text:
Franklin Insurance Company v. Colt

ERROR to the Circuit Court for the District of Connecticut; in which court Colt sued the Franklin Insurance Company, of Philadelphia, on a policy of insurance which he alleged had been executed by the company; an allegation on its part denied.

The uncontradicted case was thus:

The insurance company aforesaid was one incorporated by Pennsylvania and having its principal office in Philadelphia. One section of its charter gave to its president and directors power to appoint such 'agents' as should be necessary for conducting and executing its business elsewhere than in Philadelphia as well as in that city, and the company accordingly was doing business in Hartford, Connecticut, and had as its general agents there, for the transaction of its business of fire insurance, with power to take and approve risks and insure and countersign policies, a firm known as Nevers & Havens.

Another section of the charter, the eighth, was in these words:

'§ 8. The said president and directors shall have full powers on behalf of the said corporation, to make insurance against losses by fire, on any house, tenement, manufactory, or other building,. . . and to make, execute, and perfect such and so many contracts, bargains, agreements, policies, and other instruments, as shall or may be necessary, and as the nature of the case shall or may require; and every such contract, bargain, agreement, and policy to be made by said corporation shall be in writing or in print, and shall be under the seal of the said corporation, signed by the president, and attested and signed by the secretary, or other officer who may be appointed by the president and directors for that purpose.'

With this charter in force, the said Nevers & Havens, as agents of the company, on the 26th of August, 1870, made proposals to Colt to insure certain premises belonging to him. He thereupon made an application for insurance for the sum of $10,375, from August 26th, 1870, for a term of five years, to be placed in the company. And a parol contract of insurance was then completed with the said Nevers & Havens, agents as aforesaid, to insure this said property with the company for five years from the said date, the insurance to be binding on and from that date, at a premium then fixed and agreed to. Credit was given for the payment of the premium till the 1st of October then next, and it was agreed that a policy should be made, and that Nevers & Havens should keep it in their possession for Colt till the 1st of October, for his convenience, he saying that he had then no safe and convenient place in which to keep papers of that character.

The property was destroyed by fire without fault of Colt, on the 20th day of September, 1870, and proofs of loss were duly made and presented.

No policy was made until after the fire, when Nevers & Havens, upon the request of Colt, filled out a blank policy of the company, properly signed and countersigned. They declined, however, to surrender the possession of the same to Colt till they should have consulted the company.

The company had no knowledge of the said negotiations or of the contract to insure (except as the knowledge of the said agents might be the knowledge of the company) till after the fire, and no communication respecting the negotiations or contract had been made by Nevers & Havens to it till after the fire.

The policy was subsequently, after such consultation, returned by the agents to the company.

Colt tendered to the agents the premium on the 22d of September, 1870, and demanded the policy, and it not having been produced he demanded the insurance money (again tendering the premium), and the insurance money being refused he brought suit against the company at law, and on the trial, proved the contents of the policy.

The counsel for the defendant requested the court to charge the jury—

1st. That the eighth section of the company's charter prescribed the manner in which every contract, bargain, and agreement of insurance should be made, and that no contract having been made in writing or print, and executed as therein required during the existence of the property claimed to have been insured, the company was not liable in the action.

2d. That under and by virtue of the charter of the company, it was not authorized to make a parol contract of insurance, and that any such contract was void at law.

3d. That under the said charter an action at law could not be sustained against the company upon a parol agreement to insure, or a parol contract of insurance.

4th. That it being a fact, in this case admitted by the plaintiff, that the parol contract of insurance was not executed or evidenced by a written policy until after the destruction of the property by fire, the company's agent had no authority subsequent to the fire to make and execute a written policy which should be binding upon it.

The court refused thus to charge the jury, and charged contrariwise, that upon the uncontradicted case the plaintiff was entitled to their verdict. To this charge the company excepted, and verdict and judgment having gone against it, it brought the case here.

Messrs. F. Chamberlin and E. Hall, for the plaintiff in error:

When the charter of a corporation prescribes to it in terms plainly mandatory a particular mode and manner in which all its contracts shall be executed and delivered, such prescription operates as a limit upon the mode in which such contracts shall be executed and delivered, and all persons dealing with a corporation (even a foreign one) are bound to take notice of every limitation upon its powers contained in its charter.

Now, the eighth section of this company's charter declares not only that every 'policy to be made by said corporation shall be in writing or in print,' but that every 'contract, bargain, agreement,' shall be just as much so. The only question therefore is, Was what was done by Nevers & Havens any kind of a contract, bargain, or agreement made by the corporation? The whole case of the plaintiff rests upon an assumption that it was completely a contract, bargain, and agreement made by it. He has no case whatever but on that assumption. The language of this section has an emphasis of comprehension. It is that every contract, bargain, or agreement-contracts, bargains, and agreements howsoever made-whether made by the company, at its office in Philadelphia, or in other places, and by its agents whether preliminary or final-all must be 'in writing,' &c. The legislature and the insurance company doubtless knew that thes requirements would cause a certain amount of delay to the company in transacting the business of insurance. But they considered this to be far less injurious and far less embarrassing than continual lawsuits arising on disputes of what it was that agents had done, and whether, in what they had done, they had transcended their authority or not.

The reason of this requirement in the case of this particular company is specially obvious. The Franklin Insurance Company was chartered to do business in every State of the Uniion as much as in Pennsylvania; in States far from its home as well as in its home. 'Agents' are part of its machinery as chartered. Now, it is notorious that the business of agents is not to 'execute and perfect policies,' but to 'make contracts, bargains, agreements,' preliminary to the 'execution and perfecting of policies,' and it is equally notorious that the actions of agents of insurance companies in making such preliminary 'contracts, bargains, and agreements' are among the most fertile sources of litigation in insurance cases. A wise policy of the legislature of Pennsylvania therefore required these, as well as that which was but the executing and perfecting of them, to be in a formal shape, and signed in the way prescribed, before they should become binding.

Can it be supposed that the same legislature which requires policies to have form and to be in writing, meant to leave all the preliminary contracts, bargains, and agreements on which polices were to issue, loose and open to parol? these preliminary contracts, bargains, and agreements especially being made by mere agents, persons in distant places, and of necessity unknown to the company. The preliminary contracts, bargains, and agreements are the foundation of the policies. They are the essential and only essential portions of what is done. When they are clear and undisputed, the policy is but a form. Equity will regard it as executed and perfected, though not one word of it has been written. Nay, though it be all written and printed, and sealed and attested, yet if it differ from the preliminary agreement it is nought, and will be made to conform to it. Now, did the legislature mean to sweep away all protection to the company by leaving every important thing to rest in parol, and requiring that which was but form, to be in writing and solemnly executed?

Some reliance will perhaps be placed by opposing counsel on what was said by the late Mr. Justice Grier of this court, in the case of Constant v. Alleghany Insurance Company, ruled in the Pennsylvania circuit. There a statute of Pennsylvania empowered an insurance company

'To make, execute, and perfect such contracts, bargains, agreements, policies, and other instruments as shall or may be necessary, and as the nature of the case may require, and every such contract, bargain, policy, and other agreement shall be in writing or print, under the corporate seal, and signed by the president or, in his inability, by the vice-president.'

A parol preliminary contract was made through an agent, and a loss having occurred, and the company having refused to pay, the assured field a bill in equity to compel the company to execute the policy and for relief. Mr. Justice Grier, indeed, said that—

title: Franklin Insurance Company v. Colt


text: Talk:Franklin Insurance Company v. Colt

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

title: Talk:Franklin Insurance Company v. Colt


text:
Franklin Insurance Company v. Colt/Opinion of the Court

'Before such instruments are attested in due form, the president or secretary, or whoever else may act as a general agent of the company, may make agreements, and even parol promises, as to the terms on which a policy shall be issued, so that a court of equity will compel the company to execute the contract specifically; and that where the loss had happened-to avoid circuity of action-the chancellor will enter a decree directly for the amount of the insurance for which the company ought to have delivered their policy, properly attested.'

Whether this position is correct we need not inquire further than we have done. Conceding it to be correct, the case does not touch ours. The case before Grier, J., was a proceeding in equity. Our case is at law, and though the reverend justice, of whom we speak, abhorred every sort of technicality that sought to entangle justice in its meshes, he yet noted how different the case would have been had the suit been like this, one at law. He says:

'By its act of incorporation, this company could make insurance which would be legally valid, only by a policy attested by the president, secretary, and the seal of the corporation.'

The case, therefore, is in our favor, not against us.

Messrs. H. C. Robinson and R. D. Hubbard, contra.

Mr. Justice FIELD delivered the opinion of the court.

The charter of the company defendant in the same clause which authorizes its president and directors to make insurance against fire, and for that purpose to execute such 'contracts, bargains, agreements, policies, and other instruments' as may be necessary, declares that every such contract, bargain, agreement, and policy shall be in writing, or in print, and be under the seal of the corporation, and be signed by the president and attested by the secretary or other officer appointed for that purpose.

Where similar language as to the form of the contract or policy was used in connection with a like grant of power to insure, in a general statute of Pennsylvania respecting insurance companies, it was held by the late Mr. Justice Grier, in a case before the Circuit Court of the United States, that a company to which the law applied, could make an insurance, which would be legally valid, only by a policy attested by the officers and seal of the corporation. The learned justice undoubtedly considered that the mode in which the contract or policy could be made was so associated with the grant of power as to be essential to a valid exercise of the power. And such appears to be the natural import of the language of the clause of the charter of the defendant under consideration in this case, when the whole clause, that which confers the power and that which prescribes the mode of its exerise, is read.

But the learned justice at the same time very justly observed, that before the policy was attested in due form the president or secretary, or whoever else might act as general agent of the company, might make agreements and parol promises as to the terms on which a policy should be issued, so that a court of equity would compel the company to execute the contract specifically; and that where a loss had happened, to avoid circuity of action, the chancellor would enter a decree directly for the amount of the insurance for which the company ought to have delivered its policy properly attested.

The requirement of the charter in this case has reference, in our judgment, only to executed contracts or policies of insurance, by which the company is legally bound to indemnify against loss, and not to those initial or preliminary arrangements which necessarily precede the execution of the formal instrument by the officers of the company. The preliminary arrangements for the amount and conditions of insurance are in a great majority of instances made by agents. It is always so where the insurance is effected out of the State where the company is incorporated and has its principal place of business. The charter of the company in this case authorized the president and directors to appoint officers and agents for conducting its business in other places than the city of Philadelphia. And it would be impracticable to carry on its business in other cities and States, or at least the business would be attended with great embarrassment and inconvenience, if such preliminary arrangements required for their validity and efficacy the formalities essential to the executed contract. The law distinguishes between the preliminary contract to make insurance or issue a policy and the executed contract or policy. And we are not aware that in any case, either by usage or the by-law of any company, or by any judicial decision, it has ever been held essential to the validity of these initial contracts that they should be attested by the officers and seal of the company. Any usage or decision to that effect would break up or greatly impair the business of insurance as transacted by agents of insurance companies.

In a recent case in the Court of Appeals of Kentucky this precise question was considered, and its determination was in accordance with the views we have expressed. There the suit was to enforce a parol contract of insurance made by the agent of the company, whose charter provided that all policies or contracts of insurance made by the corporation should be 'subscribed by the president, or president pro tem., and signed and attested by the secretary, and being so signed and attested,' should he binding and obligatory upon the corporation without its seal, according to the tenor, extent, and meaning of the policies or contracts. And the court held that this clause did not require an executory contract for an insurance to be in writing, and said that it knew of no American charter which did so require, observing that whilst a policy as an executed contract of insurance was defined to be documentary and authenticated by the underwriter's signature, yet a contract to issue a policy as an executory agreement to insure might be binding without a written memorial of it; that no statute of frauds applied, and that the common law did not require writing.

There is no suggestion that the preliminary contract in this case was not made in perfect good faith on both sides, with full knowledge by the agents of the condition, character, and value of the property insured. The credit allowed for the payment of the premium was an indulgence which the agents were authorized by general suage to give. Its allowance did not impair the preliminary contract; that, being valid, could have been enforced in a court of equity against the company; and having been enforced by the procurement of a policy, an action could have been maintained upon the instrument; or the court in enforcing the execution of the contract might have entered a decree for the amount of the insurance. But no resort to a court of equity for specific performance was necessary in this case by reason of the action of the agents in filling up the blank policy, which was duly attested, as they should have done immediately after the preliminary arrangement with the assured. The agents were authorized to do after the fire that which they had previously stipulated to do on behalf of the company. The original neglect to fill up the blank policy at once constituted no valid reason for further delay. If the policy filled up at once would have bound the company, so must the policy subsequently filled up. The relations of the parties and the obligations of the company were not changed by the neglect of the agents. The filling up of the policy was a voluntary specific performance of the preliminary agreement. And, when filled up, the policy was by express stipulation to be held by the agents in their safe for the assured, and no actual manual transfer was, under these circumstances, essential to perfect the latter's title. It then became his property, and upon a refusal of the defendant to surrender it two courses were open to him: either to proceed by action to recover the possession of the policy, or to sue upon the policy to recover for the loss, and in the latter case to prove its contents upon failure of the company to produce the instrument on the trial.

In Kohne v. The Insurance Company, the terms of insurance upon a vessel were agreed upon between the agent of the plaintiff and the company. For the premium a note was to be received with approved security. A policy was accordingly filled up by the president in conformity with the agreement, and notice thereof given to the agent. Three days afterwards the agent called at the office of the company to deliver the note and receive the policy. The company had in the meantime heard of the loss of the property insured, a fact which was unknown to either party when the agreement was made, and refused to deliver the policy, asserting that the agreement for the insurance was inchoate, which it had a right to retract. The assured then brought trover for the policy, and Mr. Justice Washington, presiding in the Circuit Court, sustained the action, holding that the contract was perfected when the policy was executed, and, of course, that the possession of the instrument by the company, after giving notice of its execution, did not impair the title of the assured.

In Lightbody v. The North American Insurance Company, the agent of the plaintiff made a contract of insurance of certain buildings with the agent of the defendant on the 30th of March, and paid the required premium. On the following morning the buildings were destroyed by fire. The policy was made out and delivered by the agent on the 21st of April following, after the company had refused to pay the loss; and the court held that the policy took effect by relation from the day of its date, which was the day the premium was paid and the contract concluded; that it was the manifest intent of the parties that the contract should operate from its date, so as to give the plaintiff the same legal remedy which he would have had if the policy had been then delivered; that the agent pursued his authority in delivering the policy after the loss, and that the delivery bound the defendants.

In the case of The City of Davenport v. The Peoria Marine and Fire Insurance Company, the power of an agent to issue a policy after a loss, pursuant to his agreement, was very fully and ably considered with reference to the principal decisions on the subject. There the agreement for insurance was made between the parties by their agents on the 20th of March; on the night of the same day the property was destroyed by fire; on the following morning the policy was executed and delivered in accordance with the agreement, both parties at the time being ignorant of the loss. The court held that the policy was valid and binding; that the doctrine that an act done at one time may take effect as of a prior time, by relation back, was applicable to contracts of insurance; that the agreement to insure was the principal act, and that the formal execution of the policy might be concurrent therewith, or subsequent thereto, and when subsequent, and made as of the date of the principal act, took effect by relation as of that date.

Numerous other authorities to the same purport were cited on the argument, but we do not deem it necessary to pursue the subject further. We see no error in the ruling of the court below, and its judgment must, therefore, be affirmed; and it is so ordered.

JUDGMENT AFFIRMED.


text: Talk:Franklin Insurance Company v. Colt/Opinion of the Court


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Gillette v. Bullard

ERROR to the Supreme Court of the Territory of Montana.

Bullard, assignee of Marden, sued Gillette upon an appeal bond. The action was commenced on the 30th of January, 1872. The complaint alleged that on the 15th June, 1868, Marden recovered a judgment in the District Court of the Territory against Plaisted & Wheelock, which yet remained in full force, unreversed and unsatisfied except as thereinafter stated; that on the 16th day of July, 1868, Plaister & Wheelock appealed from that judgment to the Supreme Court of the Territory, and that on such appeal Gillette executed a bond, whereby he became bound for the payment of the judgment and all damages and costs that might be awarded against the appellants if it should be affirmed; that on the 31st December, 1868, said judgment was affirmed by the Supreme Court of the Territory, and costs adjudged against the appellants; that on the 2d of July, 1870, Marden assigned the judgment and his interest therein to the plaintiff; that by virtue of executions issued, certain sums were made on the 22d of August, and the 26th of September, 1870, but that a large balance still remained unpaid, for the recovery of which the action was brought.

The answer, filed on the 21st of February, A.D. 1872, did not deny any of the averments in the complaint, but alleged by way of defence, that on the ___ day of January, 1869, Plaisted & Wheelock appealed from the judgment of the Supreme Court of the Territory to this court; that they thereupon executed and filed with the clerk of the Supreme Court of the Territory a good and sufficient bond on appeal, and that court stayed all proceedings upon the judgment and granted a supersedeas in the action; that no remittitur or mandate had ever been issued from this court to the Supreme Court of the Territory, or from the Supreme Court of the Territory to the District Court, and that the judgment of the Supreme Court of the Territory still remained in that court 'so stayed by the order thereof by the giving of the bond on appeal and by the supersedeas.'

After the filing of the answer, judgment was given against Gillette upon the pleadings, and he brought the case here.

The question was whether the answer stated facts sufficient to constitute a defence to the action.

By the seventy-eighth section of the Practice Act of Montana it is provided, that 'in the construction of a pleading for the purpose of determining its effect, its allegations shall be liberally construed, with a view to substantial justice between the parties.'Mr. Robert Leech (a brief of Mr. W. F. Sanders being filed), for the plaintiff in error:

title: Gillette v. Bullard


text: Talk:Gillette v. Bullard

title: Talk:Gillette v. Bullard


text:
Gillette v. Bullard/Opinion of the Court

The undertaking sued on was simply security for the judgment, and the plaintiff had no right to maintain an action thereon until the final affirmance of the judgment in the court of last resort. To enable him to maintain this action against the surety, it was necessary that he have a right to enter and collect a judgment of affirmance in the case. This right, as the pleadings show, the plaintiff has never acquired.

It is true that the defendant, in his answer or plea, does not allege in express terms that the cause is still pending in this court. But he avers that which, by reasonable intendment and independent of any enactment, is equivalent thereto, namely, that 'no remittitur or mandate has ever been issued from this court to the Supreme Court of the Territory, or from the Supreme Court of the Territory to the District Court; and that the judgment so rendered in the Supreme Court of the said Territory still remains in that court so stayed by the order thereof, by the giving of the said bond on appeal, and by the said supersedeas.'

But the answer is made more effective by statute. The seventy-eighth section of the Practice Act of Montana enacts that in the construction of a pleading for the purpose of determining its effect its allegations shall be liberally construed. Coustruing this answer or plea liberally, it must be taken to intend not only that the appeal had been taken, but that it had been perfected and was pending when the action was begun.

No opposing counsel.

The CHIEF JUSTICE delivered the opinion of the court.

The seventy-eighth section of the Practice Act of Montana which provides that 'in the construction of a pleading for the purpose of determining its effect, its allegations shall be liberally construed, with a view to substantial justice between the parties'-is a modification of the common-law rule which construes all pleadings most strongly against the pleader, but even with the statute as our guide, we think the judgment below was correct. An answer to be good must overcome the case made by the complaint. If the facts well pleaded in the complaint are admitted, as in this case, it must state other facts, sufficient, if true, to defeat the action in whole or in part, or it will not avail as a defence.

That is not the case here. It is nowhere averred that at the time of the commencement of this action the appeal to this court was pending or that it had ever been perfected. In fact, such averments seem to have been studiously avoided. The appeal was allowed in January, 1869. Unless a transcript was filed in this court before the end of the following term that appeal would be vacated. In the language of very many decisions it would become functus officio. #fn-s-s * *  The supersedeas is but an appurtenance of the appeal. The stay insisted upon in the answer, although there seems to have been an attempt to make it more, is only that which resulted from the supersedeas. That was at an end when the appeal became inoperative. The failure, therefore, to aver that the appeal was in force was a failure to aver that the stay as granted continued to have effect.

The complaint alleges that money was made upon executions in 1870. The date of the issue of the executions is not given, but if the collection was regular the judgment could not have been stayed when the money was made, and that was after the time within which the appeal, if it was to remain in force, must be perfected. Clearly, therefore, to make the defence perfect, it was incumbent upon the defendant to aver distinctly in his answer not only that the appeal had been taken, but that it had been perfected and was still pending when the action was commenced.

It is, however, stated that no mandate or remittitur had been issued from this court to the Supreme Court of the Territory, or from the Supreme Court of the Territory to the District Court when the action was commenced. None could issue from this court, for there was nothing here, so far as the pleadings show, to remand. None was necessary from the Supreme Court of the Territory to the District Court, because the condition of the bond is to pay if the judgment should be affirmed. The affirmance, therefore, is the material fact which is to fix the liability. That is averred in the complaint and not denied in the answer.

JUDGMENT AFFIRMED.


text: Talk:Gillette v. Bullard/Opinion of the Court


text:
Longstreth v. Pennock

ERROR to the Circuit Court of Pennsylvania; the case being thus:

A Pennsylvania statute of June 16th, 1836, enacts as follows:

'The goods and chattels being in or upon any messuage, lands, or tenements, which are or shall be demised for life or years or otherwise, taken by virtue of an execution, and liable to the distress of the landlord, shall be liable for the payment of any sums of money due for rent at the time of taking such goods in execution: Provided, That such rent shall not exceed one year's rent.

'After the sale by the officer, of any goods or chattels as aforesaid, he shall first pay out of the proceeds of such sale, the rent so due, and the surplus thereof, if any, he shall apply towards satisfying the judgment mentioned in such execution.'

This statute being in force, Pennock rented a warehouse in Philadelphia to Wattson & De Young, at the yearly rent of $4500, payable in equal quarterly instalments. Wattson & De Young, the lessees, being in possession of the premises, and having therein a stock of goods more than sufficient to pay the rent if a distress had been made, were adjudicated bankrupts, and Longstreth, their assignee, took possession of the premises, and of the stock upon them. The landlord claimed of him the rent due and accrued up to the date of the issuing of the warrant in bankruptcy, and it having been paid to him under a stipulation to restore the same if the assignee were not allowed credit therefor on the settlement of his account, and he not having been allowed such credit, this action was brought by him to test his right to get back what had been so paid for rent accruing prior to the warrant, which was for much less than a year's rent. The Circuit Court adjudged that the payment was rightfully made, and that the assignee could not recover it back. The assignee now brought the case here.

Mr. J. C. Longstreth, for the assignee, plaintiff in error; Mr. J. B. Townsend, contra.

Mr. Justice SWAYNE delivered the opinion of the court.

title: Longstreth v. Pennock


text: Talk:Longstreth v. Pennock

title: Talk:Longstreth v. Pennock


text:
Longstreth v. Pennock/Opinion of the Court

The assignee acquired his title to the movable property found on the demised premises, subject to the rights of all other persons. #fn-s-s The rent in question was for a period which terminated when the assignee took possession, and the entire period was within a year of that time. Before the commencement of the proceedings in bankruptcy, the defendants in error might have distrained; and it is agreed that the property upon the premises was more than sufficient to satisfy the demand. The statute of Pennsylvania, of June 16th, 1836, provides that where property under such circumstances is seized and sold under execution, the rent due for a period not exceeding one year shall be paid first out of the proceeds of the sale. This case is within the equity of that statute. #fn-s-s-s The question presented is one belonging to the local law of Pennsylvania. We think it was correctly decided by the Circuit Court.

JUDGMENT AFFIRMED.


text: Talk:Longstreth v. Pennock/Opinion of the Court


text:
Cannon v. New Orleans

ERROR to the Supreme Court of Louisiana; the case being thus:

The Constitution of the United States ordains as follows:

"Congress shall have power to regulate commerce with foreign nations and among the several States, and with the Indian tribes. No State shall, without the consent of Congress, lay any duty of tonnage."With these provisions in force as fundamental law, the city of New Orleans made an ordinance as follows:

"From and after the 1st day of January, 1853, the levee dues on all steam boats which shall moor or land in any part of the port of New Orleans shall be fixed as follows; ten cents per ton if in port not exceeding five days, and five dollars per day after said five days shall have expired; provided, that boats arriving and departing more than once in each week shall pay only seven cents per ton each trip."

This ordinance was subsequently amended by the substitution of the words "levee and wharfage dues" for the words ':levee dues," and by providing further that "boats making three trips per week shall pay five cents per ton each trip."

The length of both shores of the Mississippi embraced by the port of New Orleans is at least twenty-two miles. The entire portion of the shore on which wharves had been built, was at most two miles; less than one-tenth of the wharved space.

In this state of things and under the ordinance above-mentioned, the city had claimed and collected of one Cannon for several years a tax on his steamboat, the R. E. Lee; and claiming it again Cannon filed a petition to enjoin such further collection, and also to recover back the money already paid. The ground of his petition was, that under each of the above-quoted clauses of the Constitution the ordinances were void. The Supreme Court of the State held the ordinance valid, and dismissed the petition. Its view was thus-expressed:

"The same points that are made in this case, supported by the same line of argument as here, were presented in the case of The First Municipality v. Pease et al., and were decided adversely to the position taken by the plaintiff in this case.

"We think the views there expressed correct.

"The 'levee dues,' under consideration, are not a 'duty on tonnage,' nor a regulation of or burden on commerce, nor a duty upon vessels plying between the States, within the contemplation of the Constitution of the United States, but charges as compensation for commercial facilities furnished by the city, and for which, by the common consent of mankind, compensation is paid. The question of the right to impose such charges, whether under the name of wharfage or levee dues, being judicially determined, the manner and extent of its exercise are left to those to whom the management of the municipal affairs are intrusted, under their responsibility to those whom they represent. The aggregate of charges may possibly be largely in excess of the actual necessary expenses during one year, and the very next be insufficient to meet. This will result from the nature of the river banks, the action of the river current, the quality and nature of materials used, the fluctuations of commerce; and many other causes unforeseen and irregular in their operation, and all which show the impossibility of judicial control and regulation of the subject."

From the decree of dismissal Cannon brought the case here.

Messrs. R. H. Marr, P. Phillips, and W. W. King, for the plaintiff in error. The brief of these gentlemen mentioned, in the course of its argument, that in the year 1843, and in consequence of a very onerous wharfage tax imposed by the city in 1842, the legislature of Louisiana passed an act as follows:

"From and after the passage of the present act, it shall be incompetent for the mayor and city council of New Orleans, or for either of the municipalities of said city to enact, or enforce, or execute any law, ordinance, or regulation now enacted, whereby any tax, duty, impost, or charge of any nature whatsoever, shall be or is imposed upon goods, produce, wares, and merchandise of whatsoever kind or nature, landed in or shipped from the corporate limits of the said city."

They further stated that the Supreme Court of the State decided that after this act this wharfage tax could not be collected.

Mr. W. H. Peckham, contra.

Mr. Justice MILLER delivered the opinion of the court.

title: Cannon v. New Orleans


text: Talk:Cannon v. New Orleans

title: Talk:Cannon v. New Orleans


text:
Cannon v. New Orleans/Opinion of the Court

This writ of error is based upon the proposition that the city ordinance is in conflict with two clauses of the Constitution of the United States, namely, that which grants to Congress the right to regulate commerce with foreign nations, among the States, and with the Indian tribes; and that which forbids the States to levy any duty of tonnage without the consent of Congress.

We shall only consider the question raised by the latter clause.

It is argued in support of the validity of the ordinance that the money collect under it is only a compensation for the use of the wharves which are owned by the city, and which have been built and are kept in repair by the city corporation.

Under the evidence in this case of the condition of the levee and banks of the Mississippi River within the limits of the city, to which the language of the ordinance must be applied, this contention cannot be sustained. It is in proof that of the twenty miles and more of the levee and banks of the Mississippi within the city, not more than one-tenth has any wharf, and that vessels land at various places where no such accommodations exist. The language of the ordinance covers landing anywhere within the city limits. The tax is, therefore, collectible for vessels which land at any point on the banks of the river, without regard to the existence of the wharves. The tax is also the same for a vessel which is moored in any part of the port of New Orleans, whether she ties up to a wharf or not, or is located at the shore or in the middle of the river. A tax which is, by its terms, due from all vessels arriving and stopping in a port, without regard to the place where they may stop, whether it be in the channel of the stream, or out in a bay, or landed at a natural river-bank, cannot be treated as a compensation for the use of a wharf. This view is additionally enforced if, as stated by counsel for the plaintiff, in their argument, the Supreme Court of the State has decided that, under the act of 1843 of the Louisiana legislature, no wharfage tax or duty can be levied or collected by the city.

We are of opinion that upon the face of the ordinance itself, as applied to the recognized condition of the river and its banks within the city, the dues here claimed cannot be supported as a compensation for the use of the city's wharves, but that it is a tax upon every vessel which stops, either by landing or mooring, in the waters of the Mississippi River within the city of New Orleans, for the privilege of so landing or mooring.

In this view of the subject, as the assessment of the tax is measured by the tonnage of the vessel, it falls directly within the prohibition of the Constitution, namely, 'that no State shall, without the consent of Congress, lay any duty of tonnage.' Whatever more general or more limited view may be entertained of the true meaning of this clause, it is perfectly clear that a duty or tax or burden imposed under the authority of the State, which is, by the law imposing it, to be measured by the capacity of the vessel, and is in its essence a contribution claimed for the privilege of arriving and departing from a port of the United States, is within the prohibition.

There have been several cases before this court involving the construction of this provision. The more recent and well considered of these are The Steamship Company v. The Portwardens, 5 The State Tonnage Tax Cases, and Peete v. Morgan.

In the first of these cases the late Chief Justice, who delivered the opinion, seemed inclined to guard against too narrow a construction of the clause, lest its spirit and purpose might be evaded. He says, 'that in the most obvious and general sense, it is true, the words describe a duty proportioned to the tonnage of the vessel; a certain rate on each ton. But it seems plain that in this restricted sense, the constitution provision would not fully accomplish its intent. The general prohibition against laying duties on imports or exports would have been ineffectual if it had not been extended to duties on the ships which serve as the vehicles of conveyance. This extension was doubtless intended by the prohibition of any duty on tonnage. It was not only a pro rata tax which was prohibited, but any duty on the ship, whether a fixed sum upon its whole tonnage, or a sum to be ascertained by comparing the amount of tonnage with the rate of duty.' The other two cases fully sustain the proposition as we have stated it.

In saying this we do not understand that this principle interposes any hindrance to the recovery from any vessel landing at a wharf or pier owned by an individual or by a municipal or other corporation, a just compensation for the use of such property. It is a doctrine too well settled, and a practice too common and too essential to the interests of commerce and navigation to admit of a doubt, that for the use of such structures, erected by individual enterprise, and recognized everywhere as private property, a reasonable compensation can be exacted. And it may be safely admitted also that it is within the power of the State to regulate this compensation, so as to prevent extortion, a power which is often very properly delegated to the local municipal authority.

Nor do we see any reason why, when a city or other municipality is the owner of such structures, built by its own money, to assist vessels landing within its limits in the pursuit of their business, the city should not be allowed to exact and receive this reasonable compensation as well as individuals. But in the exercise of this right care must be had that it is not made to cover a violation of the Federal Constitution in the point under consideration

We are better satisfied with this construction of the Constitution from the fact that this is one of the few limitations of that instrument of the power of the States which is not absolute, but which may be removed wholly or modified by the consent of Congress.

The cases which have recently come before this court in which the State by itself or by one of its municipalities has attempted to levy taxes of this character, clearly within the letter and the spirit of the constitutional prohibition, show the necessity of a rigid adherence to the demands of that instrument. If hardships arise in the enforcement of this principle, and the just necessities of a local commerce require a tax which is otherwise forbidden, it is presumed that Congress would not withhold its assent if properly informed and its consent requested.

This is a much wiser course, and Congress is a much safer depositary of the final exercise of this important power than the ill-regulated and overtaxed towns and cities, which are not likely to look much beyond their own needs and their own interests.

We are of opinion that the ordinance under which the levee dues were assessed upon the plaintiff's vessel is unconstitutional and void.

JUDGMENT REVERSED, and the case remanded to the Supreme Court of Louisiana for further proceedings,

IN CONFORMITY TO THIS OPINION.


text: Talk:Cannon v. New Orleans/Opinion of the Court


text:
Clark v. Iowa City

ERROR to the Circuit Court for the District of Iowa. The case was thus:

On the 1st of March, 1856, Iowa City issued a number of bonds, dated on the day just named, promising in each to pay to the bearer, on the 1st of January, 1876, the sum of $500, with interest at 10 per cent., payable on the 1st of January in each year. For this interest ten coupons, or interest warrants in negotiable form, for $50 each, were annexed to the bonds. From ten of these bonds the coupons were subsequently cut off, and long before the commencement of this suit-which was on the 31st of January, 1874-were negotiated and by purchase and delivery became the property of a certain Clark. The ten bonds themselves, from which the coupons were thus severed, were paid off and satisfied by the company prior to the said date; Clark not being at the time owner or holder of any of them.

In this state of things Clark, on the said 31st of January, 1874, sued the city on ten coupons representing the instalments due on the 1st of January, 1860. More than fourteen years had thus elapsed since the coupons had become due, and since suit might have been brought on them.

The statute of limitations in Iowa, making no distinction between simple contracts and specialties, enacts that all actions 'founded on written contracts' must be brought within ten years after the cause of action accrued.

In bringing his suit so long after the coupons became due, the plaintiff's idea, founded on his interpretation of the decisions in The City of Kenosha v. Lamson and The City of Lexington v. Butler, in this court, was that the statute began to run against the coupons only from the maturity of the bond, and as the bond would not be barred until January 1st, 1886, that his suit on the coupons, though brought more than fourteen years after they became due, was still in time.

The defendant's position was that the cases just mentioned and relied on by the plaintiff were misinterpreted by him; that suits on the coupons were barred in ten years after their own maturity, or barred January 1st, 1870, more than four years before this suit was brought.

The defendant accordingly pleaded the statute of limitations, alleging that more than ten years had elapsed since the cause of action arose and before the bringing of the suit.

He pleaded further the facts abovementioned about the coupons and bonds; to wit, that the plaintiff got them by purchase in the market after they had been severed from the bonds; that long before the suit brought the bonds had been satisfied, and that the plaintiff was not owner of them when they were so paid.

To this plea the defendant demurred, assigning for cause 'that the statute had not run for ten years against the covenant in the bonds to pay the interest, and that the payment of the bonds to another person than the holder of the coupons did not bar his remedy on the coupon, his right of action running on the coupons until the remedy thereon was barred by running of the statute against the bond itself.'

A point thus made was—

'Does the statute of limitation commence to run upon the coupons in suit from their own maturity respectively, or does it commence to run upon the coupons only from the maturity of the bonds to which said coupons belonged?'

The judges being opposed in opinion on the question, they certified it to this court for answer.

Mr. James Grant, for the plaintiff:

As we interpret the decisions of this court, the point raised has been decided here in our favor.

In The City of Kenosha v. Lamson, in 9th Wallace, a suit on coupons which, not having been under seal, were barred as a simple contract by the statute, though the bond which was under seal was, as a specialty, not barred, Nelson, J., giving the judgment, says:

'The coupon is not an independent instrument,. . . but is given for interest thereafter to become due upon the bond, which interest is part of the bond and partakes of its nature, and the bond. . . is not barred by lapse of time short of twenty years.'This language may perhaps be capable of two interpretations, but the most reasonable seems to be that which would make it say that all rights belonging to the creditor on the bonds belong to him also on the coupons. If that is its meaning, then as suit on the bond in this case would not be barred till January 1st, 1886, neither will suit on the coupons be. That the meaning which we assume to be the true meaning of this case was subsequently understood in this court to be so, appears by the case of The City of Lexington v. Butler, in 14th Wallace. There Clifford, J., says expressly, and in a way which leaves no doubt as to the conception by that learned justice of the former case, and of his meaning in the one then before the court:

'It is well-settled law that a suit upon a coupon is not barred by the statute of limitations unless the lapse of time is sufficient to bar also a suit upon the bond, as the coupon, if in the usual form, is but a repetition of the contract in respect to the interest, for the period of time therein mentioned which the bond makes upon the subject, being given for the interest thereafter to become due upon the bond, which interest is parcel of the bond, and partakes of its nature, and is not barred by lapse of time except for the same period as would bar a suit, unless it is barred on the bond to which it was attached.'

Mr. L. B. Patterson, contra.

Mr. Justice FIELD delivered the opinion of the court.

title: Clark v. Iowa City


text: Talk:Clark v. Iowa City

title: Talk:Clark v. Iowa City


text:
Clark v. Iowa City/Opinion of the Court

The bonds of Iowa City were taken up and cancelled before the commencement of this action, but previous to such cancellation the coupons for interest due on the 1st of January, 1860, upon which the action is brought, were detached and negotiated to other parties until by purchase they came to the possession of the plaintiff. The statute of Iowa prescribes the limitation of ten years to actions on all written contracts, whether under seal or otherwise.

The simple question, therefore, presented for our determination is whether the statute is a bar to an action upon the coupons detached from the bonds and transferred to parties other than the holders of the bonds, when it would not be a bar to an action on the bonds themselves had they not been cancelled.

The counsel for the plaintiff cites the case of The City of Kenosha v. Lamson, reported in the 9th of Wallace, and the case of The City of Lexington v. Butler, reported in the 14th of Wallace, as conclusive against the bar of the statute. There are expressions in the opinions of the court in those cases which, detached from the context, would seem to justify this conclusion. But the whole purport of the decisions in those cases was to the effect that the coupons being given for interest on the bonds, partook of their nature and were equally high as security, and therefore the statute could only run against them when it would run against instruments of the dignity of the bonds. In other words, the decisions only established the doctrine that the coupons so far partook of the nature of the bonds that as the latter were specialties so were they specialties also, and not mere simple contracts.

The first case, that of The City of Kenosha v. Lamson, arose in Wisconsin, where actions upon sealed instruments are not barred until the lapse of twenty years, whilst actions upon simply contracts are barred in six years. The action was brought upon the coupons when more than six years but less than twenty years had elapsed after their maturity. And the court held that the coupons were substantially copies of the bond in respect to the interest, and were given to the holder of the bond for the purpose of enabling him to collect the interest at the time and place mentioned, without the trouble of presenting the bond every time the interest became due, and to enable him to realize the interest by negotiating the coupons in business transactions; and that the coupons partaking of the nature of the bonds, which were of higher security than the coupons, were not barred by lapse of time short of twenty years. The court concluded its opinion by observing that it would be a departure from the purpose for which the coupons were issued, and from the intent of the parties, to hold that when they are cut off from the bonds the nature and character of the security changes and becomes a simple contract debt and adds: 'Our conclusion is that the cause of action is not barred by lapse of time short of twenty years.'

The case of The City of Laxington v. Butler arose in Kentucky, where the statute prescribes fifteen years as the limitation for actions on bonds and only five years for actions on simple contracts. The action was upon coupons of certain bonds issued by the city, and the city pleaded the statute of limitations of five years, but the court answered that bonds were specialties not falling within the period prescribed; that suits on bonds might be maintained if commenced within fifteen years after the cause of action accrued, and that a suit upon a coupon was not barred by the statute unless the lapse of time was sufficient to bar also a suit upon the bond, as the coupon, if in the usual form, was but a repetition of the bond in respect to the interest for the period of time therein mentioned, and partook of its nature.

It is evident from this examination of the cases cited that it was not the intention of the court to decide that an action upon a coupon detached from the bond, and negotiated to other parties, was not subject to the same limitations as an action upon the bond itself; much less to hold that the coupons remained a valid and existing cause of action not only for the period prescribed for actions on the bond after its maturity, but for the additional period intervening between the maturity of the coupon and the maturity of the bond, however, great that might be. The question before the court in those cases was only whether the time the statute ran against the coupons was the longest or shortest period;-was it six or twenty years in the Wisconsin case, or was it five or fifteen years in the Kentucky case;-and the court held that the statute ran for the longest period, because the coupons partook of the nature of the bonds and the statute ran for that period as to them.

Most of the bonds of municipal bodies and private corporations in this country are issued in order to raise funds for works of large extent and cost, and their payment is, therefore, made at distant periods, not unfrequently beyond a quarter of a century. Coupons for the different instalments of interest are usually attached to these bonds, in the expectation that they will be paid as they mature, however, distant the period fixed for the payment of the principal. These coupons, when severed from the bonds, are negotiable and pass by delivery. They then cease to be incidents of the bonds, and become in fact independent claims; they do not lose their validity, if for any cause the bonds are cancelled or paid before maturity; nor their negotiable character; nor their ability to support separate actions; and the amount for which they are issued draws interest from its maturity. They, then, possess the essential attributes of commercial paper, as has been held by this court in repeated instances. Every consideration, therefore, which gives efficacy to the statute of limitations when applied to actions on the bonds after their maturity, equally requires that similar limitations should be applied to actions upon the coupons after their maturity.

Coupons, when severed from the bonds to which they were originally attached, are in legal effect equivalent to separate bonds for the different instalments of interest. The like action may be brought upon each of them, when they respectively become due, as upon the bond itself when the principal matures; and to each action-to that upon the bond and to each of those upon the coupons-the same limitation must upon principle apply. All statutes of limitation begin to run when the right of action is complete, and it would be exceptional and illogical to hold that the statute sleeps with respect to claims upon detached coupons, whilst a complete right of action upon such claims exists in the holder.

We answer, therefore, the question certified to us, that the statute of Iowa which extends the same limitation to actions on all written contracts, sealed or unsealed, began to run against the coupons in suit from their respective maturities; and accordingly

AFFIRM THE JUDGMENT.

I dissent from the opinion of the court, upon the ground that the case is governed by our prior decisions.

title: Clark v. Iowa City/Opinion of the Court


text: Talk:Clark v. Iowa City/Opinion of the Court


text:
Murdock v. City of Memphis

ERROR to the Supreme Court of Tennessee; the case being thus:

The Constitution of the United States after vesting the judicial power of the United States 'in one Supreme Court, and in such inferior courts as the Congress may from time to time ordain and establish,' ordains as follows:

'The judicial power shall extend to all cases in law and equity arising under this Constitution, the laws of the United States, and treaties made under their authority,' &c.

On the 24th of September, 1789, at the first Congress of the United States, after the adoption of the Constitution, Congress passed the 'act to establish the judicial courts of the United States;' the great act commonly called the Judiciary Act. The twenty-fifth section of it gave to this court whatever power was given in the act at all to re-examine, reverse, or affirm the final judgments or decrees in suits in the highest courts of law or equity of the States.

On the 5th of Feb., 1867, after the late rebellion had been suppressed,-and just before the adoption of the fourteenth amendment to the Constitution, which declares that 'no State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States'-but while more or less disorganization of things remained in the Southern States, Congress passed an act entitled 'An act to amend an act to establish the judicial courts of the United States.' This act was in two sections. The first section gives to the courts of the United States, and the several judges thereof, within their respective jurisdictions, in addition to the authority already conferred by law, power to grant writs of habeas corpus in all cases where any person may be restrained of liberty in violation of the Constitution, or of any treaty or law of the United States.

The second-the one alone much concerning this case,-was on the same subject as the twenty-fifth section of the old act.

The twenty-fifth section of the old act and the second section of the new one are here juxtaposited verbatim in columns.

THE TWENTY-FIFTH SECTION OF THE ACT OF 1789.

That a final judgment or decree in any suit, in the highest court of law or equity of a State in which a decision in the suit could be had, where is drawn in question the validity of a treaty or statute of, or an authority exercised under the United States, and the decision is against their validity; or where is drawn in question the validity of a statute of, or an authority exercised under any State, on the ground of their being repugnant to the Constitution, treaties, or laws of the United States, and the decision is in favor of such their validity, or where is drawn in question the construction of any clause of the Constitution, or of a treaty or statute of, or commission held under the United States, and the decision is against the title, right, privilege, or exemption specially set up or claimed by either party, under such clause of the said Constitution, treaty, statute, or commission, may be re-examined and reversed or affirmed in the Supreme Court of the United States upon a writ of error, the citation being signed by the chief justice, or judge, or chancellor of the court rendering or passing the judgment or decree complained of, or by a justice of the Supreme Court of the United States, in the same manner and under the same regulations, and the writ shall have the same effect as if the judgment or decree complained of had been rendered or passed in a Circuit Court, and the proceeding upon the reversal shall also be the same, except that the Supreme Court, ''instead of remanding the cause for a final decision, as before provided, may at their discretion, if the cause shall have been once remanded before, proceed to a final decision of the same and award execution. But no other error shall be assigned or regarded as a ground of reversal in any such case as aforesaid than such as appears on the face of the record and immediately respects the before-mentioned questions of validity or construction of the said Constitution, treaties, statutes, commissions, or authorities in dispute.'' THE SECOND SECTION OF THE ACT OF 1867.

That a final judgment or decree in any suit in the highest court of a State in which a decision in the suit could be had, where is drawn in question the validity of a treaty or statute of or an authority exercised under the United States, and the decision is against their validity, or where is drawn in question the validity of a statute of or an authority exercised under any State, on the ground of their being repugnant to the Constitution, treaties, or laws of the United States, and the decision is in favor of such their validity, or where any title, right, privilege, or immunity is claimed under the Constitution, or any treaty or statute of, or commission held, or authority exercised, under the United States, and the decision is against the title, right, privilege, or immunity specially set up or claimed by either party under such Constitution, treaty, statute, commission, or authority, may be re-examined and reversed or affirmed in the Supreme Court of the United States, upon a writ of error, the citation being signed by the chief justice, or judge, or chancellor of the court rendering or passing the judgment or decree complained of, or by a justice of the Supreme Court of the United States, in the same manner, and under the same regulations, and the writ shall have the same effect as if the judgment or decree complained of had been rendered or passed in a court of the United States; and the proceeding upon the reversal shall also be the same, except that the Supreme Court may, at their discretion, proceed to a final decision of the same, and award execution or remand the same to an inferior court.

The published proceedings of the two houses of Congress show that the bill, which subsequently became a law, was reported by a committee which had been instructed 'to inquire and report what legislation was necessary to enable the courts of the United States to enforce the freedom of the wives and children of soldiers of the United States, under the joint resolution of Congress of March 3d, 1865, and the liberty of all persons under the operation of the constitutional amendment abolishing slavery.' The bill, so far as the point now under consideration is concerned, was not the subject of special comment. The effect of it was declared by the member of the House of Representatives who reported it from the committee, to be 'to enlarge the privilege of the writ of habeas corpus.' In the Senate an inquiry was made 'whether the second section was drawn on the same principle as the twenty-fifth section of the Judiciary Act of 1789.' The reply was, 'It is a little broader than the Judiciary Act. It is of a similar character.'

Thus, apparently it happened that the fact that Congress had passed the act of 1867, was hardly noted for some time within the precincts of this bar-where the venerable Judiciary Act of 1789 was in some sort regarded as only less sacred than the Constitution, and most unlikely to be wished to be altered-and that the less studious observers considered that the new section was but a careless transcript of the old one. However, the more careful readers were early awakened by possibilities of meanings in the second section of the new act which would have far-reaching effects. Mr. Phillips in his work on Practice, in this court, early observed that the new act 'in some of its provisions and omissions seems to have been intended to work a change in the exercise of the jurisdiction of the court.' So in the case of Stewart v. Kahn, the difference between the two acts was enforced by Mr. S. M. Johnson, counsel, on one side of the case who claimed for it vast effects.

A careful reading of the act shows, indeed, to every one certain verbal changes. Thus:

1st. By the old act, this court could not proceed to final judgment and award execution, except in cases where the cause 'had been once remanded before.'

By the new act, this limitation is omitted, and the court is authorized in all cases at their discretion, to render judgment and award execution.

2d. By the old law the jurisdiction is vested in cases where is drawn in question the construction of any clause of the Constitution, or treaty, or statute, or commission.

In the new, we have the use of these other words, 'or where any right, title, privilege, or immunity is claimed,' under the Constitution, &c.

3d. By the old law it was required that what is called 'the Federal question' must 'appear on the face of the record.'

In the new, the words making this requisition are omitted.

4th. By the old law, 'no other error could be assigned or regarded as ground of reversal, than such as immediately related to the validity or construction of the Constitution, treaties, statutes, commissions, or authorities in dispute.'

In the new, the words putting this limitation on the jurisdiction disappear, and makes an argument plausible that Congress or the draughtsman of the act had meant to say that if a Federal question once existed in the case, and this court so got jurisdiction of the case, then it was bound to go on and decide every question in it, though these questions were questions of local law, and such as, in numberless cases, the court had decided that, under the old section and in consequence of the now omitted language at the close of it, could not be passed on here.

Referring to this last change, its operation seemed so important and its bearing on the twenty-fifth section so direct, in a matter oftener discussed and decided by this court than any question ever submitted to it; that it was difficult for some persons to conclude that the legislator who drew the bill, and the legislature that adopted it, did not comprehend that the bill was effecting a radical change in the exercise of the jurisdiction of the court.

However, it was obvious that as long as in the cases brought up here, either,

1st. No Federal question at all existed in the case, OR,

2d. The Federal question, where one did exist, had been wrongly decided in the court below,-and there was no local question on which the case might have been disposed of—

There was no necessity to pass upon the effect of the concluding sentences of the new section. The case would come within both the old and new. The necessity to consider the effect of the new act would, however, arise on the first occasion when some case should come before the court, in which (1st), there was a Federal question, (2d), where that question had been rightly decided, and (3d), where there were, besides, local questions which would dispose of the case, and which the plaintiff in error alleged had been wrongly adjudged below. Such a case now seemed to be here.

The case was thus:

Murdock filed a bill in one of the courts of chancery of Tennessee, against the city of Memphis, in that State. The bill and its exhibits made this case:

In July, 1844,-Congress having just previously authorized the establishment of a naval depot in that city, and appropriated a considerable sum of money for the purpose-the ancestors of Murdock by ordinary deed of bargain and sale, without any covenants or declaration of trust on which the land was to be held by the city, but referring to the fact of 'the location of the naval depot lately established by the United States at said town'-conveyed to the city certain land described in and near its limits 'for the location of the naval depot aforesaid.'By the same instrument (a quadrupartite one) both the grantors and the city conveyed the same land to one Wheatley, in fee, in trust for the grantors and their heirs, 'in case the same shall not be appropriated by the United States for that purpose.'

On the 14th of September, 1844, the city of Memphis, in consideration of the sum of $20,000 paid by the United States, conveyed the said land to the United States with covenant of general warranty; there being, however, in this deed to the United States no designation of any purpose to which the land was to be applied, nor any conditions precedent or subsequent, or of any kind whatsoever.

The United States took possession of the land for the purpose of the erection of a naval depot upon it, erected buildings, and made various expenditures and improvements for the said purpose; but in about ten years after, by an act of August 5th, 1854, transferred the land back to the city. The act was in these words:

'All the grounds and appurtenances thereunto belonging, known as the Memphis Navy Yard, in Shelby County, Tennessee, be, and the same is hereby, ceded to the mayor and aldermen of the city of Memphis, for the use and benefit of said city.'

There was no allegation in the bill that the city was in any way instrumental in procuring this transfer or the abandonment of the site as a naval depot; on the contrary, it is averred that the city authorities endeavored to prevent both.

The bill charged that by the failure of the United States to appropriate the land for a naval depot, and the final abandonment by the United States of any intention to do so, the land came within the clause of the deed of July, 1844, conveying it to Wheatley in trust; or if not, that it was held by the city in trust for the original grantors, and the prayer sought to subject it to said trusts.

The answer, denying the construction put upon the deed of 1844, which established a trust, asserted that the land had been appropriated by the United States as a naval depot within the meaning and intent of the deed of July, 1844, and that the subsequent perpetual occupation of it was not a condition subsequent; and consequently that the abandonment of it as a naval depot was not a breach of a condition such as divested the title so conveyed by the deed.

It pleaded the statute of limitations. It also demurred to the bill as seeking to enforce a forfeiture for breach of condition subsequent.

The court sustained the demurrer, and also decreed that the city had a perfect title to the property against the complainants both under the act of Congress and the statute of limitations, and dismissed the bill. The Supreme Court of Tennessee affirmed this decree.

That court was also of opinion, and so declared itself to be, that the act of Congress 'cedes the property in controversy in this cause to the mayor and aldermen of the city of Memphis, for the use of the city only, and not in trust for the complainant; and that the complainant takes no benefit under the said act.'

The complainant thereupon sued out a writ of error to this court.

The case was first argued January 21st, 1873.

Messrs. W. I. Scott and J. B. Hieskell, for the plaintiff in error:

1. Is there a Federal question, so that the court can take jurisdiction? There is such a question. The ancestor of Murdock conveyed to the city and Wheatley on condition, or more properly speaking perhaps, in trust. Neither party could discharge himself of the trust. When the city conveyed to the United States, the United States took the land fettered with a trust. When the United States reconveyed to the city, they, of necessity, conveyed in trust. The fact that the deed said that it conveyed to the city 'for its own use' does not alter the case. If a trustee, in fraud of a declared trust, conveys to another for the use of that other, that other holds not for his own use but for the cestui que trust. Therefore, we set up and claim a right under the act of Congress. No right arose to us but for that act. When the act reconveyed the property to the city there was an abandonment, a breach of the trust or condition on which the property had been conveyed. The grantors or their heir, the present complainant, took it. There is, therefore, a Federal question, and that question has been decided against us.

2. That question was decided wrongly, as our remarks just made show.

Whether the new act changes the old twenty-fifth section or not the judgment below must be reversed, and the case remanded.

3. But, however our second point may be-that is to say, whether the Federal question was decided wrongly or rightly, and conceding that it was decided rightly-then although in consequence of the closing sentence of the old twenty-fifth section, no question of law merely local could formerly be considered here, yet that closing part being now left off, the restriction on this court to consider this class of questions is removed; and it being once shown that there is a Federal question in the case to give this court jurisdiction, the court must re-examine, affirm, or reverse the decision of the State court on these local questions as well as on the Federal question. This, doubtless, was what was meant by Mr. Justice Swayne in Stewart v. Kahn, where, distinguishing between changes merely verbal throughout the section and the great omission at its close, that learned justice says:

'The section is to a great extent a transcript of the twenty-fifth section of the prior act. There are several alterations which are not material, but at the close of the second section there is a substantial omission.'

[The learned counsel on an assumption of the correctness of this position, then went on to argue that the decision of the court below on the pleas of the statute of limitations, &c., was erroneous.]

Messrs. W. T. Otto, B. M. Estes, J. M. Carlisle, and J. D. McPherson, contra:

title: Murdock v. City of Memphis


text: Talk:Murdock v. City of Memphis

title: Talk:Murdock v. City of Memphis