text: Talk:Meriwether v. Garrett/Opinion of the Court

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text:
Meriwether v. Garrett/Dissent Strong

MR. JUSTICE STRONG, with whom concurred MR. JUSTICE SWAYNE and MR. JUSTICE HARLAN, dissenting.

The several bills of the complainants were consolidated in the Circuit Court, and, so far as it appears, without objection. They are, therefore, to be considered as one case. The important facts averred in the bills and confessed by the demurrer are the following:--

The complainants are creditors of the city of Memphis. For a part of their claims they had recovered judgments against the city before the bills were filed, and had obtained writs of mandamus to enforce the levy of taxes to satisfy the judgments. In obedience to these writs the proper city authorities had levied the taxes required, but had neglected to collect them, in large measure, and, even when a portion of the taxes had been collected, had failed to appropriate the money collected to the payment of the judgments for which it had been specially levied, and to which alone it could be lawfully applied. Some of the money thus collected remained on deposit. These levies were made during the years 1875, 1876, 1877, and 1878, the city ordinances by which they were ordered specifying the amounts and the parties for whom the taxes were levied. The complainants were also large general creditors of the city, holding its obligations, upon which no judgments had been recovered.

Besides the special levies, made as above stated, the city authorities had made others for the purpose of paying interest on the city debt and for general uses. These taxes also remained uncollected. Meanwhile the city had nothing liable to execution at law, and no property except what it held for public uses (in distinction from private), such as public municipal buildings, parks, streets, fire apparatus, &c. It was insolvent.

Such was the situation when these bills were filed. Their object was to obtain the appointment of a receiver to take possession of the assets of the city (including the collected but not appropriated taxes, as well as the claims and bills for past-due and uncollected taxes), and to collect the same with a view to their being applied according to equity and legal right.

The principal one of the consolidated bills was filed on the twenty-eighth day of January, 1879, by Garrett et al. Almost immediately after it was filed,-the next day, indeed,-an act of the legislature of the State was passed, approved Jan. 31, 1879, by which the charter of the city was repealed, all power of taxation in any form was withdrawn from its authorities, and all persons holding office under the repealed acts, which constituted the charter and endowed it with power, were prohibited from attempting to exercise any of the functions of their offices. The public buildings, squares, promenades, wharves, streets, alleys, parks, fire-engines, hose and carriages, engineer instruments, and all other property, real and personal, theretofore used for municipal purposes, were declared to be transferred to the control and custody of the State, to remain public property, as it always had been, for the uses to which it had theretofore been applied. The act contained no reservation of the rights of creditors, and said nothing of any outstanding taxes which had been levied but not collected, and it was declared to take effect from and after its passage.

On the same day, Jan. 29, 1879, another act of the legislature was passed, approved Jan. 31, 1879, by which the identical territory that had been embraced in the territorial limits of the city of Memphis was erected into what the act calls a 'taxing district.' The act declared that the necessary taxes for the support of the government thus established should be imposed directly by the General Assembly of the State and not otherwise. It established a board of fire and police commissioners, a committee on ordinances, or local laws, to be known as the legislative council, consisting of the commissioners of the fire and police boards and the supervisors of the board of public works. It established also a board of health, and a board of public works. It prohibited the commissioners from issuing any evidences of indebtedness, and declared that no property, real or personal, held by them for public use, should ever be subject to execution, or attachment, or seizure under any legal process for any debt created by said commissioners, and that all taxes due, or moneys in the hands of the county trustee, or on deposit, should be exempt from seizure under attachment, execution, garnishment, or other legal process. The act also declared that neither the commissioners, nor the trustee, nor the new government created by the act, should pay or be liable for any debt created by the extinct corporation (i. e. the city of Memphis), and that none of the taxes collected under the act should ever be used for the payment of any of the said debts. The act was declared to take effect from its passage. Its fourteenth section, as subsequently amended, declared that all the property of the city mentioned as transferred to the State by the act first mentioned should be thereby transferred to the custody and control of the board of commissioners of the taxing district, and that all indebtedness for taxes, or otherwise, whether in litigation or not, due the municipality, namely, the city, should vest in and become the property of the State, to be disposed of as should thereafter be provided by law.

These two acts were passed, as has been noticed, on the 29th of January, 1879, and approved two days thereafter.

On the 7th of February, 1879, the complainants, Garrett et al., filed, by leave of the court, an amended and supplemental bill, averring what had been charged in the original, and setting forth, inter alia, these acts of the legislature, denying their constitutionality, and praying, as in the original bill, for the appointment of a receiver, and praying also that the bill might be taken as a general creditors' bill for all creditors who might come in within a limited time and prove their claims.

The other bills were filed severally on Jan. 30, 1879, Feb. 3, 8, and 10, next following, and on the 12th of February the cases were consolidated, and T. J. Latham was appointed a receiver in accordance with the prayer of the complainants. He gave the required bond on the same day, and took immediate possession of the tax-books, bills, &c., of the city.

Subsequently, on the 13th of March, 1879, the legislature of the State passed another act, the first section whereof directed the governor to appoint an officer for municipal corporations whose charters had been repealed (the city of Memphis being the only one), to be known as a receiver and back-tax collector. Subsequent sections required such receiver and collector to take possession of all books, papers, and documents pertaining to the assessment and collection of the taxes embraced by the act; namely, the taxes due at the time of the repeal of the charter. It further directed that the receiver should file in the Chancery Court of the State an original creditors' bill, in the name of the State, on behalf of all the creditors, against all the delinquent tax-payers; and it provided that taxes assessed prior to 1875 might be settled in the valid indebtedness of the extinct municipality, to wit, in valid bonds, whether due or not, due coupons, and any other valid debts of such municipality, with accrued interest, whether in the shape of scrip, warrants, judgments, ledger balances, paving certificates, or receipts for money paid by tax-payers to paving contractors. It directed the receiver and back-tax collector to receive such evidences of debt at the following rates, namely: compromise bonds, at their face value; all other indebtedness at fifty cents on the dollar, except judgments, which should be received at fifty-five per cent of their face value.

The act also directed that the receiver should receive in payment of taxes levied after 1874 the indebtedness of the municipality, when there was no lien or equity requiring payment thereof in current money. It also prohibited the collector or receiver from coercing payment of a greater sum than one-fifth of the taxes in arrear annually, so as to distribute the whole through five equal annual instalments, commencing from his appointment and qualification,-and it remitted all costs of condemnation, penalties, and charges,-provided, however, that nothing therein contained was intended to interfere with any vested rights entitling the party having such right to a speedy collection.

Under the provisions of this act, Minor Meriwether, the principal appellant, was appointed receiver and back-tax collector by the governor of the State. He accepted the appointment, and proceeded to demand the payment to him of the taxes in arrears, interfering with the receiver previously appointed by the Circuit Court, and impeding that receiver in the discharge of his duties. The complainants then filed a supplemental bill, making Meriwether a party defendant, together with some defaulting tax-payers, and praying, among other things, for an injunction against such interference.

To the consolidated bill thus amended and supplemented a general demurrer was filed, which was not sustained by the Circuit Court, and, the defendants electing to stand upon it, a final decree was entered in favor of the complainants. From that decree this appeal has been taken.

Whatever may be said of the equities of the complainants and of their power to enforce those rights in a court of equity, I agree that the decree as entered was too broad. It declared and adjudged that all the assets and property of every description theretofore belonging to the city of Memphis, or so much thereof as may be necessary for the purpose, including taxes theretofore assessed and remaining unpaid and due the city, should be applied to the payment of the debts due to the complainants and other creditors who had made, or might thereafter make, themselves parties to the suit. This included not only the private property of the city, but also that which it had held for public uses; namely, for governmental purposes and as a trustee for the State, such as the public buildings, streets, squares, parks, school-houses, promenades, fire-engines, hose and hose-carriages, engine-houses, engineer instruments, and generally everything held by the city for merely municipal purposes. To this extent, I think, the decree cannot be sustained.

Such property cannot be subjected to the payment of the debts of the corporation. Its public character forbids such an appropriation. It could not be subjected to taxation at the instance of the municipality. It was never held for the payment of debts. Instead thereof, it was held by the city merely as a trustee for the public. It would not be contended that it could have been taken in execution at law, and for the same reason it cannot be reached in equity to satisfy creditors.

I think, also, that part of the decree which adjudges that all the property within the limits of the territory of the city of Memphis is liable and may be subjected to the payment of all the debts owing by the city, and that such liability shall be enforced hereafter, from time to time, in such manner as the Circuit Court might order and direct, is erroneous. Notwithstanding what has been held in some of the New England States, I think the doctrine is generally accepted, that the private property of individuals within the territorial limits of a municipal corporation cannot be reached by its creditors directly, any more than the private property of stockholders in other corporations can be thus reached. It may, it is true, be subjected to taxation for the payment of the corporate debts, but the levy of taxes must be made by the corporation itself, or by the State. It is not a judicial act, and courts of equity, at least the circuit courts of the United States, cannot by their own officers levy a tax. Rees v. City of Watertown, 19 Wall. 107.

They certainly have no power to compel the levy of a tax by a corporation which is without officers and which has ceased to exist.

But while, in these particulars and for these reasons, the decree entered by the Circuit Court cannot be sustained in its full extent, I am of opinion that the complainants are entitled to some of the relief granted them by the decree. If they are not, then a new way has been discovered to pay old debts. It cannot be that a corporation, whether municipal or not, can be dissolved, and that by its dissolution its property can be withdrawn from the reach of its just creditors by any process of law or equity. No doubt there are technical difficulties in the way of maintaining proceedings at law against a corporation after its charter has been repealed, but a court of equity is competent to enforce justice to some extent, even where the processes of law fail.

A case, I think, was made by the bill for the appointment of a receiver to take into the possession of the court those taxes which had been levied by judicial direction for the payment of judgments recovered against the city,-taxes which had been only partially collected. Those taxes were in a most legitimate sense charged with a trust and a trust for the complainants. The fund to be raised by the levies was set apart for a special purpose. It could be used lawfully for no other. The ordinances which directed the levies specified the amounts to be raised, and the judgment creditors for whose use the levies were made. Those creditors were, therefore, cestuis que trust in the fullest sense of the term, the legal interest alone being in the city. The case shows that this trust had been neglected and abused by the trustee. The taxes which it was the duty of the city as trustee to collect had been suffered to remain uncollected in great measure, and for an unreasonable time, and even the portions which were collected had not been paid over, as the writs of mandamus required. This breach of duty by the trustee had continued from 1875 to 1879. Had the trustee been a natural person, or a private corporation, no one would doubt the power of a court of equity to interfere and take the trust out of the hands of the faithless trustee, either by removing him and appointing another trustee, or by administering the trust by its own officers. It can make no difference that the city of Memphis was a municipal corporation. Its character as such does not affect the nature of its obligations to its creditors, or its cestuis que trust, or impair the remedies they would have if the city was a common debtor or trustee. While as a municipal corporation the city had public duties to perform, yet in contracting debts authorized by the law of its organization, or in performing a private trust, it is regarded by the law as standing on the same footing as a private individual, with the same rights and duties, and with the same liabilities, as attend such persons. Over its public duties, it may be admitted, the legislature has plenary authority. Over its private obligations it has not. Bailey v. The Mayor, & c. of the City of New York, 3 Hill (N. Y.), 531; Small v. The Inhabitants of Danville, 51 Me. 359; Oliver v. Worcester, 102 Mass. 489; Dillon, Mun. Corp., sect. 39, and cases cited in the notes.

Moreover, if, as contended by the appellants, the city of Memphis ceased to have any legal existence on the thirty-first day of January, 1879, when the legislative act repealing the charter was approved, the case then became one of a trust without a trustee, pre-eminently fit for equitable interference. A court of equity will not permit a private trust to fail for want of a trustee. And this rule is applicable to cases in which a municipal corporation has been nominated the trustee. Girard v. Philadelphia, 7 Wall. 1; Philadelphia v. Fox, 64 Pa. St. 169; Montpelier v. East Montpelier, 29 Vt. 12. In such cases, as in cases where a natural person or a private corporation is the trustee, and the person has died or the corporation has been dissolved, the court will appoint a new trustee, or execute the trust by its own officers or agents. In Potter on Corporations, sect. 699, it is said: 'Where in any way the legal existence of municipal trustees is destroyed by legislative act, a court of equity will assume the execution of the trust, and, if necessary, will appoint new trustees to take charge of the property, and carry into effect the trust.' In High on Receivers, 304, 305, it is said: 'When creditors of a corporation have a charge upon a particular fund, in the nature of a trust fund, the mismanagement or waste of such fund by those intrusted with its control will warrant the appointment of a receiver.'

So in Batesville Institute v. Kauffman (18 Wall. 151), this court, when speaking of the power of a court to appoint a new trustee in place of one deceased, said: 'It is, however, within the power of a court of equity to decree and enforce the execution of the trust through its own officers and agents, without the intervention of a new trustee,' citing Story's Equity, 976-1060.

Without further citations, which might easily be made, enough has been said to show that in the present case the Circuit Court was authorized to seize by the hands of its own receiver, for administration, those taxes which had been levied specially for the payment of judgments recovered, in regard to which the city had occupied the relation of a trustee, at least practically.

Much of what I have said is equally applicable to the taxes which the city during its corporate existence had levied for the payment of interest on its debt, or for other purposes, and had not collected, and generally to all the assets of the city of every character, except such as I have heretofore mentioned, held for strictly public uses, such as public buildings, parks, fire-apparatus, &c. These general assets, though not held specially in trust for any particular creditors, were held by the corporation, in a very just sense, for the benefit of its creditors. The corporation having ceased to exist, it was perfectly within the power of the Circuit Court, sitting as a court of equity, to seize all its assets to which its creditors have an equitable or legal claim, and hold them for administration. Such assets cannot be appropriated to any other use until the creditors are satisfied. Even legislative action cannot divert them to other uses. These principles have been fully recognized, and particularly in the code of Tennessee. Referring to dissolved corporations, that code enacts (sect. 3426): 'The court shall appoint a receiver, with full power to take possession of all the debts and property, and sell and dispose of, collect and distribute, the same among the creditors and other persons interested, under the orders of the court.' This statute is only an affirmance of equitable remedies before acknowledged and found in textbooks. Thus, in Potter on Corporations (sects. 714, 715), the rule is thus stated: 'Whatever technical difficulties exist in maintaining an action at law against a corporation after its charter has been repealed, in the apprehension of a court of equity there is no difficulty in a creditor's following the property of the corporation into the hands of one not a bona fide creditor or purchaser, asserting his lien thereon, and obtaining satisfaction of his debt.' In Broughton v. Pensacola (93 U.S. 266), the language of the court was: 'The ancient doctrine that, upon the repeal of a private corporation, its debts were extinguished, and its real property reverted to its grantors, and its personal property vested in the State, has been so far modified by modern adjudications that a court of equity will now lay hold of the property of a dissolved corporation and administer it for the benefit of its creditors and stockholders. The obligation of contracts, made whilst the corporation was in existence, survives its dissolution; and the contracts may be enforced by a court of equity, so far as to subject, for their satisfaction, any property possessed by the corporation at the time. In the view of equity, its property constitutes a trust fund pledged to the payment of the debts of creditors and stockholders; and if a municipal corporation, upon the surrender or extinction in other ways of its charter, is possessed of any property, a court of equity will equally take possession of it for the benefit of the creditors of the corporation.'

So in Curran v. Arkansas (15 How. 307), it was said, 'The assets of a corporation are assets for the payment of its debts, and are trust funds for that purpose.' See also Maenhout v. New Orleans, 2 Woods, 108-114.

In Dillon on Municipal Corporations, sect. 37, the rule is stated thus: 'Where the legal existence of a municipal trustee is destroyed by legislative act, a court of chancery will assume the execution of the trust,. . . take charge of the property, and carry into effect the trust.'

In Beckwith v. Racine (7 Biss. 142) the court said: 'Where a contract cannot be enforced at law against a municipal corporation owing to a repeal of its charter, and there are any funds, a court of equity will administer them for the benefit of creditors.'

It is hardly necessary to say that the private property of a municipal corporation is so decidedly stamped with a trust in favor of its creditors, that it is incapable of being diverted to other uses by the legislation of the State. This law has again and again been declared. Grogan v. San Francisco, 18 Cal. 590, by Field, J.; Board of Park Commissioners v. Common Council of Detroit, 28 Mich. 228; City of Dubuque v. ''Ill. Cent. Railroad Co.'', 67, 68.

The citations I have made (many others might be added) are sufficient to maintain the jurisdiction of the Circuit Court in this case, and its power to lay hold, by its receiver, of all the property and assets belonging to the city of Memphis, when its charter was repealed, including all taxes levied and collected but undisposed of, and all taxes uncollected, all property purchased by the city in sales for taxes, and all assets of every description, except the property above mentioned held for strictly public uses, and also to administer such assets for the benefit of the creditors.

I do not contend that a court of equity can itself levy a tax. I agree it cannot, and so this court has decided. Rees v. City of Watertown, 19 Wall. 107. The argument which has been submitted to prove that the Circuit Court has no such power is quite unnecessary. It is inapplicable to the case we have in hand. The complainants' bill asked for no assessment or levy of a tax, and the Circuit Court decreed none. The levy of a tax is a very distinct thing from the collection of a tax already levied. The levy is generally a legislative or a quasijudicial act. The collection of a tax after it has been levied is a ministerial act, which a court has power to enforce.

I have said, and I earnestly maintain, that the taxes which the city of Memphis had levied before the repeal of its charter, some of which were collected, but remained on deposit or undisposed of, and some of which are not collected, are assets of the corporation, which its creditors have an equitable right to have seized and appropriated to the payment of the corporate debts. By the lawful assessment and levy of a tax the taxpayer becomes a debtor to the municipality, and the debt may be recovered, like other debts, by a suit at law; or, when it is a lien, by a bill of equity. Such certainly is the law of Tennessee. Mayor & Aldermen of Jonesboro v. McKee, 2 Yerg. (Tenn.) 167; Rutledge v. Fogg, 3 Coldw. (Tenn.) 554; Marr v. The Bank of West Tennessee, 4 id. 487. The imposition of a tax, creates a legal obligation to pay. In Savings Bank v. United States (19 Wall. 227), this court ruled that, independently of an act of Congress authorizing them, suits at law may be maintained by the United States to recover taxes assessed and levied. The statutes of Tennessee leave the matter in no doubt, so far as it relates to the rule in that State. And in the Civil Code, sects. 554, 555, it is enacted that assessed taxes shall be and remain liens upon all taxable property of the person against whom they are assessed. If they are liens, they are enforceable in equity.

It is passing strange if those claims, which, by the law of the State, are debts due to the city and collectible as such by the ordinary processes of law, are not assets of the corporation for the payment of its debts. And if they can be collected in the State courts, I am unable to see why the Circuit Court of the United States, sitting in Tennessee, and having jurisdiction, may not also collect them, or seize them as assets of an insolvent and dissolved corporation. I cannot perceive why they are not as truly assets of the city as are the assessments made by an insolvent mutual insurance company its assets. Nobody would deny that such assessments could be seized by a court of equity, through the agency of its receiver, and administered for the benefit of the creditors of the company. No difficulty would be found in the way of collecting them.

Thus far I have considered the merits of the case as unaffected by the legislation of the State, heretofore spoken of, except so far as that legislation repealed the charter of the city. That legislation was certainly very extraordinary, and quite unprecedented in the history of the country since the Federal Constitution was adopted. Whatever may have been its purpose, and however carefully that purpose may have been disguised, if it can be sustained, its effect is to obstruct, if not totally destroy, all the power of the creditors of the city to enforce payment of the debts due them. They are remanded to the mere grace and favor of the legislature. If ever legislation impaired the obligation of contracts, this did. If it had been simply the repeal of the municipal charter, no one could have called it in question. Undoubtedly the legislature of a State may amend or dissolve the organization of a municipal corporation, so far as its governmental powers are concerned. But no legislature can so dissolve a corporation, municipal or private, as to destroy or impair the obligation of any contracts the corporation may have made. Dillon, Mun. Corp., sect. 114; Von Hoffman v. City of Quincy, 4 Wall. 535. Creditors of municipal corporations are as completely within the protection of the Constitution as any other creditors. What is meant by 'impairing the obligation of a contract' is well defined. Embarrassments thrown by a statute in the way of enforcing payment of a debt, or a statutory substitution for the obligation and liability of the debtor, of the will of some other person, though that person be a State, have not heretofore been recognized as consistent with the Constitution. The protection afforded by its provisions and its prohibition of certain State legislation relate, not to the mode and form of State statutes, but to their operation or effect.

In the view I take of the case, however, it is unnecessary to decide how far the legislation of the State is constitutional, or how far it is in conflict, if at all, with the paramount law which controls alike State and natural persons. Certainly the appointment by the governor of Meriwether as a receiver and back-tax collector can have no effect upon the prior appointment of Latham by the Circuit Court. It cannot confer upon Meriwether any right to interfere with the peformance of the duties which the court had imposed upon its receiver. The jurisdiction of the Circuit Court had fully attached, and, by the action of its receiver, the assets of the city, the tax-bills and books, had come into the possession of the court before Meriwether's appointment. That jurisdiction and possession cannot be divested by any State action. The injunction decreed against Meriwether was, therefore, I think, properly adjudged.

I have thus stated, as briefly as possible, my reasons for dissenting from the action of the majority of the court, reversing the decree of the court below and ordering a dismissal of the complainants' bill.

I think the decree should be modified by striking out so much of it as subjects to the payment of the debts of the city the property held exclusively for public uses, and so much as subjects to such payment the private property of all persons within the city's territorial limits.

Thus modified, I think the decree should be affirmed.

title: Meriwether v. Garrett/Dissent Strong


text: Talk:Meriwether v. Garrett/Dissent Strong


text:
Wadsworth v. Supervisors

APPEAL from the Circuit Court of the United States for the Western District of Wisconsin.

The facts are stated in the opinion of the court.

The case was argued by Mr. Matthew H. Carpenter for the appellant, and by Mr. W. P. Bartlett for the appellees.

MR. JUSTICE HARLAN delivered the opinion of the court.

title: Wadsworth v. Supervisors


text: Talk:Wadsworth v. Supervisors

title: Talk:Wadsworth v. Supervisors


text:
Wadsworth v. Supervisors/Opinion of the Court

By an act of the legislature of Wisconsin, approved April 1, 1864, the legal voters of certain counties, among which are the counties of Eau Claire and St. Croix, were authorized to vote upon the subject of municipal aid in the construction of a railroad from Tomah to Lake St. Croix, by the Tomah and Lake St. Croix Railroad Company, subsequently called the West Wisconsin Railway Company.

The act declared that 'if a majority of the ballots cast in any of said counties be for railroad aid, the county board of supervisors of said counties shall have power, by resolution, to cause to be issued bonds of the denomination of one hundred to one thousand dollars each, to an amount not exceeding $50,000 for each of said counties, payable thirty years after the date thereof, with interest at the rate of seven per cent, payable semi-annually in the city of New York, at such place as the treasurer of the State shall designate.' The board of supervisors of each of the counties voting such aid were required to 'annually cause to be levied and collected, as other State and county taxes are collected, a sum of money sufficient to pay the interest accruing and existing by reason of the bonds which either of said counties may issue, at the rate aforesaid, and such further amount to defray any expense attending the payment of such interest.'

The act further provided that 'the said bonds, when authorized to be issued as aforesaid, shall be held by the county board of supervisors of each of said counties, and the same, or the avails thereof, shall be expended in the counties which issue the same (provided the railroad passes through the said county), in the grading of said railroad, or in the purchase of ties therefor; and the said bonds shall be delivered to the said railroad company when the board of supervisors of each of said counties are satisfied that the same will be applied for such purpose.'

On the 5th of November, 1867, an election was held in the county of Eau Claire, at which a majority of votes were cast in favor of aid, to the extent of $50,000, to the Tomah and Lake St. Croix Railroad Company. The road was constructed through the county prior to March 10, 1870, but it does not appear when the work of such construction was commenced. The entire road was, however, fully constructed on or about Dec. 1, 1871, since which date it has been operated as a railway.

On and prior to March 15, 1870, the company demanded of the board of supervisors for the county of Eau Claire, county bonds to the amount of $50,000, and payable as required by the statute. The board refused to comply with that demand, and made the following record of such refusal, viz.: 'The county board of supervisors of Eau Claire County met at the office of the clerk, all members present. The board took up the subject of issuing the bonds of the county to the West Wisconsin Railroad Company as voted in 1867, and expressed themselves as willing to issue the bonds of the county if they could be paid by a tax as understood at the time the vote was taken, but as our highest courts have decided that it is illegal to levy and collect a tax to pay such bonds, they refuse to issue them. They are unwilling to issue the bonds of the county which cannot be paid, but must be repudiated in the end, for the reason that it would be unjust to the bondholder, and a disgrace to the county, and requested the county board of supervisors of said county to cause said bonds to be issued and delivered to the said company as required by law and the aforesaid vote of the electors of said county.'

There is some confusion in the lauguage employed in this minute of the proceedings of the county board, but there can be no doubt as to the grounds upon which it refused to execute and deliver the bonds.

By an act approved March 25, 1872, so much of the act of April 1, 1864, as authorized the counties of St. Croix and Eau Claire to issue bonds in aid of the construction of a railroad from Tomah to Lake St. Croix was repealed.

On or about Sept. 1, 1875, the railroad company, for a valuable consideration, assigned and transferred to Wadsworth all and every cause of action, in law or equity, it then had, or to which it was entitled, against the county of Eau Claire, by reason of the failure and refusal of its board of supervisors to issue and deliver county bonds in accordance with the vote of the people.

The object of the present suit in equity, by Wadsworth as assignee of the company, is to compel the execution and delivery to him of such bonds. To the bill filed a demurrer was sustained, and a decree entered for the defendants.

In the view which the court takes of this case, it may be assumed that due notice was given of the election held on the 5th of November, 1867.

The main question then presented is, whether the county of Eau Claire ever came under a legal obligation to execute and deliver to the railroad company, county bonds to aid in the construction of the road from Tomah to Lake St. Croxi? The decision of that question, it seems to the court, is controlled by the principles announced in Aspinwall, &c. v. Commissioners, &c., 22 How. 364. That case involved the validity of certain county bonds which were in the hands of bona fide holders for value, having been issued by the board of commissioners for Daviess County, Indiana, in payment of a subscription made in behalf of the county to the capital stock of an incorporated railroad company. The subscription was made under the sanction of a popular vote and in conformity with the charter of the railroad company, which made it the duty of the commissioners to subscribe for the stock and issue bonds in payment thereof, whenever a majority of qualified voters of the county, at an election held for that purpose, should declare in favor of such subscription.

It, however appeared that after the people had voted in favor of the subscription, but before any subscription was in fact made, a new constitution for Indiana went into operation, containing, among others, the provision that 'no county shall subscribe for stock in any incorporated company, unless the same be paid for at the time of such subscription; nor shall any county loan its credit to any incorporated company; nor borrow money for the purpose of taking stock in any such company.'

It was argued in that case, that as the statute under which the election was held made it the duty of the commissioners to subscribe for the stock and issue county bonds in payment thereof, the right of the railroad company to receive the bonds became complete and perfect when a majority of legal voters declared in favor of the subscription; and that such right was not, and consistently with the contract clause of the national Constitution could not be, affected by any subsequent changes in the organic law of the State. To that position this court was unable to give its assent. The reluctance expressed in its opinion is not to be construed as implying doubt as to the correctness of the legal conclusions there reached, but only as referring to the fact that the bonds in suit were in the hands of those who, for aught that appeared, had purchased them in the belief that they were valid obligations of the county. We held in that case that the popular vote did not itself create a vested right in the railroad company to the bonds, and that a subscription was necessary to create a contract binding the county to issue bonds in payment of the stock, and binding the company to issue stock for the bonds. 'Until the subscription is made,' said Mr. Justice Nelson, speaking for the whole court, 'the contract is unexecuted and obligatory upon neither party.' Hence, the new State Constitution was held to govern the case, and from the time of its adoption to have withdrawn from the county commissioners all authority to make subscriptions to the stock of incorporated companies, except in the manner and under the circumstances prescribed by that instrument.

Applying the doctrines announced in Aspinwall, &c. v. Commissioners, &c., to the present case, it is clear that there was no binding agreement or contract between the railroad company and the county of Eau Claire, by which the latter became legally bound, through its board of supervisors, to execute and deliver bonds to aid in the construction of the road from Tomah to Lake St. Croix. The act of April 1, 1864, neither in express words nor by necessary implication, made it imperative upon the board of supervisors to issue bonds in pursuance of the popular vote. The act was an enabling one, and its legal effect was to invest the board with power to supplement the expressed will of the people by an issue of bonds. We find nothing in its provisions justifying the conclusion that the popular vote was to be taken as an absolute direction that the supervisors should issue the bonds, at all events, and without regard to the circumstances intervening after the people had voted in favor of county aid to the enterprise in question.

It will be observed that the act of 1864 did not contemplate a subscription of stock upon the part of the county, but simply a donation of bonds to aid in the construction of the road. We can understand why the legislature might invest the constituted authorities of the county with large discretion as to the exercise of a power to issue bonds by way merely of donation to aid in the construction of a railroad. But whether sound policy indicated such a course, it is not material to inquire, since our duty is to ascertain the legislative intent, and, if possible and consistent with the law, to give it effect according to the reasonable interpretation of the words employed to express that intent.

As the statute only declared that the supervisors should have power, by resolution, to cause bonds to be issued when the people voted in favor of railroad aid, we are not at liberty to say that the legislature meant such vote to be a positive command to exercise that power without regard to the circumstances arising after the expression of the popular will.

But if we should be mistaken in this construction of the statute,-if the statute had, in terms, made it the duty of the supervisors to issue bonds, to the extent indicated by the popular vote,-we should feel bound, upon the authority of Aspinwall, &c. v. Commissioners, &c., to hold that the legislature could, at any time before the bonds were in fact issued, or before the county came under a legal obligation to issue them, repeal, as it did, the statute conferring the power to issue, and thereby withdraw from the supervisors all authority in the premises. The election at which the people gave their sanction to railroad aid had, as we have seen, no other effect than to confer power upon the supervisors to issue bonds, and did not place them under any legal obligation to the railroad company to exercise the power granted. The railroad company had not, prior to the passage of the act of 1872, acquired any perfect or vested right to the donation. The repealing statute of 1864 was, under the circumstances, a total abrogation or obliteration of the law repealed, as much so as if the latter had never existed.

We have not overlooked the averments in the bill that the company constructed its road through Eau Claire County at a cost, in grading and in the purchase of ties, exceeding the sum of $50,000; that such work was done, and such money expended upon the faith of the aid voted, and with 'the full understanding and belief' that the bonds would be issued and delivered to the company; and that the company would not have built the road and expended the money except in reliance upon an issue of the bonds as authorized by the statute.

With whom such understanding was had, and upon what special facts such belief was based, does not appear from any specific allegations in the bill. The seventh section of the act of 1864 directed that the bonds, 'when authorized to be issued as aforesaid,' that is, when issued under the power conferred by popular election, should be held by the supervisors, and not delivered until they should be satisfied that the proceeds would be expended in the grading of the road in the county issuing them, or in the purchase of ties therefor. Had the bonds been in fact executed before the act of 1872, but retained by the supervisors under an agreement for their delivery when the purposes indicated by the section just cited had been met, there might have been some ground for holding that the power given by the statute to issue the bonds had been finally and fully exercised by the supervisors, and that, in such case, the railroad company would have been entitled to enforce their delivery, upon the completion of the road through the county, or after the expenditure of an equal amount, either in the grading of the part of the road which lay in that county, or in the purchase of ties therefor. But we have seen that the bonds had not in fact, been executed, when the power to issue and deliver them was withdrawn by the legislature. The discretion conferred upon the supervisors had not then been exercised. If the company chose to enter upon the work of construction in the county before the supervisors had, in fact, elected to exert the power conferred by the statute, and without any agreement, upon sufficient consideration, binding the county to execute and deliver the bonds, their understanding, however induced, and their belief, upon whatever facts based, that the bonds would, at some future time, be issued and delivered, could not trammel the power of the legislature, or prevent it from withdrawing the authority conferred upon the supervisors in the act of 1864.

Nor do we think it at all material in the determination of this case that the supervisors expressed upon their records a willingness to issue the bonds, and that they were restrained from so doing by the circumstance that the Supreme Court of Wisconsin had judicially declared that the payment of the bonds, if issued, could not be enforced. The cases in that court to which, as we suppose, the supervisors referred were Curtis v. Whipple (24 Wis. 350) and Whiting v. The Sheboygan & Fond du Lac Railroad Co., pc. (25 id. 167), in the former of which, decided in 1869, it was held that the legislature had no power to raise money, or to authorize it to be raised, by taxation, for the purpose of donating it to a private educational institution; and in the latter, decided in 1870, that no such power existed to make a donation in aid of the construction of a railroad owned, managed, and operated by a corporation in all respects private, except that in its behalf the power of eminent domain might be exercised, and except also that it was charged with certain public duties and was subject to certain public uses. Notwithstanding the reasons assigned by the supervisors for the non-issue of the bonds, the fact remained that they did not, prior to the repealing act of 1872, assume to impose any legal obligation upon the county, either by an actual issue of the bonds, or by an agreement to issue and deliver them upon the completion of the road through the county. Under this view of the case we need not consider the question, suggested by counsel, as to how far the rights of parties are to be controlled by the decisions of the Supreme Court of the State, rendered after the election of 1867, upon the subject of municipal donations to railroad and other private corporations.

What has been said is sufficient to dispose of the case.

The decree below sustaining the demurrer was correct, and is

Affirmed.


text: Talk:Wadsworth v. Supervisors/Opinion of the Court


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Lord v. Steamship Company

ERROR to the Circuit Court of the United States for the District of California.

Sects. 4283 and 4289 of the Revised Statutes are as follows:

'SECT. 4283. The liability of the owner of any vessel, for any embezzlement, loss, or destruction, by any person, of any property, goods, or merchandise, shipped or put on board of such vessel, or for any loss, damage, or injury by collision, or for any act, matter, or thing lost, damage or forfeiture done, occasioned, or incurred, without the privity or knowledge of such owner or owners, shall in no case exceed the amount of the value of the interest of such owner in such vessel, and her freight then pending.'

'SECT. 4289. The provision of the seven preceding sections relating to the limitation of the liability of the owners of vessels shall not apply to the owners of any canal-boat, barge, or lighter, or to any vessel of any description whatsoever used in rivers or inland navigation.'

Sect. 4283 was one of the seven sections referred to in sect. 4289.

The steamship 'Ventura,' owned by the defendant in error, the Goodall, Nelson, and Perkins Steamship Company, was employed in navigation between San Francisco and San Diego, in the State of California, touching at the intermediate ports on the coast. In making her voyages she ran a distance of four hundred and eighty miles on the Pacific Ocean. She formed part of a transportation line which was largely engaged in foreign and inter-state commerce, but was herself only employed on her own route, and neither took on nor put off goods outside of the State of California. While on one of her regular voyages from San Francisco to San Diego she was totally lost, with all her pending freight and cargo, on the coast of California, without the privity or knowledge of her owner. This suit was brought against her owner as a common carrier to recover the value of the goods lost. The cargo was mostly owned by retail merchants in San Diego and other places in California who had made purchases for their business from wholesale merchants in San Francisco and was in transit from there. The steamship company pleaded its exemption from liability as owner of the vessel under sect. 4283 of the Revised Statutes. On the trial the court instructed the jury 'that if the jury believed that the said losses occurred solely by reason of the negligence of the master of said ship and without the privity or knowledge or neglect of said defendant, that said sect. 4283 of the Revised Statutes fully exonerated the defendant from liability for any such losses, notwithstanding the goods when lost were being transported on a journey, the final termini of which were different points in the State of California.' To this charge an exception was duly taken. The jury found in favor of the defendant, and judgment was rendered accordingly. To reverse that judgment the present writ of error was sued out.

Mr. Samuel F. Leib and Mr. Charles A. Kent, for the plaintiff in error.

Sect. 4283 of the Revised Statutes has no application to the case at bar, for it has repeatedly been held that the clause of the Constitution conferring upon Congress the power to 'regulate commerce with foreign nations, and among the several States, and with the Indian tribes,' does not authorize that body to exercise any control over the purely internal commerce of a State. Gibbons v. Ogden, 9 Wheat. 1; License Cases, 5 How. 504; Passenger Cases, 7 id. 283; Allen v. Newberry, 21 id. 244; Maguire v. Card, id. 248; Sinnot v. Davenport, 22 id. 227; Moore v. American Transportation Co., 24 id. 1; United States v. Holliday, 3 Wall. 407; License Tax Cases, 5 id. 462; Steamship Company v. Port Wardens, 6 id. 31; Woodruff v. Parham, 8 id. 123; United States v. Dewitt, 9 id. 41; The Daniel Ball, 10 id. 557; State Tonnage Tax Cases, 12 id. 204; Case of the State Freight Tax, 15 id. 232; Peet v. Morgan, 19 id. 581; The Seneca, 1 Biss. 371; The Tug Oconto, 5 id. 463, and cases cited; The Mary Washington, 1 Abb. (U.S.) 1; The James Morrison, 1 Newb. Adm. 241; Sears v. The Board, &c., 36 Ind. 270; Navigation Company v. Dwyer, 29 Tex. 382; Story, Const., sect. 1061.

Congress did not, in passing sect. 4283 of the Revised Statute, attempt or intend to exercise any power over the internal commerce of a State. Its object was to regulate an instrument of commerce over which it had undoubted control.

Mr. John E. Ward, contra.

MR. CHIEF JUSTICE WAITE, after stating the facts, delivered the opinion of the court.

title: Lord v. Steamship Company


text: Talk:Lord v. Steamship Company

title: Talk:Lord v. Steamship Company


text:
Lord v. Steamship Company/Opinion of the Court

The single question presented by the assignment of errors is, whether Congress has power to regulate the liability of the owners of vessels navigating the high seas, but engaged only in the transportation of goods and passengers between ports and places in the same State. It It is conceded that while the Ventura carried goods from place to place in California, her voyages were always ocean voyages.

Congress has power 'to regulate commerce with foreign nations and among the several States, and with the Indian tribes' (Const., art. 1, sect. 8), but it has nothing to do with the purely internal commerce of the States, that is to say, with such commerce as is carried on between different parts of the same State, if its operations are confined exclusively to the jurisdiction and territory of that State, and do not affect other nations or States or the Indian tribes. This has never been disputed since the case of Gibbons v. Ogden, 9 Wheat. 1. The contracts sued on in the present case were in effect to carry goods from San Francisco to San Diego by the way of the Pacific Ocean. They could not be performed except by going not only out of California, but out of the United States as well.

Commerce includes intercourse, navigation, and not traffic alone. This also was settled in Gibbons v. Ogden, supra. 'Commerce with foreign nations,' says Mr. Justice Daniel, for the court, in Veazie v. Moor (14 How. 568), 'must signify commerce which, in some sense, is necessarily connected with these nations, transactions which either immediately or at some stage of their progress must be extra-territorial.' p. 573.

The Pacific Ocean belongs to no one nation, but is the common property of all. When, therefore, the Ventura went out from San Francisco or San Diego on her several voyages, she entered on a navigation which was necessarily connected with other nations. While on the ocean her national character only was recognized, and she was subject to such laws as the commercial nations of the world had, by usage or otherwise, agreed on for the government of the vehicles of commerce occupying this common property of all mankind. She was navigating among the vessels of other nations and was treated by them as belonging to the country whose flag she carried. True, she was not trading with them, but she was navigating with them, and consequently with them was engaged in commerce. If in her navigation she inflicted a wrong on another country, the United States, and not the State of California, must answer for what was done. In every just sense, therefore, she was, while on the ocean, engaged in commerce with foreign nations, and as such she and the business in which she was engaged were subject to the regulating power of Congress.

Navigation on the high seas is necessarily national in its character. Such navigation is clearly a matter of 'external concern,' affecting the nation as a nation in its external affairs. It must, therefore, be subject to the national government.

This disposes of the case, since, by sect. 4289 of the Revised Statutes, the provisions of sect. 4283 are not applicable to vessels used in rivers or inland navigation, and this legislation, therefore, is relieved from the objection that proved fatal to the trade-mark law which was considered in Trade-Mark Cases, 100 U.S. 82. The commerce regulated is expressly confined to a kind over which Congress has been given control. There is not here, as in Allen v. Newberry (21 How. 244), a question of admiralty jurisdiction under the law of 1845, but of the power of Congress over the commerce of the United States. The contracts sued on do not relate to the purely internal commerce of a State, but impliedly, at least, connect themselves with the commerce of the world, because in their performance the law of nations on the high seas may be involved, and the United States compelled to respond.

Having found ample authority for the act as it now stands in the commerce clause of the Constitution, it is unnecessary to consider whether it is within the judicial power of the United States over cases of admiralty and maritime jurisdiction.

Judgment affirmed.


text: Talk:Lord v. Steamship Company/Opinion of the Court


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Insurance Company v. Eldredge

APPEAL from the Supreme Court of the District of Columbia.

The facts are stated in the opinion of the court.

Mr. Walter D. Davidge and Mr. Samuel R. Bond for the appellant.

Mr. Enoch Totten, contra.

MR. JUSTICE FIELD delivered the opinion of the court.

title: Insurance Company v. Eldredge


text: Talk:Insurance Company v. Eldredge

title: Talk:Insurance Company v. Eldredge


text:
Insurance Company v. Eldredge/Opinion of the Court

In November, 1871, John Van Riswick sold and conveyed certain real property in the city of Washington, of which he then was the owner, to one George B. Coburn, for the sum of $7,734.40, for which the latter gave his three promissory notes, each for $2,578.13, payable respectively in one, two, and three years after date, with interest. To secure these notes, Coburn EXECUTED TO ONe william h. ward A deed oF TRust of the property. this deed authorized Ward, upon default in payment of either of the notes, to sell the property, and upon full payment of the notes, and not otherwise, to release and reconvey the property to Coburn. The deed was recorded the same month. In February, 1872, Coburn sold and conveyed the property to one Edwin E. Mayhew, subject to the deed of trust.

In June, 1872, two persons by the names of Aistrop and Dudley jointly borrowed of the complainant. Eldredge, $4,000, for which they gave their note payable in sixty days, and as collateral security delivered to him two of the three notes of Coburn before mentioned, which had been indorsed to them.

In October following, Mayhew, who had subdivided the property into sixteen lots, upon eight of which, fronting on 14th Street, houses were then being constructed, applied to the Connecticut General Life Insurance Company, through its agent at Washington, John G. Bigelow, for a loan of $32,000; and through him the loan was effected, and secured by a deed of trust upon each of the eight lots. To obtain this loan it became necessary to have the existing incumbrances upon the property discharged. The company would not take the property as security with any prior lien upon it. In addition to the deed of trust to secure Coburn's notes, the property was then subject to a prior deed of trust, executed by a former owner, to secure the sum of $7,000. The insurance company left the matter of investigating the title and determining as to the sufficiency of the security to Bigelow, who was specially instructed to see that the company had the first lien upon the property. He employed Ward, the trustee of the Coburn deed, to examine and report upon the title. In compliance, it would seem, with Bigelow's wishes and in conjunction with Van Riswick, who described himself as the holder of the first note of Coburn, but without the consent or knowledge of the complainant, then holding the other two notes, Ward executed a deed of release of the property. It is to set aside this deed, as a fraud upon the rights of the complainant, that the present suit is brought.

It is very plain, from the evidence contained in the record, that Bigelow, in the course of his inquiries as to the condition of the property, became fully acquainted with the existence of the deeds of trust, and learned that the notes secured were not paid. The deeds were on record, and he was bound to take notice of them. The deed of Coburn designated the notes and limited the power of the trustee to release the property. He was in terms authorized to release and reconvey it only upon the full payment of the notes, and not otherwise. The deed showed the time the notes had to run, and that by their terms they were not then due. Unless paid at the time, or, what would be deemed equivalent, surrendered, the trustee had no authority to execute the release. It was not sufficient that the original payees of the notes joined in the instrument or consented to its execution. So far as they had parted with the notes they were denuded of power over the subject.

It is not necessary to express any opinion as to the authority of a trustee to release property conveyed to him at any time, where no such restriction, as in the present case, is in terms placed upon his power. We confine our language to the precise point before us. Here there was no authority on the part of the trustee to execute the deed until payment of the notes was made. The fact of their non-payment being known to Bigelow, the agent of the insurance company, knowledge of it must be imputed to the company, his principal; and both must be charged with knowledge of the law and the consequent inability of the trustee, at the time, to release the property.

To prevent misapprehension, it is proper to state that we do not wish to intimate any opinion upon the general question, whether a purchaser of property may not rely upon a release of a previous mortgage or trust-deed found upon the official records of the district where the property is situated, without further inquiry, where he has no knowledge of the non-payment of the indebtedness secured; but what we hold is, that where a purchaser (and a mortgagee or trustee of a trust-deed stands in the same position), at the time of taking a deed, has information that a prior mortgagee or trustee of a prior deed has released the property from the mortgage or trust, without payment of the notes or their surrender, or express authority from the holder of them, he will take the property subject to any equitable right of the holder of the notes, to secure the payment of which the mortgage or trust-deed was executed.

As to the position that the complainant is barred of the relief he asks by laches in asserting his claim, we do not think there is any force in it. The company, as already stated, must be deemed to have known of the want of power in the trustee to release the property from the Coburn deed, and it does not lie in its mouth to object that the complainant did not sooner seek to set aside the priority of lien thus gained; nor can it aver that his claim to have the instrument cancelled, by which this priority was secured, is a stale one, when asserted within the period allowed by law, and no rights of third parties as bona fide purchasers have intervened to render inequitable the assertion of his original lien.

Decree affirmed.


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


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United States v. Pinson

ERROR to the Circuit Court of the United States for the Western District of Tennessee.

The facts are stated in the opinion of the court.

The Solicitor-General for the United States.

Mr. B. M. Estes and Mr. Henry T. Ellett, contra.

MR. JUSTICE HARLAN delivered the opinion of the court.

title: United States v. Pinson


text: Talk:United States v. Pinson

title: Talk:United States v. Pinson


text:
United States v. Pinson/Opinion of the Court

This is an action against the executrix of one of several sureties on the official bond, executed April 9, 1858, of Miles H. Morris, formerly a purser in the navy. The government claims that deceased failed to account for certain clothing received by him as purser on board the ship 'Vandalia,' and for a large amount of public money received by him as purser and disbursing officer on board the ship 'Seminole.'

The bill of exceptions states that the district attorney, after reading in evidence a certified copy of the bond of Morris, as purser in the navy, offered to read to the jury, as evidence in behalf of the United States, 'the account of Miles H. Morris, as purser in the United States Navy, as certified by the Treasury Department.' The account, thus offered, is made up of several distinct papers, as follows: Brief to accompany the account of Miles H. Morris, late paymaster U.S. Navy; abstract of expenditures of Miles H. Morris, paymaster U.S. S. 'Vandalia;' abstract of clothing and small stores; abstract of expenditures of Miles H. Morris, paymaster U.S. S. 'Seminole;' statement of the account of Miles H. Morris, a purser U.S. S. 'Vandalia,' from May 19, 1858, to Jan. 6, 1860; statement of the account of Miles H. Morris, paymaster U.S. S. 'Seminole,' from May 1, 1860, to March 12, 1861, report 4,805; statement of the account of M. H. Morris, late paymaster U.S. Navy, supplementary to report 4,805; statement of the account of M. H. Morris, late paymaster U.S. Navy, supplementary to report 161 A.

To these abstracts and statements is appended a certificate or communication by the Fourth Auditor in the Treasury Department, under date of Jan. 19, 1874, addressed to the Second Comptroller of the Treasury, stating that he had examined and adjusted the account of Morris, late paymaster United States Navy, supplementary to his account of 'Seminole' report 161 A, and found that there was due from him to the United States the sum of $5,922.60 under certain heads of appropriations which are specified, and also that the statements and accounts showing such balance were therewith transmitted to the Second Comptroller for his decision thereon. There is also appended a statement by the Second Comptroller, under date of Jan. 20, 1874, to the effect that he admitted and certified the balance reported by the Fourth Auditor.

Prefixed to the foregoing papers is the certificate of the Secretary of the Treasury, under the seal of that department, to the effect that William B. Moore, who certified the 'annexed transcript,' was then, and at the time of doing so was, deputy Fourth Auditor of the Treasury, and that full faith and credit were due to his official attestations.

Following that of the Secretary was a certificate in these words:--

'TREASURY DEPARTMENT, FOURTH AUDITOR'S OFFICE.

'July 23, 1875.

'Pursuant to an act of Congress to provide for the prompt     settlement of public accounts, approved 3d of March, 1817, I,      William B. Moore, deputy Fourth Auditor of the Treasury      Department, do hereby certify that the annexed transcripts      are true copies of the originals on file in this office.

WM. B. MOORE.'

To the reading of the foregoing 'account' or 'transcript' the defendant objected, and the objection was sustained, to which ruling an exception was taken by the government. Under instructions from the court, a verdict was then returned for the defendant.

Whether the papers offered in evidence by the government are competent evidence in support of its claim, is the general question presented for our determination.

By the law, as it has long existed, it is the duty of the Fourth Auditor of the Treasury Department to receive and examine all accounts accruing in the Navy Department, or relating thereto, and after such examination to certify the balances, transmitting such accounts, with the vouchers and certificates, to the Second Comptroller for his decision thereon. Rev. Stat., sect. 277. Upon their examination by the latter officer it becomes his duty to certify the balance arising thereon to the Secretary of the Navy. Id., sect. 273. The statute also provides that 'the auditors charged with the examination of the accounts of the departments of war and of the navy shall keep all accounts of the receipts and expenditures of the public money in regard to those departments, and of all debts due to the United States or moneys advanced relative to those departments; shall receive from the Second Comptroller the accounts which shall have been finally adjusted, and shall preserve such accounts, with their vouchers and certificates; and record all requisitions drawn by the secretaries of those departments, the examination of the accounts of which has been assigned to them.' Id., sect. 283.

When an account has thus been examined, passed upon, and the balance certified, it is adjusted, as well within the meaning of the section last quoted, as of sect. 957 of the Revised Statutes. The latter section, in part, provides that 'when suit is brought by the United States against any revenue officer or other person accountable for public money, who neglects or refuses to pay into the treasury the sum or balance reported to be due to the United States, upon the adjustment of his account, it shall be the duty of the court to grant judgment at the return term, upon motion, unless the defendant in open court (the United States attorney being present) makes and subscribes an oath that he is equitably entitled to credits which had been, previous to the commencement of the suit, submitted to the accounting officers of the treasury and rejected; specifying in the affidavit each particular claim so rejected, and that he cannot then safely come to trial. If the court, when such oath is made, subscribed, and filed, is thereupon satisfied, a continuance until the next succeeding term may be granted.' This section is referred to for the purpose of showing as well the importance attached to the final adjustment of accounts by the proper officers of the treasury, as the difficulty in going behind or disputing the correctness of such adjustment when made the basis of a suit instituted to recover the balance reported to be due the government.

We come now to sect. 886 of the Revised Statutes, upon the construction of which depends the solution of the question to which we have already referred. That section declares that 'when suit is brought in any case of delinquency of a revenue officer, or other person accountable for public money, a transcript from the books and proceedings of the Treasury Department, certified by the register, and authenticated under the seal of the department, or, when the suit involves the accounts of the War or Navy Departments, certified by the auditors respectively charged with the examination of those accounts, and authenticated under the seal of the Treasury Department, shall be admitted as evidence, and the court trying the cause shall be authorized to grant judgment and award execution accordingly. And all copies of bonds, contracts, or other papers relating to or connected with the settlement of any account between the United States and an individual, when certified by the register, or by such auditor, as the case may be, to be true copies of the originals on file, and authenticated under the seal of the department, may be annexed to such transcripts, and shall have equal validity and be entitled to the same degree of credit which would be due to the original papers, if produced and authenticated in court: Provided, that where suit is brought upon a bond or other sealed instrument, and the defendant pleads non est factum, or makes his motion to the court, verifying such plea or motion by his oath, the court may take the same into consideration, and, if it appears to be necessary for the attainment of justice, may require the production of the original bond, contract, or other paper specified in such affidavit.'

This section embodies the provisions found in the second section of the act of March 3, 1797 (1 Stat. 512), providing more effectually for the settlement of accounts between the United States and receivers of public money, and the eleventh section of the act of March 3, 1817, relating to the prompt settlement of public accounts. 3 id. 367.

It will be observed that sect. 886 refers to 'transcripts from the books and proceedings of the Treasury Department,' as well as to 'copies of bonds, contracts, or other papers relating to or connected with the settlement of any account between the United States and an individual.' The former, certified and authenticated as required by the statute, 'shall be admitted as evidence,' while the latter, certified and authenticated in like manner, 'may be annexed to such transcript,' and have 'equal validity, and be entitled to the same degree of credit which would be due to the original papers, if produced and authenticated in court.' Commenting upon similar language in the act of March 3, 1817, this court, in Smith v. United States (5 Pet. 300), which was a suit against a paymaster in the army for a balance alleged to be due to the government, said, that under the head of 'a transcript from the books and proceedings of the Treasury Department' were included 'charges of money advanced or paid by the department to the agent, and claims suspended, rejected, or placed to his credit.' These all appear, said the court, upon the 'books' of the department; and the decision on the vouchers exhibited, and the statement of the amount due, constitute, in part, the 'proceedings' of the treasury. The court, in that case, recognizes the transcript from the books and proceedings of the department as a document which shows the account of the government debtor, as finally adjusted by the proper officers, and as it appears upon the records of the department. Such adjusted accounts, says Mr. Chief Justice Taney, necessarily show the charges against as well as the credits of the disbursing officer. They 'could not,' said he, 'be adjusted on the books in any other manner, and the transcript, or, in other words, the copy of the entire account, as it stands on the books (which must include debits as well as credits), are made evidence by the law. Nor do we see any reason for restricting the words of the act of Congress within narrower limits than the words plainly imply. The accounts are adjusted by public sworn officers, bound to do equal justice to the government and the individual. They are records of the proper departments, and are always open to inspection of the party interested.' Bruce v. United States, 17 How. 437.

Unless, therefore, the transcript offered, as evidence, upon the trial below is certified by the proper officer, and authenticated under the department seal, to be 'a transcript from the books and proceedings of the Treasury Department,' it is not such a transcript as the statute makes evidence.

We are of opinion that the transcript offered is not certified and authenticated to be of that character which the statute declares shall be admitted as, in itself, evidence. The certificate of the deputy Fourth Auditor is that the 'transcript' thereto annexed, that is, the statement and abstracts heretofore described, are 'true copies of the originals on file' in his office. That is precisely such a certificate as the officer would make in reference to mere copies of bonds, contracts, or other papers relating to or connected with the final adjustment of the account, for the purpose of giving to such copies the same effect as would be accorded to the originals if produced and authenticated in court. If the papers offered, and excluded by the court below, constitute, in fact, the final adjustment of Morris's accounts, the certificates should not have described them as copies of originals on file, but as transcripts of the books and proceedings of the department. The statute, for the convenience of the government in a certain class of suits against delinquent public officers, makes an alteration of the established laws of evidence. The government, by a statutory rule which the courts must enforce, denies to defendants in such suits the benefit of the recognized principles which, at common law, govern the proof of essential facts in issue, and it should not be permitted to claim an exemption from the fair and legitimate operation of that rule. It may be true, as the certificate of the deputy Fourth Auditor states, that the papers offered are true copies of some originals on the files of his office; for instance, of the original drafts of settlement. But it does not necessarily follow that they present an accurate or correct statement of the final settlement or adjustment of the accounts as shown on the books and in the record of the proceedings of the department. Such originals may never have become a part of the books and proceedings of the department, in the sense of the law, or within the meaning of our former decisions. United States, v. Buford, 3 Pet. 12; Smith v. United States, 5 id. 292; Cox v. United States, 6 id. 172; United States v. Jones, 8 id. 375; Gratiot v. United States, 15 id. 336; Hoyt v. United States, 10 How. 109; Bruce v. United States, 17 id. 437. That the abstracts or statements offered and excluded may, upon their examination, seem to the court to be the final adjustment of Morris's accounts is not sufficient. Upon that question the court might be mistaken in any conclusion it should reach, or it may err in the inferences drawn from the items of the accounts. What the statute meant was, that the official certificate of the officer, charged with the examination of the accounts, should be of such character as to give the court, as well as the parties, an assurance that the transcript offered as evidence to support the claim of the government exhibits, in fact, the final adjustment of the accounts of the delinquent officer, as shown, not by mere copies of original papers on the files, but upon the books and records of the department.

This question, in a somewhat different form, arose in Smith v. United States, supra. There, as here, the auditor certified that the transcripts offered in evidence were 'true copies of the originals on file' in his office, and, in that form, the certificate narrowly escaped condemnation. The majority of the court, evidently with some hesitation, held the transcripts admissible in evidence upon the ground that the bill of exceptions stated that the documents, offered as evidence and excluded, purported to be transcripts 'from the books and proceedings of the Treasury Department.' Upon that point three of the judges dissented. The grounds of the dissent are stated in the opinion of the court. The minority held that the certificate could be regarded as referring only to papers the originals of which were on file; that the books of the department could not be said to be on file, nor were copies from them copies from originals within the meaning of the statute; that it was a copy from the books and proceedings in the Treasury Department which was made evidence, and not mere copies of papers, though on the files, on which the rough draft of settlement may have been entered.

The bill of exceptions does not bring the present case, upon this particular point, within the ruling in Smith v. United States. There is no statement in the bill here that the papers offered and excluded were transcripts from the books and proceedings in the treasury, but only that they constituted the 'account of Miles H. Morris, as purser of the United States Navy, as certified by the Treasury Department.' This language is not equivalent to that which the statute requires in order to make the transcript evidence, and we are not disposed to extend the rule announced in Smith v. United States. The statute is founded in justice as well as in the necessities of the government when compelled to institute suits against delinquent public officers. Its provisions are easily understood, and it is not at all difficult to meet the manifest object Congress had in enacting them. When the government desires, in suits against a delinquent officer accountable for public money, to use the final adjustment of his accounts as evidence, the certificate of the officer should show, not, necessarily, in the very words of the statute, but plainly, and not by mere inference, that the transcript offered is from the books and proceedings of the department; in other words, that such transcript presents the account of the delinquent as finally adjusted by the proper officers of the government, and spread upon the records of the department.

Without stopping to consider other points raised by counsel in support of the ruling below, it is sufficient to say, that, for the reasons given, the court below did not err in excluding from the jury the transcripts offered by the government.

Judgment affirmed.

MR. JUSTICE SWAYNE and MR. JUSTICE BRADLEY dissented.


text: Talk:United States v. Pinson/Opinion of the Court


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Goodman v. Niblack

APPEAL from the Circuit Court of the United States for the District of Indiana.

This was a bill in chancery filed by Charles Goodman against William E. Niblack, administrator de bonis non of Albert G. Sloo, deceased. A demurrer to it was sustained, and Goodman appealed.

The case is fully stated in the opinion of the court.

Mr. James C. Denny and Mr. D. V. Burns for the appellant.

Mr. F. W. Viehe for the appellee.

MR. JUSTICE MILLER delivered the opinion of the court.

title: Goodman v. Niblack


text: Talk:Goodman v. Niblack

title: Talk:Goodman v. Niblack


text:
Goodman v. Niblack/Opinion of the Court

There came into the hands of Niblack, as administrator de bonis non of the estate of Albert G. Sloo, the sum of $150,000, and the complainant is the owner of a judgment against said Sloo for $31,344.44, recovered in the Supreme Court of the State of New York, on the twentieth day of January, 1855. The purpose of the present bill is to follow this money in Niblack's hands as a trust fund devoted by Sloo in his lifetime to the payment of that judgment. This trust arises, if it exist at all, out of a deed of assignment made by Sloo of all his property, rights, and credits to Benjamin H. Cheever and James Wiles, of the date of Feb. 3, 1860, for the benefit of all his creditors, but with some preferences, among which is the judgment. The sum above mentioned was received by Niblack as the share of Sloo's estate in a claim of over a million dollars recovered in the Court of Claims against the United States and paid by the government to Marshall O. Roberts and Edward N. Dickerson, in whose names the judgment was recovered. The history of this claim, which is necessary to an understanding of the case in hand, is this:--

The fourth section of the act of Congress of March 3, 1847, chap. 62 (9 Stat. 187), directed the Secretary of the Navy to contract with Sloo for the transportation of the mails of the United States from New York to New Orleans, Charleston, Savannah, Havana, and Chagres and back twice a month, at a compensation not to exceed the sum of $290,000. The mail was to be carried in steam vessels of a character described in the act, not less than five in number, to be constructed under the supervision of officers of the navy, in such manner as to be easily converted into war steamers of the first class. Under this authority the Secretary and Sloo executed a written contract on the 20th of April of that year, for the construction of the ships and transportation of the mails at the sum of $290,000 per annum. On the 17th of August thereafter Sloo entered into an agreement with Marshall O. Roberts, George Law, Prosper M. Wetmore, and Edwin Croswell, by which they were taken into this contract with him, and agreed to build the vessels, and run them, and perform the obligations of Sloo to the government. He was to receive one-half of the net profits of the venture and the four persons named the other half. In order to the perfect working of this agreement, a tripartite instrument in writing was made, in which Sloo is called the party of the first part, and Roberts, Law, Wetmore, and Croswell the party of the second part, and George Law, Marshall O. Roberts, and Berres R. McIlvaine party of the third part, whereby, after reciting the agreement between the party of the first part and the party of the second part, the contract of Sloo is assigned to the party of the third part as trustees for the due execution of the agreement. This was signed by all the persons named.

The ships were built, and the mails carried for many years. By death and substitution, Marshall O. Roberts and Edward N. Dickerson became the surviving trustees under the agreement, and, as such, recovered in a controversy with the United States in the Court of Claims judgment for the sum of $1,031,000 as money due under the original contract with Sloo, which judgment was affirmed in this court and the money paid to them.

In the mean time, Sloo, who had become insolvent, executed in 1860 the general assignment to Cheever and Wiles, already mentioned. He died before the final payment of the money by the government to Roberts and Dickerson. Niblack was appointed his administrator.

These facts are all set out in the bill, and copies of the several contracts and assignments are filed as exhibits. Another averment of the bill is that the sum really due to Cheever and Wiles, as assignees of Sloo, out of the sum paid by the government, was $182,000; that Cheever and Wiles received $37,000 of this money, and consented to the payment of the remaining $145,000 to Niblack under some arrangement not understood by the complainant. It is also alleged that all the other indebtedness of Sloo which might have been a claim on this fund under his assignment to Cheever and Wiles has been paid, and there remains no other claim on it than complainant's. It is also averred that Wiles and Cheever are not citizens of Indiana, and cannot be served with process, and are not made parties to the bill, and for the reasons above stated are not necessary parties.

The demurrer is, first, general, and, secondly, special as regards the failure to make Cheever and Wiles parties.

The general demurrer is maintained on the ground that the assignments made by Sloo are void by reason of the provisions of sect. 3477 of the Revised Statutes. These provisions were enacted by Congress in 1853 (10 Stat. 170), and were, therefore, not in force when Sloo made his contract with the government, or his agreement with Roberts, Law, and others. That agreement remains unaffected by them. They were in force, however, when he made the general assignment of all his effects to Cheever and Wiles, and as the complainant claims through it, and can probably succeed only in that way (because, as we are informed, the State court of Indiana has decided that the Statute of Limitations bars his claim as an ordinary debt), we must inquire whether that assignment is void under the act of Congress.

The statute has several times within the last few years received the consideration of this court. United States v. Gillis, 95 U.S. 407; Spofford v. Kirk, 97 id. 484; Erwin v. United States, id. 392.

It is understood that the Circuit Court sustained the demurrer under pressure of the strong language of the opinion in Spofford v. Kirk. We do not think, however, that the circumstances of the present case bring it within the one then under consideration, or the principles there laid down. That was a case of the transfer or assignment of a part of a disputed claim, then in controversy, and it was clearly within all the mischiefs designed to be remedied by the statute. Those mischiefs, as laid down in that opinion, and in the others referred to, are mainly two:--

First, the danger that the rights of the government might be embarrassed by having to deal with several persons instead of one, and by the introduction of who was a stranger to the original transaction.

Second, That, by a transfer of such a claim against the government to one or more persons not originally interested in it, the way might be conveniently opened to such improper influences in prosecuting the claim before the departments, the courts, or the Congress, as desperate cases, when the reward is contingent on success, so often suggest.

Both these considerations, as well as a careful examination of the statute, leave no doubt that its sole purpose was to protect the government, and not the parties to the assignment. Erwin v. United States (supra), decided at the same term as Spofford v. Kirk, is suggestive on this point. It was there held that the claim of a bankrupt against the United States passed by the assignment in the bankruptcy proceeding to his assignee, and that the latter, and not the original claimant, was the proper person to sue in the Court of Claims. 'The passing of claims to heirs, devisees, or assignees in bankruptcy is not within the evil at which the statute aimed,' said the court. The language of the statute, 'all transfers and assignments of any claim upon the United States, or of any part thereof, or any interest therein,' is broad enough (if such were the purpose of Congress) to include transfers by operation of law, or by will. Yet we held it did not include a transfer by operation of law, or in bankruptcy, and we said it did not include one by will. The obvious reason of this is that there can be no purpose in such cases to harass the government by multiplying the number of persons with whom it has to deal, nor any danger of enlisting improper influences in advocacy of the claim, and that the exigencies of the party who held it justified and required the transfer that was made. In what respect does the voluntary assignment for the benefit of his creditors, which is made by an insolvent debtor of all his effects, which must, if it be honest, include a claim against the government, differ from the assignment which is made in bankruptcy? There can here be no intent to bring improper means to bear in establishing the claim, and it is not perceived how the government can be embarrassed by such an assignment. The claim is not specifically mentioned, and is obviously included only for the just and proper purpose of appropriating the whole of his effects to the payment of all his debts. We cannot believe that such a meritorious act as this comes within the evil which Congress sought to suppress by the act of 1853.

It is also to be remarked that the government had recognized Sloo's original assignment of his contract to Roberts, Law, and McIlvaine, as trustees, by permitting them to perform the contract and receive the pay under it for years; and when a dispute arose as to the sum due under that contract, Congress, by the act of July 14, 1870, very fully recognized the validity of that transfer.

That act is in these words:--

'Be it enacted by the Senate and House of Representatives of     the United States of America in Congress assembled, that the      claim of the trustees of Albert G. Sloo, for compensation for      services in conveying the United States mails by steamers,      direct between New York and Chagres, in addition to the      regular service required under the contract made between the      said Albert G. Sloo and the United States be, and the same is      hereby, referred to the Court of Claims; and the said court      is hereby directed to examine the same, and determine and      adjudge whether any, and if any, what, amount is due said      trustees for said extra service, provided that the amount to      be awarded by said court shall be upon the basis of the value      of conveying other first-class freight of like quantity with      the mails actually carried between the same points at the      same time.'

This is still further recognized by the appropriation to pay this judgment 'to Marshall O. Roberts and E. N. Dickerson, surviving trustees of A. G. Sloo,' found in chapter 3 of the Second Session of the Forty-fifth Congress. 20 Stat. 7.

The first agreement of Sloo, therefore, is unassailable.

His assignment to Cheever and Wiles, in 1860, conveyed only his interest in the profits of the contract which the parties in the first assignment were performing or had performed for the government.

The general assignment of Sloo, in 1860, gave Cheever and Wiles no right to assert a claim against the government. They could only deal with the trustees under the first assignment, and on them they had only the claim for net profits which came into their hands. Cheever and Wiles and the present complainant were neither of them capable of suing the United States in the Court of Claims, or of presenting the matter before the accounting officers of the government, and could give no valid or just acquittance to the government for any part of the claim.

We do not think the transfer to Cheever and Wiles, as trustees for Sloo's creditors, is forbidden by the act of 1853, or by any other principle of law or of public policy.

But we are of opinion that Cheever and Wiles are not only proper but necessary parties to this suit. The entire sum to which the estate of Sloo could possibly be entitled was assigned to them. The trust on which it was assigned remains unexecuted. They are charged with having received $37,000 of that fund. What have they done with it?

If, as alleged in the bill, there are no other debts of Sloo secured by the assignment, this sum in their hands should be accounted for before a decree is rendered against his administrator. They are charged with consenting to the payment to the administrator of the fund now sought in this suit. There may have been good reasons for it, and if not, they may be personally liable for it. The fund can only be subjected to the complainant's debt through these trustees. It is only in right of the assignment to them that he proceeds. They are living, and cannot be divested of this trust by any decree to which they are not parties. The administrator has a right, if a decree is rendered against him, to have it made effectual against them.

Notwithstanding the allegation of the bill that all the liabilities of the trust fund except the complainant's debt have been discharged, this may not be so; and it may be in the power of these trustees, and it may be their duty, if made parties to this suit, to show that there are others entitled to share in it. No decree against that fund can rightfully be made while they are not before the court.

This, however, need not defeat the jurisdiction of the court if the bill is amended by making them defendants.

This is a proceeding in equity to enforce a lien on the fund which is within reach of the court, and as the trustees and complainant have the requisite citizenship, sect. 738 of the Revised Statutes provides a remedy for inability to serve process by an order of publication. If they appear, the suit will proceed as usual. If they do not appear, the decree, so far as it affects the fund in the hands of Niblack, will bind them; and that is all that is necessary to give the court jurisdiction to grant the relief prayed for by the complainant.

If the decree of the Circuit Court had dismissed the case without prejudice for want of proper parties, we should have been bound to affirm it. But standing as it does now, it is a decision on the merits of the case and a bar to any other suit. It must, therefore, be reversed and remanded to that court. If the complainant shall ask leave to amend his bill by making Cheever and Wiles defendants, he should be permitted to do so and proceed with his case. If he does not do this, a decree should be entered dismissing the bill for want of these parties and without prejudice to any other suit on the merits. Shields v. Barrow, 17 How. 130; Barney v. Baltimore City, 6 Will. 280; House v. Mullen, 22 id. 42; Kendig v. Dean, 97 U.S. 423.

The decree will be reversed, and the cause remanded for further proceedings in conformity with this opinion; and it is

So ordered.

title: Goodman v. Niblack/Opinion of the Court


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Page:Babyhood of Wild Beasts.djvu/32

24 up on their haunches, hold the twigs in their little hands, and eat the bark. Long before he is out of childhood, he begins gnawing on bits of wood with his new teeth and exercising his jaws on everything he can reach. He carries small sticks in his mouth as soon as he begins to swim, and long before he is full-grown he begins gnawing trees.

The building instinct is strong in him. He leads the mammals of the world in mechanical and engineering skill. Our beavers are architects, carpenters, masons, lumbermen, log-cutters and dam-builders, and are the most versatile animals known. He is always on the job, and pays no attention to the unions.

The most expert lumber-jack is inferior to the Beaver as a tree feller. He cuts down trees in the most scientific way. He can fell a tree so it will fall toward the pond where he wishes to construct his home, thus saving himself unnecessary work.

After the trees are felled, the construction work begins. He works chiefly by night, for he is a nocturnal prowler. The moon is his lantern; the

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