author: Mr. Justice WOODBURY

text:
    Anna M. Mason, Widow, and John Mason, James M. Mason, Eilbreck Mason, Murray Mason, Maynadier Mason, Barlow Mason, Samuel Cooper and Sarah M., his Wife, Sidney S. Lee and -, his Wife, Cecilius C. Jameson and Catherine, his Wife, Heirs and Devisees of John Mason, deceased, Plaintiffs in error, v. Joseph N. Fearson.
    Under the earlier charters of the city of Washington, this court decided (8 Wheaton, 687), that, where an individual owned several lots which were put up for sale for taxes, the corporation had no right to sell more than one, provided that one sold for enough to pay the taxes on all.
    In 1824, Congress passed an act, providing, “That it shall be lawful for the .said corporation, when there ¡shall be a number of lots assessed to the same person or persons, to soil one or more of such lots for the taxes and expenses due on the whole ; and also to provide for the sale of any part of a lot for the taxes and expenses due on said lot, or other lots assessed to the same person, as may appear expedient, according to such rules and regulations as the corporation may prescribe.”

      This is not in conflict with the previous decision of this court. The discretion given to the corporation is not unlimited to sell each lot for its own taxes. On the contrary, the words '‘it shall be lawful ” and “ may ” sell one lot, impose an obligation to stop selling if that one lot produces enough to pay the taxes on all.
    What a public corporation or officer is empowered to do for others, and it is benefi- , cial to them to have done, the law holds he ought to do.
    This was an action of ejectment brought by John Mason, in his lifetime, to recover possession • of some lots in- the city of Washington held under a tax title.
    The case was brought up, by writ of error, from the Circuit Court of the United States for the County of Washington and District of Columbia,
    In the trial of the cause in the Circuit Court, the following statement of tacts was agreed upon, subject to the opinion of the court upon it.

      Statement.

      “ The plaintiff, to support the issue on his part, made out a' title in one Benjamin Stoddert, in all the lots in the declaration mentioned, except lot No. 8, in square No. 44, under the Commissioners of the City of Washington, or the Superintendent of the Public Buildings in said city, and proved that lot No. 8, in square'.No. 44, was allotted to'Robert Morris and John Nicholso'a, original proprietors of the ground on which the said square was laid out, in the distribution of the lots in said square between the public and the proprietors, and then made out a title in the said Benjamin Stoddert, under the said Morris and Nicholson, to the-said lot No. 8, in square No. 44. It was thereupon agreed that Benjamin Stoddert was, prior to the 18th day of April, in the year 1805, seized in fee .of all .the lots in the said- declaration mentioned. The plaintiff, further to support the issue on his part, offered to read, and read in evidence to the jury, a deed of conveyance of each of the said lots from the said Benjamin Stoddert, bearing date the 18th day of April, in the year 1805, to David Peter and James S. Morsell, and to the survivor of them, and the heirs of such survivor, in the words and figures following, to wit (copied in p. 20); also the printed articles of association mentioned and referred to in the said deed (copied in p. 49). The plaintiff also offered to read, and read in evidence to the jury, the bill of complaint, answers, and decree, in a certain cause on the chancery side of the said Circuit Court for the county aforesaid, in which Henry 'Alexander and Mary Air were complainants, and James S. Morsell, and Joseph Forrest, and others, were defendants; also the report of the proceedings of James S. Morsell, the trustee appointed by the decree of said court, in the said cause, and of the sales made by him in virtue of such decree, and the orders of the said court ratifying the said sales, and a deed from the said trustee to the plaintiff’s lessor, the said John Mason, for the said lots in- the said declaration mentioned,, bearing date the 13th day of November, in the. year 1844 (copied in pp. 32 to. 57). The plaintiff also read in evidence to the jury two receipts signed W. W. Billing, collector, marked B and C, one for taxes for the years' 1826 and 1827, the other for taxes for the year 1832, on sundry lots therein mentioned, assessed to the Washington Tontine Company (copied in pp. 61, 62). The plaintiff there rested.
    ££ Whereupon the defendant, to support the issue on his part, produced, and-read in evidence to the jury, the official assessment-books of the corporation of the city of Washington, for the years 1836 and 1837, and proved that the lots in the said declaration mentioned, with divers other lots in the said city, amounting tó twenty in number, were assessed for the said years to the Washington Tontine Company; £ that the said lcts¿ and many others in the said city, had been so assessed in the books of the said corporation to1 the Washington Tontine Company,’ from the years 1808 down to 1840 inclusive. The defendants also produced and read in evidence the tax-books, of the said corporation for the years 1836 and 1837, and proved thereby that the lots in the said declaration mentioned, and sundry other lots assessed to the Washington Tontine Company, appeared arranged in columns in the established and accustomed forms, exhibiting the manner in which , said lots were assessed for those years, the numbers of the lots and squares, the rate of assessment, valuation of the lots severally, the valuation of the improvements, and the amount of tax on each lot; that the lots so assessed to the Washington Tontine Company were entered in the said tax-books for the years 1836 and 1837, in the following manner (copied in pp. 63 .)'
    ££ The defendant further proved, that the tax on the said lots; so assessed to the Washington Tontine Company, for the year 1836, fell due and was payable on the 1st day of January, in the year. 1837, and the tax on the same lot for the year 1837 féll due and was payable on the 1st day of January, 1838 ; and that on. the 1st day of January, in the year 1838, there were two years’ taxes due and in arrear on the said lots in the said declaration mentioned, and on the others so assessed, to the said Washington Tontine Company. It is further proved, on the part of the defendant, that the collector of taxes imposed by the said corporation, and who was authorized to advertise and sell th'e property liable to be sold in the said city for taxes, on the 15th day of September, in the year 1838, the taxes on the said lots for the year 1836 and 1837 being in arrear and unpaid, caused to be inserted in the National Intelligencer, a newspaper published in the said city, the following advertisement (copied in p. 64); and that the said advertisement appeared in the said newspaper once in each week for twelve successive weeks before the day appointed therein for the sale of the said lots; that the said advertisement was erroneous, in that it stated that three years’ taxes were in arrear and unpaid on the said lots, the fact being that the tax on the said Lots for the year 1835 had been paid to the corporation before the said advertisement appeared; that such error was detected before the sale, and the lots were in fact sold for the taxes- due and in arrear for the years 1836 and 1837; that in pursuance of his authority, and according to the tenor of the said advertisement, the said .collector, on the 8th day of December, in the year 1838, set up at public sale, in the Aldermen’s room, in the City Hall, in said city, in the presence of about sixty persons, the said lots so advertised and assessed to the Washington Tontine Company; and the said lots, being all the lots so assessed to said Washington Tontine Company, were severally sold, each for its own tax, and the said sales were reported, and entered on the official sales book of the said corporation, in manner and form following, (copied in p. 65,) which shows the number of the lots - and squares, to whom the same were assessed, the names of the purchasers, the amount of tax due on each lot, the expenses of sale, and the amount for. which each lot sold; it was- also proved by the said collector, and is admitted, that the said lots, were sold in the order in which they appear set down in the said advertisement and report of sales.
    “ It was further proved by the defendant, that the said defendant paid the taxes and expenses on each lot purchased by him at said sale ; and that on the 19th day of May, in the year 1841, the said defendant paid the residue of the purchase-money-for the said lots bought by him, with interest thereon, at the rate of 10 per cent, from the 8th day of December, in the year 1840, to the said 19th day of May, 1841, and no more, and received a deed'for the said lots from the mayor of the said city of. Washington on the 1st day of'June, in the same year, duly executed and acknowledged, and afterwards recorded, which was given in evidence to the jury, and in the words and figures following, to wit (copied in p. 66). It was further admitted, that the said John Mason, the plaintiff lessor, was one of the original subscribers and members of the said Washington Tontine Company, from the commencement of its organization to its dissolution, and received his share of the.assets thereof; and that certificates of stock in said company were issued by said company to the original shareholders, in the words and figures following, to wit (copied in p. 70). And tliat the said John Mason, the plaintiff lessor, held such certificate for the shares of stock in the said company owned by him.
    “ Whereupon, the said facts having been so proved and agreed, and reduced to writing, it was agreed by the counsel for the plaintiff and the defendant, that a verdict should be entered for the defendant, subject to the opinion of the court on the facts and evidence so proved, agreed, and stated, as well on the part of the plaintiff as of the defendant; and that if the court should be of opinion, from the facts and evidence so proved, agreed, and stated, on both sides, that the sale of the lots mentioned in the declaration so made as aforesaid, by the authority of the corporation of Washington city, was a legal and valid sale, and that the defendant thereby acquired a legal title to the said lots, the sgid verdict should be entered for the defendant; but if the court should be of opinion that the said sale ivas not a legal and valid sale, and that the legal title to the said lots did not thereby pass to the defendant, that the verdict shall be entered, and judgment thereon be recorded for the plaintiff. Either party to have a right of appeal to the Supreme Court of the United States upon the above statement of facts and evidence, só proved and agreed, and the judgment of. the court thereon.
    John Mahbury, Plaintiff’s Attorney.

    W. Redin, Defendant’s Attorney.”

    The assessed value of the lots an'd report of sales, referred to in the above statement, were as follows: —

      Assessed Value of the Lots.

      Extract from the Report made by the Collector to the Register, of Lots sold for Taxes, on the 8th day of December, 1838.

    Upon the agreed state of facts, the Circuit Court gave judgment for the defendant. The plaintiff brought the case to this court, by, writ of error, and the present plaintiffs in error were his heirs and devisees.
    It was argued by Mr. James M. Mason, for the plaintiffs in error, and Mr. Bradley, for the defendant in error.
    On the part of the plaintiffs in error, three points were raised, of which it is necessary to notice only one.
    2. That, pursuant to the charter of their authority, it was the duty of the corporate authorities of this city, in selling for taxes in arrears the several lots in the proceedings mentioned, all of which, though belonging to the appellant, were assessed to the Washington Tontine Company, to sell only “so much, thereof as might be necessary ” to pay the taxes due, with all legal costs and charges arising thereon; that is to say, to sell “ one or more of said lots,” so assessed, as might be found necessary to discharge the same.
    Whereas, as appears by the case stated, these lots were “ severally sold each for its own tax,” without regard to the fact that the first two lots sold did sell for more than sufficient to pay all taxes and charges due on the whole number advertised, as assessed to the Washington. Tontine Company. Upon this point we refer to the act aforesaid of 1820, § 10; Act of 1824, § 4; Act of 1848, § 7; Corporation of Washington v. Pratt, 8 Wheaton, 681; Ronkendorf v. Taylor’s Lessee, 4 Peters, 349; Stead’s Executors v. Course, 4 Cranch, 403; Williams et al. v. Peyton’s Lessee, 4 Wheaton, 77; S. C., 4 Cond. Rep. 349; Thatcher et al. v. Powell, 6 Wheaton, 119.

      Mr. Bradley, for the appellant,
    maintained the following propositions: —
    First. The power of taxation, and the mode in which it is to be exercised, are given alone by the act of May, 1820. ■
    And in- point of fact all the requirements of that act in that particular have been complied with, and the books of the corporation are evidence of these acts.
    Second. The means of enforcing this .power, as against the lot itself, are given in the second section of the act of 1824.
    And in point of fact all the acts necessary under that section to be done have been fully performed by them in this case, unless they are restricted by the fourth section of the same act.
    Third. That the fourth section of the act of 1824 is not mandatory; and it is left to the discretion of the corporate authorities whether they will or will not provide for the sale of any one or more lots, or part or parts of lots, to satisfy thé taxes due on the whole, assessed to the same- person.
    ' No objection having been taken below, and none appearing on the record as to the first two propositions, the argument will be principally directed, to the third, on which, indeed, the case turns. If it shall be established, this case will operate to confirm the titles to a vast amount of property in this city which has been sold for taxes since 1824; and if a different construction is given to it, those titles will, to that extent, be disturbed.
    1st. If we collect from the original act and this supplement alone, or from the case of the Corporation of Washington-a. Pratt, Francis, and others, the defects which existed in the charter, and which were designed to be remedied by-this supplement, we will find it’ must be construed as discretionary and not mandatory. The following rules of interpretation are given by the Barons of the Exchequer in Heydon’s case, 3 Report, 7: — Inquire
    1. What was the common law before-making the act.
    2. What was the mischief and defect against which the common law- did not provide.

      3. What remedy Parliament hath resolved- and appointed to cure the disease of the commonwealth, &c.
    4. The true reason of the remedy.
    And it was held to be the'duty of the judges, at.all times, to make such construction as would suppress the mischief and advance the remedy, putting down all subtile inventions for the continuance of the mischief, et pro privato commodo ; and adding force and life to the cure and remedy, according to the.true intent of the makers et pro bono publico.

    And Dwarris, p. 697, says, — “ The cause and reason of. the act (or, in other words, the mischief requiring the remedy) may either be collected from the statute itself, or discovered from circumstances extrinsic of the act......The remedy is to be gathered from the act itself.”
    2d. If we take the whole act, and compare its different provisions to reconcile them, this section must be construed as granting a power to be exercised at the discretion of the corporation. Howell v. Lord Zouch, Plowd. 365; Doe ex d. Bywater v. Brandling, 7 Barn. & Cress. 643; Co. Lit. 381, a; Opinion of Coleridge, J., in Rex v. Poor Law Com., 6 Ad. & El. 7; Broom’s Leg. Max. 253, 254; 1 Kent’s Com. 462; Pennington v. Cox, 2 Cranch, 33; U. States v. Fisher, Ibid. 358.
    3d. If the words are not precise and clear, and such construction is given as will alone secure it from an absurd consequence, it must be taken as permissive, not mandatory. Commonwealth v. Kimball, 24 Pick. 37; United States v. Fisher, 2 Cranch, 358.
    4th. In order that one clause shall not frustrate and destroy the others, but. explain and support- them, this section must be construed as permissive. Best, J., 4 Bingh. 196; Dwarris, 703, 704.
    5th. The words of the act are plain and unambiguous. It is “to be read without breaks or stops” ; there are qualifying words at the end of the section; they must operate on 'all the precedent grants in the section. 2 Inst. 50; Dwarris, 704; 1 Stev. Elec. L. 21.
    6th. It may be generally true, that, where a public body or officer has been clothed by statute with power to do an act which concerns the public interest, or the right of third persons; the execution of the power may be insisted on as a duty, though the phraseology of the statute be permissive merely, and not peremptory. City of New York v. Furze, 3 Hill, 612. Yet if the exercise of that power is clearly intended by the legislature to be discretionary in the public body or officer to whom it is intrusted, the rule cannot apply. For no general rule can be laid down upon this subject, further than that that exposition ought to be adopted in this, as in other cases, which carries into effect the true intent and object of the legislature in the enactments. Story, J., in Minor et al. v. The Mechanics’ Bank of Alexandria, 1 Pet. 64.
    In this' case the intention is clear from “ the cause, the reason, and remedy,” from .“the whole act itself,” from “a comparison of the different sections and provisions,” from “the very words of the act,” and because “ any other construction would involve absurd consequences,” and that intention was, not. to give a power which the corporation must, but which it niight, exercise.
   Mr. Justice WOODBURY

delivered the opinion of the court.

Several 'reasons have been assigned for the reversal of the judgment in this case; but as we think one of them is well 'founded, it is not necessary to examine the others. That one is the sale of each of the twenty lots, assessed to the Washington Tontine Company, instead of selling the first two lots only, they having been bid off for more than enough to pay the taxes on the whole. The sale of all of them was, therefore, unnecessary to insure the collection of all the taxes; and as they brought but little beyond one fourth of their appraised value, the sale of all was not only unnecessary, but a great sacrifice of property.

• It is' admitted by the city," which defends this action, that the law authorized thé sale of so many lots assessed to. the same proprietor as would b.e sufficient to pay the taxes on all, and there to stop. But at the same time, it is contended that the law allowed a discretion to the city to sell each lot for the tax on each, and that In the exercise of this discretion the sale of all can be vindicated as legal.

We think otherwise. After careful examination, we are satisfied that no such discretion was meant to be conferred, under the circumstances of the present case. Though the ancestor of the plaintiffs- in error became entitled to eleven of the twenty lots sold as early as 1827, and paid the taxes on them for two or three years, yet he never caused his name to be entered in the city books as proprietor of them, nor obtained any-deed of them executed and recorded, so that the city might see the change of title to him on the records, and tax them to him, till November 13th,- 1844. Hence, in 1836-37, when the taxes now in controversy were assessed, the city rightfully taxed all these lots to the Tontine Company, and could sell any of them to pay the taxes imposed on all, against that company.

The ancestor of the plaintiffs could not complain of that course, under his own neglect to perfect his title, ■ so as to have his name, rather than the name of the company, entered on the táx-list as owner of eleven of the lots. Much less does it comport with reason that the city should on this ground object to its own power to sell any of thosé lots to pay the taxes assessed on all, when its officers had claimed them all to belong to the company, and had assessed and sold them all as the property of the company.

But, independent of this, á discretion to sell all is claimed under the act of Congress- of 1824. In order to judge correctly whether there is a good foundation for this discretion, it will be necessary to examine brieffy the history of the legal provisions on this point, and th$ provisions themselves.

Under the city charter, as amended May 4th, 1812 (2 Statutes at Large, p. 721, § 8), “unimproved lots,” “or so much thereof as may be necessary to pay such taxes, may be sold,”for their payment.

On the 15th of May, 1820, a new charter was given to the city, which provided that “-real property, whether improved' or unimproved,” “ or so much thereof, not less than a lot,. (when the property upon which the tax has accrued is not less • than that quantity,) as may be necessary to pay any such taxes,” “ may be sold,” &c. 3 Statutes at Large, p. 589, <§> 10.

In 1823, a decision was made by -this court, in the case of the Corporation of Washington v. Pratt, 8 Wheaton, 687, settling the construction of the laws as existing in 1812 on several points in relation to the assessment and sale of lots for taxes ; and, among other things, holding on this particular point as follows : — “ But if taxes be due by one and the' same .individual in small sums upon many lots, and one lot, being set up for'sale, produces a sum adequate to the payment of all, the whole arrears become paid off, and no excuse can -then exist /for making further sales.” -The act of May 26th, 1824', was then- passed, which in some respects provided anew concerning a part of the points settled in 1823, where the act or charter of 182Ó was similar to that of 1812.

But on the point now under consideration it made a special provision in these words: — “ And be it further enacted, that it shall, be lawful for the said corporation, where there shall be ' a number of lots assessed to the same person or persons, to sell one or more of such lots for the taxes and expenses due on the whole ; and also to provide for the sale of any part of a lot for the taxes and expenses due on said lot, or other lots assessed to the same person, as may appear expedient, according to such rules and regulations as the said corporation may prescribe.” (See Act of May 26th, 1824, § 4.)

The city contends, that this changed the construction given to the law of 1812 by this court in 1823, or rather changed the law of 1820, which was the same in substance as that of 1812, and conferred a discretion to sell each lot for its own tax, or only so many of several assessed to the same person as might be necessary to pay all the taxes due from him.

But it will be seen that the language used in the last act, of 1824, was substantially the same on this subject as that in 1812 and 1820. The words used in the former acts, as to a sale of all or a portion, of the lots for the taxes dn all, had been recently adjudged by this court to require absolutely that the latter course be pursued when a part sold for enough. And Congress, so far from appearing to wish an alteration of the law in this particular, as just construed, seem to sanction it by declaring explicitly, as before, the existence of the power to sell a part of the lots, and which power this-court had, under all the circumstances, decided was imperative on the city. The chief difference in this respect between the acts of 1812, 1820, and 1824 was, that, in the last, Congress used more clear and positive terms than before, when authorizing the sale of a part of the lots for all the taxes, and added a material change, authorizing them to sell, when “ appearing expedient,” even a part of one lot. Evidently, by the sense and the locality in the sentence of the expression “ as may appear expedient,” they confined any new discretion or expediency thus conferred to the new provision for the sale of a oart of a lot.

Was there any reason existing why we should infer that Congress meant to make any otner change than this last in respect to such sales ?

The former provisions for selling only one or more lots, when enough to pay the taxes on all belonging to the same owner had existed so long, had been so positively' adjudged by this court to be imperative, and were so obviously just and necessary to prevent sacrifices and speculation, that Congress in 1824 might well entertain no disposition to alter them, but rather to adopt and confirm the construction given by this court in the previous year.

With the knowledge of our construction, like words being again repeated by Congress, it may well be considered that a like.construction was intended; and was expected to be given to those words. The only plausible argument which remains to be considered against the design to make this power to sell only enough to pay all the taxes mandatory, as it had before been construed by this court, rests on the supposed incorrectness of the general rule of construction, as applied to the facts here, which holds the expression “ may ” sell, or “ it is lawful ” to sell, in a particular way, to be imperative. But if we look to the true test of the principle involved in the question, no great doubt can remain. This general rule may seldom be correct, in a popular sense, as to such words when used in contracts and private affairs. But under the circumstances existing here, it is founded on sound principles and numerous precedents.

The form of expression adopted here, it must be remembered, is employed in laws, and not contracts, and of course, if a well established construction had been before given to it in laws by the courts under certain circumstances, it must be presumed.to have been well known, and intended here under like circumstances. What are these circumstances ? Whenever it is provided that a corporation dr officer “ may ” act in a certain way, or it “ shall be lawful ” for them to act in a certain way, it may be insisted on as a duty for them to act so, if the matter, as here, is devolved on a public officer, and relates to the public or third persons.

Thus, in Rex & Regina v. Barlow, 2 Salkeld, 609, — “ Where a statute directs the doing of a thing for the sake of justice or the public good, the word ‘may’ is the same as the word ‘ shall ’; thus, 23 Hen. 6 says the sheriff may take bail; this is construed he shall, for he is compellable so to do.” Carthew, 293.

On this, see further The King v. The Inhabitants of Derby, Skinner, 370; Backwell’s case, 1 Vernon, 152-154; 2 Chitty, 251; Dwarris on Stat, 712; Newburgh T. Co. v. Miller, 5 Johns. Ch. 113; City of New York v. Furze, 3 Hill, 612, 614; Minor et al. v. The Mechanics’ Bank, 1 Peters, 64. Without going into more details, these cases fully sustain the doctrine, that what a public corporation or officer is empowered to do for others, and it is beneficial to them to have done, the law holds he ought to do. The power is conferred for their benefit, not his; and the intent, of the legislature, which is the test in these cases, seems undér such circumstances to; have been “ to impose a positive and absolute duty.” But, under other circumstances, where the act to be done affects no third persons, and is .not clearly beneficial to them or the public, the words “may” do an act, or it is “lawful” to do it, do not mean “ must,” but rather indicate an intent in the legislature to confer a discretionary power. Malcom v. Rogers, 5 Cowen, 88; 1 Peters, 64; 5 Johns. Ch. 113.

So, in private contracts or trusts, such language may confer a discretion. 5 Johns. Ch. 113. But in the case of a law and of public officers, and as to acts affecting third persons, as here, that the authority thus conferred must be construed to be peremptory is not only manifest from the above precedents and their analogies, but has been virtually settled by this court in the 8th of Wheaton, before cited, on the act of 1812, which, we have already seen, used language the «same in substance as that of 1824 on this particular point.

The argument that the owner of these lots need not have suffered by all of them being sold, and at a low price, because he might have redeemed them, has little force when the same oversight, or accident, or misfortune, which prevented the seasonable payment of the .tax, is likely to prevent the redemption, and when this argument, if sound, would apply to any other-defect in the sale, and operate against the force of it, on the ground that the owner might redeem.

But instead of such- loose constructive leniency towards a purchaser under a special law, it is well settled that where a tax title is to be made out by a party under such a law, as by the defendant in this case, it must be done in all material particulars fully and clearly. Stead’s Executors v. Course, 4 Cranch, 403; Waldron v. Tuttle, 3 N. Hamp. 340. In the language of some of the cases, it must be done “ strictly,” “exactly,” “with great strictness.” 6 Wheaton, 127; 8 Wheaton, 683; 4 Peters, 359.

The purchaser, setting up a new title in hostility to the former owner, is not to be favored, and should .have looked into it with care before buying, and not expect to. disturb or defeat old rights of freehold without showing a rigid compliance with all the material requisitions of the laws under which the sale was made. Finally, it tends to fortify the view here adopted, that the statutes in several States on the subject of such sales allow only so many lots to be sold as will pay all the taxes against the same owner, such course being manifestly the most just. 4 Cranch, 403; 4 Wheaton, 81, note.

'Judgment below: reversed.

Order.

This cause came on tp be heard on the transcript of the record from- the Circuit Court of the United States for the District of Columbia,- holden in and for the. County of. Washington, and was • argued by counsel. On .consideration whereof, it is now here ordered and adjudged by this court, thát the judgrnent of the said Circuit Court in this cause bepand the same is hereby, reversed, withr costs, and that this cause be, and the same is hereby, remanded to the said Circuit Court, with directions to award a venire facias de novo.


source: Caselaw Access Project

author: Mr. Justice GRIER

license: Public Domain

text:
    Jacob Strader, Robert Buchanan, John McCormick, John R. Coram, Joseph Smith, James Johnson, and George C. Miller, Trustees of the Commercial Bank of Cincinnati, v. Henry Baldwin.
    Where the defendant pleaded his discharge under the Bankrupt Act of 1841 .passed by Congress, and the plea was allowed, the plaintiff cann'ot bring the case to this court to be reviewed, under the twenty-fifth section of the Judiciary Act.
    The defendant pleaded a privilege or exemption under a statute of the United States, and the decision was in favor of it..
    The case must, therefore, he dismissed, for want of jurisdiction.
    ■ This c.ase was brought up, from the Supreme Court of the State of Ohio, within and for the County of Hamilton, by a writ of error issued under the twenty-fifth section of the Judiciary Act.
    The case arose in this way.
    Baldwin was a clerk in the Commercial Bank of Cincinnati. In 1844, the trustees of the bank brought an action of assumpsit against him for $ 10,000. Baldwin pleaded, amongst other matters, that he had received a discharge under the bankrupt law passed by Congress. The plaintiffs filed a replication, that the debt was contracted whilst Baldwin was acting in a fiduciary capacity, and therefore not discharged from the debt. The defendant demurred to this replication, which demurrer was sustained by the Superior Court, and also by the Supreme Court of Ohio on error.
    The plaintiffs then brought the case to this eourt, under the twenty-fifth section of the Judiciary Act.
    It was argued by Mr. Walker, for the plaintiffs in error, and Mr. Lincoln, for the defendant in error.
    The question of jurisdiction was not argued by either counsel.
   Mr. Justice GRIER

delivered the opinion of the court.

This case is brought here by a writ of error to the Supreme Court of Ohio.

As the power of this court to review the decisions of State tribunals is limited to certain specified cases and conditions, the first inquiry which necessarily presents itself 'is* whether we have -jurisdiction.

The plaintiffs in error instituted this suit in the Superior Court of Cincinnati. The declaration has the common counts in assumpsit. The defendant appeared and pleaded his discharge under the act of Congress of the 19th of August, 1841, to establish a uniform system of bankruptcy, &c.” The plaintiffs denied the validity of this discharge, on the ground that the debt was incurred by defendant while acting as clerk or book-keeper in the Commercial Bank, and thérefore “ acting in a fiduciary capacity.”

The Supreme Court of Ohio gave judgment for the defendant, and the plaintiffs prosecuted their writ of error to this court.

The twenty-fifth section of the Judiciary Act, which is the only source of our authority in cases like the present, gives this court jurisdiction to “ reexamine'” the judgment of a State court only where the decision “ is against the title, right, privilege, or exemption specially set up or claimed” under an act of Congress.

The plaintiffs in this case have set up no act of Congress in their pleadings, under which they support their claim or title to recover. It is the defendant who has pleaded a privilege or exemption under a statute of the United Stat>-3, and relies upon it as his only defence. If the decision of - the State court had been against him, his right to have his case reexamined by this court could not be doubted. But the decision has been in favor of the right set up under the statute, the validity of which was denied by the plaintiffs. We have no jurisdiction to entertain a writ of error to the Supreme Court of Ohio at their suggestion.

This case must, therefore, be dismissed, for want of jurisdiction.

Order.

This cause came on to be heard on the transcript of the record from the Supreme Court of the State of Ohio, within and for the County of Hamilton, and was argued by counsel. On consideration whereof, it is .now here ordered and adjudged by this court, that this cause be, and the same, is hereby, dismissed, for the want of jurisdiction.


author: Mr. Justice McLEAN

text:
    Ann Brabston, Plaintiff in error, v. Tobias Gibson.
    Where promissory notes were executed in Louisiana, but made payable in Mississippi, and indorsed in Mississippi, and the indorsee sues in Louisiana, the law of Mississippi, and not that of Louisiana, must be the law of the ease.
    By the law of Mississippi, where the indorsee sues the maker, the “ defendant shall be allowed the benefit of all want of lawful consideration’, failure df consideration, payments, discounts, and set-offs, made, had, or possessed against the same, previous to notice of the assignment.”
    Where the notes were originally given for the purchase of a plantation, which plantation was afterwards reclaimed by the vendor (under the laws of Louisiana and the deed), and, in the deed of reconveyance made in consequence of such reclamation, the plantation remained bound for the payment of these notes, these facts do not show a “ want of lawful consideration, failure of consideration, payment, discount, nor set-off,” and consequently furnish no defence for the maker when .sued by the indorsee.
    The fact, that the notes were indqrsed “ Ne varietur” by the notary, did not destroy the negotiability of the notes.
    This case was brought up, by writ of error, from the Circuit Court of the United States for Louisiana.
    Ann Brabston was a citizen of Mississippi, and Gibson of Louisiana.
    The facts in the case were .somewhat complicated. There was-a “case agreed” in the Circuit Court, which is inserted in this statement; but in consequence of a reference to long deeds, which are made a part of the case agreed, it may be proper to collect the facts stated in those deeds, and throw them into the form of a continued narrative.
    The case was this.
    On the 18th of May, 1837, William Harris, a citizen of Mississippi, residing in Adams County in that State, became indebted to the heirs- of Epheus Gibson, in the sum of $11,000, bearing eight per cent, interest till paid.
    On the 24th of March, 1838, Harris purchased from Tobias Gibson, the defendant in error, who was then the owner of a plantation of 1,219 acres in the parish-of Concordia in Louisiana, and of twenty-four slaves thereon, an undivided moiety of the said plantation and slaves, whereby he-and Gibson became tenants in common thereof.
    On the 11th of March, 1839, Harris became indebted to the Agricultural Bank of Mississippi, in the sum of $ 25,272.02, for which he gave his two promissory notes to the said bank, both dated on that day, one of them for $ 6,398.55 payable on the 1st of February, 1840; the other -of them for $ 18,873.47,-payable on the 1st of April, 1840.
    On the 16th of March, 1839, Harris executed a mortgage of his undivided moiety of the plantation and slaves purchased from Gibson to the Agricultural Bank of Mississippi, to secure the payment of these two notes.
    On the 24th of December, 1839, Harris executed a second mortgage of the same property to the heirs of Epheus Gibson, to secure the payment of the debt due to them.
    On the 24th of December, 1839, Harris and wife resold to Tobias Gibson the undivided moiety of the plantation and slaves (subject to these two mortgages), for the sum of § 70,000, which was to be thus paid by Gibson. He was to pay off the two mortgage debts in the following manner: — The two notes held by the Agricultural Bank of Mississippi in four annual instalments during the years 1840, 1841,1842, and 1843; the debt to the heirs of Epheus Gibson in three annual instalments during the years Í844, 1845, and 1846 (which arrange-' ment and postponement of payments by the bank and the heirs of Epheus Gibson Harris became responsible for) ; and for the balance of the- §70,000 of purchase-money, viz. §29,510.79, he, Gibson, gave Harris (then being a citizen and resident of Mississippi) four promissory notes, all dated at the parish of Concordia, on the 24th of December, 1839, and payable at the Agricultural Bank.of Mississippi, viz.: —
    One for § 2,000, payable on the 1st of February, 1844.
    One for § 6,000, payable on the 1st of February, 1845.
    One -:for § 7,000,' payable on the 1st of February, 1846.
    One for § 14,510.79, payable on the 1st of February, 1847.
    But he, Gibson, wás to have the liberty of extending the time of the payment of each note one year more, on payment of eight per cent, interest. The said four notes were each respectively marked “ Ne varietur ” by the parish judge, at the the time of thé act of salé, to identify the same therewith.
    As security for the fulfilment of the terms of purchase, Gibson, in the act of sale, specially mortgaged and hypothecated, in favor of Harris, the property so purchased; and he also covenanted that it was “ a sale in, which the power or right of redemption was specially reserved in favor of the vendor (Harris), for the period of ten years from the date of the act of sale, to be by him exercised at any time within the said period of ten years, agreeably to the provisions of the laws of the State of Louisiana.”
    Those provisions are the following (Civil Code of Louisiana, <§> 2031,. <§, 2545 to § 2566): —
    <§> 2031. “ A sale may be made conditioned to be void, if the vendor chooses to redeem the property sold.”
    <§>'2545. “The right of redemption is an agreement or petition, by .-which the vendor reserves to himself the power of taking, back the thing sold by returning the price paid for it.”

      <§> 2546. “ The right of redemption cannot' be reserved for a time exceeding ten years.”
    $ 2550. “ A person having sold a thing, with the power m redemption, may exercise the right against a second purchaser, even in case such right should not have been mentioned in the second sale.”
    § 2553. “ The person who purchases an estate under a condition of redemption has the fruits until the vendor exercises his right of redemption.”
    § 2565. “ The vendor who exercises, the right of redemption is bound to reimburse to the purchaser, not only the purchase-money, but also the expenses resulting from the necessary repairs, those which have attended the sale, and the price of the improvements which have increased the value of the estate.”
    § 2566. “ When a vendor recovers the possession of his inheritance, by virtue of the power of redemption, he recovers it free from any mortgages or encumbrances created, by the purchaser, provided full possession be recovered within the ten years, as provided by § 2546.”
    On the 21st of January, 1840, Harris, then being a citizen and resident of Mississippi, executed a promissory note (for what particular consideration does not appear), dated at Natchez, for $ 6,000, payable to Ann Brabston, the plaintiff in error, who was also a citizen and resident of Mississippi, twelve months after date, and delivered it to her there.
    On the same day, Ann Brabston gave Harris a receipt, also dated at Natchez, acknowledging that she had received from him two of the above stated notes of Gibson, viz. that for $ 6,000, payable on the -1st of February, 1845, and that for $ 7,000, payable on the 1st of February, 1846, “ to be held by me as collateral security for the payment of the note of William Harris to me,” executed the same day.
    The indorsement, transfer, and delivery of these notes by and between Harris and Brabston, were made at Natchez, in Mississippi. The whole transaction was without any notice, knowledge, or consent, on. the part of Gibson.
    On the 21st of January, 1841, the note of Harris and Brabston for’0 6,000 (as collateral security for which the two notes of Gibson of $ 6,000 and $ 7,000 were given to her) beeame due; it was not presented for payment, renewed, or protested (so fa.r as appears); no notice thereof, or that the said note or that the two other notes were held by Brabston, was given to Gibson ; and Brabston then was, and at all times since has continued to be, the holder of the note of Harris, dated the 21st of January, 1840.

      On the 18th of September, 1841, Harris claimed his right of redemption, and thereupon Gibson and wife reconveyed to him, by an authentic act, dated that day, all the property conveyed to him by Harris on the 24th of December, 1839, for the consideration of $.70,000, which he acknowledges to have received in the manner following, viz.: — It was recited in the said act of reconveyance, that the two mortgage debts to the Agricultural Bank of Mississippi, and to the heirs of Epheus Gibson, still remain unpaid; and Harris covenanted to assume the payment thereof himself, •'and to guarantee Gibson against any personal liability therefor; as to the remaining part of the said $70,000, viz. the $29,510.79, for which Gibson had giyen his four promissory notes to Harris, the first and last of,them, those for $2,000 and.$ 14,510.79, were actually surrendered and returned, and as to the remaining two, for $ 6,000 and $ 7,000, it was stipulated that “ they are pot returned to the said Gibson at the passing of this act, but the said Harris hereby stipulates and guarantees the-return and cancelling of said notes; and, to secure the same, hereby specially mortgages in favor of said Gibson all the property ” then conveyed, with the growing crops.
    On the 8th of November, 1841, Gibson produced before the parish judge of Concordia the two notes for $ 2,000 and $ 14,510.79; and the mortgage granted for the amount thereof was thereupon declared by the said judge to be so far annulled.
    On the — of March, 1843, Harris was declared a bankrupt b.y a decree of the District Court of the United States for the Louisiana District, under the bankrupt law of the United States; and, by further proceedings in that court, obtained a j&nal discharge and certificate.
    On the 14th of February, 1846, Brabston commenced this suit against Gibson, in the Circuit Court of Louisiana, to recover the whole amount of the two notes in question, amounting to $ 13,000, with interest and costs. - •
    The answer of Gibson was as follows.
    “ The Answer of Tobias Gibson to the Petition of Ann Brabston, exhibited against him in the Court aforesaid.

      u This defendant denies all and singular the matters and things set forth and alleged in plaintiff’s petition, except such as are hereafter specially confessed and admitted. Defendant admits the execution of the two notes sued on, and that he signed the same and delivered them to William Harris, to whose order they are payable, at the time of their execution. But, defendant wholly denies that plaintiff is the owner thereof, or entitled to sue thereon. Further answering, defendant states that both the notes sued on were executed and given to the said William Harris, in sole consideration of the purchase, and for a part of the price, of one undivided half of a certain plantation, and certain slaves thereon, purchased by said defendant from said Harris, on the 24th day of December, 1839: which purchase, as 'well as execution and delivery of said notes, was evidenced by an authentic act of sale, passed before George W. Keeton, parish judge of the parish of Concordia in this State, on the day and year last aforesaid, and a duly certified copy of which act is hereto annexed, and made a part of this answer.
    “Defendant further alleges, that in said act of sale said vendor, Harris, specially stipulated for and reserved to himself the right of redemption of-the property so sold for the period of ten years from the date of said act, as will more fully appear by reference thereto, and said notes sued on were identified with said act, and marked Ne varietur by the parish judge, as appears upon their face, as also in said act.
    “ Defendant further alleges, that afterwards, to wit, .on the 18th day of September, 1841, and long before the maturity of either of the notes sued on, the said William Harris claimed the right of redemption, so reserved by him in the act of sale above mentioned, and according to the stipulations and provisions set forth and contained in said act ;• wherefore, and jn accordance with said claim by said Harris, and of the stipulations of said original act of sale, this defendant did, on said 18th day of September, 1841, at the parish of Concordia, and in conjunction with his wife, Amanda Fletcher, by authentic act passed before James Dunlap, judge and ex officio notary public in and for said parish of Concordia, resell and reconvey said property conveyed to him by said first-mentioned act to the said Harris, according to the rights and claims of said Harris to redeem the same.
    “And defendant further states, that by said last-mentioned act said Harris did, in part consideration thereof, cancel the two notes sued on, and wholly discharge and release defendant from all liability therefor; all Of which will more fully appear by reference to an authenticated copy of said last-mentioned act, which is hereto annexed and made part of this answer.
    “ Defendant further states, that both said acts above mentioned were, upon their 'execution, respectively, duly recorded in the proper office. And so said defendant says that said notes, by virtue of said claim of the right of redemption, and of the reconveyance made in consequence thereof by this defendant and wife to said Harris, and by virtue of the stipulations contained in said act of resale, and by operation of law, were wholly discharged, and this defendant released from all liability therein.
    “ Further answering, defendant says that said notes sued on were not transferred to said plaintiff bona fide in the ordinary course of business, nor did she obtain possession thereof as owner, nor is she the owner thereof; but said notes were delivered to said plaintiff, and received and held by her, as collateral security for the payment of a certain note, drawn by said Harris, and held by said plaintiff, for the sum of six thousand dollars, dated Natchez, 21st January, 1840, and payable twelve months after date; that said plaintiff has never instituted suit upon said lastrmentioned note, nor made any attempt to enforce the collection of the same.
    “ Defendant further states, that said notes were so deposited with said plaintiff, as collateral security as aforesaid, without his knowledge’or consent, and in fraud of his rights, and that, he had no notice whatever that said plaintiff held said notes until long after his reconveyance to said Harris as aforesaid, nor until long after he had transacted with said Harris in relation to said notes as aforesaid, and had been wholly released and discharged therefrom.
    “ Defendant further states, that said notes are payable in the . State of Mississippi, and governed in their obligation and validity by the laws of' said State, and that the transfer or pledge of said notes, made by said Harris to said plaintiff, as collateral security for the payment of his own note as aforesaid, was also made in the State of Mississippi, and is governed by th$ laws of said State. And defendant avers, that by the laws, of said State of Mississippi, upon the redemption of said Harris of the property, for a portion of the price of which said notes were given as aforesaid, and upon- the release and discharge of said notes by said Harris, as aforesaid, said notes were wholly satisfied and discharged, nor can said, plaintiff, by the laws of said State, maintain any action thereon.
    ' “ Wherefore said defendant prays that plaintiff’s claim be rejected, with costs, <fcc., and that a jury trial be awarded in this case, and for all other relief.”
    When the cause came on for trial, the following case' was agreed upon.

      Case Agreed. ■

    “Ann Brabston v. Tobias Gibson.
    “ 1st. The defendant, Tobias Gibson, on the 24th day of December, 1839, executed the promissory notes sued on in this case, under the circumstances arid for the consideration set forth in the deed of 'Sale executed to him by the payee of said notes, William Harris, a copy of which act ■ or deed of sale is hereto annexed, and forms a part of this case, as also the said two notes', which are respectively marked A, B, and C.
    “ 2d. On the 21st of January, 1840, the payee of the said two notes, William Harris, being then the holder thereof, indorsed and delivered the. same to Mrs. Ann Brabston, the plaintiff, as collateral security, to secure the payment of the said Harris’s note to the said Ann Brabston, dated on the said' 21st of January, 1840, and payable twelve months after date, for the sum of six thousand dollars, and on the same notes mentioned in a receipt from the said Ann to the said Harris, under date of the said 21st of January, 1840, which is hereto annexed, and makes part of this case, and.marked D.
    “ 3d. On the 18th of December, 1841, the said defendant, Tobias Gibson, did reconvey to the said William Harris all the property, mentioned in the act of sale from Harris to the said Gibson, of the date of the 24th of December, 1839, before mentioned and referred to, and took back and cancelled all the notes mentioned in said act of December, 1839, except the two notes now sued on, and in and by the said act reserved to himself a mortgage to secure him against liability on said two notes, as is set forth in said act of reconveyance, which is hereto annexed and marked B, and makes part of. this case.
    “ 4th. The plaintiff is now the holder of the note of the said Harris for’six thousand dollars, dated the 21st of January, 1840, and payable twelve months after date, and which is the same note mentioned in the receipt from said plaintiff to said Harris, of the 21st of January, 1840, before referred to and made part of this case, and the said note is now in the hands of the plaintiff and unpaid, and is hereto annexed and made part of this case, and marked F.
    “ 5th. The mortgage reserved by the defendant, Gibson, in the act of reconveyance from him to the said Harris, of the 18th of September, 1841, to secure the return and cancelling of the said two notes, is duly recorded, and subsisting and unreleased, as appears by the certificate of the recorder hereto annexed, marked G, and made part of this case.
    “ 6th. The payee of the said two notes, William Harris, was, on the — day of March, 1843, declared a bankrupt by a decree of the District Court of the United States for the Louisiana District, under the bankrupt law of the United States, and by the further proceedings in bankruptcy before said court has obtained his final discharge and certificate.

      “ 7th. Harris, the payee, resides in the State of Mississippi,, and the notes sued on were indorsed and transferred to plaintiff, and the receipt given by her therefor-, made and executed by her at Natchez, in the State of Mississippi, in which State said notes are payable. If on this, case, as herein stated, the law be for the plaintiff, then judgment to be entered for the said plaintiff for the sum 'of six thousand dollars, with ten per cent, per annum interest, from the 21st of January, 1840, till paid; and if the law bé for the defendant, then judgment to be entered for the defendant.
    Prentiss & Finney, Defendant's Attorneys.

    Rob. Mott, for Plaintiff."

    Upon this agreed case, the Circuit Court gave judgment for the defendant, Gibson; whereupon the plaintiff sued out a writ of error, and brought the case up to this court.
    Whilst the cause was pending, Ann Brabston died, and James M. Brabston, her administrator, was substituted in her place.
    It was argued by Mr. Johnson (Attorney-General), for the plaintiff in error, and by Mr. Gilpin and Mr. Walker, for the defendant in error.
    For th'e plaintiff in error, -it -was contended that judgment ought to have been rendered for the plaintiff in error. Ber cause, —
    1. That, independent of the statute of Mississippi, the plaintiff in error was entitled to a judgment, and that the ne varietur on the notes does not restrain their negotiability, or make it the duty of the indorsee to inquire into the consideration. Fusilier v. Bonin, 12 Martin, 235; Canfield v. Gibson, 1 Martin, N. S. 145; Abat v. Gormley, 3 Louis. 241; King v. Gayoso, 8 Martin, N. S. 370.
    2. That the statute has no operation on the notes, the suit having been instituted and prosecuted in Louisiana, its operation being confined to actions commenced and sued upon promissory notes, &c., in - Mississippi. Howard & Hutchinson, Statutes, 373, 374; Bank of United States v. Donnally, 8 Pet. 361, 372, 373.
    3. That if the statute does apply to notes given in Louisiana and made payable in Mississippi, it affords no defence in this case, inasmuch as there was neither a want of lawful consideration,- nor a failure of consideration, nor a payment, discount, or set-off, within the true meaning of the statute.
    4. That if there was a want of consideration, &e., the statute affords no defence, inasmuch as the defendant had notice of the assignment of the notes, within the true meaning of the statute. The Ploughboy, 1 Gall. 41; Brush v. Ware, 15 Pet. 111, 113.
    For the defendant in error it was contended,—
    1. The right of recovery by the assignee is governed by the law of Mississippi, where her contract was made, and was to be executed.
    These notes, though drawn in Louisiana, were indorsed by Harris to Brabston in Mississippi (Record, <§> T of Case Agreed), and they were payable in. Mississippi., The contract, therefore, between the maker (Gibson) and the indorsee (Brabston) was made in Mississippi, and is governed by its laws. Story’s Confl. of Laws, §§ 272, a, 278, a, 280, 281, 316, a, 354; Story’s Prom. Notes, §§ 171, 172; 2 Kent’s Com. 458; Slacum v. Pomery, 6 Crunch, 221.
    Besides, it was to be executed in Mississippi, — the notes were to be paid there. The law of Mississippi, therefore, regulated in every respect the mode and "circumstances of payment, — the rights of the parties paying or to be paid. Story’s Promissory Notes, § 165; 2 Kent’s Com. 461; Robinson v. Bland, 2 Burr. 1078; Bank of Washington v. Triplett, 1 Peters, 34; Boyce v. Edwards, 4 Peters, 123; Musson v. Lake, 4 Howard, 278; Thompson v. Ketchum, 4 Johns. 288; Fanning v. Consequa, 17 Johns. 518; Shewell v. Hopkins, 1 Cowen, 108; Prentiss v. Savage, 13 Mass. 23; Vidal v. Thompson, 11 Martin, 23; Andrews v. Herriot, 4 Cowen, 508, 510; Cox v. United States, 6 Peters, 172, 203.
    2. The laws of Mississippi, which affect and regulate the rights of .these parties, provide that,-until the maker (Gibson) received notice of the assignment of the notes in question by the payee (.Harris) to the assignee (Brabston), he was entitled, notwithstanding the assignment, to claim the benefit, against the assignee, of every payment, discount, or set-off, which could legally exist between himself and the payee.
    Howard -and Hutchinson’s Miss. Digest, p. 373, §§ 12, 13 : —* “ All bonds, obligations, single bills, promissory notes, and all other writings, for the payment of money or any other thing, shall and may be assigned by indorsement, whether the same be made payable to the order qf the assigns of the obligee or payee or not; and the assignee or indorsee may sue in his own name, and maintain any action which the obligee or payee might or could have sued* or maintained thereon previous to assignment; and in all actions commenced or sued upon any such assigned bond, obligation, bill single, or promissory nóte, or other writing as aforesaid, the defendant shall be allowed the benefit of all want of lawful consideration, failure of consideration, payments, discounts, and set-offs, made, had, or possessed against the same, previous to notice of the assignment, any law, usage, or custom in anywise to the contrary notwithstanding, in the same manner as if the same had been sued and prosecuted by the obligee or payee therein; and the person or persons to whom such instruments so payable are assigned may maintain an action against the person "or persons who shall have indorsed or assigned the same, as in cases of inland bills of exchange ; provided, that where any debt shall be lost by the negligence or default of the assignee, the assignor or assignors shall not be liable, any such assignment notwithstanding.”
    $ 13 provides that, where a surety or indorser pays an obligation or protested note, in default of the obligor or maker, the' obligation or note shall be assigned to him, and he shall have a right of action thereon against the principal debtor.
    In the case of Parham v. Randolph, 4 How. Miss. 453, Randolph sold land in Louisiana and received in payment certain notes “ made payable at the Agricultural Bank of Mississippi,” on which Parham was indorser. The notes were assigned by Randolph to the Planters’ Bank, who recovered .judgment against the indorser. The title of Randolph to the land proved bad, and his vendee was evicted. The indorser, Parham, prayed for an injunction and rescission of the contract, which was refused by the inferior court, and this appeal taken. It was contended that the assignee, the Planters’ Bank, being an innocent holder, could not. be affected by failure of title; but the Court of Errors (Sharkey, C. J.) said, — “ This position is untenable. The statute (of Mississippi) gives the maker the' same defence against the holder that he had against the payee of the note. These notes were made payable at the Agricultural Bank.”
    ,3. The evidence in the record shows, that on the 18th of December, T841, more than four years before either of the notes of Gibson, which were assigned by the payee (Harris) to Brabston, had become due, and before this action was commenced upon them, they were both completely annulled and discharged.
    It is shown by the record (§ 1 of the Case Agreed) that the notes were executed by Gibson as a part of the purchase-money and consideration of a tract of land and some negroes bought by him from the payee (Harris), and that in the act of sale it was “ expressly stipulated between the parties (Gibson and Harris), that it was a sale in which the right of redemption was specially reserved in favor of the vendor (Harris), for the period of ten years from the date of the sale (24th December, 1839), to be exercised by him at any time within that period, agreeably to the provisions of the laws of the State of Louisiana.” (These laws are quoted in the statement of the case.)
    It is shown by the record, that Harris did, on the 18th of September, 1841, exercise his right of redemption ; and hy the Case Agreed, that Gihson did, on that day, reconvey to him all the property sold, and acknowledged to have received back the whole purchase-money and consideration, of which the amount of the two notes now sued on was declared to be a portion ; and .that all the promissory notes given at the time of the original sale had.been actually taken back and were cancelled, except the two notes for $ 13,000 now sued on, which “ were not then returned to Gibson, but Harris stipulated and guaranteed the said two notes should be returned to Gibson and can-celled, and to secure the performance of this he mortgaged all the property in favor of Gibson.”
    4. The evidence in the record shows, that neither at the time when the notes in question were assigned by Harris to Brabston, at Natchez, namely, the 21st of January, 1840, nor at the time when Harris exercised his right of redemption and Gibson reconveyed the property, namely, the 18th of December, 1841, nor before the time when this action was commenced, namely, the 14th of February, 1846, had any notice of the assignment of the-notes in question, direst or implied, been given to or received by the defendant, Gibson, either from the payee (Harris) or the assignee (Brgbston).
    No direct notice is averred, or offered to be proved by the plaintiff, or appears upon the record. It is denied by the defendant, Gibson, who avers that the assignment was without his knowledge or consent, and in fraud of his rights, and that he had no notice of it whatever, until long after his reconveyance of the property to Harris, and his release and discharge from the notes in question.
    No implied notice, if such were sufficient to contradict the positive requisitions of the statute of Mississippi, can be inferred from any evidence in the record. The circumstance relied upon in argument, namely, that the notes in question were not cancelled and delivered up to the defendant at the time of the reconveyance of the property, and that he reserved a mortgage to secure their cancellation and delivery to him, affords no ground for such an inference.
    Allein v. The Agricultural Bank, 3 Smedes & Marsh. 57.

    This was a suit by the assignee of a note against the maker, who had no notice of the assignment, and had paid the note without its being delivered up, taking a bond conditioned for its subsequent delivery. It was held by the Court of Errors, that a payment of a note without its delivery, where the maker had no notice of its transfer, is good; and is protected by the operation of the statute of Mississippi. The fact of its nondelivery at the time might possibly raise a presumption that it had been assigned; but the proof of notice to the maker of. the assignment, is a matter requiring a higher degree of evidence than that of presumption. ' The obligation of indemnity extended merely to á future delivery of the note. The fact of taking indemnity, might be considered as a presumptive notice of assignment, but still of no higher grade of evidence than that which arises from the non-delivery of the note, and, so far as it was intended as a protection against payment in the hands of other holders, was unnecessary; because such payment could not be enforced by them, by the terms of the statute, without proof of notice of the assignment to them. The statute allows the defendant, in all-actions upon such instruments, whether negotiable or not, the benefit of all want of legal consideration, failure of consideration, payments, discounts, profits, made, had, or possessed, against the same previous to notice of assignment. This has the effect to change the rule in many particulars as established by the law merchant. The assignee takes the note, subject to all objections and incumbrances that appertain to it, of the kind described in the statute, up to the time of notice of the assignment.

      5. The grounds upon which it is attempted to withdraw this contract, and the rights of the defendant (Gibson), in this action, from the provisions of this statute of Mississippi are not sustained, either by the evidence in the record, or the principles established by legal decisions.
    There is not a single circumstance to warrant the allegation of fraudulent cooperation between the maker (Gibson) and the payee (Harris) against the assignee (Brabston). On the contrary, if there is evidence of fraud, it is in the withholding, by the assignee (Brabston), of all notice of the assignment, which was contrary to law; in neglecting also to give Gibson any notice of the non-payment at maturity of Harris’s own note of $ 6,000 (for which the notes in question were held merely as collateral security); and in adopting no proceedings whatever against her principal debtor. These acts, whether of fraud or gross negligence, deprived Gibson of the opportunity to protect himself, at the time of reconveying the property, and also at the time of Harris’s bankruptcy.
    There is nothing in the form or substance of the notes in question which exempts the party who commences an action upon them from the provisions of the statute of Mississippi, The indorsement of “ Ne varietur ” did not give, as is alleged, “ increased confidence and additional value ” to their negotiable character; on the contrary, it gave notice to the assignee that they were connected, when made, with other transactions, into which, receiving them as she did, not “ in the usual course of business,” but as collateral security, she was bound to inquire. The cases of Fusilier v. Bonin, 12 Martin, 235, Canfield v. Gibson, 1 New Series, 145, and Abat v. Gormley, 3 Louis. 241, are decisions, not of the law of Mississippi, but of Louisiana, nor do they go further than to hold that the mere indorsement of “ Ne varietur,” unaccompanied with other circum.stances, does not destroy in Louisiana the negotiable character of bills or notes, taken “ in the usual course of business.” Indeed, Fusilier v. Bonin goes to show that, if the notarial act accompanying the note marked “ Ne varietur ” exhibits a right existing in the maker to cancel the note, the holder could not recover. In State Bank v. Orleans Navigation Co., 3 Louis. 294, 304, a third party was held bound to notice a defect disclosed by an instrument referred to in the bill.
    The facts that the assignment of the notes was as a pledge or collateral security, and that the reconveyance of the property was subsequent to the assignment, though in accordance with the stipulation entered into, by a public notarial act, between the parties to the notes at the time they were made, are equally unavailing as grounds of exemption from the provisions of the statute of Mississippi.
    The allegation that the rights'of the-assignee (Brabston) are to be governed by the law, not of Mississippi, but of Louisiana, because the notes "were accompanied by a mortgage of property in Louisiana; and that, if so governed, the assignee could recover in this action against the maker,upon the principles of the “ law.merchant,” free from all equities he might have, cannot be sustained in either respect.
    It has already been shown, that, although the notes were originally made in Louisiana, they were not payable there, and. therefore not governed by her laws. If they were, the “ law merchant ” would not authorize the recovery by the assignee.
    Because the notes of which Brabston now seeks to recover the whole amount of $ 13,000 • were not taken in the usual course of business, or in payment or extinguishment of a debt, but merely as collateral security for a note of $ 6,000. Collins v. Martin, 1 Bos. & Pull. 651; Coddington v. Bay, 20 Johns. 651; Depeau v. Waddington, 6 Whart. 232; Petrie v. Clark, 11 Serg. &. Rawle, 377; Brooks v. Whitson, 7 Smedes & Marsh. 520; Homes v. Smith, 16 Maine, (4 Shep.) 180; Norton v. Waite, 20 Maine, (2 App.) 177; Swift v. Tyson, 16 Pet. 1; Stalker v. McDonald, 6 Hill, 93.
    Because the terms of the receipt on which the notes of Gibson were assigned to Brabston place him in the position merely of a guarantee to her, to the extent of $ 13,000, for the payment by Harris of his note- to her for $ 6,000; and therefore it is incumbent on her, before resorting to the guarantee, to show notice given to Gibson of Harris’s failure to pay the guaranteed debt, prompt proceedings against Harris for its recovery, and no injury to Gibson by reason of any neglect therein. The evidence in the record exhibits no proof of such notice or proceedings; but, on the contrary, it shows the surrender by Gibson, from want of such notice, of property sufficient for his protection; the possession by Harris of large property when the guaranteed debt became payable ; and his insolvency and discharge before Gibson’s knowledge of a claim against him. French v. Bank of Columbia, 4 Cranch, 161; Douglass v. Reynolds, 7 Pet. 126; 2 Starkie on Evidence, 266; Phillips v. Astling, 2 Taunt. 206; Cammidge v. Allenby, 6 Barn. & Cress. 383; U. States v. Hillegas, 3 Wash. C. C. 75; Ramsay v. West. Bank, 2 Penn. 205; Johnston v. Chapman, 3 Penn. 19; Isett v. Hoge, 2 Watts, 129; Thomas v. Callihan, 5 New Series, 181; Styles v. McNeill, 6 New Series, 296; Mitchell v. Dall, 2 Har. & Gill, 75; Read v. Cutts, 7 Greenl. 186.
    Because it is neither proved by the record, admitted, nor agreed, that the notes on which this action is brought were presented for payment, or that payment thereof was demanded, either at the Agricultural Bank of the State of Mississippi, or on the day of the maturity thereof, or that any notice of presentation; or of non-payment thereof, was given to the said Gibson or Harris. Story on Promissory Notes, §§ 227-230; 3 Kent’s Com. 97, 99; Rowe v. Young, 2 Brod. & Bingh. 165; U. S. Bank v. Smith, 11 Wheat. 171; Wallace v. McConnell, 13 Pet. 136; Mellon v. Croghan, 3 New Series, 423, 431; Smith v. Robinson, 2 Louis. 405; Morton v. Pollard, 10 Louis. 552; Warren v. Allnut, 12 Louis. 454.
   Mr. Justice McLEAN

delivered the opinion, of the court.-

This writ of error is brought to review a judgment of the Circuit Court for Louisiana.

The action was founded on two promissory notes given by Tobias Gibson, and dated the 24th of December, 1839, in which he promised to pay to William Harris, for value received, at the • “ Agricultural Bank of the State of Mississippi,” in one nóte, -six thousand dollars, the 1st of February, 1845, and in the other, seven thousand dollars, the 1st of February, 1846. These notes were given in part consideration for a plantation and slaves in Louisiana, sold by William Harris to Gibson, to secure the payment of which and other notes a mortgage was executed on the property. The words “ Ne varietur ” were indorsed on the notes to identify them with the sale of the estate.

On the 21st of January, 1840, these notes were assigned, in {he State of Mississippi, to the plaintiff, as collateral security for the payment of a note to her of the same date, given by Harris, who was a citizen of Mississippi, for six thousand dollars, payable twelve months after date. In the sale of ■ the above property there was reserved to the vendor a right to repurchase it within ten years ; and it appears there was a redemption of the property at the price for which it was sold, and a reconveyance to^ Harris was executed on the 18th of September, 1841. Two notes on Gibson were given up as a part of the consideration for the repurchase, but the above two notes for thirteen thousand dollars, having been assigned by Gibson to the plaintiff, were not surrendered, but- Harris agreed that they should be given up and cancelled, and- a mortgage was executed on the property to indemnify Gibson against them. The first mortgage for . the consideration money was cancelled. Harris became bankrupt, and took the benefit of the bankrupt act in 1843.

The cause was submitted to the court on the facts agreed, and a judgment was rendered for the defendant. On several grounds, the plaintiff asks the reversal of this judgment.

The notes were given in Louisiana, but they were made payable and indorsed in Mississippi; consequently they are governed by the law of Mississippi. The law of the place where a contract is to be performed, and not the place where it was executed, applies. The indorsement of a note subjects the indorser to the-obligations imposed by the law where the indorsement was made.

It is. contended that, under the law of Mississippi, the defendant is not bound. The law referred to is in Howard and Hutchinson’s Digest, 373, which declares that “ all bonds, obligations', single bills, -promissory notes, and all other writings for the payment of money or any other thing, shall and may be assigned by indorsement,” &c., and the assignee may bring an action, &c., “and in all actions commenced or sued upon any such original bond, obligation, bill single, or promissory note, or other writing as aforesaid, the defendant shall be allowed'the benefit of all want of lawful consideration, failure of consideration, payments, discounts, and set-offs, made, had, or possessed against the same previous to notice of the assignment.”

The only question in the case which can arise under this statute is, whether the admitted facts constitute a defence to the action. The facts not being within the statute cannot be set up as a defence -under it. They do not show “ an illegal consideration, a failure of consideration, payment, discount, or set-off.” There was no pretence of payment of these notes in the redemption of the property. They were declared to remain in force, and to be subject to extinguishment when obtained. The case cited, of Parham v. Randolph, 4 How. Miss. 453, was where the note was given for land, the title to which failed; the failure of the consideration was held a good defence against the note in the hands of an assignee. That case was clearly within the statute.

These notes, being negotiable, were assigned to the plaintiff, for a valuable consideration, without notice, prior to the act of redemption. That act being a voluntary one by Harris, the assiguor of the notes, it could in no respect prejudice the rights of his assignee. Under the laws of Louisiana, the right of redemption may be enforced against a purchaser of the thing liable to be redeemed, though that fact was not named in the second sale. And when a vendor recovers the possession of land, by virtue of the power of redemption, he takes it free of all encumbrances created by ihe purchaser.

But these principles can have no application to negotiable paper, though given for a thing purchased which the vendor may redeem. The purchaser who holds land or other property liable to be redeemed, reconveys the property only on the payment of the consideration money. And whether this payment be made by returns of the notes given, in money, or in some other manner acceptable to the parties, cannot be material. In the present case, it seems, Gibson was content to take a mortgage, on the property reconveyed, to indemnify him against the outstanding notes.

From the fact that the notes were not given up, and an indemnity against him having been taken, a jury might well presume that Gibson had notice of the assignment. But this was not important to the right of the assignee. She stands unaffected by the reconveyance. The indorsement of the words “ Ne varietur ” could have no effect on. the notes which were payable in Mississippi, and which were indorsed to the plaintiff in that State. Nor could they have affected the negotiable character of the notes, had they been assigned in the usual course of business in Louisiana. Abat v. Gormley, 3 Louis. 241.

These notes were assigned to the plaintiff, as collateral security, by Harris, for the payment of his note for six thousand dollars, executed at the same time, which constituted a legal transfer of the notes, for the purpose stated. On the credit of these notes, it may be presumed, the plaintiff received the note of six thousand dollars from Harris.

If Gibson be considered as a guarantor, as contendéd, yet a notice was not necessary, as he received an ample indemnity against the six thousand dollars by the mortgage. But he was not a guarantor in any sense of that term. Harris assigned the notes as security, and, under the circumstances, he cannot complain of want of notice of his own default.

No demand of the notes, when' due, at the Agricultural Bank of Mississippi, where they were made payable, was necessary. The action is against the maker of the notes, and if the money was in the bank, or if the party was there with the money to pay the notes on presentation, it is matter of defence, and consequently the demand at the bank need not be averred in the declaration, nor proved on the trial. This question was fully considered and decided in Wallace v. McConnell, 13 Peters, 136.

We think the judgment of the Circuit Court must be reversed, and the cause remanded to that court for further proceedings, conformably to this opinion.

Order.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the District of Louisiana, and was argued by counsel. On consideration whereof, it ■ is now here ordered and adjudged by'this court, that the judgment of the said Circuit Court in this cause be, and the same is hereby, reversed, with costs, and that this cause be, and the same is hereby, remanded to the said Circuit Court for further proceedings to be had therein in conformity to the opinion of this court.