MUSCHANY ET AL. v. UNITED STATES
NO. 31.
SUPREME COURT OF THE UNITED STATES
Argued October 18, 1944. Decided February 5, 1945.
324 U.S. 49
So ordered.
MR. JUSTICE ROBERTS is of opinion that the writ of certiorari should be denied.
Mr. Paul A. Freund, with whom Solicitor General Fahy, Assistant Attorney General Littell and Mr. Norman MacDonald were on the brief, for the United States.
MR. JUSTICE REED delivered the opinion of the Court.
Writs of certiorari were allowed to petitioners by this Court in these two cases to review the action of the Cir-
The petitions for certiorari were granted, 321 U. S. 760, because of asserted conflict with United States v. Grace Evangelical Church, 132 F. 2d 460. Jurisdiction of this Court rests on
Under the authority of the Second Supplemental National Defense Appropriation Act of 1941,
”Provided further, That the cost-plus-a-percentage-of-cost system of contracting shall not be used under this section; but this proviso shall not be construed to prohibit the use of the cost-plus-a-fixed-fee form of contract when such use is deemed necessary by the Secretary of War.”
54 Stat. 713 .
The duty to act for the War Department in obtaining the land lay in the office of the Quartermaster General and specifically in the Real Estate Branch of that office. In an effort to expedite the acquisition of the needed land,
The employment of McDowell as agent to secure options for the United States was confirmed by the War Department to the Citizens Committee, an informal organization of those who owned property which was needed for the proposed project. McDowell went to work to
The approved form of option, which was a part of McDowell‘s contract with the Government, was used by McDowell in the particular transactions which are under examination in these proceedings. The option accords with the requirements of the McDowell contract and in addition provides for an agreed valuation at the option price in case of condemnation.4 The offer was accepted by the Government.
Petitioners’ options were among those accepted only to be repudiated later, the Government then instituting condemnation proceedings to obtain petitioners’ lands. In the two condemnation proceedings instituted against petitioners, judgments were entered upon a declaration of taking which vested titles in the United States.
The two cases were decided in favor of the validity of the contracts and the compensation was fixed at the price
The following determination appears in the opinion of the trial court for these cases, 46 F. Supp. at page 928:
“There is an absence of any showing that facts were concealed, that misrepresentations were made, or that duress was used. The price stated in the option contract is not unconscionable. There is no fraud, actual or constructive, in this case.”6
As a result of this conclusion, the issues of corrupt action in these two instances are decided contrary to the Gov-
“There is no evidence that the option price of forty-five hundred dollars included the amount the defendants asked for the land plus McDowell‘s fee of 5% of sale price, the Kansas City Title Insurance Company‘s fee of 1 1/2% for examining title, the stamp tax or the recording fee.”
We treat the finding and determination as applicable to both cases.
On appeal the Circuit Court of Appeals found, contrary to the trial court‘s finding quoted above, that the commission and expenses were added to the vendors’ net price. We agree with the appellate court. While no direct evidence appears as to the addition of the expenses to the vendors’ net price, it seems clear from the agreement between the Government and McDowell, the option contract, the statements of McDowell at public meetings, the advice given by the citizens’ committee and Colonel Valliant‘s testimony that it was generally understood that the option price was to be calculated in this way. Although Messrs. Muschany and Andrews were not asked specifically as to how they figured their gross prices stated in the options, both were present at a meeting at which McDowell explained his contract. Since the vendors agreed by the contract to pay all commissions and expenses, they must have added these expenses to what they expected to receive net for their land. Whether the addition was by precise arithmetical computation or by intuitive action is immaterial. The mere fact that no separate statement of the items appears in the evidence in these cases would not overturn the force of this general and definite understanding.
The Court of Appeals was of the opinion that the contracts with the landowners were cost-plus-a-percentage-
Prior to consideration of the two principal issues raised by the petitioners and respondent in their arguments before this Court, it seems necessary to refer to the allegations of fraud, unconscionable dealing, bad faith and misrepresentation on which respondent relied in the trial court as invalidating petitioners’ contracts. As is indicated, ante, pp. 55-56, the trial court specifically found against the respondent on these issues. Nor did the Circuit Court of Appeals reverse the trial court‘s findings. Fraud, misrepresentation and duress were not argued before this Court. Since the trial court‘s findings on these issues are supported by substantial evidence, it is not for this Court to undertake an independent examination of these issues as such, or under the guise of determining “just compensation.”7 Only recently this
The federal district court admitted evidence which indicated that McDowell engaged in questionable conduct in securing options from sellers other than the petitioners in the instant case. Such evidence is not relevant to the issue of the validity of petitioners’ contracts. The enforceability of petitioners’ contracts is not to be determined or colored by McDowell‘s alleged dealings with other parties; these other contracts are not involved in the instant case and circumstances which might urge a different result with respect to them must be carefully eliminated lest petitioners be penalized for illegal acts of others.
There remains to be considered the question whether mere disparity between the original cost of these lands to the seller and the sale price to the government makes the contracts illegal—whether a contract with the government is invalid on a mere showing that it was highly profitable but not unconscionable. Congress’ adoption of statutes providing for the renegotiation of war contracts indicates that in certain instances the government seeks to recover abnormally high contract profits. That Congress could
It goes without saying that in all dealings with the government, contractors and agents alike are under an obligation to deal strictly within the limits of the statutes and with absolute honesty. Criminal sanctions enforce this rule. Similarly, the doctrines of fraud, unconscionable dealing and unjust enrichment are to be strictly applied to insure fair and honest dealing between the government and its citizens. These remedies are available whenever and wherever transgressions take place. However, the right to determine the policies or methods by which property is to be acquired rests with Congress.
Applicability of cost-plus-a-percentage-of-cost clause. Prior to the present war emergency the Secretary of War had broad powers to acquire land for military purposes by purchase at prices deemed reasonable by him or by condemnation.9 There were no restrictions as to the manner in which he should exercise this power to purchase, but his power to contract for construction work was sharply limited by statute.10 These restrictions, if continued, would have seriously impeded the War Department‘s preparation for war. Thereupon Congress passed the
We are of the opinion that the first section of the
Our next inquiry is as to whether the contract with the vendors, note 4, supra, violates this prohibition against cost-plus-a-percentage-of-cost contracts. Evidently the proviso was inserted to avoid the abuses which were prevalent before and during the first World War from the Government‘s guarantee of cost plus a profit to contractors.12
The purpose of Congress was to protect the Government against the sort of exploitation so easily accomplished under cost-plus-a-percentage-of-cost contracts under which the Government contracts and is bound to pay costs, undetermined at the time the contract is made and to be incurred in the future, plus a commission based on a percentage of these future costs. The evil of such contracts is that the profit of the other party to the contract increases in proportion to that other party‘s costs expended in the performance. The danger guarded against by the Congressional prohibition was the incentive
The vendors’ contract, when read with the McDowell contract, shows that the Government arranged for a fee to its agent based on a percentage of the purchase price. This does not fall within the language of cost-plus-a-percentage-of-cost. The offer was to sell to the Government at a fixed, definite price. The Government when it accepted this offer agreed to pay this set amount and no more. The contract contains no provision allowing adjustment of price based on possible future indeterminate expenses. The vice of cost-plus contracts is not inherent in the vendors’ contract. That vice basically is the incen-
When this is done, it is clear that the objection to the vendors’ paying a fee contingent on the securing of a Government contract disappears. While in form the McDowell fee and other expenses are paid by the vendors, it was so handled, as is shown by the finding of the trial court, that “the several transactions [might be] closed with the issuance of one, instead of several vouchers, for each tract.” 46 F. Supp. at 925-26. The evidence indicates that in reality McDowell was the Government‘s agent and that his commission, although nominally paid by the vendor, amounted to a payment by the Government to him as its agent. Contingent fee contracts to secure Government business for the employer of the recipient have been held invalid because of their tendency to induce improper solicitation of public officers and the exercise of political pressure. Steele v. Drummond, 275 U. S. 199, 206.14 For
In reaching the foregoing conclusion on the contingent fee aspect of the problem, we laid aside consideration, from the standpoint of public policy, of the fact that the contingent fee is to be measured by a certain percentage of the purchase price. We now consider that. The record gives no satisfactory explanation for the apparently ingenuous action of the Real Estate Branch of the War Department in paying a commission on the purchase price to its soliciting agent. Certainly the officers realized the possibility of and temptation to price inflation.
It may have been the Department‘s conclusion that its officers could regulate the offer of prices above the market by a refusal to accept the options. Colonel Valliant visited the area to gather information during the purchases. Our inquiry at this point, since corruption is not shown, is as to whether the likelihood of disadvantage to the Government is so menacing as to prohibit such contracts regardless of the effect in a particular case.
No other case has come to our attention which has declared that a commission or purchase contract is invalid on the ground of public policy. Public policy is to be ascertained by reference to the laws and legal precedents and not from general considerations of supposed public interests. Vidal v. Philadelphia, 2 How. 127, 197-98. As the term “public policy” is vague, there must be found definite indications in the law of the sovereignty to justify the invalidation of a contract as contrary to that policy. Twin City Pipe Line Co. v. Harding Glass Co., 283 U. S. 353; Frost & Co. v. Coeur D‘Alene Mines Corp., 312 U. S. 38. It is a matter of public importance that good faith contracts of the United States should not be lightly invalidated. Only dominant public policy would justify such action. In the absence of a plain indication of that policy through long governmental practice or statutory enactments, or of violations of obvious ethical or moral
The Government calls attention to
Here the pay was for services rendered to the Government. In form the vendors agreed to pay the compensation but actually the United States was the payor. As stated above it was merely a convenient way in which the Government‘s promise to pay its agent could be met.
Since it is Congressional enactments which determine public policy, any doubt which might exist as to the legality of such an arrangement as was adopted by the War Department for this and a few other projects is dissipated by the action of Congress on the Military Establishment Appropriation Bill for 1942. Apparently a limitation of commissions on land purchases was omitted from the bill in accordance with suggestions of the War Department.19 The commission type of contract was recognized as appropriate in certain circumstances by the
Reversed.
MR. JUSTICE JACKSON took no part in the consideration or decision of this case.
MR. JUSTICE BLACK, dissenting.
The
The agreements were executed under the following circumstances. A War Department representative agreed that one McDowell should undertake to secure options to buy 18,000 acres of land at Weldon Springs, Missouri,
The ensuing results were, if not inevitable, at least not surprising. With phenomenal speed McDowell obtained 270 separate options and promptly recommended their purchase to the Department at the stipulated prices. On what appears to have been no more than an inescapably formal examination of these recommendations,1 129 options were accepted and contracts of purchase were executed at an expense of approximately a million dollars to the government. After an investigation of the whole affair by the Department of Justice the remaining 149 contracts were repudiated by the government, condemnation pro
This Court now holds that the government is irrevocably bound by the contracting officer‘s “acceptance” of the McDowell options. And while the immediate judgment directly affects only the two pieces of property here involved, the principles announced uphold the validity of all the McDowell-procured agreements, even though the agreed cost stipulated in those agreements might in condemnation proceedings be judicially determined to exceed just compensation. The District Court in these two cases did not determine what would be just compensation. It found no more than that the option agreed price of these particular lands was not “unreasonably excessive.” The District Court did not find that the agreed prices represent a fair market value; the opinion of the Circuit Court of Appeals makes it clear beyond doubt that it was impossible to make such a finding. The record shows that the government will now be required to pay the petitioners in No. 31 a value, as of 1940, of $4,500.00, or $165.00 per acre, for land which petitioners bought in 1939 for $1,000.00, or $33.33 per acre. The other petitioners are to be the beneficiaries of a similar “contract” bounty. For lands and improvements which cost them $2,250.00 in 1934, or about $24.00 per acre, the government must pay $12,000.00, or $127.00 per acre.2
The details of the negotiations between McDowell and the landowners are set out in the opinion of the Circuit Court of Appeals and need not be repeated at length here. Reference is there made to successive recommendations by McDowell on the same parcel of land for purchase at $4,500.00, $10,000.00 and $4,900.00. In another instance a landowner refused the request of one of McDowell‘s representatives to up the price of his property $50.00 per acre. Still other illustrative items included in agreed prices, such as those which the Court today holds invulnerable, are “one year‘s loss in salary of each partner” and $6,500.00 for “loss of business.”
Nothing but the clearest and most unequivocal Congressional enactment could in my judgment bind the government to such arrangements. There is no such enactment. And even if Congress had not itself condemned such contracts as these, conceivably, they are within the ban of principles previously enunciated by this Court.3 For the terms of McDowell‘s contract, which was an integral part of the purchasing system here involved, were such that the harder he worked to reduce the price of the land he bought, the less he made. He could not possibly serve most profitably his own interest and that of the government at the same time. Only by acting to the financial disadvantage of the government could he act for the financial advantage of himself.
It was to protect the public from the dangerous tendency of the excesses of just such contracts that Congress
The same Senator who made this report, initiated a Senate discussion which led to the immediate adoption of the prohibition of “cost-plus-a-percentage-of-cost” contracting in the Act here involved. He excoriated the cost-plus-a-percentage system as a “vicious” one.6 It was this
That this was the moving purpose in prohibiting such a contract system is further shown by the fact that Congress at the same time permitted a “cost-plus-a-fixed-fee form of contract.” Certainly Congress could not thereby have intended to reduce the scope of its sweeping condemnation of “cost-plus-a-percentage-of-cost system.” On the contrary, permission to use the fixed fee contract but underlines the Congressional intent absolutely to prohibit any War Department agent from using a system of contracting which would impose upon the government inflated costs by providing an incentive to pad costs or to take too rosy a view of value. Whatever other disadvantages the cost-plus-a-fixed-fee system may have, no
That incentive looms large in the contracts here involved.8 It matters not into what form the arrangement is cast. It is conceded that had this contract required McDowell himself to buy and take title to the lands, the arrangement with him would have been within the Congressional prohibition as a “cost-plus-a-percentage-of-cost” contract. But the fact that he did not take title himself did not lessen the tendency of the contractual arrangement to invite him to increase his reward by inducing the government to pay a high price for the land. The difference created by this slight deviation in the structure of the arrangements did not alter their effect. The “vicious” tendency at which Congress hit was still present. The government was still obligated to pay the
It is said that statutes providing for the renegotiation of war contracts indicate that in “certain instances the government seeks to recover abnormally high contract profits.” These efforts of Congress to safeguard the public interest against unjust exactions provide no excuse for the narrow construction the Court today gives the “cost-plus-a-percentage-of-cost” prohibition. They but emphasize the intention of Congress to devise many safeguards against unfair procurement prices which might unjustly enrich some few people at the expense of the many. I should think that if these statutes could be given any effect, under the circumstances of these cases, they would but provide an added reason why the government should not be required to pay these landowners more than “just compensation.” Certainly, in the light of the legislative policy articulated in the renegotiation statutes, I can see no reason why this Court should work overtime to shrink the scope of the cost-plus-a-percentage-of-cost statutory prohibition.
The Court‘s judgment in effect upholds McDowell‘s percentage agreement with the government and the option agreements with the landowners made pursuant thereto. It requires full payment not only of the stipulated land prices but of McDowell‘s commissions as well. This is so because the $4,500.00 and $12,000.00 included the cost of the land plus the percentage of that cost which was McDowell‘s commission. Thus, affirmance of the District Court judgments necessarily must imply that
The landowners’ rights are indissolubly intertwined with McDowell‘s.9 Both must stand or fall together on the validity of McDowell‘s and the landowners’ arrangements with the government. And under those arrangements the government was to pay cost of the lands for which McDowell negotiated plus five percent of that cost. This was a “cost-plus-a-percentage of cost system of contracting.” Such an integrated scheme of illegal arrangements should not be permitted to support these judgments. The government should be required to pay no more than just compensation for the lands it has condemned.10
We are not faced here with a situation in which findings, upon “ample evidence,” have been clearly made by a master and unequivocally and jointly affirmed by both a District Court and Circuit Court of Appeals—as in United States v. Bethlehem Steel Co., 315 U. S. 289, 297-9.11 The District Court and the Circuit Court of Appeals did not,
The District Court did state in its opinion that there was “no fraud,” and that the option prices were “not unconscionable.” This finding of the absence of fraud was, however, unsupported by the primary findings of fact made by it, and that court‘s conclusion rested upon legal assumptions which I think contrary to many decisions of this Court. The same is true of the finding of unconscionability. As to “unjust enrichment,” the District Court made no finding at all, and I believe that its primary findings of fact are inconsistent with any holding that these landholders would not be “unjustly enriched” if the government is forced to pay the option prices.
The Circuit Court of Appeals found it unnecessary to pass upon either of these questions. It refused to indulge in what it termed a “judicial paring” of the cost-plus-a-percentage-of-cost statutory prohibition, and held the contracts void under that statute.
The District Court considered that the government‘s argument required it affirmatively to find the following three facts in order to hold that there was fraud: “(1) The agent‘s commission was added to the purchase price, (2) the price did not represent the reasonable market value of the land, and (3) McDowell misrepresented the value of the land to Col. Valliant.”
As to the latter point, the District Court, in its opinion, stated that there was no misrepresentation by McDowell. The Circuit Court of Appeals did not affirm this finding. It did say that the record and findings of the trial court left no question “as to the actual good faith of the Quartermaster Department in the matter.” But after narrating certain activities of McDowell, it observed that “These inconsistencies and disguisings can hardly be commended as desirable methods of handling expenditures of public funds. The excuse made by the Quartermaster Depart
The District Court further based its conclusion that there was no fraud on a finding that the agent‘s commission was not added to the purchase price. This finding the Circuit Court of Appeals expressly rejected. This Court has done likewise.
The third and last element which the District Court had posed concerning the presence of fraud was whether “the price did not represent the reasonable market value of the land.” Neither the District Court nor the Circuit Court of Appeals found that the price did represent such a value. If such a holding has been made at all, it is by this Court, and I cannot agree to it. The District Court escaped the necessity of making a finding as to market value by holding that market value was immaterial since “The circumstances of this case show that other considerations were in the minds of the parties when the option was taken. The necessity of national defense had flashed upon the country. The imminence of the peril was impressive. The land must be acquired at once, without the delay incident to condemnation. . . . The land was sought, but more was demanded; immediate possession was essential to its undertaking.”
I can accept neither the court‘s conclusion, nor its reasoning. In the first place, this Court has long held “market value” to be the proper standard of value in eminent domain proceedings, and in considering market value it has consistently been held that landowners are not entitled
Having thus put aside consideration of the fair or market value of the property, the court limited itself to finding that the option prices did not represent an “unreasonably excessive value.” What line marks the distinction between reasonable excess and unreasonable excess does not appear from the District Court‘s opinion nor from this Court‘s opinion today. An examination of the particular facts in No. 31 suggests the difficulty of ever ascertaining what would be an unreasonably excessive value. In 1939, $800 back taxes had accumulated on 33 acres of land. The Muschanys bought it, paying the $800 taxes, $100 to the owners, and approximately $100 was allegedly expended for attorney‘s fee, abstract of title, etc. In 1940, the “necessity of national defense had flashed upon the country.” The finding of the District Court, which was not approved by the Circuit Court of Appeals, is apparently approved by this Court today to the effect that 350% profit on this purchase of land is not “unreasonably excessive,” even though the purchaser has held it for only one year. The only subsidiary finding of fact which the District Court made to support this phenomenal rise in value was that in 1937 a road had been built which shortened the distance to St. Louis by about 15 miles. But this road had been built two years before the Muschanys paid
The Circuit Court of Appeals in discussing this question of value said, “There is, however, no occasion for us here to review either the government‘s or the landowners’ evidence as to the value in the two cases. If the value of the land were the issue to be determined, we might hesitate to reject the trial court‘s findings in either case, under
At the very least, I think the government is entitled to have the Circuit Court of Appeals pass on the questions of fraud, unconscionability, and unjust enrichment which this Court says “are available whenever and wherever transgressions take place.”
MR. JUSTICE FRANKFURTER and MR. JUSTICE RUTLEDGE join in this dissent.
Notes
In referring to the District Court‘s finding that $12,000.00 was “not an unreasonably excessive valuation of the land in question,” the Circuit Court of Appeals made this comment:
“The latter finding is perhaps a bit strained, since the substance of the evidence on behalf of the landowners was simply that the land had a farm value of only $50 an acre (a total of $4,725), but, as the landowners’ only value-witness put it, ‘I think someone from
Marsh v. Whitmore, 21 Wall. 178; Michoud v. Girod, 4 How. 503; Providence Tool Co. v. Norris, 2 Wall. 45; Hume v. United States, 132 U.S. 406; United States v. Carter, 217 U.S. 286; Crocker v. United States, 240 U.S. 74; see also the opinion of District Judge Collet in 45 F. Supp. 1016.“3. The Optioner shall diligently endeavor to acquire such options, not only within such time, but at the reasonable value of the land to be acquired, and subject at all time to the directions of the Government. The form of option contracted to be executed, and all terms, covenants and conditions thereof, shall be on the form approved by the Government, and a copy of which is to be attached hereto and made a part hereof. It is understood that the Government is to have the exclusive right to take up or reject any option to any parcel of land optioned by said Optioner hereunder, except as hereinafter provided.
“4. . . . The Optioner shall procure from the vendors in all cases where options are accepted on behalf of the United States, an order to the Kansas City Title and Insurance Company, to prepare certificates of title and deeds and it shall be his responsibility to see that said certificates of title and deeds are transmitted to the proper Government official for examination. The certificates of title to be furnished by The Kansas City Title and Insurance Company will be on forms similar to the one attached hereto and made a part hereof and funds to effect closing of purchases by the Title Company will be furnished by the Government to the Title Company in form of checks payable to each vendor in the amount of the purchase price set forth in the accepted options.”
“8. For all services hereunder the compensation of the Optioner shall consist solely of the five per cent (5%) commission in each purchase, to be paid by the vendor, as more specifically set forth in the form of option attached hereto and made a part hereof.”
“Upon furnishing of final certificate of title as above showing title to be vested in the United States of America, the agreed purchase price above mentioned will be paid by the Government to the undersigned.
“If for any reason the title to the land is not approved by the Attorney General, the Government will proceed to acquire the land by condemnation proceedings instituted in the District Court of the United States in which said property is located, under a consent verdict fixing the award at the agreed valuation and in accordance with all the terms and provisions of this option and will upon filing its petition in such proceedings deposit said agreed purchase price with the clerk of said court, same to be disbursed by said officer pursuant to the decree entered in such condemnation proceedings.”
“As a result of experiences with cost-plus-a-percentage-of-cost contracts during the first World War and the early part of this war, use of this type of contract is now almost without exception prohibited by statute.” C. C. H., War Law Service, Government Contracts, Par. 1015. SeeNo finding of value appears for the Andrews case but the evidence shows an average valuation by Government witnesses of $3,114 and by the vendor and one of his witnesses of $12,000.
“So there is nothing to hinder the present Secretary of War, or any other Secretary of War, if he desires to do so, from going back to the old, vicious cost-plus system which we had during the World War, when, in one instance which fell under my observation—not in the War Department, but in the Navy Department—in the construction of naval vessels on a cost-plus 10-percent basis, in making up the cost base on which the people of the United States were required not only to pay cost but to pay 10 percent additional, one great shipbuilding company in this country added in the cost of wines, liquors, and cigars used on the trial trip, and the cost of the prize given to the lady who christened the ship. They even added in the cost of representatives maintained by the company in China and in Japan for the purpose of promoting other business of the company on the theory that if they secured any outside business it would reduce the overhead chargeable to the Government.” Cong. Record, Vol. 86, Part 7, p. 7839, 76th Cong., 3d Sess. Another Senator, in the same discussion, said with reference to this system of contracting, “A man will say, ‘I have a return of 10 percent of the contract price, and I will get what I can under it, pile up expenses, and so forth.’ ” Cong. Record, Vol. 86, Part 7, p. 7841, 76th Cong., 3d Sess.Were this contract not invalid as violating the Congressional prohibition against the cost-plus-a-percentage-of-cost system, there would still remain the question as to whether the government was compelled to pay more than “just compensation” in these condemnation proceedings. We have never decided that there may not be circumstances short of those necessary to hold private contracts illegal, under which the government may, in condemnation proceedings, obtain judicial ascertainment of just compensation, despite a single contracting officer‘s agreement to pay more, and despite his attempted waiver of the Constitutional provision that the government need only pay “just compensation” for land it takes for public use. Danforth v. United States, 308 U. S. 271, actually decided quite different questions under a different statute, different pleadings, and quite different circumstances. In condemnation proceedings, Danforth filed a counterclaim seeking judgment against the government for a price stipulated in an agreement. The government attacked the counterclaim and it was stricken in District Court on two grounds only: (1) the government had not consented to the suit; (2) the District Court was without jurisdiction because more than $10,000 was involved.
As examples of contracts which have been held invalid as acts or contracts against public policy, see Sprott v. United States, 20 Wall. 459; McMullen v. Hoffman, 174 U. S. 639; Burt v. Union Central Life Ins. Co., 187 U. S. 362.