the things prohibited; not personal use. (254 U. S. 83) WELLS BROS. CO. OF NEW YORK v. said exterior face stonework, which would require an additional appropriation by Congress"; the appellant assented to a delay of two weeks only, but, although protesting that further delay would result in its damage, it refrained from purchasing limestone until August 19, 1910, when, the required appropriation by Congress having been obtained, a supplemental agreement was en (Submitted April 30, 1920. Decided Nov. 8, tered into by the parties to the contract, by delays. A government building contractor, whose contract authorized the United States to suspend the whole or any part of the work, and allowed additional time to the contractor for such suspension, but provided that no claim for damages on account of such delays should be made or allowed, cannot make claims for delays ordered until additional legislation affecting the building was enacted by Congress, especially where the first and longest delay was ordered before the contractor became bound by the approval of his bond. Appeal from the Court of Claims. Claim by the Wells Bros. Company of New York against the United States. A general demurrer to the amended petition was sustained, and the amended petition dismissed by the Court of Claims, and claimant appeals. Affirmed. Messrs. A. R. Serven and Burt E. Barlow, both of Washington, D. C., for appellant. Mr. Assistant Attorney General Davis, for the United States. which marble was substituted for limestone for the street fronts of the building, the compensation of the appellant was increased $210,500, and the time for completion of the building was extended from April 1, 1911, to February 5, 1912; during this delay the contractor proceeded with other work under the contract, and prior to August 19, 1910, it had completed all the required excavation, foundation, and structural steel work; after the "modification and addition of August 19, 1910, to the contract work" the appellant so proceeded with the performance of the contract that by February 1, 1912, the building was substantially completed except the interior partitions, and thereupon the United States, again over the protest of appellant, "ordered and directed" a delay, which continued to Au*gust 24, 1912, until congressional legislation was obtained authorizing the parcel post, whereupon the plans for the interior arrangements of the building were adapted to that service and the building was completed. *85 The claim is wholly for damages occasioned by the two delays thus described, and the question for decision is whether the terms of the contract authorized the govern Mr. Justice CLARKE delivered the opin- ment to require such delays without becomion of the Court. ing liable to the contractor for damages which may have been caused to it thereby. The contract involved contains this provision: "It is further covenanted and agreed that the United States shall have the right of suspending the whole or any part of the work herein contracted to be done, whenever in the opinion of the architects of the building, or of the supervising architect, it may be necessary for the purpose or advantage of the work, and upon such occasion or occasions the contractor shall, without expense to the United States, of the work as may be liable to sustain injury properly cover over, secure and protect such from the weather, or otherwise, and for all such suspensions the contractor shall be allowed one day additional to the time herein The appellant, a corporation organized under the laws of New York, and engaged in the general building and construction business, entered into a written contract with the United States for the construction of a post office and courthouse building in New Orleans, dated September 30, 1909, for which it was to be paid $817,000, but its bond for performance was not approved un-stated for each and every day of such delay so til 9 days later, on October 9; on the day after the contract was signed the United States "ordered and directed" appellant to delay ordering limestone (as specified in the contract) for the exterior of the street fronts of the building "for the reason, as caused in the completion of the work, the same to be ascertained by the supervising architect; and a similar allowance of extra time will be made for such other delays as the supervising architect may find to have been caused by the United States, provided that a written claim therefor is presented by the contractor within For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes |