and collection of taxes for state, county, town- numerous decisions of other courts, holding that ship, or road purposes" was intended to refer to acts of the Legislature, exacting a fee in the adanything other than to general or public taxes, to ministration of estates proportioned upon the be levied and collected for the benefit of the inventoried value of an estate, are unconstitustate, township, or road district.' Also, in the tional as imposing an extra burden upon_the case of Blackrock Copper M. & M. Co. v. Tingey, property belonging to the estate. State v. Gor34 Utah, 369, 98 Pac. 180, 28 L. R. A. (N. S.) man, 40 Minn. 232, 41 N. W. 948, 2 L. R. A. 255, 131 Am. St. Rep. 850, the court says: "The 701; Cook County v. Fairbank, 222 Ill. 578, contention that the act is void on the ground 78 N. E. 895; State v. Case, 39 Wash. 177, 81 that it offends against the uniformity clause of Pac. 554, 1 L. R. A. (N. S.) 152, 109 Am. St. the Constitution cannot be sustained. Having Rep. 874. These decisions are all based upon determined that the tax is not a tax upon prop- the theory that the person paying the fees for erty, within the purview of the Constitution of the administration of the estate does not receive this state, it follows that the classification, the any benefit, by reason of the payment, and, furamount of the tax, and the manner of collecting thermore, in most instances the fee is arbitrary it, is a matter largely, if not entirely, within and not fixed upon any rule of percentage. In the legislative discretion.' Also, in the case of the case of State v. Gorman, the court says: 'It State ex rel. v. Frazier, the Supreme Court of seems hardly necessary to refer particularly to this state in its opinion says: 'It is claimed, the schedule of values and of amounts required however, that the case of Manning v. Klippel, 9 to be paid, to show that the law wholly fails in Or. 367, is decisive on this point. The author- apportioning the burden imposed, to regard the ity of this case is very much impaired by the sub- constitutional rule of equality, measured with sequent cases of Northern Counties Trust v. reference to the value of the property taxed. In Sears, 30 Or. 388, 41 Pac. 931, 35 L. R. A. 188, the first place, estates not exceeding $2,000 in and Landis v. Lincoln Co., 31 Or. 424, 50 Pac. value are wholly excepted from contribution. 530.' The Supreme Court, also in the case of If estates are taxable in this manner at all, State ex rel. v. Frazier, supra, in its opinion, such an exemption is contrary to the requireuses this language: And it is said by Mr. Jus- ments of the Constitution. Le Duc v. City tice Wolverton, in Northern Counties Trust v. of Hastings, 39 Minn. 110, 38 N. W. 803. Sears, 30 Or. 388, 41 Pac. 931, 35 L. R. A. Again, while the schedule of sums to be paid is 188, "a law which requires a fee to be paid to arranged somewhat with regard to value, yet an officer, and finally covered into the treasury this is done arbitrarily and not upon any rule of a county, for which the party paying the fee of percentage; and the burden is very unequalreceives some equivalent in return, other than ly distributed, as measured by the standard of the benefit of good government, which is enjoyed values. To illustrate, an estate of little less by the whole community, and which the party than $50,000 pays a tax of $100, or about onemay pay and obtain the benefit under the law, fifth of one per cent. of the value; an estate or let it alone, as he chooses, does not come with- ten times larger pays a tax fifty times larger in the category of an act for raising revenue.' $5,000, or about one per cent. of the valuation; In the case of Northern Counties Trust v. Sears, an estate of $500,000 pays a tax of $1,000, while supra, the court in its opinion says: "The con- an estate of $500,001, one dollar in excess of trolling feature which characterizes bills of this the former, pays a tax of $5,000. * * * Suitnature, says Johnson, J., is that they impose ors in this (probate) court of exclusive jurisdictaxes upon the people, either directly or indi- tion should not be required to pay as a condition rectly, or lay duties, imposts, or excises for the to their suits being entertained a tax measured use of the government and give to the person by the value of their property, and without refrom whom the money is exacted no equivalent gard to the nature or extent of judicial proceedin return, unless in the enjoyment in common ing, which may be invoked or becomes necessawith the rest of the citizens of the benefit of ry.' In the case of McMahan v. Olcott, 65 Or. good government. United States v. James, 13 537, 133 Pac. 836, the Supreme Court of the Blatchf. 207, Fed. Cas. No. 15,464. This case state held that where an act of Legislature is was instituted to test the validity of an act of constitutional the court cannot question the wisCongress increasing the rate of postage upon dom or policy of a law. Furthermore, the Suthird class matter, under the national Constitu- preme Court of this state has held, in a long tion providing that "all bills for raising revenue line of decisions from State ex rel. v. Malheur shall originate in the House of Representatives," County, 46 Or. 519, 81 Pac. 368, to Miller v. and it was further observed by the court that: Henry, 62 Or. 4, 124 Pac. 197, 41 L. R. A. "A bill regulating postal rates for postal serv- (N. S.) 97, that unless a court can say that it ice, provides an equivalent for the money which is satisfied beyond a reasonable doubt that an the citizen may choose voluntarily to pay. He act of the legislative assembly is unconstitutiongets the fixed service for the fixed rate, or he al, it is the duty of the court to uphold it. For lets it alone as he pleases, and as his own in- the reasons above given, the demurrer to the terests dictate." Hence it was concluded that complaint will be sustained. the bill was not one for raising revenue.' "Dated at La Grande, Oregon, this 30th day of March, 1914. J. W. Knowles, Circuit Judge."

"The landowner, who files his claim with the board of control and pays his money to have his water right adjudicated, receives some benefit over the other taxpayers of the state, in that he has his water right adjudicated and obtains from the board of control a certificate showing his water right, which is certainly a benefit to him, in case he either desires to sell the land with the water right or the water right alone. Further more, it is optional with the landowner or the owner of the water right, whether he has his water right adjudicated or not. The fees are not paid simply as a filing fee, but cover all the services of a state engineer, and board of control in the surveying of the land, and making a plat thereof, taking the testimony and adjudicating the water right. Of course, the greater the number of acres, the greater the labor in making the survey, taking the testimony, and making the determination.

"Counsel for the plaintiff in the able brief, which they have filed, have cited the court to

[4, 5] We cannot agree with the statement of the learned judge that it is optional with the landowner to have his water rights adjudicated. Section 6656 provides:

in such proceedings and submit proof of his "Any such claimant who shall fail to appear claims shall be barred and estopped from subsequently asserting any rights theretofore acquired upon the stream or other body of water embraced in such proceeding, and shall be held to have forfeited all rights to the use of said water theretofore claimed by him."

It is evident that a failure by the claimant of a water right to appear and submit his claims when properly required to do so bars his right to assert it thereafter to the same extent that a party is barred who makes

upon final determination. The theory of the act seems to have in contemplation the fact that ultimately all claims to water rights in the streams of this state will have to be determined and settled by the board, and exacts in advance from the applicant for a permit the possible expense of a determination of his rights. Having paid this once, he in good conscience should not be required to pay it a second time. If any one should be heard to complain of discrimination, it would seem that the applicant for a permit is that person in so much as he may possibly be required to lay out of the use of the money contributed for a long period before his rights are finally determined. However, as the tak ing out of a permit is purely a voluntary act which he may or may not leave undone, he cannot be heard to complain. We are of the opinion that the construction of section 6641 is as above indicated, although the language used is somewhat involved. The whole section is as follows:

default after service of summons in a pro- ment of this fee claimants having permits unceeding at law; but it does not follow that, der the act of 1909, renders the act discrimbecause the amount exacted is a necessary inatory; but, when section 6641 is read in prerequisite to the claimant being heard in connection with section 6601, the apparent disthe action, he is thereby deprived of his prop- | crimination is explained. The latter section erty without due process of law. It is not requires the state engineer to exact in adnecessary here to decide whether the pro- vance from the applicant for a permit to apceeding by the board to determine water propriate water exactly the same amount rights is judicial or administrative. To a as fees which is exacted from the claimants large extent it is administrative, but, like many proceedings of that character, the board must also act in a quasi judicial capacity. A determination of the water rights to a stream finally ends as a report to the circuit court, and a decree of final determination by that court. The board is required to take testimony which consumes the time of a stenographer paid by the state; to make, through the state engineer, an examination of the stream and the works diverting water therefrom, including the measurement of the discharge of the stream and of the capacity of the various ditches and canals; to examine and measure the irrigated lands and to gather such other data as may be necessary; to reduce the same to writing and make it a matter of record in the office of the state engineer; to make maps and plats of the various ditches and of the stream-all at the expense of the state. That these services are beneficial to the claimant and necessary to the preservation of his rights in the stream and the protection and assurance of his title goes without saying. The people in general, for instance taxpayers in the western part of the state, have little or no interest in the determination of the question as to whether the title of the Pacific Live Stock Company to a particular quantity of water is settled one way or the other. The proceeding is primarily beneficial only to the parties in interest, and in justice they should bear their share of the cost. Nor does the fact that they are not the moving parties alter the situation. It has always been the custom for courts to demand of litigants, whether plaintiff or defendant, fees to partly defray the expense of litigation-clerk's fees, trial fees, and others of like nature-and to forbid the filing of papers or the trial of a cause until such fees are paid. The only limit to this power is that the fee shall not be dis-es to be $2.50, also a fee of $5.00 for any other proportionate to the service rendered. In the case at bar it is contended that the rule established by the statute is arbitrary and not so proportioned. It is, of course, difficult to fix a rule that will apply with mathematical nicety to every case, but in the present instance it is reasonable to assume that the expense to the state of the investigation, mapping, taking testimony, and other acts involved in the determination of the claimant's rights will equal and in many cases exceed the amount of the fee charged; and that the method indicated by the act by which the amount is determined is eminently fair.

"At the time of the submission of proof of appropriation, or at the time of the taking of testimony for the determination of rights to water, the division superintendent shall collect from each of the claimants or owners a fee of $1.00 for the purpose of recording the water right certificate, when issued, in the office of the county clerk, together with the additional fee of fifteen cents for each acre of irrigated lands up to and including one hundred acres, and five cents per acre for each acre in excess of one hundred acres up to and including one thousand acres, and one cent for each acre in excess of one thousand; also twenty-five cents for each theoretical horsepower up to and including one hundred horsepower, and fifteen cents for each horsepower in excess of one hundred up to and including one thousand horsepower, and five cents for each horsepower in excess of one thousand horsepower up to and including two thousand horsepower, and two cents for each horsepower in excess of two thousand horsepow er, as set forth in such proof, the minimum fee, however, for any claimant or owner in such cas

character of claim to water. All fees collected by the division superintendent shall be accounted for at the following regular meeting of the board of control and paid by such board into the general fund of the state treasury, except, however, those fees due, or to be paid to the county clerk. But in cases of appropriations of water made under a permit issued under the provisions of this act, only $1.00 recording fee above provided shall be so collected by the division superintendent."

Bearing in mind that the applicant for a permit is required by section 6601 to pay in advance acreage fees, that is, graduated fees proportionate to the number of acres to be irrigated and a fee for recording his permit, It is said, however, that the clause in sec- and that he is required by section 6633 to

less than his principal's judgment, costs, and acfor the goods on the sheriff's sale was properly crued expenses, evidence of the amount obtained received as bearing on the question whether defendant's agent had reason to believe that the bankrupt was insolvent when her goods were

attached.

Cent. Dig. §8 458-462; Dec. Dig. § 303.*1
[Ed. Note. For other cases, see Bankruptcy,

board of control that his proposed appropria-ger permitted the goods to be sold for an amount tion has been perfected, it would seem that by the section above quoted it was intended to indicate that at the final determination no further fee should be collected from the appropriator under the act of 1909, beyond the sum of $1 necessary to record his certificate of final determination; that being the only fee not before exacted of him under the provisions of the previous section. But it was, no doubt, the intent of the lawmakers to require of other persons taking the benefit of the law by having their claims adjudicated under it to pay a like sum as, at least, partial compensation for the expense to the state. In this we see no discrimination or unfairness, and certainly nothing that would satisfy us beyond a reasonable doubt that the

act is unconstitutional.

The judgment is affirmed.

(73 Or. 433)

PATTERSON v. BAKER GROCERY CO. (Supreme Court of Oregon. Dec. 8. 1914.) 1. BANKRUPTCY (§ 166*)-PREFERENCES-IN

TENTION.

Since the amendment of Bankr. Act July 1, 1898, c. 541, § 60, 30 Stat. 562, by Act Cong. Feb. 5, 1903, c. 487, § 13, 32 Stat. 800,† an intention on the part of an insolvent debtor to create a preference is not essential to a suit by his trustee in bankruptcy to set aside the advantage thus secured, but it is sufficient if the party obtaining the benefit had reasonable cause to believe that such effect would result from the means adopted.

[Ed. Note. For other cases, see Bankruptcy, Cent. Dig. 88 250-253, 255-258; Dec. Dig. 8 166.*]

2. BANKRUPTCY (§ 166*)-PREFERENCES "IN

SOLVENCY."

In order to ascertain whether a debtor is insolvent within the bankruptcy law, all his property that is salable or convertible into money should be taken into consideration, including exempt property, and a creditor has reasonable cause to believe his debtor insolvent when such a state of facts is brought to the creditor's notice as to the affairs and pecuniary condition of the debtor as would lead a prudent business person to the conclusion that the debtor is unable to pay his obligations as they mature in the ordinary course of business.

In Banc. Appeal from Circuit Court, Baker County; Gustav Anderson, Judge. Action by W. L. Patterson, as trustee in bankruptcy of Mrs. George W. Mutch, against the Baker Grocery Company. Judgment for plaintiff, and defendant appeals. Affirmed.

ruptcy to recover from a creditor of the es

This is an action by a trustee in bank

tate the proceeds of property sold upon execution issued upon a judgment which it is alleged was suffered by the bankrupt while insolvent, and secured by the creditor whose agent had reasonable cause to believe that by the legal proceedings thus employed it was intended thereby to gain a preference. The facts are: That Mrs. Julia A. Mutch, on December 1, 1912, began conducting at Huntington, Or., a general merchandise business under the name of George W. Mutch & Co. She personally had charge of the store until July, 1913, but thereafter two clerks employed by her carried on the trade until September of that year, when J. E. Paul agreed with her to take at cost price the goods in the store, pay the creditors' demands, and if, after disposing of the property, any sum of money remained, to give it to Mrs. Mutch. An invoice was thereupon taken, and it was found that the value of the merchandise and fixtures was $2,833.43, and the amount of the bills receivable that were considered collectible was $219.80, making $3,053.23, and the sum due the creditors was $3,055.17, thus showing the liabilities to have been, as then estimated, $1.94 in excess of the assets. Mr. Paul thereupon took charge of the store, and on September 23, 1913, pursuant to sections 6069 and 6070, L. O. L., as amended by chapter 281, Gen. Laws, Oregon 1913, gave to the several creditors written notice that five days thereafter he proposed to purchase the entire stock of goods, wares, and merchandise of the George W. Mutch Company, to assume the indebtedness thereof, to pay the same as soon as possible, and to conduct the business at the same place under the name of J. E. Paul Company. posing the bargain had been concluded, thereupon moved to Payette, Idaho. Nearly all the creditors objected to the contemplated sale of the goods to Paul, who immediately notified the creditors that he abandoned the proposed purchase after conducting the busiIn a suit by a bankrupt's trustee to recover ness a few days. The possession of the store an alleged preference received by defendant through an execution sale of the bankrupt's was thereupon surrendered to Mrs. Mutch's stock, etc., it appearing that defendant's mana-agent who had been appointed upon the recFor other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes 144 P.-43 U. S. Comp. St. 1913, § 9644.

[Ed. Note.-For other cases, see Bankruptcy, Cent. Dig. §§ 250-253, 255-258; Dec. Dig. § 166.*

For other definitions, see Words and Phrases, First and Second Series, Insolvency.] 3. BANKRUPTCY (§ 303*)-PREFERENCES-EVI

DENCE.

In an action by a bankrupt's trustee to recover an alleged preference, evidence held to warrant a finding that defendant's general manager, when he caused the bankrupt's merchandise to be attached, had reasonable cause to believe she was insolvent and intended thereby to secure a preference.

[Ed. Note.-For other cases, see Bankruptcy, Cent. Dig. §§ 458-462; Dec. Dig. § 303.*] 4. BANKRUPTCY (§ 303*)-PREFERENCES-RECOVERY-ACTION EVIDENCE.

Mrs. Mutch, sup