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People v. The Commissioners

THESE were two cases which arose upon a certiorari, prosecuted, the one by Denning Duer, as relator, the other by Ralph Mead, in the same way, out of the Supreme Court of the State of New York, and directed to the Commissioners of Taxes and Assessments for the City and County of New York, the defendants in error. The relator in the first case was a holder of certain shares of stock in the National Bank of Commerce in New York, a banking association organized under the National Bank Law. The relator in the second case held certain shares in the Corn Exchange Bank, in the city of New York, incorporated under the laws of the State. These shares, in both banks, had been assessed in the year 1866, for the purposes of taxation under the

State laws, by the commissioners, as personal property of the relator, in the place in which the banks were located.

In justification of their proceedings the commissioners relied upon:

First. The enactments, in the form of provisos, in the forty-first section of the National Bank Law, passed June 3d, 1864, in these words:

'Provided, that nothing in this act shall be construed to prevent all the shares in any of the said associations, held by any person or body corporate, from being included in the valuation of the personal property of such person or corporation in the assessment of taxes imposed, by or under State authority, at the place where such bank is located, and not elsewhere; but not at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such State.

'Provided further, That the tax so imposed under the laws of any State upon the shares of any of the associations authorized by this act, shall not exceed the rate imposed upon the shares in any of the banks organized under authority of the State where such association is located.'

Secondly. An act of the State of New York, passed April 23d, 1866, in these words:

'SECTION 1. No tax shall hereafter be assessed upon the capital of any bank or banking association organized under the authority of this State or of the United States; but the stockholders in such banks and banking associations shall be assessed and taxed on the value of their shares of stock therein; said shares shall be included in the valuation of the personal property of such stockholder in the assessment of taxes at the place, town, or ward where such bank or banking association is located, and not elsewhere, whether the said stockholder reside in said place, town, or ward, or not; but not at a greater rate than is assessed upon other moneyed capital in the hands of individuals in this State.'

The case was heard by the Supreme Court of New York, on the return of the commissioners, as upon a demurrer thereto. The return stated that the commissioners did assess the relator upon the value of said shares, and included the same in the valuation of his personal estate.

That they made no allowance or deduction on account of investments by the bank in any securities of the United States.

That such a deduction or allowance was made in assessments upon insurance companies and individuals.

The Supreme Court gave judgment for the commissioners, which judgment the Court of Appeals affirmed.

The cases were now here for review, under the twenty-fifth section of the Judiciary Act; two questions, among others brought up but not considered by this court, being:

1. Whether the New York statute, of 23d April, 1866, was valid so far as it attempts to authorize the taxation of bank shares where the capital of such bank is invested in United States securities, exempt from taxation under the acts of Congress? a question argued separately in respect to State banks, and to those organized under national laws.

2. Whether the taxation of the shares of the several relators was not invalid, for the reason that an illegal discrimination was made in favor of other State corporations and individuals, citizens of said State?

Besides the two cases reported by name here, there were eight or ten cases in substance very similar to them, the cases being represented by different counsel.

The various relators, plaintiffs in error, were represented by Messrs. W. M. Evarts, B. D. Silliman, J. E. Burrill, and E. S. Van Winkle.

title: People v. The Commissioners


text: Talk:People v. The Commissioners

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title: Talk:People v. The Commissioners


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People v. The Commissioners/Opinion of the Court

On the other side were, Messrs. C. O'Connor, A. J. Parker, R. O'Gorman, and W. Hutchins.

I. The case of Van Allen v. The Assessors, adjudged, in fact, no more than that, under the legislation of New York, as then existing, a tax could not be laid on shares in the national banks. That was the point of the case. Whether such an act as that passed 23d April, 1866, would be valid so far as it taxed bank shares, where the capital of the banks was invested in Federal securities, was not a question necessarily in the case.

[The counsel then proceeded to discuss at large the first question as related to national banks, upon the assumption that this question was still open in this court for discussion.]

II. There is no act of Congress authorizing the taxation of shares of State banks whose capital is invested in United States securities, and the State, in asserting its right to tax such shares, cannot invoke any power or authority from Congress, but must maintain such right as one of State sovereignty. It is evident from the opinions in Van Allen v. The Assessors, that the court, in sustaining the assessment and the State law under which it was made, place its judgment upon the proviso in the forty-first section of the act of Congress.

A question is now presented, whether, in the absence of any act of Congress authorizing the taxation of the shares of STATE banks, whose capital is invested in government securities, such taxation by the State can be supported.

1. The United States securities, in which the capital of the Corn Exchange Bank, which is a State bank, is invested, are included within the provision of the act of Congress, that such securities, 'whether held by individuals, corporations, or associations, shall be exempt from taxation by or under State authority.'

2. It is settled, in adjudications of the Supreme Court of the United States, that the capital of such bank cannot be taxed upon any measure or computation of it which includes the investment in these United States securities, thus exempt by law from State taxation.

3. It is also adjudicated by the Supreme Court of the United States, upon a unanimous judgment of that court, that a tax, incompetent to State authority when assessed to the corporation or association as owner, and upon its capital in bulk, is equally incompetent to State authority when as sessed to the shareholder as owner, and upon his shares.

4. The tax complained of by the relators, depending for its validity, as it does, upon the mere vigor of the legislation of the State of New York, and being without aid from any legislation or permission of Congress, is necessarily invalid as respects the investment of the bank, in United States securities, exempt from taxation.

III. In making the assessment, the commissioners diseriminated against the shareholders of national banks, and in favor of insurance companies and individuals, by refusing to make to the former the same allowance which is made to the latter on account of investments in United States securities, and have thus assessed 'such shareholders at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens,' in violation of the act of Congress above referred to.

The only permissive legislation of Congress touching the subject to State taxation of the shares of national banks is found in the forty-first section of the National Currency Act of June 3d, 1864.

And the only permissive State legislation touching the taxation of shares of State banks is the act of April 23d, 1866, and by each of said acts it is provided that such taxation shall not be 'at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such State.'

The two provisos of the forty-first section of the act of June 3d, 1864, respectively refer to different subject.

The first relates to the valuation at which the shares shall be assessed; and provides that it shall not exceed the rate of valuation at which other moneyed capital in the hands of individuals shall be assessed.

The second refers to the rate at which taxes shall be imposed on such valuation, after such assessment has been made, and provides that such taxes shall not exceed in rate, or percentage, that imposed on shares in State banks.

The question in this case is not as to any rate, or percentage, at which taxes have been imposed, but as to the rate or value at which the shares have been assessed.

The assessment of the shares held by the relator in the Bank of Commerce was invalid, because they were assessed at a greater rate than was assessed on the shares in insurance companies, and at a greater rate than was assessed on the capital of insurance companies; and hence were assessed at a greater rate than 'other moneyed capital, in the hands of individual citizens' of New York.

Insurance companies incorporated under the laws of New York are moneyed corporations. Such companies by the laws of New York are subject to taxation on their capital. But they were assessed, and could legally be assessed, only upon the balance or residue of their capital and surplus profits, after deducting therefrom the amount of bonds and other securities of the United States held by them.

Insurance companies in New York are subject to taxation of their capital, and the owners of stock in such companies are consequently exempt from taxation thereon. The stock so held by them, therefore, could not, under the laws of New York, be included in the valuation of their personal property in the assessment of taxes imposed by or under State authority. It is no answer, however, to say that the bank shares have not been assessed for valuation at a greater rate than insurance shares, because the latter are not assessed at all, and are not aubject under the State laws to taxation. Such omission to assess and tax insurance shares is subversive of the principle of the first proviso. Its direct result is to produce the prohibited discrimination.

It is submitted that the reasons above assigned for the reversal of the judgment of the State court are sanctioned by the unanimous opinion of this court in Van Allen v. The Assessors.

In that case the judgment was reversed, because of a noncompliance with the second proviso of the forty-first section relating to the tax.

In the present case the defect is a parallel non-compliance with the first proviso relating to the assessment.

For the defendants in error: All the questions involved in the discussion of these cases upon the merits have, in effect, been decided by this court against the positions maintained by the plaintiffs in error.

When the question of the right of the State authorities to tax shareholders in national banks was before the court, in Van Allen v. The Assessors, it was held, as will be seen by reference to the case, that the right existed, and that the tax would have been legal, except for a single defect in the enabling act passed by the legislature of New York in 1865, which consisted in an omission to re-enact a provision of the act of Congress which required, that 'the tax so imposed under the laws of any State upon the shares of the associations authorized by this act, shall not exceed the rate imposed upon the shares of any of the banks organized under the authority of the State where such association is located,' and it was then said by the court that that defect 'may be readily remedied by the State legislature.'

That defect was accordingly remedied by the act of the legislature of New York, passed April 23d, 1866, by which both state and national banks were put on the same footing as to taxation.

That it was then intended, in the decision of Van Allen v. The Assessors, by this court, to make a final disposition of the question whether the shares of national banks were liable to municipal taxation, is declared by the court itself in the following language: 'The court are of opinion that this power is possessed by the State, and that it is due to the several cases which have been so fully and satisfactorily argued before us at this term, as well as to the public interest involved, that the question should be finally disposed of.' And the court then proceeded to state the grounds and reasons which they said 'had led to their judgment in the case.'

The report shows that ever point was fully considered by all the judges, with a view to a decision of all the questions now attempted to be raised again.

1. That it is not a tax upon the Federal bonds, but upon the benefits the shareholder would derive from the new use of them under the privilege conferred upon the associations by the act of Congress.

2. That a tax on the shares is not a tax on the capital of the bank.

3. That Congress has the power to permit the States to levy the tax, and has so legislated at to leave the shares of the stockholder subject to State taxation without any deduction for United States bonds held by the association.

4. That 'the State tax under this act of Congress involves no question as to the plighted faith of the government.'

It is true, there was another question, a technical one, involved. But that makes the decision none the less authoritative on the other question. Both the questions were equally presented, discussed, and decided; the constitutional power to tax, and the question whether the tax was properly levied. And it makes no difference that the decision of one, standing alone, requires the affirmance of the judgment, and the other called for a reversal, though the judgment was in fact reversed. A decision becomes authority, when it appears that the question was really involved and was fully considered and decided by the court.

But if the question upon the merits is again open for discussion, then we say: [The counsel then discussed the matter upon merits.]

I. In the case of Mead and others of the cases now before this court, the question is raised whether a municipal tax may be collected from the shareholders of State banks, when the capital of the State bank, or a part of it, is invested in government, bonds. Why should it not be?

This tax is levied in accordance with the express provision of the State act of April 23, 1866.

It is not a tax on the capital of the banks, nor on the United States bonds held by the bank. This view is sustained in Van Allen v. The Assessors.

This taxation is by implication authorized by the act of Congress, which expressly permits shares of stock in national banks, under like circumstances, to be taxed, and then requires that the taxation of shares of both national and state banks shall be placed on the same footing.

And the same reason for it exists as in the case of national banks, because the bonds are in fact put to a use not contemplated in the original contract between the government and the lender, of which use the shareholder receives the benefit in the way of dividends.

II. The only other requirement of the act of Congress was, that the taxes on the shares of the national banks shall not be 'at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such State.'

This, too, has been complied with. The statute of the State expressly forbids a higher rate of taxation.

This last proviso does not refer to corporations of any kind, but refers to private individuals-citizens of the State. The tax on bank shares is not to exceed the rate assessed upon other moneyed capital in the hands of such persons.

We submit that the words 'moneyed capital' refer only to such moneyed capital as is liable to assessment. They do not refer to bonds of the United States owned by individuals, for they are not moneyed capital liable to assessment. No assessment at all is to be made on such property.

The moneyed capital in the hands of an individual liable to assessment is first to be ascertained. The United States bonds, if he has any, are to be deducted. The balance is his moneyed capital liable to be assessed, and the assessment is made on it at precisely the same rate as that upon the shares of stock in a bank.

Congress did not say and did not mean all the moneyed capital in the hands of individual citizens, but only that which 'is assessed' or, in equivalent words, is liable to assessment.

No other construction could have been intended by Congress for that body well knew that United States bonds held by individuals were not liable to be assessed by State authority-and that this State had not the power to pass an act which should subject them to State taxation. They will not be supposed to have prescribed an impossibility, or the enacting of an unconstitutional statute as a condition on which alone a State could have the benefit of the privilege tendered by this act of Congress of taxing the shares of national banks.

We assert that, in this proviso, 'rate' means the rate per cent. If the assessment on moneyed capital in the hands of individuals is at the rate of two per cent., the assessment on the shares of stock cannot be at a greater rate.

Nor was any different meaning given to this word by this court in the case of Van Allen v. The Assessors where it occurs in the other proviso. The act of Congress had required that the tax on the shares of national banks should not exceed the rate imposed upon the shares in State banks. No tax has been imposed by the State upon the shares of State banks. They were left, as before, to be assessed on their capital, and this operated unequally, as where assessments were made upon capital, certain deductions could be made which could not be made when assessed upon shares. The tax therefore on the shares of national banks was at a rate exceeding the tax on the shares of State banks by the whole amount of the tax. If the rate of taxation was two per cent., that was the excess of rate over the rate on shares of State banks not taxed at all.

It is objected that insurance companies are taxed on their capital, and that the United States bonds held by them, if any, are exempt from taxation. But Congress has made nerequirement as to such corporations. They are neither 'banking associations,' nor 'individual citizens.'

It was the policy of Congress to place the national banks upon an equal footing with the State banks with which they were to come in competition. It allowed the national banks to be taxed on 'all their shares,' but required that the tax should not exceed the rate imposed on the shares of State banks.

The national banks were not to be placed in competition with insurance companies, and needed no special protection as to them.

To protect them, however, against a possible abuse-a legislation which might discriminate unjustly, by authorizing a greater rate per cent. to be assessed on bank shares than on the taxable property of individual citizens,-the proviso last discussed was adopted.

We suppose that the only safeguards attempted to be secured by Congress at all necessary to the protection of the national banks were the two following:

1st. Fairness of competition with State banks.

2d. No discriminating abuse of the taxing power on the rate per cent. as compared with taxable individual capital.

There was no necessity, therefore, for any provision in the act of Congress as to insurance companies. Nor is any amendment called for. Insurance companies stand already upon the same footing as 'individual citizens.' Their taxable capital is taxed at the same rate as the shares of banks. And so it should be. It was the intention of Congress, as was said in Van Allen v. The Assessors, to subject 'all the shares' of banks to taxation, without deduction for any United States bonds they might hold, because they had availed themselves of the privilege given by that act to use the bonds in a way to secure large profits, but by a use neither contemplated nor permitted at the time of the original contract between the government and the bondholder.

But insurance companies had no such privilege and could make no such use of the bonds. They could only hold them as 'individual citizens' did, making no more on them than was agreed upon when the bonds were issued, viz., simple interest.

Mr. Justice NELSON delivered the opinion of the court.

These cases are writs of error to the Court of Appeals of the State of New York. The relator in the first is an owner of one hundred and fifty-two shares of stock in the National Bank of Commerce in New York.

The capital of the bank consists of one hundred thousand shares of one hundred dollars each, and which is invested in United States securities, and exempt from State taxation. The commissioners of taxes, in making their assessments, valued the shares at par, and imposed upon them the same rate of tax as was imposed upon other personal property in this city.

The commissioners, in their return to the certiorari, state that in estimating the value of the shares they made no deduction on account of the investment of the capital of the bank in United States securities. That in the valuation of the personal estate of individuals, these securities held and owned by them were deducted and the tax assessed on the balance; and the like deductions were made from the capital of insurance companies.

The assessment of this tax on the shares of the relator in the Bank of Commerce was carried to the Supreme Court of the State, and, after argument, was affirmed, and thence to the Court of Appeals, where the judgment of the Supreme Court was affirmed. The case is now here on error under the twenty-fifth section of the Judiciary Act.

The first objection taken to the legality of the tax is on the ground that the commissioners in the valuation of the shares refused to deduct the amount of capital of the bank invested in United States securities, and, hence, refused to regard this deduction in the valuation of the shares.

This question has heretofore been considered by this court, and, after full deliberation, determined, in the case of Van Allen v. The Assessors, and need not again be examined. That case was one of a large class of cases, which were very thoroughly argued, and received, at the time, the most careful examination of the court.

The next, and perhaps the only material question in the case, arises upon a construction of a clause in the first proviso of the forty-first section of the National Bank Act. After referring to the taxation of these shares by State authority, it provides: 'But not at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such States.'

It is argued that the assessment upon the shares of the relator is at a greater rate than that of the personal property of individual citizens, upon the ground that allowance was made on account of United States securities held and owned by them, when at the same time the deduction was disallowed to him.

The answer is, that upon a true construction of this clause of the act, the meaning and intent of the law-makers were, that the rate of taxation of the shares should be the same, or not greater, than upon the moneyed capital of the individual citizen which is subject or liable to taxation. That is, no greater proportion or percentage of tax in the valuation of the shares should be levied than upon other moneyed taxable capital in the hands of the citizens.

This rule seems to be as effectual a test to prevent unjust discrimination against the shareholders as could well be devised. It embraces a class which constitutes the body politic of the State, who make its laws and provide for its taxes. They cannot be greater than the citizens impose upon themselves. It is known as sound policy that, in every well-regulated and enlightened state or government, certain descriptions of property, and also certain institutions-such as churches, hospitals, academies, cemeteries, and the like-are exempt from taxation; but these exemptions have never been regarded as disturbing the rates of taxation, even where the fundamental law had ordained that it should be uniform.

The objection is a singular one. At the time Congress enacted this rule as a limitation against discrimination, it was well known to that body that these securities in the hands of the citizen were exempt from taxation. It had been so held by this court, and, for abundant caution, had passed into a law.

The argument founded on the objection, if it proves anything, proves that these securities should have been taxed in the hands of individuals to equalize the taxation; and, hence, that Congress by this clause in the proviso intended to subject them, as thus situated, to taxation; and, therefore, there was error in the deduction. This we do not suppose is claimed. But if this is not the result of the argument, then, the other conclusion from it is, that Congress required that the commissioners should deduct the securities, and at the same time intended the deduction, if made, should operate as a violation of the rate of the tax prescribed. We dissent from both conclusions, and think a sound construction of the clause, and one consistent with its words and intent, is also consistent with all the acts of Congress on the subject.

The commissioners, in their return, state that insurance companies created under the laws of the State, and doing business in the city of New York, were respectively assessed upon the balance of their capital and surplus profits, liable to taxation, after deducting therefrom such part as is invested in United States securities.

Another objection taken is, that the taxation of the shares of the relator is illegal, on account of this deduction,-it being a departure from the rate of assessment prescribed in the clause already cited.

The answer is, that this clause does not refer to the rate of assessments upon insurance companies as a test by which to prevent discrimination against the shares; that is, confined to the rate of assessments upon moneyed capital in the hands of individual citizens. These institutions are not within the words or the contemplation of Congress; but even if they were, the answer we have already given to the deduction of these securities in the assessment of the property of individual citizens is equally applicable to them. These companies are taxed on their capital, and not on the shareholder, at the same rate as other personal property in the State. There is not much danger to be apprehended of a discriminating tax in their favor, prejudicial to the rights or property of the citizen; and, of course, to the rights of the shareholders in these national banks, who stand on the same footing.

The relator in the second case, Ralph Mead, is the holder and owner of twenty-five shares of stock in the Corn Exchange Bank, in the city of New York, incorporated under the laws of the State.

The act of April 23d, 1866, imposed a tax on the shares of these banks.

It is insisted that the tax is illegal on account of the refusal of the commissioners to deduct the United States securities in which a portion of the capital stock of the bank was invested.

The general question was distinctly presented in the bank cases of the last term, of which Van Allen v. The Assessors was one of the class, and disposed of. It was there said: 'But, in addition to this view, the tax on the shares is not a tax on the capital of the bank. The corporation is the legal owner of all the property of the bank, real and personal; and within the powers conferred upon it by the charter, and for the purposes for which it was created, can deal with the corporate property as absolutely as a private individual can deal with his own. . . . The interest of the shareholder entitles him to participate in the net profits earned by the bank, in the employment of its capital, during the existence of its charter, in proportion to the number of his shares; and upon its dissolution or termination, to his proportion of the property that may remain, of the corporation, after the payment of its debts. This is a distinct, independent interest or property, held by the shareholder like any other property that may belong to him;' and, we add, of course, is subject to like taxation.

It was supposed, on the argument, that this principle was in conflict with that which governed the decision of this court in the case of Gardner v. The Appeal Tax Court, but this is a mistake. That case turned upon the construction of an act of Maryland exempting the bank from taxation on account of a large bonus to the State for the extension of the charter. This court held, that upon a true construction of the act, the stockholders were within the scope of the exemption. The court say: 'In whatever way we examine the acts of 1813 and 1821, we are of opinion that it appears from the eleventh section in those acts, to have been the intention of the legislatures which passed them, to exempt the stockholders from taxation as persons, on account of the stock which they owned in the banks.'

Some other questions were discussed on the argument, besides those we have noticed, but they are questions of which this court cannot take cognizance. We have examined all of them that are here under the twenty-fifth section of the Judiciary Act.

AFFIRMED.

In concurrence with my brothers Wayne and Swayne, I dissent from the opinion just read. The reasons of dissent sufficiently appear in our dissenting opinion in the case of Van Allen v. The Assessors, read at the last term, and we do not think it necessary to repeat them.


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Graham v. United States (71 U.S. 259)

ON the 22d of April, 1841, a grant of land was issued to one Mayors by the Governor of California. The grant describes the land granted as that formerly occupied by Francis Moss, and known by the name of Zayante, bordering on the village of Brancoforte and Mission of Santa Cruz, and as being in extent 'longitudinally one league, and latitudinally one-half league, more or less,' as explained by an accompanying diagram.

This grant was transferred to the appellants by the grantee, and was by them presented to the Board of Land Commissioners for confirmation, and was confirmed by the board on the 26th of June, 1855. An appeal taken from the decree by the United States was withdrawn on the 9th of February, 1857, and by consent of the district attorney, upon instructions from the Attorney-General, a decree was entered on that day, by the District Court, giving leave to the claimants to proceed upon the decree of the board as a final decree. In the proceedings before the board the claimants produced an original record of juridical measurement, from which it appeared that the grantee was formally put in possession of the premises granted, by the proper officer, to the extent of one square league in length by three thousand varas in width.

The decree of the board describes the land as follows: 'The land of which confirmation is made is situated in the County of Santa Cruz, and is known by the name of Zayante, being the same which is now held and occupied by the claimants, and is of the extent of one league in length, and a half league in width, a little more or less, as shown by the original grant, record of juridical possession, and map filed in the case, to all of which reference is hereby made for a more particular description.'

In surveying the land confirmed, the Surveyor-General of the United States for California did not follow the measurement contained in the record of juridical possession. The District Court, for that reason, set it aside, and ordered a new survey which should correspond with such measurement. Such survey being made was approved by the decree of the District Court, October 26th, 1863. From this decree the present appeal was taken, and the question presented is, whether this survey embraces the land granted and confirmed.

Mr. Reverdy Johnson, for the appellants.

Mr. Wills, contra.

Mr. Justice FIELD delivered the opinion of the court.

title: Graham v. United States (71 U.S. 259)


text: Talk:Graham v. United States (71 U.S. 259)


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Graham v. United States (71 U.S. 259)/Opinion of the Court

As we have had occasion heretofore to observe, the Mexican law, as well as the common law, made a formal delivery of possession, or livery of seizin of the property, essential, after the execution of a grant, for the investiture of the title. This proceeding was usually taken by the magistrate of the vicinage, with assisting witnesses, in the presence of the adjoining land proprietors, who were summoned for the occasion. As preliminary to the actual delivery of possession, the land had to be measured and its boundaries established, when there was any uncertainty in the description of the premises. Various regulations for the guidance in these matters of the magistrates were prescribed by law. That which concerns the present inquiry is that they required the magistrate to preserve a record of the measurement, and of all other steps of the proceeding, to have the same attested by the assisting witnesses, and to furnish an authentic copy to the grantee. By this proceeding-called in the language of the country the delivery of juridical possession-the land granted was separated from the public domain, and what was previously a grant of quantity, become a grant of a specific tract.

The record of a proceeding of this nature must necessarily control the action of the officers of the United States in surveying land claimed under a confirmed Mexican grant.

In the present case, juridical possession of the land had been delivered to the grantee, and the record was produced and given in evidence. The first survey of the land made by the Surveyor-General of the United States for California, after the confirmation, did not conform to the measurement shown by this record. The District Court, for that reason, set the survey aside, and directed a new survey, which should correspond with that measurement.

To the application of the appellants for a change in the location, the District Court held that there were insuperable objections presented by the action of the officers under the former government, and that it was the duty of the court to locate the land according to the measurement made by the alcalde, and signed by him and the assisting witnesses in the record of proceedings upon the delivery of possession.

We fully concur in this view with the District Court, and, therefore,

AFFIRM ITS DECREE.


text: Talk:Graham v. United States (71 U.S. 259)/Opinion of the Court


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Brown v. Bass

APPEAL from the Circuit Court of the United States for the Southern District of Mississippi.

A bill was filed in the court below to foreclose a mortgage executed by C. R. Bass, now deceased, and Eugenie his wife, on the 22d November, 1851, to Brown, to secure the payment of two promissory notes-one for the sum of $1704.03, and the other for $1703.16-payable respectively 15th January, 1854, and 1855, at a house in New Orleans.

The answer set up, by way of defence, in substance, that Brown, to whom the mortgage and notes were given, was not the legal or equitable owner of the same; but, on the contrary, that the property in them belonged to the Bank of Mississippi, and that the transaction out of which they arose was illegal, and the notes and mortgage in the hands of Brown void. The court below sustained the defence; and the case was now here for review.

''Messrs. Carlisle and McPherson for the appellant. Mr. Reverdy Johnson, contra''.

Mr. Justice NELSON delivered the opinion of the court, stating previously the case.

title: Brown v. Bass


text: Talk:Brown v. Bass

title: Talk:Brown v. Bass


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Brown v. Bass/Opinion of the Court

The case is this: In the year 1840, C. R. Bass, the husband, being indebted to the Bank of Mississippi for a considerable amount, gave his notes for the debt, secured by a mortgage of certain real estate in Washington County, State of Mississippi. In 1843, Brown Brothers & Co. filed a creditor's bill against the bank in the Court of Chancery in the State, obtained an injunction, and the appointment of a receiver, with authority to proceed and collect the debts due the bank, and among others this debt of C. R. Bass. At this time Mrs. Bass had become the owner of the equity of redemption of the mortgage to the bank, and was desirous of arranging the suit instituted by the receiver to foreclose the same. An arrangement was agreed on accordingly between her and the receiver, and Brown Brothers & Co., the complainants, by which the notes and mortgage of C. R. Bass were given up to her, in consideration of which she and her husband made to Brown, the complainant, a member of the firm of Brown Brothers & Co., a draft and three promissory notes, amounting in the whole to the sum of $6652.58, secured by mortgage, which mortgage and two of the notes (the draft and the other having been paid) are now the subjects of this controversy.

The receiver, in making this arrangement on behalf of the bank, obtained a credit on a judgment of Brown Brothers & Co. against it for the whole amount of the indebtedness of C. R. Bass, the husband, a sum exceeding $8000. This judgment against the bank amounted to about $159,000, constituting at least two-thirds of all its indebtedness. By this arrangement Mrs. Bass saved more than $1500, and also procured forbearance on her debt. C. R. Bass owed the bank, and the bank, Brown Brothers & Co. The latter accepted the indebtedness of Bass, and accounted for it to the bank by reducing its indebtedness to that amount. This transaction took place in November, 1851, when the notes and mortgage in question were given. The creditor's bill of Brown Brothers & Co. had been commenced in June Term, 1843, and after a litigation of some thirteen years the bill was dismissed for want of jurisdiction, in October, 1856. The grounds of the dismissal were, that the judgment at law of Brown Brothers & Co. had not been obtained and execution issued and returned before the commencement of the suit. The receiver had been appointed at the June Term of the court in 1844, and consequently had been engaged in collecting the assets of the bank and converting them into money, to be applied in discharge of its indebtedness, upwards of twelve years at the time the bill was dismissed.

The defence in the case rests upon the effect of the decree dismissing the bill in respect to the past acts of the receiver, in the collection of the debts of the bank, in the settlement with its debtors, and in the general management of its assets for the period mentioned.

On the part of the defendant it is insisted that his acts were void, and are to be so regarded in all subsequent dealings with the assets since the dismissal of the bill; and hence, that the adjustment of the debt of C. R. Bass and the taking of the new securities to Brown were without authority and illegal, or if legal, that the new securities belong to the bank and not to Brown. In order to test the force and validity of these positions it is material to bring into view an other branch of this case.

After the dismissal of the bill, and in January, 1857, it was ordered, among other things, that the cause should be retained in court for the purpose of proceeding against the receiver, to enforce and close his account, and to compel the return of the assets of the bank, or their proceeds, into court, and the court recalled a previous order vacating his appointment. And on the 27th January, 1855, it was, among other things, ordered by the court that the receiver should render an account, and 'that he should bring into court all notes, bills, choses in action, and moneys, and all other property which came into his hands, and the proceeds thereof, as well as all securities, notes, bonds, liens, mortgages, as he may have taken and received to secure or in payment of any of said liabilities which came into his hands,' &c.

And again, in December, 1857, the receiver was ordered to deliver into court 'all notes, bonds,' &c., 'and securities of every kind that he may have taken or received by way of substitution or in payment or compromise of any of the debts, notes, choses in action, or securities of any kind which came into his hands as receiver.'

The receiver, in his report, on the 7th April, 1857, in pursuance of these orders, states that, acting in good faith, and believing that he had power to do so, and with the consent of the complainants in that suit, who, as shown by the answer of the bank, were the principal creditors, and in fact the only creditors, with the exception of note-holders and depositors to a small extent, whose claims had been almost if not entirely extinguished by him, and, as he believes, with the approbation of all parties, he proceeded, by compromises and settlements with various persons, debtors of the bank, instead of collections by law, which were wholly impossible, to settle the various amounts, &c.; that many of the settlements were made with the directors themselves, who were among the principal debtors of the bank. He proceeds:

'Your receiver is advised that if he did not have the power to make said settlements and compromises, the assets so by him arranged and disposed of would still remain the property of the bank; but that he is unable to return the property, for the reason that he is not in possession of the same, having parted with the possession in good faith and in discharge of a supposed duty (in settling the affairs of the bank), and that the court will not require of him a legal impossibility by compelling him to teturn what he has no control of.'

He further states, that he executed a receiver's bond in the sum of $300,000, with undoubted security, in court, and that the rights of any parties to said assets cannot be injured. That many of the settlements and arrangements were made by Brown Brothers & Co., complainants in the creditors' bill, with directors of the bank, and that transfers were made by the complainants in many instances, as will be seen, of portions of this judgment, on the faith of which your receiver gave up the assets thus settled and arranged, believing that in law and equity he was bound to do so. In other cases the debtors of the bank, and among them some of the directors, made compromises with the complainants; and in such cases your receiver delivered to the complainants the evidences of the indebtedness of such debtors, on obtaining a credit for the full amount of such assets on the judgment.

He closes the report by returning all the assets in his hands undisposed of, and which were described in the statements and exhibits thereinafter referred to; also, the circulation of the bank which he had taken up, and which, if not all, is nearly all of the circulation that was issued by the bank,

Exceptions were afterwards taken of said bank, of any magnitude, is the debt due the complainants.

Exceptions were aftertwards taken to this report by the bank, and allowed. It is not material specially to refer to them. And in November, 1859, it was adjudged and decreed that the receiver pay forthwith into court the sum of $125,243.85, the amount of money in his hands, as receiver, unaccounted for; and also the further sum of $227,044.29, being the amount of bonds, bills, assets, &c., which came into his hands as receiver, and unaccounted for amounting in all to the sum of $349,259.14; and the receiver having failed to pay into court this sum as ordered, a decree was entered, directing a writ of scire facias against his sureties, among whom were the complainants, Brown Brothers & Co. The sum adjudged against the receiver and his sureties included the assets surrendered on compromises and settlements, and which had been applied upon the judgment, and, of course, embracing the indebtedness of C. R. Bass to the bank, the settlement in respect to which is the subject of controversy in this suit.

The question upon this state and posture of the case is whether or not the bank is entitled to a remedy against the receiver and his sureties for this old indebtedness of C. R. Bass, deceased, thus compromised and satisfied by the new and substituted securities, and also against the estate or legal representatives of the deceased, founded upon the original securities, which it is claimed were surrendered without authority?

In our judgment it is not. Even assuming that the compromise and surrender of these old securities and the substitution of the new were not authorized, and might have been set aside and annulled, the bank having elected to charge the receiver with this indebtedness, has thereby affirmed the transaction, and left the parties to the arrangement as they stood when it was entered into.

This result, we think, is clearly deducible from the proceedings on the part of the bank and the decrees of the court. From the report of the receiver, it appears that as it respects this debt, and others in the like condition, it was not in his power to produce before the court either the original or substituted securities. The original were in the hands of the debtors of the bank, to whom they had been surrendered, and the new securities in the hands of third persons to whom they had been delivered. The bank, on the supposition that the acts of the receiver were void, could have pursued its remedy against the original debtors, and perhaps against the persons holding the new securities, if not negotiable and in the hands of bon a fide holders for value, or it could have proceeded by attachment against the receiver and dealt with him until he had exhausted all the means in his power to repossess himself of these securities. But no steps in this direction have been taken. No intimation has been given by any proceeding under the decree dismissing the bill, or otherwise, of an intent to disturb the debtors of the bank or the adjustments by the receiver. It has accepted the proposition of this officer in his report to look to his bond for indemnity against any wrongs or losses sustained in the discharge of the duties of his office. Indeed, it is manifest that a resort to the original debtors or to the substituted securities for the purpose of collecting or realizing the assets would have been ruinous, not only to the bank but to the debtors. The receiver had been diligently engaged for some thirteen years in the service and had exhausted the resources of the debtors. A second call on them would have been hopeless.

The bank was insolvent, and proceedings were pending to take away its charter. Its organization had been given up as early as 1844, and the business abandoned. In this condition the receiver, under the order of the court, was the only person to deal with its assets, and to administer upon them in a way most beneficial to all concerned.

No doubt this obvious view of the affairs of the institution, together with the complications and inextricable confusion into which the assets had become involved by the dismissal of the chancery suit, led to the election of a remedy against the receiver in preference to a resort against the original debtors.

Another reason for considering the bank concluded by the election is, that no notice has been given to the debtors of an intention to look to them for payment, and at the same time forbidding payment to the holders of the new securities. This notice it was a duty to give, in all fairness, to prevent loss to the debtors. Seven years have elapsed since the decree against the receiver. Doubtless a large portion of these new securities have, in the meantime, been paid. The present appellee, Mrs. Bass, has already paid more than half of her indebtedness upon the new securities.

This absence of any claim against the debtors, as well as against the holders of the substituted securities, shows that great injustice would necessarily result from permitting the defence relied on in the present case. Full value has been received for the notes and mortgage in controversy by Mrs. Bass and by the bank. The old securities were surrendered to her and an equal amount of the indebtedness of the bank extinguished. She has enjoyed the consideration thus paid for some fourteen years without any adverse claim or attempted disturbance of the arrangement. There has been no eviction or disturbance of possession by an attempt to foreclose the old mortgage against the lands covered by it. She has been in the undisturbed enjoyment of the rents and profits for aught that appears down to the present time. Even as respects Mrs. Bass, and independently of the foregoing considerations, in analogy to the rule applicable to the sale of real estate, or any interest therein, which obliges the purchaser to pay the purchase-money according to his contract, notwithstanding the failure of title, unless evicted or the possession disturbed by paramount title, the payment of the demand in the present case, we think, should be enforced. The principle is as applicable to the sale of personal chattels as to that of real property.

Upon the whole, without pursuing the case further, our conclusion is, that the defendant below has failed to establish the want of title in the complainant to the mortgage which he is seeking to foreclose and the notes accompanying the same, or a title in the Bank of Mississippi, by force of which she may be subjected to a second payment of the same indebtedness. She does not deny but that she owes the debt, nor does she seek to avoid the payment. The question which is important to her and which she desires to have determined is as to the proper party to receive the payment. We think the complainant is that party.

The decree of the court below reversed and the cause remitted, with directions to that court to enter a decree for the complainant in conformity with this opinion.

DECREE ACCORDINGLY.

title: Brown v. Bass/Opinion of the Court


text: Talk:Brown v. Bass/Opinion of the Court

title: Talk:Brown v. Bass/Opinion of the Court


text:
Mitchell v. Burlington

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

Mr. Grant, for the plaintiff in error; Mr. Ewing, contra.

Mr. Justice CLIFFORD delivered the opinion of the court.

title: Mitchell v. Burlington


text: Talk:Mitchell v. Burlington

title: Talk:Mitchell v. Burlington


text:
Mitchell v. Burlington/Opinion of the Court

Plaintiffs sued the corporation defendants, in a plea of debt, declaring on five bonds of one thousand dollars each, issued by the city on the 23d day of March, 1850, and made payable ten years after date, to E. W. Clark, Brother & Co., or bearer, with interest on the same at ten per cent. per annum. The bonds were signed by the mayor and recorder of the city, and purport to have been issued in pursuance of an ordinance of the city, 'to provide for procuring and investing the loan of ten thousand dollars to the city, to be invested in the stock of the Burlington and Mount Pleasant Plank-road Company, and for other purposes.' Declaration alleged that the plaintiffs became the lawful owners and holders of the bonds before they were due, and that the defendants were liable to pay to them the amount of the bonds.

Defendants appeared and pleaded, among other defences, as set up in the answer, that the plank-road company mentioned in the declaration was a private corporation; that the bonds were executed for the purpose of procuring money to invest in the stock of that company, and that the obligees of the bonds purchased the same, and loaned the money, well knowing that the proceeds of the bonds were to be used for that purpose. They also set up the defence that the officers of the city had no authority to issue the bonds, and that the bonds, as against the defendants, were void.

Parties defendant, under the rules of practice which prevail in the court below, may set forth in the answer as many causes of defence as they may have; but when the facts stated in the answer, or any division of the same, are not sufficient to constitute a defence, the plaintiff may demur. Neither party is allowed to demur generally, but the requirement in all cases is that the demurrer must distinctly specify, as the grounds of objection, the matters of error intended to be argued as defects in the pleadings, and no joinder in demurrer is required.

Pursuant to those rules of pleading, the plaintiffs demurred to the answer of the defendants, and assigned, among others, the following causes of demurrer:

1. That the answer did not allege that the plaintiffs knew for what purpose the bonds were to be issued, or to what use the proceeds of the same were to be applied.

2. That the answer is defective, because the allegation that the plank-road company was a private corporation, contradicts the law of the State, of which the court will take judicial notice.

3. That the answer is insufficient, because the defendants, in their corporate capacity, had a right to borrow money, upon a proper vote of their citizens, for any public purpose, and that the construction of the plank-road mentioned in the pleadings was a public purpose within the meaning of their charter; and that, inasmuch as the money was not borrowed for any illegal purpose, the defence set up was no bar to the action.

Such being substantially the state of the pleadings, the court overruled the demurrer of the plaintiffs, and decided that the answer of the defendants disclosed a good defence to the action; and the plaintiffs electing to stand on that demurrer, judgment was rendered for the defendants, and the plaintiffs sued out this writ of error.

1. The pleadings raise the question as to the validity of the bonds mentioned in the declaration, and the effect of the decision in the court below was that they were issued without authority. Whether valid or invalid, it is certain that they were issued under the provision in the charter of the city which authorized the corporation defendants to borrow money for any public purpose, whenever, in the opinion of the City Council, it should be deemed expedient to exercise that power. Certain important conditions, however, are annexed to the exercise of the power, as appears by the provision itself, but it is unnecessary to examine those conditions, as it is conceded by the defendants that there is no formal objection to the exercise of the authority. All the conditions annexed to the exercise of the power, as expressed in the provision, having been fulfilled, the only questions which, under any circumstances, could arise in the case, are whether the provision is a valid one, and if so, whether the power conferred was exercised for a purpose within the meaning of the provision? Questions of a similar character have been repeatedly before the court, and they have uniformly been decided in the same way. Present defendants presented the same questions to this court at the last term, and the court held that the power to borrow money for any public purpose, within the meaning of the provision, was conferred by the charter in express terms, and that there was nothing in the constitution of the State which limited the authority so conferred, or rendered it invalid. Satisfied with that conclusion, it is not deemed necessary to assign new reasons in its support, or to repeat those adduced in our former opinion.

Proceeds of the bonds in that case had been appropriated in the construction of a railway, and the court held that railways were so far to be considered as in the nature of improved highways, and as indispensable to the public interest and the successful pursuit even of local business, that a State legislature might authorize the towns and counties of a State through which a railway passes to borrow money, issue their bonds, subscribe for the stock of the company, or purchase the same, with a view of aiding those engaged in constructing or completing such a public improvement, and that a legislative act conferring such authority was not in contravention of any implied limitation of the power of the legislature. Substantially the same decision, as to the power of the legislature, was made in the case of Gelpcke v. The City of Dubuque, and it is proper to remark that the opinion of the court in that case was chiefly founded upon a provision in the charter of that city, expressed in the same words as the provision under consideration in this case. Same question was presented to this court, on a second occasion, at the last term, and the court unanimously held that, unless restrained by the organic law, the legislature of a State had the right to authorize a municipal corporation to take stock in a railroad or other work of internal improvement, to borrow money to pay for it, and to levy a tax to repay the loan.

2. Applying these decisions to the present case, it is clear that nothing remains open for discussion except the question, whether the bonds issued to aid in constructing a plank-road fall within the same principle as those issued granting aid to a railway? Plank-roads are as much highways as railroads, and if authorized to be constructed by the legislature, they are public improvements. Money borrowed to aid in the construction of such a work by a municipal corporation is borrowed for a public purpose, and if the road leads from, extends to, or passes through the limits of the corporation furnishing the aid, the bonds of the corporation given as the means of raising the money, are within the power conferred by that provision.

3. Attention is also called to the fact, that the courts of the State have recently decided, in several cases, that the city had no authority to issue the bonds; and reference is made to the decisions of this court, where it is held that this court follows the decisions of the State courts in the settled construction of their constitutions and statutes.

Similar suggestions, in this class of cases, have several times been presented to this court, and the court has on two occasions carefully examined the subject, and shown to a demonstration that they cannot avail where the bonds, at the time they were issued, were valid by the constitution and laws of the State, as expounded by the courts of the State. Discussion upon that topic is unnecessary, as the point is controlled by those decisions.

For these reasons, we are of the opinion that the Circuit Court should have sustained the demurrer of the plaintiffs to the answer of the defendants.

The judgment of the Circuit Court is, therefore, reversed, with costs, and the case is remanded for further proceedings in conformity to the opinion of this court.

JUDGMENT ACCORDINGLY.


text: Talk:Mitchell v. Burlington/Opinion of the Court


text:
Larned v. Burlington

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

Mr. Grant, for the plaintiff in error; Mr. Ewing, contra.

Mr. Justice CLIFFORD delivered the opinion of the court.

title: Larned v. Burlington


text: Talk:Larned v. Burlington

title: Talk:Larned v. Burlington


text:
Larned v. Burlington/Opinion of the Court

The present case, in many of its features, is like the preceding. It was an action of debt to recover the amount of two bonds, each for one thousand dollars, with interest at the rate of eight per cent. per annum. They were issued on the seventeenth day of June, 1852, under an ordinance of the city to authorize a loan, to be invested in the stock of the plank-road company mentioned in the declaration. Allegations of the declaration were substantially the same as in the preceding case. Corporation defendants appeared and demurred to the declaration and showed for cause, (1) That the mayor and recorder of the city had no power to issue the bonds; (2) That the section of the charter of the city mentioned in the declaration conferred no authority on the city to issue the bonds for the purpose stated; (3) That the purpose for which the bonds were issued as alleged, was not a public purpose.

Parties were heard, and the court sustained the demurrer, and the plaintiff electing to stand upon the declaration, the court rendered judgment for the defendants and the plaintiff removed the cause into this court by writ of error. Both parties agree that the questions presented for decision in this case are the same as in the preceding case and it must be decided in the same way. All of the reasons assigned for the decision in that case are equally applicable in this case, and we have but few additional remarks to make in support of our conclusion. Cases involving the validity of the bonds given by municipal corporations as material aid in the construction of railroads, have frequently been before the court, and whenever they have come up they have uniformly received the attentive consideration of the court. Defects in the proceedings of the board of county commissioners were suggested in the case of Knox County v. Aspinwall; but the court held that the board were the proper judges whether or not a majority of the votes in the county had been cast in favor of the subscription to the stock, and that where the bonds on their face imported a compliance with the law under which they were issued, the purchaser and holder for value was not bound to look further for evidence of a compliance with the conditions in the grant of power.

Precisely the same rule was applied to cities in the case of Bissel v. Jeffersonville, #fn-s-s where it was again held that it was too late to make such objections as against innocent holders, or even against the railroad, when it appeared that the bonds purporting on their face to have been executed by authority, had been issued and delivered. Very stringent application of the same rule was made in the case of Mercer County v. Hacket, #fn-s-s-s which is the last of the series to which reference will be made,-all of these cases, proceeding upon the ground that the construction of a railroad for travel and transportation was a public improvement, and that it was competent for the legislature to authorize municipal corporations to furnish material aid for such a work, and we have no doubt that the views of the court were entirely correct. Like the preceding, the present case has respect to a plankroad, but we repeat, that where such an improvement is authorized by the legislature and is connected with the municipality issuing the bonds, the case properly falls within the same rule. It follows that the declaration was sufficient, and that the demurrer should have been overruled.

The judgment of the Circuit Court is therefore reversed, with costs, and the cause remanded for further proceedings, in conformity with the opinion of this court.

JUDGMENT ACCORDINGLY.


text: Talk:Larned v. Burlington/Opinion of the Court


text: Cummings v. Missouri

title: Cummings v. Missouri


text: Talk:Cummings v. Missouri

title: Talk:Cummings v. Missouri