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McPhaul v. Lapsley/Opinion of the Court

ERROR to the Circuit Court for the Western District of Texas; the case being thus:The State of Texas has made a succession of statutes, on the subject of recording instruments, relating to the titles of real estate. They are thus:

1. An act of 20th December, 1836, after requiring all persons who claim lands, by deed, lien, or any other color of title, to record their instruments of title in the clerk's office of the county where the land lies within twelve months from the 1st April, makes it, by the thirty-fifth section, the duty of the clerk to record all deeds, conveyances, mortgages, and other liens, and all other instruments in writing, provided that one of the witnesses shall swear to the signature of the signer, or he, himself, shall acknowledge the same.

The fortieth section enacts that no deed, conveyance, lien, or other instruments respecting lands, shall take effect as to third persons until proved and recorded.

2. An act of 10th May, 1838, repealed the limitation of twelve months, in the act of 1836, just referred to.

These acts are cited by the Supreme Court of Texas, in Guilbeau v. Mays, with the statement that subsequent legislation had not materially changed them.

3. An act of January 19th, 1839, makes it the duty of county clerks to record all 'deeds, conveyances, mortgages, and other liens affecting the title to land; provided that one of the subscribing witnesses shall swear to the signature of the signer, or he, himself, shall acknowledge the same before the clerk,' &c. All laws in conflict are repealed.

The act further provides in its second section (and the provision bears specially upon this case), that 'copies of all deeds, &c., when the originals remain in the public archives, and were executed in conformity with the laws existing at these dates, duly certified by the proper officer, shall be admitted to record where the land lies.'

4. An act of May 12th, 1846, makes clerks of the county court recording officers for their several counties.

The fourth section makes it their duty to record 'all deeds, mortgages, conveyances, deeds of trust, bonds, covenants, defeasances, or other instruments of writing of and concerning any lands.'

The fifth section makes similar provision for marriage contracts, powers of attorney, and official bonds.

The seventh section directs the acknowledgment to be made 'by the grantor or person who executed the instrument in writing.'

The eighth section provides for proof being made by the subscribing witnesses.

The ninth section enacts that when the witnesses are dead, or their residence unknown, or when they reside out of the State, the instrument may be proved by evidence of the handwriting of the 'grantor OR person who executed the same, and of one of the subscribing witnesses; and this proof is to be made by 'two or more disinterested witnesses."

This act was to take effect July, 1846, and all prior laws in conflict with it are repealed.

In A.D. 1858, commenting on the fourth section, above cited, as descriptive of the instruments to be recorded, the Supreme Court of Texas, in Henderson v. Pilgrim, say:

'It is the obvious policy to require all instruments concerning land to be recorded in the proper county.'

And the court, therefore, held that an assignment of a mortgage was within the provision of the act.

In the same year it was held that a covenant for title, though a mere executory contract, was within the law.

So far as to the recording acts.

Another statute, that of May 13th, 1846, having for its frequent effect to change the burden of proof as existing at common law, is as follows:

'Every instrument in writing (properly recorded), shall be admitted as evidence without the necessity of proving its execution, provided that the party who wishes to give it in evidence shall file the same among the papers of the suit three days before the trial, and give notice to the opposite party, of such filing, and unless such opposite party, or some other person for him, shall within one day after such notice, file an affidavit stating that he believes such instrument to be forged.'

With the different statutes about recording instruments of title, and this last-quoted act as to the effect, in the matter of evidence, of filing among the papers of the suit of any instrument 'properly recorded,' Lapsley, on the 31st of March, 1863, brought trespass to try title against N. A. McPhaul and eight other persons, in the court below, to recover possession of eleven leagues of land described.

The plaintiff claimed under a power of attorney, said to have been executed by Thomas Vega, Jos e Maria Aguerre, and Rafael Aguerre, to Samuel May Williams, dated the 5th of May, 1832.

McPhaul answered, pleading an outstanding title to one league in a certain Fleming, but junior in date to the title of the plaintiff, which he mentioned had been perfected, as he alleged, by a title from Thomas de la Vega.

Appended to McPhaul's answer was the statement of de la Vega that he had sold this league, in 1860, to McPhaul, and that this was within the eleven leagues claimed by Lapsley, and he asked to be made a party to defend his title warranty, and prayed for a decree confirming the title to said defendants.

This application was never allowed by the court.

Subsequently to this, on the 16th January, 1872, Lapsley filed among the papers of the cause (giving notice to the other side, on the same 16th, that he had done so), a paper thus described:

'A testimonio of a power of attorney from Thomas Vega, Jos e Maria Aguerre, and Rafael Aguerre, to Samuel May Williams, dated the 5th of May, 1832, the said testimonio being executed by Juan Gonzales, with his proper attesting witnesses, and duly recorded in the counties of Falls and McLennan, after being duly proved.'

The reader not familiar with the Spanish law, prevalent until 1836, in what is now the State of Texas-a region till that date a portion of Mexico, itself formerly a colony of Spain-may not know exactly what a testimonio is. For any such it may be stated that in Spain and her colonies, deeds, contracts, and powers of attorney are executed before a regidor, a public officer, a sort of notary or alderman, exercising quasi judicial power. The parties appear before him accompanied by a certain number of their neighbors as 'instrumental witnesses.' The parties state the matters between them. The officer makes a minute of the terms stated. He then enters in a book the formal agreement. This is the protocol. He then furnishes to the party in interest a similar document. This is a testimonio.

What common-law lawyers would call the contract itself, but what lawyers of Spain and her colonies call the protocol of the contract, remains with the notary apud acta; like the original of a will in a surrogate's office. The testimonio is delivered to the parties, as the surrogate gives letters testamentary preceded by a transcript of the will.

The so-called testimonio, filed in this case, was in Spanish, and when translated into English ran thus:

'Second seal two reals for the two years 1832 and 1833.

'In the city of Leona Vicaria, on the 5th day of the month of May, in the year 1832, before me, citizen Juan Gonzales, regidor (alderman) of the honorable council of this city, and acting alcadi (mayor) therein, and in its jurisdiction, during the indisposition of the proper officer who officiates in the treasurer's office, no secretary being allowed him according to the terms of the law, and in the presence of the witnesses who will be named at the close hereof, personally appeared citizens Dr. Jos e Maria Aguerre, Thomas Vega, and Rafael Aguerre, residents of this city, well known to me, and declared that, in the most complete form which may be required by law, they grant, give over, and concede unto Mr. Samuel May Williams, a resident of the city of Austin, full power, as much as may be required and as may be necessary in law, especially, in order that in the names of these appearers, and in representation of their own persons, rights, and actions, so far as is allowed by the colonization law of the 24th March, 1825, he may be able to proceed, and may proceed according to his judgment, to the sales of the tracts of land which, on the 14th June, 1830, the supreme governor of this State granted to them, the appearers.'

The document having given the power of sale, concluded thus:

'Thus have they granted and signed it in presence of these witnesses, citizens Antonio Espinosa, Rafael de Leon, and Francisco de la Fuente, Gonzales, residents of this city.

THOMAS VEGA,

JOSE MA. AGUERRE,

RAFAEL AGUERRE.

'I attest:

JUAN GONZALES.

'Copy from the original, with which it agrees, the day of its execution; given on two 'useful' pages of paper, of the second stamp, conformable to law. All of which I, the undersigned judge, officiating with those assiting me according to law, hereby attest.

'JUAN GONZALES.

'Witnesses:

JOSE NAZO ORTIZ,

J. M. MORAL.'

Annexed to the testimonio were certain affidavits, on which it was recorded, in McLennan County, as shown by the certificate of the proper officer, on 7th September, 1856 (twenty years after its date), and again in same county, on 22d September, 1858.

In Falls County, 6th October, 1859.

In Williamson County, 15th October, 1859.

Among the affidavits on the testimonio was one by J. N. Seguin, made on 3d September, 1856, proving the handwriting of Juan Gonzales, by whom the testimonio or copy was made, and of his assisting witnesses, Moral and Ortiz, and that these parties, if living, were residents of Saltillo, in the State of Coahuila.

There was also an affidavit from Gonzales himself, made on the 13th July, 1857, testifying that the testimonio was executed by him, at the personal request of Jos e Maria Aguerre, Rafael Aguerre, and Thomas Vega, and in their presence; that the signature 'Juan Gonzales' is his genuine signature, officially signed as regidor of the corporation of Saltillo, and second alcalde in turn, in the year 1832, as expressed therein; and that the signatures of Ortiz and Moral, who signed as assisting witnesses, in his presence, were their genuine signatures; that Thomas de la Vega executed a certain other power of attorney before him to said S. M. Williams, on 28th April, 1832, and that the said Thomas Vega, who was a party to this testimonio, was one and the same person; that he knew of no other Thomas Vega, or Thomas de la Vega, in the city of Saltillo, or any other part of Mexico.

Through a deed made on this power of attorney, and other conveyances not disputed, the plaintiff made a title apparently regular, if the power was genuine.

Previous to the trial, which came on, February 5th, 1872, all the defendants except McPhaul were, with the plaintiff's consent, dismissed.

On the 3d of February, while the case was a trying, a certain Simon Mussina, representing himself to be 'attorney of Thomas de la Vega,' filed an affidavit that the testimonio was, 'as he verily believed, a forged instrument.'

The plaintiff moved to strike this affidavit from the files as made out of season; the statute requiring it should be made within one day after notice of filing the document sought to be used, and the affidavit not having been made until many days afterwards.

This motion the court granted.

The testimonio, therefore, stood without any affidavit against its genuineness, and IF properly recorded,' was entitled, under the already quoted act of May 13th, 1846, to be used 'without the necessity of proving its execution.' But the question whether it was properly recorded' remained.

On the trial the plaintiff, assuming, of course, that it was, offered it in evidence without proof of its execution; and the court, under the defendant's exception, received it. Being thus in evidence, the defendant offered one T. J. Walker, to show that it was a forgery. The bill of exceptions said:

'Upon the trial, &c., the defendant introduced in evidence a witness, T. J. Walker, and offered to show the jury that in the year 1868 he went from Austin, Texas, to the city of Saltillo, Mexico, formerly called Leona Vicario, in Coahuila, and that he carefully examined the book of protocols in the office of the secretary of the ayuntamiento of the said Saltillo, and that he found in the book of protocols for the years 1832, 1833, an original protocol or matriz of a power of attorney in the Spanish language, of date May 5th, 1832, from Jos e Maria Aguerre to Samuel May Williams, giving said Williams the power to sell the land which the government had granted to Thomas de la Vega and Rafael de Aguerre and Jos e Maria de Auerre, to wit, eleven leagues each; that said protocol or original has not to it the signature or pretence of the signature of any one or person except Jos e Maria de Aguerre and Juan Gonzales; that the name of neither Rafael de Aguerre or Thomas de la Vega, nor any witnesses, is found on said protocol or original he examined; that in said protocol book aforesaid, and of date April 28th, 1832, he found an original protocol of a power of attorney, signed by Jos e Maria de Aguirre or Aguerre, and Thomas de la Vega and Juan Gonzales, and with assisting witnesses Ortiz and Moral; that this power is to Samuel M. Williams; and that in said book of protocols, from the power of attorney of the 27th of April, 1832, to the power of the 5th day of May, 1832, inclusive, there were seven leaves and no visible evidence of any mutilation of the book; that there are no protocols of any power of attorney from either Maria de Aguirre or Aguerre, or Thomas de la Vega, to any one in said seven leaves, except the two named above; that he has in his hands, now in court, photographic copies of the said seven leaves of the said book, which show exactly what he states.'

To the admissibility of these facts in evidence the plaintiff objected, and the court sustained the objection, to which ruling the defendant excepted.

The plaintiff derived title, under the power already mentioned to Samuel May Williams, from a person who in some parts of his title-papers was styled Thomas Vega and sometimes Thomas de la Vega.

Thus it appeared—

That when Williams, as attorney, applied in 1833, for a title of personal possession, he described himself as 'attorney of Jos e Maria Aguerre, Rafael Aguerre, and Thomas Vega, inhabitants of the town of Leona Vicaria;'

That when Lesassier, alcalde of the town, granted the title, he described the eleven leagues as 'denounced by the attorney of Thomas de la Vega;'

That when the surveyor made his return, he said he had executed it 'by virtue of your decree for the attorney of Thomas de la Vega;'

That in the petition of Jos e Maria Aguerre he declared it made 'on his own behalf, and also in the name of Thomas Vega and Rafael Aguerre;'

That when, in conformity to this petition, Lesassier made his decree, he described it as made in favor of 'Jos e Maria Aguerre, Rafael Aguerre, and Thomas de la Vega.'

The court charged that the title set up by the defendant in Fleming could not defeat the plaintiffs, because it was junior in date to it, and that they would find for the plaintiff unless they believed from the evidence that the testimonio was a forgery; that the registration was only prim a facie evidence of its genuineness, and that the fact that the court had admitted the testimonio in evidence did not preclude the defendant from showing that it was forged, and that if the jury believed that Thomas de la Vega never did sign it they would reject it; that there was no evidence of forgery except the difference in the name Thomas Vega and Thomas de la Vega; that the testimonio, 'the original and copy of which' was before them, was evidence for their consideration; that it was not necessary that the signature of Thomas de la Vega should be in his own proper handwriting on the testimonio before the jury, and that if Thomas de la Vega did sign the original of it in the office at Saltillo then the testimonio given in evidence, with a proof of a conveyance by Williams, under it, would divest Vega of his lands.

The defendant asked the court to charge—

1. That the jury must disregard the paper purporting to be a testimonio;

2. That unless they believed that the original grantee of the land and the person making the instrument (if it ever was made) purporting to be a power of attorney, were one and the same person, they must disregard it;

3. That unless they believed as last abovementioned they must find for the defendant;

The court refused the charge first above requested, and gave the other two, with the qualification that if the jury believed, from either the documentary or oral testimony, that the original grantee was known indifferently by the name of Thomas Vega and Thomas de la Vega, the presumption was that he was the person who signed the power; and that the jury would so consider, unless satisfied otherwise from other evidence.

Verdict and judgment having gone for the plaintiff, the defendant brought the case here; the writ of error being in the name of the whole nine original defendants; all of whom, as already said, except McPhaul, had been with the plaintiff's assent dismissed from the case before trial.

'An act to further the administration of justice,' passed June 1, 1872, enacts,

'That the Supreme Court may, at any time, in its discretion and upon such terms as it may deem just, and where the defect has not injured and the amendment will not prejudice the defendant in error, allow an amendment of a writ of error when there is a mistake in the teste. . . and in all other particulars of form.'

In the assignments of error, it was alleged for error that the court erred, among other ways—

1. In admitting the testimonio in evidence.

2. In excluding the testimony of Walker.

3. In charging that the admission in evidence of the testimonio was prim a facie evidence of its genuineness;And further, that there was before them no evidence that the testimonio was not genuine, except the evidence of difference of name;

And in improperly withdrawing the mind of the jury from considering the want of genuineness of the testimonio from a failure of the plaintiff to show the existence of or the genuineness of any protocol at Saltillo.

Mr. T. J. Durant, for the plaintiff in error:

1. The court erred in receiving the testimonio in evidence, under the act of May 13th, 1846. That act, by which written instruments on being filed in a cause prove themselves, applies only to those instruments which are 'properly recorded.' Now, a testimonio is but a copy; an ex parte copy, made without any opportunity to cross-examine the witnesses as to its authenticity. In the present case the copy purports to be taken from the original on the day of its date (5th May, 1832). It was afterwards recorded in different counties; but recorded when afterwards? Not until twenty-four, twenty-six, and twenty-seven years afterwards.

If a registration of a document were provided for by previous laws (and unless it was so plainly the testimonio did not by filing prove itself), no document recorded until so very far from the proper time was 'properly recorded.'

Further: the law of Texas providing for the registration of powers of attorney says they 'shall be proved or acknowledged according to law.' No such proof or acknowledgment could be made as to the testimonio, for it was without any actual signature of De la Vega to it. If Thomas Vega was the name, that name was on the copy; but the whole paper, name and all, purports to be a copy written wholly by Juan Gonzales himself, as regidor, second alcalde, and acting in the absence of the notary public, and does not purport to have been written or signed by De la Vega.

But even if the document were one the registration of which was contemplated by the statute, the affidavits are short of the requisitions, and the document is left as an office-copy of a power of attorney without the slightest effect as proof, farther than that there was, in form, such a power. Indeed, Gonzales says (more than twenty-five years after the alleged power of attorney was given) that he executed the copy at the personal request of, &c., &c., and 'that the signatures of. . . and. . . were signed as assisting witnesses in his presence, and are their true and genuine signatures,' meaning and certifying that the witnesses are to the fidelity of the copy, and not to the correctness or genuineness of the original.

Neither of these assisting witnesses is produced. The case is equivalent to that of an office clerk in a common-law State copying a power of attorney, swearing to the execution of the original, having the copy recorded, and hoping by this means to make the copy supply the place of the original, under the special legislation of the several States.

But these assisting witnesses were not the witnesses to the signature of Vega or De la Vega to the original power of attorney. Three citizens and neighbors are declared present at the execution and delivering. Their names are given in full: Antonio Espinoza, Rafael de Leon, and Francisco de la Fuente. Neither is produced, nor is his absence accounted for.

Were these witnesses bound under Spanish law to sign with the principals and notary? Doubtless. But they do not sign. And no one of them was produced to prove the execution and acknowledgment.

But if the testimonio, in virtue of being filed, proved itself, what was it? Nothing, even as pretended, but a copy of an original confessedly existing and capable of being produced.

The testimonio did not profess to be an original. The filing may hae dispensed with proof of its being a copy. But if it had not been filed, and had been offered in evidence as a copy, and been conceded by us to be a true copy, how did that help the plaintiff? In Spain and her colonies indeed, these testimonios or copies, make prim a facie full proof of all they contain, when offered in evidence on a judicial contestation. But this institution of the notariat forms no part of the laws of Texas, where the common-law rules of evidence prevail, except so far as statutes may alter them.

The filing, in short, may have dispensed with certain formal proof, but it does not allow you to prove by a secondary sort of evidence that which you can prove by an original in your control.

2. The court erred in rejecting the testimony of Walker.

If a copy became, by filing, under the act of May 12th, 1846, the equivalent of an original of which it purported to be a copy, or even if the rule of the Spanish law prevailed, and this testimonio became as a mere copy evidence, it would not even under that law become more than prim a facie evidence; and the court erred in rejecting the evidence of Walker to prove that there was no such original as that of which the testimonio purported to be a copy; in other words, that the testimonio was fraudulently made. Even under Spanish law that could be proved. Now, certainly the testimony of Walker, with his photograph fac similes in his hand, did tend to prove this. In our opinion such testimony tended strongly to prove it. But certainly the testimony tended somewhat to do so, and if it tended at all-tended in the least-it ought to have been received. It will be said that the originals could have been produced, and that such original was better than the photograph. The argument is double-edged. It cuts two ways; and more sharply backwards than forwards. If the argument has any force, why was not the original produced to support the plaintiff's claim? To prove what was in the protocol the photographs were infinitely better than the testimonio.

3. The court erred in charging. It charged that there was no evidence that the testimonio was not genuine except the evidence of difference of name. If there was any law authorizing the record (and, as we have already said, unless there was, the testimonio was wrongly admitted without being proved), some presumption of fraud (in our view a considerable one) arose, from the non-recording of the paper for nearly thirty years after its date.

The principles of law, as to the testimonio, were entirely disregarded in the instructions. The court says:

'The testimonio, the original and copy of which is before you, of May 5th, 1832, is evidence for your consideration.'

Whilst the record shows that only the testimonio or officecopy of the power of attorney was before the jury. It further said that 'it was not necessary that the signature of the grantee, Thomas de la Vega, in his own proper handwriting, should be on the testimonio before the jury, and also that if Thomas de la Vega did sign the original of the testimonio and the testimonio before the jury in the office at Saltillo, then the testimonio given in evidence, with proof of a conveyance made by Williams, the attorney, by virtue of it, would divest La Vega of his lands claimed.'

This withdrew the minds of the jurors from the consideration of the want of genuineness of the testimonio, arising from a failure of plaintiffs to show the existence of or the genuineness of any protocol in Saltillo.

In Spencer v. Lapsley, this same testimonio was, indeed, received by this court; but then the court relied for its judgment upon the fact that 'its authenticity had never been questioned by La Vega, so far as is shown in the record.'

I. The testimonio was 'properly recorded,' and, therefore, having been filed, with notice of the filing, was made evidence by the act of May 13th, 1846.

1. A testimonio is what is known in Texas, deriving its terms from the Spanish law, as a 'second original;' and not, as is assumed by the opposing counsel, a copy simply. This was settled by this court in Mitchel v. The United States so far back as 9th Peters. It is there said:

'The original is a record, and preserved in the office, and cannot be taken out; a testimonio or copy is delivered to the party, which is deemed to be and is certified as an original paper, having all the effect of one in all countries governed by the civil law.'

And in Herndon v. Casiano, the Supreme Court of Texas said the same thing:

'The testimonio, though denominated a second original, is still an original.'

As an original it was rightly recorded under the recording acts of Texas.

That the testimonio is an 'instrument in writing concerning land,' as described in the fourth section of the act of May 12th, 1846, is plain.

And that the acknowledgment by Gonzales was made by 'the person who executed the instrument.'

And that his deposition, together with that of Seguin, as to the genuineness of the handwriting of the assisting witnesses (who are residents of a foreign country), bring the case fully within the provisions of the seventh and ninth sections.

In Edwards v. James, the officer who executed the testimonio acknowledged the same, and on this it was recorded. The Supreme Court of Texas held this sufficient under the thirty-fifth section of the act of 1836. It said:

'The officer who executed the protocol, and issued the copy or second original, appeared before the county register and acknowledged his signature to the certificate authenticating the testimonio, and this was sufficient, under the thirty-fifth section of the act of 1836, to have authorized its record.'

If we compare these words of the act of 1836 with those of 1846, we find them to be substantially the same.

In the first, evidence is to be produced as to the 'signature of the signer, unless he, himself, shall acknowledge the same.'

By the second, the acknowledgment is to be made by the 'grantor, or person who executed the instrument.'

The signer of the instrument, and the person who executes it, are the same. So that the decision made under the act of 1836 applies in full force to a like acknowledgment made under that of 1846.

'If the instrument be legal and authentic, without subscribing witnesses, it would require language too plain to be mistaken to exclude it from record for the want of proof by such witnesses, the signature of the signer being substantiated by satisfactory proof.'

In this case we not only have this acknowledgment of the signer, but the evidence of two witnesses to his signature, and the genuineness of the signature of the assisting witnesses, non-residents.

2. The paper as a copy of an 'original remaining in the public archives, executed in conformity to the laws existing when it was made, duly certified by the proper officer,' was properly recorded under the second section of the act of 19th January, 1839.

In Guilbeau v. May, decided in the Supreme Court of Texas A.D. 1855, the court says:

'It is believed this act has a direct reference to this description of titles. It is well known that in the titles to land executed prior to our separation from Mexico, the original remained as an archive, and a testimonio was given to the interested party as an evidence of title. . . . The act leaves no doubt that this kind of evidence ought to be recorded.'

The recording acts, therefore, applied to the paper whether it was an original or a copy; and as either it was 'properly recorded. What if it was not recorded for many years after its execution? Papers do not lose their right to be recorded by delay. If proper papers for record at one time, they are of right recorded at any time; and when recorded of right are properly recorded.'

Having been properly recorded the document was made evidence by the act of May 3d, 1846.

II. The testimony of Walker was rightly excluded. Its purpose was to discredit a testimonio making a title to land, by showing, forty years after the execution of the document, a discrepancy between the testimonio and the matrix or protocol.

If evidence to do this is admissible at all, it ought to come from the best source. The officer in charge of the archives should have been examined, and the documents themselves, or authentic copies, should have been produced in court for inspection.

In this case what purported to be a photographic copy of the protocol was no proof at all, because not established by the testimony of any person who made it.

It is by no means admitted that if proper evidence of discrepancy had been produced, this would have invalidated the testimonio.

It is stated by Sala, that the paper which is always signed by the parties and witnesses is the first draft on common paper.

That it ought afterwards to be extended in the book of protocols, and should be again signed by them.

That the first paper, when free from blots, &c., is better evidence than the protocol, because it is always signed by the parties, whereas the protocol is not always signed by them, and because the former contains the rubric or seal of the officer, while the latter does not.

That the protocol has full faith for which it is intended; but in court so much faith is not awarded to it as to the testimonio, because it was not established for the purpose, and because it wants the rubric or seal which authenticates it, and which every public instrument ought to have.

That the testimonio makes full proof except in cases where the instrumental witnesses dispute it.

By a law of Texas all the archives were required to be deposited in the General Land Office, whether in possession of an empressario, political chief, alcalde, commissary, or commissioner. The failure to do this was visited with a heavy penalty. Documents so deposited were to remain there, and certified copies were made evidence.

In Titus v. Kimbro, a testimonio was offered in evidence and held to be conclusive, and to be better evidence than a certified copy of an original title from the General Land Office.

III. The charge was right.

The judge was requested to charge, that unless the jury believed that the grantee and Thomas Vega were one and the same person, the instrument must be disregarded. The instruction was given, with the qualification, that if the jury believed that the grantee was known indifferently as Thomas Vega and Thomas de la Vega, then the presumption is that he was the same person, and they would so consider, unless satisfied that such was not the fact.

In view of the documentary evidence on which the two names were used indifferently, there can be no valid objection to this charge.

No instruction was asked for as to the effect of the lapse of time before the instrument was recorded. If such instruction had been asked, it would have been properly refused, as the registration, whenever made, is effective from its date.

We need not assert that the testimonio coming from our possession would have proved itself. We rest its admission in evidence without proof of execution, on the ground that the statute of the State made it evidence after it had been recorded, and when notice had been given that it was to be used in evidence on the trial.

IV. The writ of error is sued out by McPhaul and all the other eight original defendants to correct a judgment rendered against them.

There is no judgment such as is described in the writ. The only judgment is against McPhaul alone. He alone petitioned for the writ. The writ must, therefore, be dismissed (if amendable in this particular) as to all others than McPhaul.

Mr. Justice SWAYNE delivered the opinion of the court.

The action was ejectment. Lapsley was the plaintiff. The plaintiffs in error were the original defendants. In the progress of the cause the plaintiff dismissed the action as to all of them except N. A. McPhaul, and judgment was rendered against him for their costs. He recovered against McPhaul, and this writ of error is prosecuted to reverse the judgment.

The writ should have been in the name of McPhaul alone as the plaintiff in error. But as the defect is clearly amendable under the third section of the act of June 1st, 1872, it is unimportant.

There are numerous assignments of error. Except those involving points which we deem material to be considered, we shall pass them by without remark.

The affidavit of Mussina was properly stricken from the files.

The law of Texas provides as follows: 'Every instrument in writing (properly recorded) shall be admitted as evidence without the necessity of proving its execution, provided that the party who wishes to give it in evidence shall file the same among the papers of the suit three days before the trial and give notice to the opposite party of such filing, and unless such opposite party, or some other person for him, shall within one day after such notice file an affidavit stating that he believes such instrument to be forged.'

The affidavit was filed by Mussina as the attorney of De la Vega. It set forth that the instrument of writing purporting to be a testimonio or second original of a power of attorney from Thomas de la Vega, by the name of Thomas Vega, to Samuel M. Williams, dated May 5th, 1832, was, as affiant verily believed, a forgery. The testimonio was one of the plaintiff's files in the case for the purposes of evidence upon the trial. The object of the affidavit was to throw the burden of proof upon the plaintiff.

He had given the proper notice to the defendants on the 16th of January, 1872. The affidavit was filed, not within one day thereafter, as the statute required, but on the 5th of February following, while the trial was in progress. De la Vega, in whose behalf it was filed, was not a party to the record.

It is insisted that the testimonio was improperly admitted to record, and that it was not properly admitted in evidence. These objections present questions of local law.

It bears date on the 5th day of May, 1832, and sets forth that Thomas Vega, Rafael Aguerre, and Jose Ma. Aguerre, of the city of Leona Vicaria, appeared before Juan Gonzales, regidor of that city, and declared that they conceded to Samuel May Williams, a resident of the city of Austin, full power, 'in order that in the names of the appearers' he might proceed to sell the lands therein described. 'And to confirm all that may be granted and executed, the appearers bind themselves, their persons, and their property present and to come.' It concludes, 'Thus have they granted and signed it in presence of these witnesses, Antonio Espinosa, Rafael de Leon, and Francisco de la Fuentes, Gonzales, residents of this city.

'I attest: Juan Gonzales. Thomas Vega, Jose Ma. Aguerre, Rafael Aguerre.'

'Copy from the original, with which it agrees, the day of its execution; given on two 'useful' pages of paper, of the second stamp, conformable to law. All of which I, the undersigned judge, officiating with those assisting me according to law, hereby attest.

'JUAN GONZALES.

'Witness:

JOSE NAZO ORTIZ,

J. M. MORAL.' Affidavits are annexed upon which it was recorded, in McClennan County, September 7th, 1856, and again, September 22d, 1858; in Falls County, October 6th, 1859, and in Williamson County, October 15th, 1859. The affidavits were all sworn to in Texas. Among them are, one proving the handwriting of Gonzales and the attesting witnesses-Moral and Ortiz-and that, if living, they are residents of Saltillo, in the State of Coahuila; one by Gonzales, made July 13th, 1857, proving that the testimonio was executed by him at the personal request of the grantors named therein and in their presence, and that his signature thereto, and those of Moral and Ortiz, are all genuine; that Thomas de la Vega executed a certain other power of attorney before him to S. M. Williams on the 28th of April, 1832, and that 'the said Thomas de la Vega, who executed this testimonio, is one and the same person.'

The testimonio here in question being a copy from the protocol, or original instrument, made by the officer by whom the protocol was executed, was, in the eye of the Spanish law and of the law of Texas, 'a second original,' and of equal validity and effect with the prior one.

That Gonzales had authority adequate to the function he performed, and that the testimonio was valid, was held by this court in Spencer v. Lapsley.

In relation to the recording of the instrument, our attention has been called to the following statutes of Texas: the act of the 20th of December, 1836, sections thirty-five and forty; the act of May 10th, 1838; the act of January 19th, 1839; and the act of May 12th, 1846, sections four, five, seven, eight, and nine. A careful examination of these statutes has satisfied us that the registration was authorized by law. If there could be any doubt upon the subject it is removed by the Texas adjudications upon the subject, referred to in the argument of the learned counsel for the defendant in error. A certified copy from the office where the testimonio was recorded would, therefore, have been competent evidence. The original, with the recorder's indorsement, would, as a consequence, also have been admissible. In such cases, it would be a solecism to receive the copy and reject the original.

In this case the plaintiff offered the testimonio in evidence, and it was properly received. It would have been admissible without recording. In Martin v. Parker, it was objected that an act of sale of real estate, not having been signed by the instrumental witnesses, was inadmissible without proof of its execution. The court replied: 'We do not think the objection well taken. In McKissick v. Colquhoun, Chief Justice Hemphill said: 'The signature of a judge or alcalde acting in place of a notary, authenticated by two assisting witnesses, has all the force and effect of the signature and seal, or rubric, of a notary."

The defendant offered to prove by T. I. Walker, a witness present, that in the year 1868 he went from Austin, Texas, to Saltillo, formerly Leona Vicaria, in Coahuila, Mexico, and there examined the books of protocols in the office of the secretary of the ayuntamiento; that he found in the book of protocols for the years 1832 and 1833, among others a protocol of a power of attorney, in the Spanish language, of the date of May 5th, 1832, from Jos e Maria Aguerre to Samuel M. Williams, giving Williams the power to sell the land granted by the government to Thomas la Vega and Rafael and Jos e Maria Aguerre, to wit, eleven leagues each; that said protocol had to it no signatures but those of Gonzales and Jos e Maria Aguerre, and that it had no signatures of witnesses; that in said protocol-book, and of the date of April 28th, 1832, he found an original protocol of a power of attorney, signed by Jos e Maria de Aguirre, or Aguerre, and Thomas de la Vega and Juan Gonzales, with attesting witnesses Ortiz and Moral; that this power was to Samuel M. Williams; and that in said book, from the power of attorney of the 28th of April, 1832, to the power of the 5th of May, 1832, inclusive, there were seven leaves, and no visible evidence of any mutilation of the book; that there are no protocols of any power of attorney from either Maria de Aguirre, or Aguerre, or Thomas de la Vega, to any one, in said seven leaves, except the two named above; and that the witness had in his hands then in court photographic copies of said seven leaves, showing exactly the facts above mentioned as to the protocol-book and the said two powers of attorney as of record therein.

The plaintiff objected to the admission of the evidence. The court sustained the objection and the defendant excepted.

It has been shown that the testimonio is 'a second original,' and of the same effect with the protocol. According to an eminent Spanish authority it is full proof, unless the instrumental witnesses contradict it. Here neither Vega, either of the Aguerres, Gonzales, Moral, nor Ortiz was produced; nor was their absence accounted for. The bill of exceptions states that the witness had the photographic copies in his hands in court-not that they were offered in evidence. But perhaps it is only fair to construe the bill of exceptions so as to give it that effect. Conceding this, the only testimony offered was that of Walker, and the two photographic copies. It does not appear to have been suggested that this was to be followed by any further testimony. The copies had been in the possession of Walker more than three years; yet it is not shown that the plaintiff had any notice of them until they were suddenly produced by the witness in the midst of the trial. It is also significant that the agent who went on the visit of exploration to Saltillo did not claim to have discovered anything whatever adverse to the testimonio, except the state of the protocol as it appeared of record. Nor did the defendant, enlightened as he must have been by Walker, invoke the testimony of the keeper of the archives, or of any other person residing in the locality where they were kept. The plaintiff's petition was filed in 1863. Walker's discovery was made in 1868. The trial was in 1872. There was time between the two periods last mentioned to procure ample testimony from Saltillo and elsewhere touching the fraud and forgery charged, if they were believed to exist. The defendant was silent. The record is a blank as to any such testimony given, offered, or suggested, except the isolated circumstances offered to be proved by Walker and the two photographic copies. These are pregnant facts. Copies of the photographs are not given in the bill of exceptions; nor are the contents of the power to Williams, of the 28th of April, given in whole or part. That is stated to have had upon it the names of Jos e Maria Aguerre and Thomas de la Vega as grantors, and of Gonzales with those of Moral and Ortiz as assisting witnesses. It is possible that the testimonio may, by the mistake of the copyist, have the date of the latter instead of the earlier instrument, or that if the fuller and better evidence, which the defendant was bound to give, had been produced, the apparent discrepancies between the two documents in question might have been explained in a manner consistent with the integrity of all concerned and the validity of the testimonio. It should at least have been shown by some one officially connected with the office, that the book seen by the witness was the book, and the only book there wherein the instrument could have been properly recorded, and that there was no such protocol anywhere in that book, or elsewhere in the office. It is also possible it was known in the office that the missing signatures had been removed by some dishonest hand.

The testimony proposed to be elicited from Walker fell far short of the requisite standard. A party is not permitted to give secondary evidence where it presupposes better evidence within his reach, which he fails to produce. In Renner v. Bank of Columbia, this court, speaking of such evidence, said: 'Every case must depend in a great measure upon its own circumstances. The rule of evidence must be so applied as to promote the ends of justice, and guard against fraud and imposition.'

It appears incidentally by the record that there has been a great amount of litigation, extending through a long period of time, touching the lands to which this testimonio relates. The protocol and testimonio bear date more than forty years ago.

The record does not show that during this long period either of the Aguerres ever questioned the validity of the latter, or that La Vega ever assailed it by his own sworn testimony.

Large and diversified interests must have grown up on the faith in its genuineness. In this case the attack upon the instrument is not made by either of the grantors, but vicariously by the defendant, who claimed under a distinct and hostile title which he wholly failed to establish.

Under all the circumstances, we think the testimony of Walker was properly excluded.

In our judgment the court was correct as to the instructions given and those refused, to which the exceptions touching that subject relate.

We direct, sua sponte, the writ of error to be amended by striking from it the names of all the plaintiffs except McPhaul; and the judgment of the Circuit Court is

AFFIRMED.

title: McPhaul v. Lapsley/Opinion of the Court


text: Talk:McPhaul v. Lapsley/Opinion of the Court

license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


text: City of Memphis v. Brown

title: City of Memphis v. Brown


text: Talk:City of Memphis v. Brown

title: Talk:City of Memphis v. Brown


text:
City of Memphis v. Brown/Opinion of the Court

[Syllabus from pages 289-291 intentionally omitted]

APPEAL from the Circuit Court for the Western District of Tennessee; the case, as appeared from a master's report, and otherwise, having been thus:

By a general incorporation act of the State of Tennessee, all cities of the State have full power to provide for the paving of streets, alleys, and sidewalks.

The charter of the city of Memphis, in the State just named, enacts that 'the board of mayor and aldermen shall have power to improve, preserve, and keep in good repair the streets, sidewalks, public landings and squares of the city.'

It enacts also, that the city may require lot-owners to improve the streets fronting their lots, and that 'should any owner fail to comply with any ordinance requiring him to repair, grade, and pave the same, the mayor and board of aldermen may contract with some suitable person for repairing, grading, and paving the same, and pay therefor,' and collect the amount from the lot owner.

It enacts also that the city may issue its bonds 'for the construction and pavement of the principal streets of the city;' and an act amendatory of the charter authorizes the issue of bonds 'for any public improvement.' Nothing was said as to the rates at which it might sell these bonds.

The ordinances of the city require that 'the city attorney' should prosecute all suits to which the city might be a party, or in which it might be interested.

These provisions of law and this ordinance being in force, the city of Memphis, in the year 1866, being desirous to have certain of its streets paved with what is known as the Nicholson pavement, passed an ordinance directing the mayor to advertise for twenty days for paving the whole or parts of them according to the plans and specifications of the engineer's office, and further authorized the mayor and the finance committee to make and enter into contract or contracts with the lowest responsible bidder, as to payments and time of completion, with such restrictions as they might think best.

'The city civil engineer shall forthwith proceed to make a plat of said streets and a plat of the lots bounding and abutting the same; and shall be actual measurement ascertain the number of feet front on each lot bounding and abutting the said streets; and shall mark upon his plat the names of the owners of such lot and the number of feet belonging to each. . . . He shall also prepare and lay before the board of mayor and aldermen at their first meeting after a contract shall have been made by them for the grading, constructing, and paving of the street, upon which such lots front, an estimate of the entire cost of said improvement under the contract aforesaid, as shall be opposite the respective lot or lots, and shall mark upon said lot the amount thereof; and such amounts are hereby declared to be a special tax upon such lots respectively, and a debt due by the owners thereof in such instalments as the board of mayor and aldermen may determine; and he shall make out and deliver to the attorney for the city a list of the owners and the amounts due respectively, with the number of the lot and time of payment, and the attorney shall proceed to collect the same, and in case the owner shall fail to pay on demand, to enforce the lien against the lots given by the charter of the city.'

The advertisements and surveys directed were made, and bids put in by different parties. Among the bids were one by Taylor, McBean & Co., and another by Forest, Mitchell & Co. These two bids were accepted.

Accordingly, on the 11th of March, 1867, the city entered into a contract with Taylor, McBean & Co. for the paving, in sections, certain streets. The contract said:

'Upon the completion of each section, the contractors shall receive from the owner or owners of lots fronting upon said section one-half of the price of the same in cash, the remaining half to be paid by the said owner or owners in thirty, sixty, and ninety days, they giving their notes for the same, with the lien fixed by the city charter retained in said notes.

'The accounts for said pavement will be made out upon the completion of each section, by the city engineer, against the property owner or owners and delivered to the contractors for collection, and if not paid according to the terms above specified, within ten days after said payment becomes due, said accounts shall be placed in the hands of the city attorney for collection under the city charter.

'The city of Memphis will and does hereby guarantee to the contractors the payment of said accounts, as so assessed against the property owner or owners for the pavement.'

This contract was called 'the cash contract.'On the 16th of July, 1867, the city entered into another contract, this one being with Forest, Mitchell & Co., for paving, in like sections, certain other streets. This contract said:

'Upon the completion of each section the contractor shall receive from the city the whole amount due under the conditions of this contract for said section; the same to be paid in Memphis city paving bonds, payable in five, ten, and fifteen years, in equal proportions, with six per cent. coupons attached, payable semi-annually. Principal and interest guaranteed and provided for by a sinking fund set aside for that purpose. Bonds to be taken at par.'

This contract was called 'the bond contract.'

As the reader will observe, there was no provision in this contract for assessment, nor any reference to property owners, or guarantee of payment. The contract was, however, subsequently modified as to the amount to be paid for certain portions of the work and as to the form of payment, with a provision for assessment and collection of certain portions thereof, as had been made in the cash contract.

Both of the contracting firms above named were unable to perform what they had contracted to do, and with their consent and that of the city, a new firm, that of Brown & Co., was substituted in their places; succeeding to their obligations and to their rights. Brown & Co. paved the streets according to the contract.

The property-holders of the streets paved did not pay for the paving opposite to their respective lots; and this failure of theirs producing embarrassment on the part of Brown & Co., these last sought relief by an application to the city. To give this relief the city, in August, 1868, lent to Brown & Co. its bonds to the nominal amount of $99,000. The bonds were worth at the time not more than fifty cents on the dollar, and they were lent with the understanding that they might be sold for what they would bring, and that other bonds might be bought to replace them when they should mature. Early in November, 1868, another application of the same character was made for $175,000 of the city bonds; and a resolution was passed on the 18th, by the city councils, and an agreement signed on the 20th of November by the city of the first part and Brown & Co. of the second. The agreement recited:

'That, whereas the party of the first part, in session on the 18th day of November, 1868, did pass the following resolution, to wit:

"Resolved, &c., That the city will loan Messrs. Brown & Co., the contractors of the Nicholson pavement, one hundred and seventy-five thirty-year $1000 pavement bonds for eighteen months, upon condition that said contractors will place in the hands of the city attorney paving bills against the property holders to the amount of the face value of said bonds; and upon the further consideration that said contractors WILL release the city from all liabilities upon said paving contract, unless it should be decided by the courts of least resort that the property holders are not liable for said pavement. The interest upon said bonds shall be paid by the said Brown & Co., and at the end of said eighteen months said bonds shall be returned to the city, principal and interest, unless said interest has been previously paid:'

'Which said resolution embraces all the conditions of said loan, and is accepted by the parties of the second part.'

'It is further agreed by said parties that the city will furnish said bonds as rapidly as they can be executed, and that as said bonds are delivered to the said Brown & Co., the said Brown & Co. will deliver to the city attorney the collaterals to secure the same. This agreement is in no wise to affect or modify the terms and obligations of the original contracts for paving the streets of Memphis with the Nicholson pavement, as now existing between the parties, or the owners of the lots abutting on the streets, except when said contracts are changed and modified by the above resolution of the board of mayor and aldermen and this agreement.'

The city did not comply with this contract. The master thus set forth the facts:

'Brown & Co. received, with much delay in their issue, $140,000 in city bonds. The remainder of the loan ($35,000) was wilfully withheld by the then acting representatives of the city, and applied to payment of interest on the general funded debt of the city, the city getting about fifty cents on the dollar for the bonds thus withheld. The mayor had given to Brown & Co. a letter (called by the city an acceptance, but which does not possess a single quality of a commercial acceptance), stating that Brown & Co. should be entitled to receive $35,000 of Memphis city bonds so soon as they could be signed and ready for delivery. But they were never signed, or if signed, never delivered, and in that particular the city did not comply with the stipulations whereby it received an agreement for release from its guaranty of the cash payments by property holders. The greatest and apparently most inexcusable neglect and delay were exhibited by the city government in the delivery of the bonds promised to Brown & Co. under their loan contracts.'

The following was the form of one of the papers termed acceptances:

'MEMPHIS, August 27th, 1868.

'MESSRS. BROWN & CO.: As soon as it is possible for me to sign them I will issue to you, or your order, ten $1000 bonds of the city of Memphis, the same being a part of the number you are entitled to by a recent order of the board. You may use this in any negotiation necessary to accomplish your purpose, and the bonds can be delivered to your order on return of this letter.

'W. LEFTWICH, Mayor.'

Brown & Co. and the city not being able to arrange matters between them, Brown & Co., in 1869, brought a suit at law to recover from the city $600,000, which the firm asserted the city now owed it upon the two contracts for paving. The city set up the agreement of November 20th, 1868, as an accord and satisfaction, and full performance was averred.

At a subsequent date, to wit, in November, 1870, the city filed a bill in equity against Brown & Co., alleging various matters of equitable defence, and asking that the firm be restrained from proceeding in a suit at law. To this bill Brown & Co. made answer, and also filed a cross-bill against the city.

In November, 1870, all proceedings in the suit at law were ordered to be stayed, to the end that the matters in controversy be determined in the equity suit; and in that same month, Brown & Co. moved for an order of reference, upon the following notice:

'Come, Brown & Co., by solicitors, and move the court in this cause to order an interlocutory decree of reference to the clerk of this court, as master, to find and report to the court, at a future day in this term, or so soon as practicable, of and concerning the following matters:

'1. That he state an account of all the labor done, and materials furnished, and the value thereof, at the agreed prices under all the contracts set out and referred to in the bill and cross-bill herein, distinguishing the value of that paving done opposite the lots of private owners from the remainder and also of all payments made on account of _____, distinguishing the payments as above in the paving; and also finding how such payments were made, and under what agreement, if any.

'2. That he find how many bonds the city of Memphis loaned Brown & Co.; and whether such bonds had a market value, and what that value was at the date of the loans; also, at the date of the maturity of the loans; also, at the bringing of this suit, also, how much, if any, the city of Memphis was indebted to Brown & Co. at the date of such loans.

'3. That he find and report how many of the city's bonds were delivered under the contracts dated July 16th and November 13th, 1867, in payment, as therein provided; and also the value of such bonds when delivered; and the average value of such bonds in this market and New York, since delivery, to the bringing of this action; also, the value, at such times, in Memphis and New York, of such bonds having the payment of the principal and interest secured by a sinking fund set aside for that purpose.

'4. That he find and report whether any, and if so how much work was done by such contractors for the city, additional to that provided.'

In April following, no exception being filed, this motion was granted, and an order entered reciting that the action at law involving an accounting and adjudication of questions arising thereon was by consent joined with the present action, and the cause being at issue and coming on for hearing, it was ordered that it be referred to Mr. Mitchell as master in chancery to take proof, hear, and report to the court the proof, and his conclusions upon twenty-seven items specified, of which the final was, 'that he state an account between the plaintiff and defendant, embracing therein all the matters in the cause of the bill and cross-bill herein, and showing in the result the aggregate balance of debt of the debtor party to the other.'

Under this order the master entered upon his office, and evidence was taken before him by the parties.

As already said, the owners of lots along the streets paved, did not in the majority of instances pay the special charges assessed for the paving against the lots. Brown & Co. accordingly put the claims (which the city ordinance had made liens against the lots) into the hands of the attorney of the city. But in addition to this, other attorneys were employed to assist him in enforcing these special assessments or liens for paving, and as appeared, Messrs. Humes and Poston, lawyers of Memphis, were paid for prosecuting between four and five hundred suits through the courts, $10,000, and other attorneys for collecting them without the judicial process, $25,000.

It did not appear that this employment of special counsel was authorized by the city councils, or by any committee intrusted by them with the collection of the liens, though the evidence tended to show that the mayor of the city and the city attorney knew and approved of what was done.

Mr. Waddel, one of the attorneys at law, employed by Brown & Co. to collect the special assessments, testified:

'As to specific directions given by the mayor, city attorney, or other officers of the corporation, I do not know that I ever heard of any; but I do know that the mayor and city attorney were apprised of the extraordinary efforts we were making to effect collections without suits, and approved the same, and urged us to make all possible. In several visits which I made to the mayor, he generally expressed his anxiety for us to effect collections in the manner we were pursuing, his idea being to get as much as possible without suit. My recollection is that the city attorney advised the same course.'Brown, himself, testified:

'Both the mayor and city attorney requested that every effort should be made to collect bills without suit by turns and trades, exchanges and discounts, and putting a large collection force at work, and making every effort to work as many of the bills into the paving of the streets as possible. Their advice and direction was followed. After it became evident it was necessary to sue, the city authorities advised suits to be brought, and to employ counsel to aid the city attorney in the examination of titles, drafting papers, and the work of suing. The city attorney took us to the office of Humes and Poston, saying that the city business outside of this was so large that it would be impossible for him to bring these suits; that he must have assistance, and preferred them. The mayor said substantially the same thing, and under their direction I retained Humes and Poston, who brought about four hundred suits.'

The testimony of one Ballard, a sub-contractor, and who was with Brown in his interview with the mayor and city attorney, showed exactly the same facts; and that of the city engineer was to about the like effect.

The city attorney, as the evidence showed, did little in the matter, except show himself in court when the cases were tried, and assist more or less with general counsels.

The 'bond contract,' as it was called, bound the contractors, as the reader will remember, to take the bonds 'at par,' and on the other hand, the city engaged that the principal and interest of the bonds should be 'guaranteed and provided for by a sinking fund set aside for that purpose.'

No sinking fund was ever set aside for the purpose of paying either principal or interest of the bonds. The interest was not paid; and the bonds would bring in the market only about fifty cents on the dollar. Brown & Co. adduced four bankers or stockdealers in Memphis, to testify what the same bonds would have been worth, had the city kept its contract in this particular, and had the bonds, principal and interest, been 'guaranteed and provided for by a sinking fund set apart for that purpose.'

One of them, Mr. Elder, testified that the market value in Memphis of bonds and stocks was governed by the New York market; that the range of value of Memphis city thirty-year six per cent. bonds, in Memphis, from the 1st day of January, 1868, to 1st January, 1871, had been from forty-six to fifty-two cents on the dollar; that personally he knew nothing of the New York price, but that the price in Memphis would be regulated by the price there; that the value of the bonds had been depressed by the failure to pay the interest; that his opinion was, that if a sinking fund had been actually provided, and placed in the hands of a trustee, the market value, in Memphis and in New York-between the dates just named, of Memphis city short bonds, running five, ten, and fifteen years in equal proportions, with six per cent. coupons attached, payable semi-annually, principal and interest guaranteed, and provided for by a sinking fund set aside for that purpose-would have been from eighty-five to ninety cents on the dollar.

Another witness, Mr. Murphy, president of the Memphis Bank, testified that in his 'opinion,' had the city guaranteed and provided for the payment of the bonds, principal and interest, by a sinking fund set aside for that purpose-'had such fund been actually collected and placed in the hands of trustees of known integrity, and had that fact been generally known by the community, in Memphis and in the Eastern cities-such bonds would be readily sold from eighty to ninety cents on the dollar.'

Mr. Barrett, 'dealer in stocks and securities,' gave the same estimates. Mr. Tobey, a banker, one slightly higher, eighty-five to ninety cents on the dollar.

On the 6th of June, 1871, the counsel of the respective parties having announced that they had no further evidence to present, submitted to the master's determination the matters which had been referred to him. The master having considered the cases, thus reported:

1. He charged Brown & Co. with the market value, say fifty cents on the dollar, of all the bonds that the city had lent them and which they had sold with a purpose to replace them before maturity.

2. He held that the city not having furnished to Brown & Co. the full $175,000 of bonds, as it had contracted by its contract of June 20th, 1868, to do, the city was not released by the said contractors from all liabilities on the contract, even though the courts of last resort had not decided that the property-owners were not liable for the pavement put before their lots.

3. He held that under its charter, the laws of Tennessee and the city ordinances, the city had a right to bind itself by guaranty to the payment of the cash contracts, and had done so.

4. He held, that the modifications of the bond contract bound the city.

5. He held that the city was liable to Brown & Co.

for all damage suffered by failure of the city to

guarantee and provide for the payment of paving

bonds as stipulated; the master herein estimating, that

had the sinking fund been provided, the bonds would

have been worth eighty-five cents on the dollar,  $115,

reasonable value of the services of attorneys

employed to prosecute special assessments, by request

of the city,10,

7. And bound to pay further the value of services

in the collection of special assessments or paving

bills, without process of law, by request of the

city,      25,


text: Talk:City of Memphis v. Brown/Opinion of the Court


text:
Stockdale v. The Insurance Companies

ERROR to the Circuit Court for the District of Louisiana; the case being thus:

The 116th section of the act of June 30th, 1864, as amended by the 13th section of the act of March 2d, 1867, enacts:

'SECTION 116. That there shall be levied, collected, and paid annually upon the gains, profits, and income of every person residing in the United States, or of any citizen of the United States residing abroad, whether derived from any kind of property, rents, interest, dividends, or salaries, or from any profession, trade, employment, or vocation, carried on in the United States or elsewhere, or from any other source whatever, a tax of five per centum on the amount so derived over $1000, and a like tax shall be levied, collected, and paid annually upon the gains, profits, and income of every business, trade, or profession carried on in the United States by persons residing without the United States, and not citizens thereof. And the tax herein provided for shall be assessed, collected, and paid upon the gains, profits, and income for the year ending the 31st day of December next preceding the time for levying, collecting, and paying said tax.'The 117th section of the same act, as amended in the same way, required that there should be included, inter alia, in the estimate of gains, profits, and income, which the act made it obligatory on the taxpayer to return, the share of any person of the gains and profits of all companies, whether incorporated or partnership, who would be entitled to the same if divided, whether divided or otherwise,

'Except the amount of income received from institutions or corporations whose officers, as required by law, withhold a per centum of the dividends made by such institutions, and pay the same to the officer authorized to receive the same, and except that portion of the salary or pay received for services in the civil, military, or naval, or other service of the United States, including senators, representatives, and delegates in Congress, from which the tax has been deducted.'

The 118th section related to the manner of the party's making and the assessor's obtaining returns of that portion of the taxpayer's income which was to be paid by such taxpayer directly.

The 119th section, as amended by the already-mentioned section of the act of March 2d, 1867, enacts:

'SECTION 119. That the taxes on incomes herein imposed shall be levied on the 1st day of March, and be due and payable on or before the 30th day of April in each year, until and including the year 1870, and no longer.'

The 120th section, as amended by the 9th section of the act of July 13th, 1866, enacts:

'That there shall be levied and collected a tax of five per centum on all dividends thereafter declared due, whenever the same shall be payable to stockholders, policy-holders, or depositors or parties whatsoever, as part of the earnings, income, or gains of any bank, trust company, savings institution, and of any fire, marine, life, or inland insurance company, in the United States, and on all undistributed sums, or sums made or added during the year to their surplus or contingent funds. And said banks, trust companies, savings institutions, and insurance companies shall pay the said tax, and are hereby authorized to deduct and withhold from all payments made on account of any dividends or sums of money that may be due and payable as aforesaid, the said tax of five per centum. And a list or return shall be made and rendered to the assessor. And for any default in the making or rendering of such list or return, with such declaration annexed, the bank, trust company, savings institution, or insurance company making such default, shall forfeit as a penalty the sum of $1000.'

The 121st section enacted that any bank of issue which should not make a dividend or add to its surplus fund as often as once in six months should make a return to the assessor of the district, where it was, of its profits during every six months preceding the 1st of January and July, &c.

The 122d section, as amended by the 9th section of the act of July 13th, 1866, after enacting that any railroad, canal, turnpike, canal navigation, or slack-water company, indebted by bonds &c., upon which interest is to be paid, or any such company that may have declared any dividend, due or payable to its stockholders, as part of the earnings, profits, income, or gains of such company, and all profits of such company carried to the account of any fund, or used for construction, shall be subject to and pay a tax of five per centum on the amount of all such interest, dividends, or profits, whenever the same shall be payable, proceeds:

'''And said companies are hereby authorized to deduct and withhold from all payments on account of any interest,. . . and dividends, due and payable as aforesaid, the tax of five per centum;'' and the payment of the amount of said tax so deducted from the interest, or coupons, or dividends, ans certified by the president or treasurer of said company, shall discharge said company.'

The 123d section of the same act, as amended by the 13th section of the act of March, 1867, enacted:

'SECTION 123. That there shall be levied, collected, and paid on all salaries of officers, or payments for services to persons in the civil, military, naval, or other employment or service of the United States, including senators, representatives, and delegates in Congress, when exceeding the rate of $1000 per annum, a tax of five per centum on the excess above the said $1000; and it shall be the duty of all paymasters and all disbursing officers under the government of the United States, or persons in the employ thereof, when making any payment to any officers or persons as aforesaid, whose compensation is determined by a fixed salary, or upon settling or adjusting the accounts of such officers or persons, to deduct and withhold the aforesaid tax of five per centum; and the pay-roll, receipts, or account of officers or persons paying such tax as aforesaid, shall be made to exhibit the fact of such payment.'

On the 14th of July, 1870, Congress passed an act, entitled 'An act to reduce internal taxation and for other purposes.' This act repealed certain sections of the previous internal revenue acts; limited the duration of the others, and reduced the income tax in certain cases from five to two and a half per cent.; limiting its duration.

By its 17th section it enacted:

'That sections 120, 121, 122, and 123 of the act of June 30th, 1864, &c., as amended by the act of July 13th, 1866, and the act of March 2d, 1867, SHALL BE CONSTRUED to impose the taxes therein mentioned to the 1st day of August, 1870, but after that date no further taxes shall be levied or assessed under said sections.'

In this state of statutory enactment, Stockdale, collector of internal revenue at New Orleans, assessed a tax on the Atlantic Insurance Company (and on certain other insurance, railroad, and banking companies of that city), 'on the earnings which had accrued to said company between the 5th day of July, 1869, and the 30th of June, 1870.' The dividend was declared after this latter date. The taxes were paid under protest and the companies having brought suits in the court below to recover them, and having there got judgments against the collector for them, that officer brought the cases here by the present writ of error.

Two questions accordingly arose here:

1. Was the tax valid as to that part of the dividend which arose from the earnings of the year 1869?

2. Was it valid as to that part which arose from the earnings of the year 1870?

Messrs. Charles Case and J. D. Rouse, in support of the judgment below:

1. ''The tax of five per cent. imposed upon the dividends of railroad companies by section 122 of the act of June 30th, 1864, as amended, is a tax upon the income of the stockholder, and not a tax upon the corporation''.

This is expressly decided in United States v. Railroad Company, where the government sought to collect a tax from the Baltimore and Ohio Railroad Company, on interest due on bonds of that company held by the city of Baltimore; and where it failed because the revenues of a municipality incorporated by the State are not taxable. If anything to the contrary to this was adjudged in the case of Barnes v. The Railroads, decided five weeks previously, it was overruled in the later case. But the official reports of the two cases show plainly, that nothing different was adjudged, and that the learned justice who announced the judgment of the court in the Barnes case, while he rightly announced the judgment, misconceived the ground upon which the majority of the court went; and that the decision in the later case is reconcilable with the judgment in the former, though not with certain assertions in the opinion then delivered by the learned judge who announced that judgment, as to what 'the court' decided.

2. The tax upon incomes imposed by the act of June 30th, 1864, as amended, expired by limitation the 31st day of December, 1869.

The limitation is found in section 119, which provides 'that the taxes on incomes herein imposed shall be levied on the 1st day of March, and be due and payable on or before the 30th day of April in each year, until and including the year 1870, and no longer.' It is elsewhere provided that the taxes so to be levied were to be levied upon the incomes 'for the year ending the 31st day of December next preceding the time for levying, collecting, and paying said tax.' Therefore the last levying of such tax being for the year 1870, it was limited to income of 1869.

3. There has been no legislation which could effect an extension of the time during which such tax could be imposed.

The 17th section of the act of July 14th, 1870, is simply declaratory of the opinion of Congress, and not a re-enactment of the law itself. This very attempt to continue the law in force by construction is an admission that it had expired. Now the construction of statutes belongs, not to Congress but to the judiciary. If the law were still in force, the judiciary would be bound to place upon it a construction given by Congress, and Congressional construction would have the effect of legislation, after the passage of the act. But Congress cannot construe statutes retroactively. This is perfectly settled.

Mr. G. H. Williams, Attorney-General, and Mr. S. F. Phillips, Solicitor-General, contra.

Mr. Justice MILLER delivered the opinion of the court.

title: Stockdale v. The Insurance Companies


text: Talk:Stockdale v. The Insurance Companies


text:
Stockdale v. The Insurance Companies/Opinion of the Court

This was a suit brought in the court below against the plaintiff in error in his official character to recover taxes collected by him, which are alleged to have been illegally assessed against the insurance company. The appeal of the company to the Commissioner of Internal Revenue having been decided against it, the tax was paid and suit brought within six months, as provided by the act of Congress. The insurance company recovered a judgment in the Circuit Court, and the collector brings a writ of error in the interest of the government, the object of which is to test the legality of the tax thus levied and collected.

An agreed statement of facts shows that the taxes complained of were assessed upon dividends declared by the insurance company 'on the earnings which had accrued to said company between the 5th day of July, 1869, and the 30th day of June, 1870;' and the dividend was declared after the latter date.

This short statement raises two questions: 1. Was the tax valid as to so much of the dividend as arose from the earnings of the year 1869? 2. Was it valid as to that which arose from the earnings of the year 1870?

As regards the first proposition, it was much considered in the Barnes cases. It was argued in those cases with much ability, and four members of the court were of that opinion that the entire income tax expired with the year 1869, and that as the tax in those cases, as in these, was assessed on dividends declared in the year 1870, they were without authority of law.

The argument in those cases, so far as the opinion of the court was concerned, turned mainly on the question whether the law intended to impose the tax on the income of the corporation, in which case it was obviously the income of 1869 which was taxed, and, therefore, properly taxed; or on the income of the stockholder, ascertained by his dividend, in which case the minority of the court thought that dividends declared in 1870 were not liable to the tax, because the taxing power under the law expired with the preceding year. It is, perhaps, fairly inferable from the report of those cases, and the opinion in the subsequent case of The United States v. Baltimore and Ohio Railroad Company, that among those who composed the majority in the Barnes cases, there were some shades of difference in the precise grounds on which the validity of the taxes rested.

Without reopening that subject for an inquiry into those differences, it may be said that the question whether the tax was, in those cases, a tax on the shareholder or on the corporation, was, and is, one of form rather than substance.

The tax is imposed by the statute alike on all dividends declared, and on all undistributed earnings of the corporation, and it is made the duty of the corporation to pay it.

It is also made the duty of the corporation to make returns of these dividends and undivided earnings to the proper internal revenue officer, under a heavy penalty.

In the case of dividends declared, the corporation is authorized to deduct the amount of the tax from the dividend due to the shareholder, before paying it to him.

And it follows from this, that when a dividend is declared to any shareholder, whose dividend is for any special reason exempt from such tax, as in the case of the city of Baltimore on her stock in the railroad company, then the corporation declaring the dividend is not liable.

The effect of such a tax on the shareholder is the same, whether it be considered a tax on his share for the dividend earned by his share, or on the corporation on account of said earnings. And it is the same, whether the tax is imposed on the undivided earnings, or on those earnings after they have been divided. He in any and all these cases, in point of fact, ultimately suffers to that extent, or loses the amount of the tax. We are of opinion that the statute intended to tax those earnings for the year 1869, whether divided or undivided, and that the tax now in question is to that extent valid.

The question arising out of the tax in these cases, so far as the dividends are based on the earnings of the corporation for the year 1870, presents other considerations.

In the view taken by this court in the Barnes cases, it did not become necessary to pass upon the validity and effect of the seventeenth section of the act of 1870. That is entitled an act to reduce internal taxes, and for othr purposes. It repealed several sections of the internal revenue law absolutely. It fixed a period in the future for the cessation of others, and it reduced the income tax in a certain class of cases from five to two and a half per cent., and provided for its continuance through the years 1870 and 1871; at the end of which all income tax was to cease.

The section we are considering declared that sections 120, 121, 122, and 123 of the internal revenue law of 1864, as modified by subsequent statutes, 'shall be construed to impose the taxes therein mentioned to the first day of August, 1870, and after that date no further taxes shall be levied or assessed under said sections; and all acts or parts of acts relating to the taxes herein repealed, and all the provisions of said acts shall continue in full force for levying and collecting all taxes properly assessed, or liable to be assessed, or accruing under the provisions of former acts,' &c., &c.

But for the unfortunate and unnecessary use of the word 'construe' in this sentence, we apprehend that none of the resistance to the class of taxes now under consideration would have been thought of.

The right of Congress to have imposed this tax by a new statute, although the measure of it was governed by the income of the past year, cannot be doubted; much less can it be doubted that it could impose such a tax on the income of the current year, though part of that year had elapsed when the statute was passed. The joint resolution of July 4th, 1864, imposed a tax of five per cent. upon all income of the previous year, although one tax on it had already been paid, and no one doubted the validity of the tax or attempted to resist it.

Both in principle and authority it may be taken to be established, that a legislative body may by statute declare the construction of previous statutes so as to bind the courts in reference to all transactions occurring after the passage of the law, and may in many cases thus furnish the rule to govern the courts in transactions which are past, provided no constitutional right of the party concerned is violated.

In the case of the Wheeling Bridge, this court, in a suit brought under its original jurisdiction by the State of Pennsylvania, had declared the bridge a nuisance and decreed its modification or abatement. Congress then passed a law declaring it a post route and a lawful structure as it stood, and this court recognizing the right of Congress to regulate such a bridge under the commerce clause of the Constitution, dismissed the case from its further consideration.

This doctrine is reaffirmed in the case of the Clinton Bridge.

It is undoubtedly true that, in our system of government, the law-making power is vested in Congress, and the power to construe laws in the course of their administration between citizens, in the courts. And it may be conceded that Congress cannot, under cover of giving a construction to an existing or an expired statute, invade private rights, with which it could not interfere by a new or affirmative statute.

But where it can exercise a power by passing a new statute, which may be retroactive in its effect, the form of words which it uses to put this power in operation cannot be material, if the purpose is clear, and that purpose is within the power. Congress could have passed a law to reimpose this tax retrospectively, to revive the sections under consideration if they had expired, to re-enact the law by a simple reference to the sections. Has it done anything more? Has it intended to do anything more? Are we captiously to construe the use of the word 'construe' as an invasion of the judicial function where the effect of the statute and the purpose of the statute are clearly within the legislative function?

A critical view of the whole of the statute of 1870 shows that it was designed to recast the internal revenue laws, to repeal some taxes, modify others, and declare the re-enactment or continuance of others for a limited time. And this was especially true of the class of taxes embraced under the general head of income taxes of all kinds. The paragraph we have been considering was not in its essence an attempt to construe a statute differently from what the courts had construed it, for no construction on this subject had been given by any court. Nor was it an attempt by construing a statute to interfere with or invade personal rights which were beyond the constitutional power of Congress. But it was a legitimate exercise of the taxing power by which a tax, which might be supposed to have expired, was revived and continued in existence for two years longer.

It was, therefore, valid for that purpose, and the tax must be upheld. It follows that on the agreed statement of facts judgment should have been rendered for the defendant in the Circuit Court, and the judgment of that court is reversed and the case remanded, with directions to enter such a judgment.

This opinion disposes of all the cases, thirteen in number, in which Stockdale is plaintiff in error, submitted with this, and the same judgment is rendered in each of these cases.

Mr. Justice BRADLEY (with whom concurred the CHIEF JUSTICE).

Whilst I concur in the opinion of the court, it seems to me that the decision may be placed on a still more satisfactory ground.

The taxes in question were levied in 1870 under the 120th and 122d sections of the Internal Revenue Act of 1864, as amended. They were, in some cases, for earnings made in 1869, but divided in 1870, and in others for earnings made partly in 1869 and partly in 1870 (prior to the first of July, in the latter year), and divided in 1870, prior to July, except in one case, in which the dividend was declared on the 5th of July.

If the 119th section of the Internal Revenue Act, which directed that the income tax should cease to be collected in 1870, did not apply to the taxes imposed by the 120th and 122d sections, there is no doubt of the validity of the taxes in question, for there was no other limitation of time affixed to those sections except that made by the act of July 14th, 1870, which declared that sections 120 and 122 should be in force until the 1st of August, 1870, and no longer. I am clearly of opinion now, as I always have been, that the 119th section did not apply to the taxes imposed by sections 120 and 122. The group of sections from 116 to 119, inclusive, stood by themselves in the Internal Revenue Act of 1862 under the head of 'income tax,' forming sections 89 to 93 of that act. They related to the annual income tax payable by individuals directly. They did not include the taxes payable by banks, insurance, railroad, and canal companies in respect of their dividends and earnings, and in respect of the interest on the bonds of the latter companies. The latter taxes were payable at a different time and in a different manner. The personal income tax was carefully defined, and the respective duties of the individual and the assessor in reference to it were first fully set forth, and then came the 119th section, which, in conclusion, directed when the tax for each calendar year, thus imposed, should be levied, and when it should be paid, namely (as directed in the last revision), it was to be levied in March and paid before the 30th of April in each year, until and including the year 1870, and no longer.' This last expression is the one on which this whole question has been raised. By the connection of the sentence, the meaning of the terms, and the rules of logic as well as grammar, this phrase can only apply to the annual personal tax of which alone section 119 is treating.

The taxes imposed by sections 120 and 122 on the banks, insurance, railroad, and canal companies (which were never included in the annual income tax, but expressly excluded, or excepted therefrom) may be, as, in the Baltimore and Ohio Railroad case, we decided they were substantially, taxes on the stockholders and bondholders, though nominally, and in form, imposed on the companies. Still, they are not referred to in the 119th section. The only taxes referred to in that section were those annual taxes, payable directly by the individuals themselves, in April (or some other month) of each year. The corporation taxes were not thus payable, and were not included in the limitation.

The phrase in question is first found in the Internal Revenue Act of July 1st, 1862, 12 Stat. 474, sec. 92. That act is divided into various parts, ranged under distinct and separate headings, which are inserted in large capitals in the body of the act. Thus we have sections 68 to 75 under the head of manufactures, articles, and products; section 76, under auction sales; section 77, under carriages, &c.; sections 78 and 79, under slaughtered cattle, hogs, and sheep; section 80, under 'railroads, steamboats, and ferry-boats,' imposing a tax of three per cent. on gross earnings; section 81, under railroad bonds,' being the section corresponding to section 122 in the act of 1864; sections 82 to 85, under banks, trust companies, savings institutions, and insurance companies,' corresponding to sections 120, 121 in the act of 1864; sections 86, 87, under salaries and pay of officers, &c.; section 88, under advertisements; sections 89 to 93, under 'income duty,' corresponding to sections 116 to 119 of the act of 1864, and so on. Under the last head, section 92 commences as follows: 'That the duties on incomes herein imposed shall be due and payable on or before the 30th day of June, in the year 1863, and in each year thereafter, until and including the year 1866, and no longer; and to any sum or sums annually due and unpaid for thirty days after the 30th of June, as aforesaid, and for ten days after demand thereof, &c., there shall be levied, in addition thereto, the sum of five per centum, &c., as a penalty, &c.' Here we have the exact language of section 119 in the act of 1864 and its subsequent amendments. An inspection of the act of 1862 shows demonstrably that the language of this section refers only to the income tax imposed by section 89, which exactly corresponds to section 116 of the act of 1864. I believe no one who has carefully examined the act of 1862 ever had a doubt on the subject.

Now, all these various provisions for different classes of taxes are contained in the act of 1864 and the several acts amendatory thereof, but somewhat differently collocated. Thus the sections on income duty in the latter act are sections 116 to 119, and come before the sections on railroad bonds, banks, &c., which are sections 120 to 122. But the general frame of the sections, and the language used in each respectively, are the same. Can it be possible that the phrase, 'until and including the year 1870, and no longer,' in section 119 of the latter act, standing, as it does, in substantially the same sentence and relative section as the corresponding words did in the act of 1862, embraced within their scope whole classes of taxes which it did not embrace in the act of 1862? taxes totally repugnant as to time and manner of payment to those described, and specially referred to in the section and sentence where the words occur. Such cannot, it seems to me, be the true construction of the act.

It is not necessary for us to explain why it was that a period was fixed to the income tax proper, and not to the taxes payable by the companies on dividends and interest. The former was an exceedingly odious tax, involving an inquiry into all the sources of every individual's income, and it may well have been the design of Congress to indicate from the start that it was to be only temporary in its operation. But no one, I think, can carefully compare the two acts, of 1862 and 1864, without coming to the conclusion that the limit of the income tax was affixed only to that tax designated as 'income tax' in the act of 1862.

JUDGMENT REVERSED.

Mr. Justice STRONG, with whom concurred Justices DAVIS and FIELD, dissenting.


text: Talk:Stockdale v. The Insurance Companies/Opinion of the Court