be used with safety by appellant and any lessee of the city, or for two ferry landings. The city's lease of that landing to the appellant has expired. Those findings were supported by evidence.

That decree was to the following effect: The preliminary injunction was dissolved, in so far as it restrained the cross-appellant from seeking to repossess itself of the property leased by it to the appellant, and a permanent injunction restraining the cross-appellant from attempting to get possession of that property was denied. Injunctive relief, restraining the cross-appellant from enforcing that part of the ordinance of June 10, 1924, prescribing the rates of ferriage, the size and character of the boats to be employed, the hours of operating ferries, and other reasonable port regulations for the safety and convenience of the public, was denied. The cross-appellant was enjoined and restrained from prohibiting appellant from operating a ferry across the Mississippi river from the city of Natchez to Vidalia, which may be established by appellant and operated from his own landing or one provided by him; from requiring of appellant, before he engages in the operation of a ferry, as above provided, a bond in the sum of $2,000, or any sum, as required by said ordinance; from imposing a penalty of $30 a day, as provided by said ordinance, or any other amount, for failing to obtain a license or franchise from cross-appellant to operate a ferry from within its limits to Vidalia; and from enforcing or seeking to enforce the provisions of said ordinance, or any other ordinance, making the grant of a ferry franchise exclusive in character.

be charged in carrying passengers, vehicles, and freight from its own shore. [2] The part of the decree which denied injunctive relief, restraining the city of Natchez from enforcing such regulations, was attacked on the ground that authority to adopt and enforce such regulations was not conferred by its charter. By its charter the city of Natchez was authorized "to lease and regulate all ferries across the Mississippi river within said city, reserving the rent for the use thereof for any time not exceeding ten years." The power to regulate conferred by that provision extends to "all ferries across the Mississippi river within said city," and is not limited to a ferry or ferries owned by the city. This conclusion is not in conflict with the decision in the case of Opelika v. Opelika Sewer Co., 265 U. S. 215, 44 S. Ct. 517, 68 L. Ed. 985. Besides, the above-quoted charter provision is quite unlike the one which was referred to in the opinion in the just cited case. We conclude that the part of the decree which was adverse to the appellant was not erroneous.

So far as the decree was adverse to the cross-appellant, it was in accord with conclusions stated in the opinion rendered when the case was here before. The decree is affirmed, each party to pay his or its own costs.

Affirmed.

revd 275π

22.d.id. 3148 Jul ELLZEY v. KANSAS CITY SOUTHERN RY, CO.*

(Circuit Court of Appeals, Fifth Circuit. March 24, 1926. Rehearing Denied April 20, 1926.)

No. 4555.

1. Railroads 278 (3)-Officer riding on motorcar driven by employee held chargeable with contributory negligence, if excessive speed, causing injury, was brought about by his insistence.

Deputy marshal, guarding defendant's employee, is chargeable with contributory negligence while riding on motorcar driven by employee, if excessive speed, causing accident, was willingly incurred the known risk resulting in brought about by insistence of marshal, who injury.

2. Railroads 278 (3)-That plaintiff was deputy marshal, guarding employee, may be considered in determining whether he had such control over railway motorcar driven by employee as to make his conduct direct cause of injury.

defendant's employee during strike, may be That plaintiff was a deputy marshal, guardconsidered in determining whether he had such control over railway motorcar driven by em *Certiorari denied, 46 S. Ct. 638, 70 L. Ed. H27,

There was evidence to the following effect: Merchant and the plaintiff stopped at Carson, a small station about six miles south of De Ridder. At that place, upon Merchant saying that he "had about enough of that wild riding," plaintiff said: "We will have some more of it, if the damned thing stays on the rail." Merchant then stated he would prefer to leave the motorcar at De Ridder, as they did not have time to go farther ahead of No. 2, a passenger train going north, which plaintiff expected to take for Shreveport. Thereupon plaintiff insisted on going on the motorcar to Leesville, which is north of De Ridder, saying they would make it if the damned thing would stay on the track. Plaintiff told Merchant to go on to Leesville. After some delay at De Ridder plaintiff said to Merchant: "We sure enough will have to run now." When the derailment occurred, the motorcar was being operated by Merchant at a dangerously high rate of speed. There was evidence in conflict with that just summarized. [1] There was evidence furnishing support for a finding that the peril which resulted in plaintiff's injury would not have been in curred but for his own conduct. In his behalf it was contended that he, being a passenger on defendant's car, was not chargeable with contributory negligence, barring his right to recover, though Merchant's operation of the motorcar at an excessive and dangerous rate of speed was brought about by the urging or insistence of plaintiff, who willingly incurred the known risk which resulted in the injury complained of. That contention is not sustainable. "That one cannot recover damages for an injury to the commission of which he has directly contributed is a rule of established law and a principle of common justice. And it matters not whether that contribution consists in his participation in the direct cause of the injury, or in his omission of duties which, if performed, would have prevented it." Little v. Hackett, 116 U. S. 366, 6 S. Ct. 391, 29 L. Ed. 652.

In that case it was decided that the hirer of a public hack, who gave the driver directions as to the place to which he wished to be conveyed, but exercised no other control over the conduct of the driver, was not chargeable with the driver's negligence in the operation of the conveyance. It was

such a hirer might become responsible for the driver's negligence, as by taking actual control of the operation of the vehicle and procuring obedience to his orders or directions as to the manner of driving it. Though Merchant was not legally bound to comply with plaintiff's orders or directions as to the operation of the motorcar, yet if he submitted to plaintiff's control in the matters of the place to which they would go on the car and the speed of its movement, the plaintiff properly may be regarded as directly contributing to the injury resulting from Merchant's compliance with his commands or directions.

[2, 3] The plaintiff's relation to the motorcar and its operator was not that of an ordinary passenger. He was a public official, performing a duty to which he was assigned. That circumstance was proper to be considered in determining whether plaintiff did, or did not, have such actual control as resulted in his conduct being a direct and efficient cause of the peril which resulted in his injury. Under the evidence adduced it was a question for the jury whether the plaintiff did or did not directly contribute to the injury complained of. It follows that the court did not err in refusing to direct a verdict in his favor.

[4] Under the above set out instruction to the jury the plaintiff could not recover, if he voluntarily remained on the car after he saw that it was being negligently run, and a person of ordinary care, situated as he was, would have realized that it was dangerous to remain on the car. Though the plaintiff was negligent in the respect stated, if, as evidence adduced indicated, the defendant's employee was aware of such negligence in time to have avoided the injury by the use of reasonable care, and he failed to use such care, that failure might be found to be the sole proximate cause of the injury, and plaintiff's negligence be deemed a remote cause. Chunn v. City & Suburban Railway, 207 U. S. 302, 28 S. Ct. 63, 52 L. Ed. 219; 10 Corpus Juris, 1107. [5, 6] The plaintiff's right to recover was not barred, if his negligence was only a remote cause of his injury, and Merchant's negligence was the sole proximate cause of it. The instruction in question was erroneous. Because of that error the judgment is reversed, and the cause is remanded for a new trial.

Reversed.

47 Sup Ct. 97.

UNITED STATES v. KEMP et al. KEMP et al. v. UNITED STATES. (Circuit Court of Appeals, Fifth Circuit. March 24, 1926. Rehearing Denied April 22, 1926.)

No. 4575.

1. Corporations 432(1).

When president and secretary of board of directors of corporation act, and no objection of other directors is shown, their acquiescence may be presumed.

2. Corporations 619-Waiver, consenting to determination, assessment, and collection of back taxes, held properly executed by officers representing dissolved corporation, and binding on stockholders (Vernon's Sayles' Ann. Civ. St. Tex. 1914, art. 1206; Revenue Act 1921, § 250 [Comp. St. Ann. Supp. 1923, §

6336tt]).

Waiver, consenting to determination, assessment, and collection of additional income taxes, held properly executed by president and secretary of board of directors of dissolved corporation, acting under Vernon's Sayles' Ann. Civ. St. Tex. 1914, art. 1206, shortly before expiration of time within which government could bring suit under Revenue Act 1921, § 250 (Comp. St. Ann. Supp. 1923, § 6336%tt), and binding on stockholders.

3. Internal revenue 7, 9-Taxpayer cannot value inventory at market price, if it is higher than cost (Revenue Act 1918, § 203 [Comp. St. Ann. Supp. 1919, § 6336%]).

Under Revenue Act 1918, § 203 (Comp. St. Ann. Supp. 1919, § 6336c), relative to inventories and rules of Treasury Department, giving taxpayer option of valuing his inventory at cost or market value, whichever is lower, taxpayer cannot value inventory at market price, if it is higher than cost.

Appeals from the District Court of the United States for the Northern District of Texas; William H. Atwell, Judge.

Action by the United States against J. A. Kemp and others. From a decree granting partial relief, the United States appeals, and defendant cross-appeals. Judgment reversed and remanded on original appeal, and affirmed on cross-appeal.

Floyd F. Toomey, Sp. Atty., Bureau of Internal Revenue, of Washington, D. C., and Henry Zweifel, U. S. Atty., of Fort Worth, Tex. (N. A. Dodge, Sp. Asst. U. S. Atty., of Fort Worth, Tex., and A. W. Gregg, Sol. of Internal Revenue, of Washington, D. C., on the brief), for the United States.

Harry C. Weeks, of Wichita Falls, Tex. (Weeks, Morrow, Francis & Hankerson, of Wichita Falls, Tex., on the brief), for Kemp

and others.

FOSTER, Circuit Judge. In this case the United States filed a bill to recover from the individual stockholders of the Wichita Falls Broom Manufacturing Company, a dissolved corporation, on an adjustment of returns and an assessment of income and excess profit taxes against the corporation for the years 1917, 1918, and 1920. The bill prayed for judgment for additional taxes for said years of $5,639.70, $5,907.76, and $725.22, respectively-a total of $12,272.05.

The case was heard by the District Court, and judgment was entered for plaintiff for the said years of $52.63, $3,500.65, and The United States $611.05, respectively. appealed, contending that it was entitled to recover the full amount prayed for. Defendants appealed, and contend that a recovery for the year 1917 was barred by limitation, apparently making no complaint as to the judgment awarded for the years 1918 and 1920. No question arises as to the return of 1919, as that year showed a loss, which was duly credited. The material facts

are these:

The Wichita Falls Broom Manufacturing Company, as its name indicates, was engaged in the manufacture of brooms at Wichita Falls, Tex., for some years previous to 1917. Its plant was practically destroyed by fire on December 14, 1919. The record does not disclose whether they again actively entered business, but the contrary may be presumed. On May 17, 1921, the corporation was dissolved and surrendered its charter. Prior to that time its assets, amounting to $31,657.50, were distributed to the defendants in proportion to the amount of stock held by them. In April, 1922, an examination of the books of the corporation was made by a revenue agent, and he rendered a report, dated April 11 of that year, in which he recommended the assessment of additional taxes of $29,656.93. Thereafter T. B. Noble, who had been president, and J. C. Ward, who had been secretary, of the corporation, filed an appeal on behalf of the corporation with the Commissioner of Internal Revenue, and appointed H. C. Weeks, attorney at law, as attorney and agent to represent the corporation in the matter, and on January 27, 1923, the same two defendants executed a waiver, and consented to a determination, assessment, and collection of the amount of taxes under the returns made in the year 1917. Thereafter an audit was had, resulting in the assessment of additional taxes for the respective years, as prayed for

The law of Texas provides that upon the

dissolution of any corporation, unless a receiver is appointed by some court of competent jurisdiction, the president and directors at the time of dissolution shall be trustees of the creditors and stockholders of said corporation, with full power to settle the affairs, collect the outstanding debts, and divide the moneys and other property among the stockholders, after paying the debts due and owing by such corporation at the time of its dissolution, and for this purpose the existence of every corporation is continued for three years. Article 1206, Vernon's Sayles'

Ann. Civ. St. Tex. 1914.

It is not denied by defendants that they are liable to the United States for the payment of additional taxes lawfully assessed in the proportion in which they have received the assets of the corporation, but they contend that the president and secretary were not authorized to execute the waiver, because they did not constitute a majority of the board of directors. The only evidence we find in the record, aside from the allegations of the bill, as to who were the directors, is the testimony of Noble, in which he states that J. A. Kemp, O. T. Bateman, J. C. Ward, and himself were directors. The bill alleges that one O. T. Bacon was a director. We are not advised as to which name is correct, or whether the discrepancy is the result of a clerical error; but neither Bacon nor Bateman, whichever may be the correct name, is a defendant in the suit, nor does it appear that either of them was a stockholder and received any distribution of the assets. Kemp, who was the other director, has not testified.

[1,2] When the president and secretary of the board of directors of a corporation act, and it is not shown that the other directors protested or objected, the presumption may be indulged that they acquiesced. That presumption is very strong in this case as the corporation received substantial benefit by the audit following the execution of the waiver. At the time of the report of April, 1922, prescription against suit had not run as the government had five years after the filing of the 1917 return in which to adjust it and bring suit. Section 250, Revenue Act of 1921 (Comp. St. Ann. Supp. 1923, § 6336tt). Had the waiver not been signed, suit could have been filed at that time based on the first audit. We agree with the District Judge that the waiver was properly executed by Noble and Ward, and that defendants are bound by it, and the suit as to the taxes assessed on the return in 1917 is not barred.

With regard to the reassessment of taxes, the sole question raised is as to the method of valuing the inventory of raw material. In the inventories taken at the close of 1916, 1917, and 1918, the corporation valued the stock of broom corn on hand at 10, 13, and 10 cents per pound, respectively, stated to be market value, while the average cost of these years, respectively, was 6.25, 13.2, and 15.86 cents per pound. The report by the revenue agent in April, 1922, is in the record in full, but the subsequent audit, made in March, 1923, used as a basis for the additional assessment of taxes, is not in evidence, except as to a statement of capital and income shown on the returns, and the figures of the adjustment of these items and the amounts of additional taxes assessed, so we are unable to say what other figures are included in that audit.

Section 203 of the Revenue Act of 1918 (Comp. St. Ann. Supp. 1919, § 63361⁄4sc), relative to inventories, is as follows: "That whenever in the opinion of the Commissioner the use of inventories is necessary in order clearly to determine the income of any taxpayer, inventories shall be taken by such taxpayer upon such basis as the Commissioner, with the approval of the Secretary, may prescribe as conforming as nearly as may be to the best accounting practice in the trade or business and as most clearly reflecting the income."

From time to time the Treasury Department has adopted rules relative to inventories, all of them of about the same purport, in which it is provided that a taxpayer, in valuing his inventory, may adopt the basis of cost, or cost or market price, whichever is lower. See T. D. 2609, December 19, 1917; T. D. 2831, April 16, 1919; T. D. 2831, December 30, 1920. There is the testimony of several witnesses in the record tending to show that it is the custom of broom manufacturers in Texas to value their inventories at market price, and it is shown that the corporation here in interest had always done so. We think that what is the "best accounting practice," referred to in the statute, would have to be determined by a consideration of a much broader field than that covered by the witnesses for defendants, and, on the other hand, there is the testimony of a government accountant tending to show that the best accounting practice during the taxable years 1917, 1918, and 1920 was to value inventories at cost or market, whichever was lower. Notwithstanding this testimony, and regardless of the practice in other lines of business, it would seem to us that the best