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

As seen by the statement of the case, each breach of the condition of the bond in suit, of the class designated by odd numbers, consists in the omission of the distiller to make the required entries in the book provided in sect. 3303. The petition alleges that, by 'means of the said omission,' the distiller was enabled to defraud and did defraud the United States of the tax imposed by law upon the spirits produced at his distillery. The answer denies this allegation, and avers that whatever fraud was committed upon the United States was effected through other means. The demurrer admits that averment to be true, and the question is thus presented whether a party seeking damages for a specified breach of duty is entitled to judgment in his favor, when admitting on the record that whatever damages he may have sustained resulted from other causes.

The case is not brought for any tax alleged to be due to the United States, which they would be entitled to recover, whatever the cause of its non-payment. In such a case it would be of no consequence whether the cause assigned for the default of the party was the true one or not; the obligation to the government would be the same. Here a specific omission of duty on the part of the distiller is alleged, for which it is sought to charge both him and his sureties on their bond. Their liability is only to the extent of the damages sustained. If none resulted to the United States from the omission stated, none can be recovered either against him or his sureties. The law does not affix any specific penalty for the omission. If, therefore, the allegations of the petition were simply traversed, the government would be compelled to prove, not only the omission complained of, but that by means of it the tax on the spirits produced was lost, which constitutes the damages alleged. It would not be sufficient to show that by other omissions of duty the government was thus defrauded, for that would be to change the entire ground of the action, the specific gravamen of the complaint.

Now, the demurrer admits that the ground of complaint-the specific breach of duty stated-did not cause the damages charged, but that whatever damages were sustained by the United States were effected by other means. Therefore the action, so far as damages are claimed for the particular omission of duty mentioned, must fail.

It is true that the breaches of duty, which are stated by the defendants in their answer as the means by which the United States were defrauded, are a series of stupendous frauds, for which the guilty parties deserve severe punishment; still they were none the less available as a defence to an action charging to other causes the damages which they produced. It is certainly one way of defending against the charge of a wrongful act for which damages are sought, to show that, notwithstanding the wrong committed, the damages resulted from other causes, however objectionable a pleading might be with averments to that effect instead of a distinct traverse of the allegations of the complaint. If, for example, a party should charge another with inflicting upon his person a wound by which he lost an arm, it would be a good defence to show that the loss resulted from unskilful medical treatment or neglect and not from the wound inflicted. So here, it is enough for the sureties to show that the loss to the government was produced by other means than the particular breach of duty by their principal, of which the government complains. It is of no consequence to them, so far as the present action is concerned, how many other sins of omission or commission he may have committed, if they can show that the particular damage claimed was not the result of the one charged.

As to the breaches of duty in the assignments of the class designated by even numbers, we are of opinion that the compromise with the government pleaded is a complete defence against a recovery of the penalty claimed. Each breach alleged consists in the removal by the distiller of spirits produced at his distillery to a place other than the distillery warehouse, without first paying the tax imposed thereon. The penalty prescribed for this offence was intended as part punishment for it, and may be enforced, equally as the additional fine and imprisonment, by criminal prosecution. It was not intended in any sense as a substitute for the tax required, or as any abatement of it when recovered. This is evident from the fact that it may be applied to those who have aided or abetted in the removal, whether the distiller or one having no interest in the spirits. So, too, the payment of the tax may be made after the removal, and yet the penalty not be discharged; it could still be imposed upon the offending party.

It may be questioned whether the only mode for a recovery of the penalty is not by indictment; but assuming that it may be recovered in a civil action, the compromise pleaded covers the penalties here claimed. Two indictments have been found against the distiller, one of which contains counts for the specific offences, which constitute the whole ground and cause of the present action. Under the authority of an act of Congress, a compromise with the government was effected, by which a specific sum was paid by him, and received by the government, 'in full satisfaction, compromise, and settlement of said indictments and prosecutions,' which were accordingly dismissed and abandoned. That compromise necessarily covered the causes or grounds of the prosecutions, and consequently released the party from liability for the offences charged and any further punishment for them. The answer avers that the removals of distilled spirits set forth in the assignment of breaches of the condition of the bond are the same removals recited in the indictments, and that all the evidence necessary to establish the breaches assigned would have been necessary and competent under the indictments. The two proceedings, the civil action and the criminal prosecution, so far as they relate to offences under sect. 3296, are based upon the same transactions.

The question, therefore, is presented whether sureties on a distiller's bond shall be subjected to the penalty attached to the commission of an offence, when the principal bas effected a full and complete compromise with the government, under the sanction of an act of Congress, of prosecutions based upon the same offence and designed to secure the same penalty.

Admitting that the penalty may be recovered in a civil action, as well as by a criminal prosecution, it is still as a punishment for the infraction of the law. The term 'penalty' involves the idea of punishment, and its character is not changed by the mode in which it is inflicted, whether by a civil action or a criminal prosecution. The compromise pleaded must operate for the protection of the distiller against subsequent proceedings as fully as a former conviction or acquittal. He has been punished in the amount paid upon the settlement for the offence with which he was charged, and that should end the present action, according to the principle on which a former acquittal or conviction may be invoked to protect against a second punishment for the same offence. To hold otherwise would be to sacrifice a great principle to the mere form of procedure, and to render settlements with the government delusive and useless.

Whilst there has been no conviction or judgment in the criminal proceedings against the distiller here, the compromise must on principle have the same effect. The government through its appropriate officers has indicated, under the authority of an act of Congress, the punishment with which it will be satisfied. The offending party has responded to the indication and satisfied the government. It would, therefore, be at variance with right and justice to exact in a new form of action the same penalty. For, as it was justly said by this court in Ex parte Lange, speaking through Mr. Justice Miller, 'If there is anything settled in the jurisprudence of England and America, it is that no man can be twice lawfully punished for the same offence. And, though there have been nice questions in the application of this rule to cases in which the act charged was such as to come within the definition of more than one statutory offence, or to bring the party within the jurisdiction of more than one court, there has never been any doubt of its entire and complete protection of the party where a second punishment is proposed in the same court, on the same facts, for the same statutory offense. The principle finds expression in more than one form in the maxims of the common law.' 18 Wall. 163, 168.

Judgment affirmed.

NOTE.-In United States v. Ulrici, error to the Circuit Court of the United States for the Eastern District of Missouri, which was submitted at the same time, MR. JUSTICE FIELD delivered the opinion of the court.

This case involves substantially the same questions considered in United States v. Chouteau. Here the principal on the bond in suit pleaded guilty to the indictments found against him, and was fined $1,000 and imprisoned for one day. The punishment inflicted was for offences which are set forth in the petition in this action as breaches of the condition of the bond. This difference in the two cases does not affect the principle upon which the first was decided. Upon its authority the judgment is

Affirmed.


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

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


text:
Cramer v. Arthur

ERROR to the Circuit Court of the United States for the Southern District of New York.

The facts are stated in the opinion of the court.

Mr. Lewis Sanders for the plaintiff in error.

Mr. Assistant Attorney-General Smith, contra.

MR. JUSTICE BRADLEY delivered the opinion of the court.

title: Cramer v. Arthur


text: Talk:Cramer v. Arthur

title: Talk:Cramer v. Arthur


text:
Cramer v. Arthur/Opinion of the Court

This is a suit against the collector of customs for the port of New York to recover back duties alleged to have been overcharged. In August and September, 1874, the plaintiff imported goods from Vienna, in Austria, chargeable with an ad valorem duty. The invoices upon which they were entered at the custom-house were made out in Austrian paper florins, in which currency they were purchased, and amounted to the sum of 10,163 71/100 florins. This was assessed and liquidated by the collector at the sum of $4,818, gold coin of the United States, by converting the same into Austrian silver florins at 45 77/100 cents for each paper florin, and 47 6/10 cents, gold coin of the United States, for each Austrian silver florin, making the duty equal to $1,930.67. The plaintiff paid the duty under a written protest, addressed to the collector, in which he assigned the following ground of objection, namely: 'In computing the amount in United States money of foreign dutiable value of the merchandise covered by the said entries, you have estimated the value of the paper florin, being the currency in which invoices, upon which entries were made, were made out, to be greater than 40 cents. I claim that under existing laws and upon the fact that in computations at the existing laws the value of the paper florin therein specified should be estimated as of the value of 40 cents, and shall hold you responsible for the excess of duty thus illegally claimed and exacted.' The plaintiff having appealed to the Secretary of the Treasury, without effect, brought the present action to recover the alleged excess of duty exacted.

On the trial, the foregoing facts being proved, the plaintiff took the stand, and testified that he was in Vienna in 1873 and part of 1874, and that in those years, and for some time prior thereto, the silver florin was not in circulation in Austria, having ceased to be a standard or measure of value early in 1873, owing to the fact that silver had been demonetized by the German Empire, where it had previously been current; its place, as a standard, being taken by the 8-florin Austria-Hungarian gold piece; that by the official paper or gazette of the stock exchange of Vienna the silver florin was worth 45 46/100 cents in American gold coin in September, 1874, and the paper florin, 43 71/100 cents; that the actual value of the invoice in question was $4,442.56; that the amount of duty should have been assessed at $1,780.67; and that the excess paid and claimed is $150.

The plaintiff further exhibited in evidence a letter of the Secretary of the Treasury to the collector of customs at New York, dated Oct. 23, 1874 (a few weeks after the importation of the goods in question), in which he stated, amongst other things, that the department had authentic information that the silver florin had generally been thrown out of use, both as a standard and as currency, its place as a standard being taken by the 8-florin gold piece, which had its exact equivalent in the 20-franc gold piece of France; that under these circumstances it became necessary to review the former action of the department in determining the value of the florin of Austria for assessment of duty on imports, and to apply to the 8-florin gold piece and the paper florin the rules applied to all currencies the values of which are not declared in terms by some specific statute: the collector was, therefore, directed to accept the certificate of a consul of the United States at any point in Austria-Hungary as to the value of the paper florin relatively to the 8-florin gold piece and its equivalent in American gold dollars, as the true value for duty of any invoice of merchandise properly expressed in that currency.

The defendant gave in evidence the consular certificate of the United States consul at Vienna, attached to the invoice, in which it was stated that the true value of the currency of the Austria-Hungarian monarchy, in which the invoice was made out, was 45 77/100 cents estimated in United States gold, silver florin being 47 60/100 cents. He also gave in evidence an extract from the proclamation of the Secretary of the Treasury, made on the 1st of January, 1874, announcing the determinations of the value of foreign moneys made by the director of the mint under the act of March 3, 1873 (17 Stat. 602), which extract was as follows, to wit:--

'The following list of standard values of foreign currencies     in the money of account of the United States shall be used in      the computation of customs duties, until otherwise provided      by law or regulation:-- 'Foreign moneys of account and their values in United   States money of account. Austria, monetary unit, florin;  standard, silver; value in U.S. money of account, 47.60   [cents].'

Upon this evidence the court directed a verdict for the defendant, and the plaintiff excepted.

Since the transactions above mentioned took place, we have decided the case of The Collector v. Richards (23 Wall. 246), which arose about the same time, and in which some of the questions involved in the present case were determined. We there held that the act of March 3, 1873, which declared that the value of foreign coin, as expressed in the money of account of the United States, should be that of the pure metal of such coin of standard value; and that the values of the standard coins in circulation, of the various nations of the world, should be estimated annually by the director of the mint, and be proclaimed on the first day of January by the Secretary of the Treasury, superseded previous acts passed for fixing the value of foreign money, both in estimating the invoices of goods imported from foreign countries, and for other purposes. Prior to 1873, various acts had been passed fixing the value of foreign money in invoices, commencing with the collection act of 1789, by the eighteenth section of which the rates for estimating certain foreign coins and currencies were prescribed. 1 Stat. 41. By this act, amongst other things, the pound sterling was valued at $4.44. Various changes and additions were made in subsequent laws. Id. 167, 673; 2 id. 121; 5 id. 496, 625; 9 id. 14; 12 id. 207. In 1842, the value of the pound sterling, in computations for payments to the treasury and in appraising merchandise, was fixed at $4.84. The last general law relating to the values of other foreign moneys was that of May 22, 1846. 9 id. 14. By this act, amongst other things, the value of the florin of the southern States of Germany was fixed at 40 cents; the florin of the Austrian Empire and of the city of Augsburg, at 48 1/2 cents; and the franc of France, Belgium, &c., at 18 cents 6 mills. This was apparently the act upon which the plaintiff in his protest based his claim that the florin in his invoice should be estimated at 40 cents. It was this act under which the importer in The Collector v. Richards claimed that the franc should be estimated at 18 cents 6 mills. In that case we held that the act of 1846 was repealed by the act of 1873 (which expressly repealed all acts and parts of acts inconsistent therewith); and that, instead of a fixed and permanent valuation of foreign coins (which must often involve a departure from the true values), Congress had adopted the juster plan of having them subjected to annual revision by the director of the mint, and announced to the public by proclamation of the Secretary of the Treatury. And as the franc had been thus proclaimed to be worth 19 cents and 3 mills, we decided that the collector rightly adopted that valuation.

In the present case, the act of 1846, if it were in force, would not help the plaintiff, inasmuch as it fixes the value of the Austrian florin at 48 1/2 cents, which is a higher rate than that announced in the Secretary's proclamation of 1874. He seems, however, to have based his claim on the valuation, in the law of 1846, of the florin of the southern States of Germany, which was at 40 cents. But, since we have decided that that act was repealed by the act of 1873, it is unnecessary to examine it further.

That the florin is the standard money of account of Austria is as evident as that the pound sterling is the standard money of account of Great Britain. The plaintiff's own invoice is a proof of this. Whether represented by a corresponding coin of equal amount is of no consequence. It was only since the beginning of the present century that the pound sterling was thus represented; and yet its value was as fixed and certain before the sovereign was coined as since. Coin is the basis of the currency of both countries. The plaintiff concedes that the eight-florin gold piece is a standard coin of Austria; and he does not pretend that, according to this standard, the florin would be less than it was valued at in the proclamation of the Secretary of the Treasury. The silver florin was also formerly a standard coin in Austria, and the florin as a money of account originally derived its value therefrom. It was from this coin that the valuation of the florin was made by the director of the mint, as set forth in the proclamation of the Secretary. That valuation, so long as it remained unchanged, was binding on the collector and on importers, just as binding as if it had been in a permanent statute, like the statute of 1846, for example. Parties cannot be permitted to go behind the proclamation, any more than they would have been permitted to go behind the statute, for the purpose of proving by parol, or by financial quotations in gazettes, that its valuations are inaccurate. The government gets at the truth, as near as it can, and proclaims it. Importers and collectors must abide by the rule as proclaimed. It would be a constant source of confusion and uncertainty if every importer could, on every invoice, raise the question of the value of foreign moneys and coins.

But whilst the annual proclaimation of the determinations made by the director of the mint has taken the place of a permanent statutory valuation of foreign coins, it has no greater force than a statute would have. The question still remains, whether the fact that the invoice was made out in a depreciated currency entitled the plaintiff to a reduction, and, if it did, whether such reduction was refused by the collector.

The laws have always made provision for the case of invoices made out in depreciated currencies. In the collection act of 1799, the sixty-first section, which fixed the values of different foreign moneys, concluded with the following proviso: 'Provided, that it shall be lawful for the President of the United States to cause to be established fit and proper regulations for estimating the duties on goods, &c., imported into the United States, in respect to which the original cost shall be exhibited in a depreciated currency, issued and circulated under authority of any foreign government.' This proviso has always continued in force, and now constitutes sect. 2903 of the Revised Statutes. Such a law is the more necessary, in view of another provision, enacted in 1801 (2 Stat. 121) and continued in sect. 2838 of the Revised Statutes, directing that 'all merchandise subject to a duty ad valorem shall be made out in the currency of the place or country where the importation shall be made, and shall contain a true statement of the actual cost of such merchandise in such foreign currency or currencies, without any respect to the value of the coins of the United States, or of foreign coins by law made current within the United States in such foreign place or country.' It was the object of this law to compel the parties to show, in the invoices, the actual prices and cost of their goods, in the currency of the country where bought, and not leave it to them to make a pretended estimate of the cost in a coin valuation. It is true, the government is not bound by the invoice, but may have the value of the goods appraised. Rev. Stat., sects. 2904, 2907. Nevertheless, such invoices, exhibiting the actual transactions, and capable of being verified by oath, are essential instrumentalities in the prevention of fraud; and, in the absence of suspicious circumstances, usually furnish the basis for estimating the actual values of the goods. But since they are required to be expressed in the actual currency of the country of exportation, and since that currency may be depreciated, it is obvious that the authority given to the President by the act of 1799, to establish fit and proper regulations for estimating the duties when the goods are invoiced in such money, is very important. It was passed at a time when the nations of Europe were at war, and the United States was neutral. In England and France, and perhaps other countries, specie payments had been suspended, and currencies based on government credit had been adopted. The law seems to have had in view artificial money of this kind; a depreciated currency, not based on specie, but still 'issued and circulate under authority of the government.' But it has been liberally construed by the government; and the President, acting through the Secretary of the Treasury, has established regulations on the subject which are sufficiently broad to meet every proper case.

The regulation in force at the time of the importation in question was as follows, namely:--

'Where the standard value of a foreign currency has been     proclaimed by the Secretary of the Treasury, in the manner      provided by law, that value is to be taken in all cases in      estimating customs duties, unless collectors have been      otherwise instructed, or unless a depreciation of the value      of the foreign currency, expressed in an invoice from the      standard of that currency, shall be shown by consular      certificate thereunto attached.'

In the present case a consular certificate was, in fact, attached to the invoice in the following words, to wit:-- 'I, P. S. Post, consul of the United States of America,  do hereby certify that the true value of the currency of   the Austria-Hungarian Monarchy, in which currency the   annexed invoice of merchandise is made out, is 45 77/100   cents estimated in United States gold, silver florin   being 47 60/100 cents.

(Signed) 'P. S. POST.' [SEAL.]

In this certificate the consul assumes the value of the silver florin to be as it was proclaimed to be at the beginning of the year by the Secretary of the Treasury, namely, 47 60/100 cents; and, on this basis, he certifies that the value of the florin in the currency in which the invoice was made out was 45 77/100 cents; and this, as we understand the statement of the case, is the valuation adopted by the collector in assessing the duties in question. The plaintiff seeks to go behind this valuation, and to show that, at the time of the purchase of the goods, the value of the silver florin in Vienna, as quoted in the papers, and as exhibited by the actual rate of exchange, was less than 47 60/100 cents, namely, 45 46/100 cents, and that the value of the paper florin was 43 71/100 cents.

This we think the plaintiff cannot be allowed to do. The proclamation of the Secretary and the certificate of the consul must be regarded as conclusive. In the estimation of the value of foreign moneys for the purpose of assessing duties, there must be an end to controversy somewhere. When Congress fixes the value by a general statute, parties must abide by that. When it fixes the value through the agency of official instrumentalities, devised for the purpose of making a nearer approximation to the actual state of things, they must abide by the values so ascertained. If the currency is a standard one, based on coin, the Secretary's proclamation fixes it; if it is a depreciated currency, the parties may have the benefit of a consular certificate. To go behind these and allow an examination by affidavits in every case would put the assessment of duties at sea. It would create utter confusion and uncertainty. If existing regulations are found to be insufficient, if they lead to inaccurate results, the only remedy is to apply to the President, through the Treasury Department, to change the regulations. From the letter of the Secretary exhibited in this case, we infer that this was afterwards done, and that he made the desired change. But this change in the regulations does not affect prior transactions which took place before they went into effect. These transactions must be governed by the regulations in force at the time. It is of the utmost consequence to the government, and it is, on the whole, most beneficial to importers, that the value of foreign moneys should be officially ascertained, and that they should be fixed by a uniform method or rule.

Judgment affirmed.

title: Cramer v. Arthur/Opinion of the Court


text: Talk:Cramer v. Arthur/Opinion of the Court


text:
Auffm'ordt v. Rasin

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

The facts are stated in the opinion of the court.

Mr. Charles M. Da Costa for the appellants.

Mr. H. E. Davies, Jr., contra.

MR. JUSTICE MILLER delivered the opinion of the court.

title: Auffm'ordt v. Rasin


text: Talk:Auffm'ordt v. Rasin

title: Talk:Auffm'ordt v. Rasin


text:
Auffm'ordt v. Rasin/Opinion of the Court

On the fifth day of February, 1874, a petition in bankruptcy was filed in the proper court against Thomas Morrell and C. Cuyler Campbell, and they were duly adjudicated bankrupts. Rasin was appointed assignee, and brought the present suit, alleging that the defendants, Auffm'ordt & Co., had received by way of preference certain securities from the bankrupts with knowledge of their insolvent condition. A decree for the value of the securities was rendered in his favor, from which this appeal was taken.

The testimony leaves no doubt that the transaction was intended as a security for an existing debt, and that the appellants had reasonable cause to believe that Morrell and Campbell were insolvents. Indeed, it is very clear that the decree must be affirmed, unless the period which elapsed between the receipt of the securities and the beginning of the bankruptey proceedings was, under the bankrupt law, sufficient to protect the appellants.

The securities were received on the 15th of November, 1873. The period fixed by the act then in force was four months. As the petition in bankruptcy was filed Feb. 5, 1874, the lapse of time is clearly no defence under that act. But Congress, on the twenty-second day of June, 1874, passed an amendatory act, in which is found this clause: 'That in cases of involuntary or compulsory bankruptcy the period of four months mentioned in section 35 of the act to which this is an amendment, is hereby changed to two months, but this provision shall not take effect until two months after the passage of this act.'

This suit was commenced May 11, 1875, and in the answer of defendants the lapse of two months from the receipt of the securities to the filing of the petition in bankruptcy is pleaded. There is, however, no allegation in the answer or in the bill, nor do we find any record evidence that the petition was filed by creditors, or anything to show whether it was a case of voluntary or involuntary bankruptcy.

The case, however, has been argued by counsel on both sides as if it were the latter, and we will so treat it. This raises the question whether the law as it stood before the amendment of 1874, or the time prescribed in that amendment, governs the rights of the parties in this suit.

It is to be observed that the full period of four months from the receipt of the securities had passed-indeed, more than six months had passed-before the enactment of this amendment, and the bankruptcy proceeding had been initiated within that period and the assignee appointed. The rights of the parties were therefore fixed before the new law was passed. The assignee had a vested right to the securities, or to their value. The legal obligation to return them or to pay him their value had been incurred by the defendants. To hold that Congress intended by this amendatory statute to take away that right of action, is to hold that it intended by a retrospective statute to destroy a vested right of property or an existing right of action. If it be conceded that Congress could do this, the principle is too well established to need the citation of authorities, that no law will be construed to act retrospectively unless its language imperatively requires such a construction. We think the clanse in the act of 1874 under consideration not only does not require this, but that such an inference is fairly negatived by the provision that the clause shall not take effect until two months after the passage of the act. The evident purpose of this provision was that in cases where such a transfer has been made as sect. 35 of the original act forbids, but had not at the date of the act been covered by the lapse of four months without the initiation of proceedings in bankruptcy, that provision should remain the law of such cases for two months after the act was passed, though it became immediately the rule as to preferences made after its passage. Congress thus showed its intent to provide one rule for cases where the lapse of time had not yet cured the unlawful transfer made before its passage, and the rule for such transfers made after its passage, leaving by a very strong inference cases where the rights of parties had been fixed under the old law to be governed by its provisions.

There is no question but what Congress could by a statute have limited the time within which an action should be brought in the future, so as to have barred the present action, which was commenced nearly a year after the new law went into effect. But this statute is not a statute of limitation of actions, but a declaration of a period when an act otherwise voidable shall be held to be valid; and we see no reason to believe that in making a new rule on that subject Congress intended to make it retrospective, for the purpose of destroying rights of property or rights of action which had become vested before the passage of the law.

Decree affirmed.


text: Talk:Auffm'ordt v. Rasin/Opinion of the Court


text:
United States v. Goldback

ERROR to the Circuit Court of the United States for the Eastern District of Virginia.

The facts are stated in the opinion of the court.

The Solicitor-General for the plaintiff in error.

No counsel appeared for the defendant in error.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.

title: United States v. Goldback


text: Talk:United States v. Goldback

title: Talk:United States v. Goldback


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

Goldback was a manufacturer of friction-matches, and as such gave bond to the United States, under sect. 3425 of the Revised Statutes, with the other defendants in error as his sureties, to pay such amounts as might from time to time be due from him for proprietary internal revenue stamps supplied him on a credit, in accordance with the provisions of that section. Under the law he was entitled to an allowance on the aggregate amount supplied him, as discount on the face value, or commission. Stamps were furnished him from time to time on the faith of this security; and when this suit was begun the balance against him, without any allowance for discount or commission, was $3,369, but deducting the commission the amount due was $3,062.72. Pending the suit he paid in full this last-named sum, and then, without any formal pleadings, the facts were agreed on and submitted to the consideration of the court, with the statement that the only point in issue was 'as to the right of the defendant, Goldback, to commissions under the provisions of sect. 3624 of the Revised Statutes of the United States.' Judgment was given in favor of the defendants so far as the commissions were concerned. but in favor of the United States for costs to Nov. 20, 1876, the date when the payment of the amount due was made. To reverse this judgment, so far as it is in favor of the defendants, this writ of error has been brought.

Sect. 3624 of the Revised Statutes provides that 'whenever any person accountable for public money 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, the First Comptroller of the Treasury shall institute suit for the recovery of the same, adding to the sum stated to be due on such account the commissions of the delinquent, which shall be forfeited in every instance where suit is commenced and judgment obtained thereon, and an interest of six per cent per annum from the time of receiving the money until it shall be repaid into the treasury.'

Goldback never received and was not accountable for any public money. He bought stamps at a certain discount and agreed to pay for them at a future day, giving the bond sued on as his security. He did not pay as he agreed, and he and his sureties were sued for what he owed. He had no moneys which in any legal sense belonged to the United States. He owed a debt for stamps bought at a certain percentage below their face value. Money in his hands was no more the property of the United States than that of any other debtor is the property of his creditors. The stamps when bought were his own, to do with as he pleased. The United States could not call on him to account for them. He was bound to pay for them at the time agreed on, whether used or not. What the statute denominates commissions were in fact discounts from the face value of the stamps sold, on account of the quantity purchased. We think it clear, therefore, that the court below was right in holding that the United States could not recover for these allowances, though called commissions.

Neither do we see any error of which the United States can complain in respect to the costs. Full costs were recovered up to the time the debt was paid. This implies that after that time each party must pay his own costs. It is clear a plea of payment puis darrien was waived, because the parties, when submitting the case, agreed on the fact of payment after the suit was commenced, and in terms said that the only issue between them was in respect to the commissions. This stipulation as to what the issue was is equivalent, for the purposes of review here, to an admission of record that proper pleadings had been filed to raise that issue.

Judgment affirmed.


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


text:
Wells v. Supervisors

ERROR to the District Court of the United States for the Northern District of Mississippi.

The facts are stated in the opinion of the court.

Mr. George Perkins for the plaintiff in error.

Mr. Van H. Manning, contra.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.

title: Wells v. Supervisors


text: Talk:Wells v. Supervisors

title: Talk:Wells v. Supervisors


text:
Wells v. Supervisors/Opinion of the Court

On the 10th of March, 1852, the legislature of Mississippi passed an act to incorporate the Mississippi Central Railroad Company. Sects. 17 and 18 of that act are as follows:--

'SECT. 17. Be it further enacted, that the boards of police     of the several counties of Madison, Holmes, Carroll,      Yallabusha, Lafayette, and Marshall, together with such other      counties as are adjoining or adjacent to the counties through      which said railroad may pass, may for their respective      counties subscribe for capital stock in said railroad, not to      exceed in amount two hundred thousand dollars for any one      county: Provided, however, that an election shall be holden      in the county for and on account of which said stock is      proposed to be subscribed, by the qualified electors thereof,      at the regular precincts of said county, ten days' notice of      the time of holding such election, and of the amount proposed      to be subscribed, being first given by the board of police;      and if at such election a majority of the qualified electors      voting shall be in favor of such subscription, then said      board shall make such subscription for and in behalf of the      county for the amount specified; but if a majority of those      voting shall be opposed to such subscription, the same shall      not be made.

'SECT. 18. Be it further enacted, that said several boards of     police, either before or after any election held as provided      in the seventeenth section of this act, may direct, that      whenever any tax shall be collected in their respective      counties for the payment of the capital stock so subscribed      by the county, which tax the several boards of police are      hereby authorized to assess and collect from the taxable      property or real property of the county as said board may      elect; that the sheriff or tax-collector shall issue to the      person paying such tax a certificate specifying the amount of      tax so paid, and on account of what railroad the same is      paid, which said certificate or certificates shall be      transferable by indorsement; and whenever any person, either      by payment of taxes as aforesaid, or by indorsement as      aforesaid, shall hold a certificate or certificates, in      amount equal to one or more shares of the capital stock of      said railroad company, he may present the same to the      treasurer of said company, who shall thereupon take up the      said certificate or certificates and issue to the holder of      them certificates for one or more shares of stock in said      company, and such holder of said certificate of stock shall be for such stock substituted to the right of      the county as a stockholder to the number of shares named in      said certificate.'

On the 19th of April, and during the same session of the legislature, a supplemental act was passed, by which, if the act should be approved by a vote of the several counties through which the road might be located, a tax of five per cent on the assessed value of all lands lying within five miles, and two and one half per cent on all lying over five miles and under ten, of the road, was to be collected annually for a term of four years to aid in the construction of the road. Sect. 4 of this act is as follows:--

'SECT. 4. Be it further enacted, that whenever any sheriff or     tax-collector shall collect any tax by virtue of this act, he      shall give to the person or persons paying the same a      certificate therefor, which certificate shall be transferable      by indorsement; and whenever any person or persons, either by      payment of taxes as aforesaid, or by indorsement as      aforesaid, shall hold a certificate or certificates in amount      equal to a share of the capital stock of said railroad      company, he may present the same to the treasurer of said      company, who shall thereupon take up the said certificate or      certificates, and issue to the holder of them a certificate      for a share of stock in said company, which certificate shall      entitle such person to all the rights and privileges of a      stockholder in said railroad company.'

On the 23d of November, 1859, the Memphis, Holly Springs, and Mobile Railroad Company was incorporated. Sect. 7 of that act of incorporation gave authority to the board of directors 'to issue, sell, negotiate, mortgage, pledge, or hypothecate the bonds or notes of the company, as well as any notes, bonds, scrip, certificates, or other property for the payment of money, or other property which said company shall or may receive as donations, or in payment of subscriptions to the capital stock of said company, or other dues thereto.' Sect. 8 provided that the board of directors might require each subscriber, at the time of subscribing, or at any time thereafter, to pay a part, not exceeding ten per cent, of his subscription to the capital stock in cash, and that no further payment should be demanded until in the opinion of the board a sufficient amount of the capital stock had been subscribed, with the means and credits of the company, to construct the road. No calls were to be made except on thirty days' notice, and the amount called for at any one time could not exceed thirty per cent to each subscriber of the amount of his subscription. Sect. 15 is as follows:--

'SECT. 15. Be it further enacted, that the sects. 17 and 18     of an act passed by the legislature of this State, and      approved March 10, 1852, entitled 'An Act to incorporate the      Mississippi Central Railroad Company,' regulating county      subscriptions to the capital stock of said company, be, and      the same are, adopted as part of this act, so far as the      provisions of the same may be applicable.'

By sect. 16 the company was authorized to consolidate with other railroad companies.

No organization is shown to have been perfected under this act, and, Feb. 20, 1867, another act was passed, of which the title and the only portion pertinent to this case are as follow:--

'An Act to revive and amend an Act entitled 'An Act to     incorporate the Memphis and Holly Springs and Mobile Railroad      Company,' approved Nov. 23, 1859, and for other Purposes.

'SECT. 1. Be it enacted by the legislature of the State of     Mississippi, that the above-recited act be, and the same is      hereby, revived, and that the style of said railroad company      shall hereafter be known as the 'Memphis, Holly Springs,      Okolona, and Selma Railroad Company;' and, as many of the      original incorporators are now dead, that N. B. Forrest'      [&c.] 'all of the State of Mississippi, together with those      who may hereafter become stockholders, their successors, &c.,      shall be said corporators.

'SECT. 2. Be it further enacted, that said company shall have     sixteen years in which to construct the said road, and shall      commence the same in three years from and after the passage      of this act.'

When these several acts were passed, the Constitution of Mississippi, adopted in 1832, was in force. This constitution contained no limitation on the power of the legislature to authorize counties to become stockholders in, or to lend their credit to, railway or other corporations. A new constitution went into effect in 1868, art. 12, sect. 14, of which is as follows:--

'The legislature shall not authorize any county, city, or     town to become a stockholder in, or lend its credit to, any      company, association, or corporation, unless two-thirds of      the qualified voters of such county, city, or town, at a      special election, or regular election, to be held therein,      shall assent thereto.'

At a special election held for that purpose on the 20th of November, 1869, the people of the county voted a subscription to the capital stock of the Memphis, Holly Springs, Okolona, and Selma company, and on the 21st of July, 1870, the name of the company was changed by a special act of the legislature to the Selma, Marion, and Memphis Railroad Company.

On the 19th of April, 1872, a general act was passed 'to authorize counties, cities, and towns to subscribe to the capital stock of railroads,' which gave any county through which any railroad should pass authority to subscribe any sum to the capital stock, if two-thirds of the legal voters should give their assent in the manner specially provided for. Such subscriptions were to be paid in the twenty-year coupon bonds of the county, bearing interest at the rate of seven per cent per annum. Taxes were to be levied and collected to pay the principal and interest of these bonds as they matured; and it was further also provided 'that certificates of shares in the capital stock of said companies shall be issued to all persons paying taxes for the principal and interest of said bonds, to the amount paid by them, whenever the receipts for the taxes so paid shall be equal to one or more shares of the capital stock.'

Under date of July 1, 1872, the board of supervisors of Pontotoc County, which was the legal successor of the board of police, under the authority of the vote of Nov. 20, 1869, issued to the Selma, Marion, and Memphis Railroad Company coupon bonds having twenty years to run, and bearing interest, payable semi-annually, at the rate of eight per cent per annum, amounting in the aggregate to $150,000. The plaintiff being the holder for value of a large amount of the coupons of these bonds, payable January and July, 1873, and January, 1874, which were not paid on presentation at maturity, brought this suit for their recovery. The court below gave judgment against him as on demurrer to the declaration, which presented substantially the foregoing facts, and to reverse that judgment this writ of error has been brought.

The controlling question in this case is whether there was authority in law for issuing the bonds to which the coupons sued on were attached. If there was not, it has always been held that no recovery can be had in an action on the bonds on coupons. It is also settled that unless the power to issue bonds for the payment of municipal subscriptions to the stock of railroad companies is given in express terms, or by reasonable implication, no obligation of that kind can be created.

In Mississippi, as a general rule, the boards of supervisors of counties have no other financial powers than 'to levy such taxes as may be necessary to meet the demands of their respective counties,' and to 'direct the appropriation of the money that may come into the treasury.' Code (1880), sects. 2148 and 2158; Code (1857), c. 59, sect. 4, arts. 16, 30. This, it has been held by the highest court of the State, gives no power to borrow money. In Beaman v. Leake County (42 Miss. 247), decided in 1868, the court, referring to an act then under consideration, passed in December, 1863, but which in no manner affects this case, said, 'The act just referred to is the only one of a general nature empowering boards of police to borrow money, and without some such act they could not lawfully do so in their official characters.' The policy of the State from its earliest history seems to have been to require municipal organizations to meet their current liabilities by current taxation; and in Hawkins v. Carroll County (50 id. 762) it was expressly declared that 'the grant of power to such a body of an extraordinary character, such as is not embraced in the general scope of its duties, must be strictly construed.'

Such being the general law of the State, we come to consider the special legislation on which this case depends, that is to say, sects. 17 and 18 of the act of 1852, in connection with the other provisions of the act of 1859, into which these sections were incorporated by adoption. Undoubtedly sect. 17 authorized a subscription to the stock of the railroad company for the county, after a majority of the electors of the county had in the proper way given their consent, and it is possible, if there had been nothing more, that, under the rule of construction stated in Lynde v. The County (16 Wall. 6), the subscription might have been paid in bonds. It seems to us, however, that the provisions of sect. 18 are such as to exclude any such presumption. By that section the boards of police (supervisors) were authorized to assess and collect a tax on the taxable property or the real property of the county, at their election, 'for the payment of the capital stock so subscribed.' No other mode of payment was provided for. This of itself, when considered in the light of the settled policy of the State to require the current liabilities of counties to be discharged by current taxation, would seem to indicate an intention not to confer upon the counties the power of funding this kind of liability. But when it is taken in connection with the further provision of the same section, which authorizes the boards of police to direct that the railroad company issue to the tax-payers, in lieu of the county, stock to the amount of their taxes paid, the intention is even more apparent. As stock was to be issued by the company to an amount equal to the taxes paid, it would seem as though it could not have been supposed that before the tax was collected any payment of the subscription was to be made, or any stock issued, that could in any manner interfere with this privilege of the tax-payers. So, too, the company could only be required to issue stock upon and to the amount of the subscription. As the tax-payer was to be entitled to stock to the full amount of his payment, it follows that the tax must have been intended to pay the subscription, and not bonds. We are not unmindful of the fact that the language of this part of the section is such as to leave it optional with the board to give this direction or not; but it may nevertheless be referred to, as we think, to strengthen the presumption arising from the other provisions, that the subscription was not to be paid through taxation, directly or indirectly, until the money to be raised in that way had actually been collected. This statute conferred an extraordinary power on the boards of police. It authorized them to create a new liability for their respective counties, and provided a special way of discharging that liability. The liability and the mode of discharge were provided for in the same statute. This being so, the mode prescribed is exclusive of all others.

This case differs materially from Lynde v. The County, supra. There the tax voted was to be levied annually during a period not exceeding ten years, and the amount for each year definitely fixed. As this was done for the purpose of building a court-house, the court very properly held the vote implied permission to borrow money to accomplish the object in anticipation of the collection of the tax, which must necessarily be delayed a considerable number of years. Here the tax was to be levied to pay the subscription, that is to say, to pay the company the amount subscribed when, by the terms of the subscription, that obligation was to be met. As the statute on its face contemplated no delay in raising the money by taxation, no implication of a power to borrow in anticipation of the tax can arise. The subscription might be made, but the money must be raised by taxation to meet it. The railroad company cannot complain; for when it received the subscription it knew, or ought to have known, from what source the money was to come to meet the payment, and it impliedly gave its consent to such delays as were necessarily incident to the mode of collection. The other provisions of the charter, as to calls on subscribers to meet their subscriptions, were not necessarily applicable to counties. Counties were to pay as they agreed, and when the tax was collected.

It may be true, as is urged, that the collection of the full amount of the subscription in a single year would be oppressive, but it by no means follows that this must necessarily have been done. These sections are to be construed in the act of 1859 precisely as they would be in that of 1852, except so far as they may have been modified by the other provisions in 1859. The original act of 1852 is to be considered in connection with the supplemental act passed a little later. Being in pari materia, and enacted at the same session of the legislature, they are to be taken together as one law. From the supplemental act it is apparent that the object of the legislature was to raise money by taxation to aid in the construction of the road, and to require the company to give the tax-payers stock for the money they paid. This is entirely inconsistent with any idea of the payment of interest. As the special tax on adjoining lands was large, it was extended over a period of years. This amount was fixed, and not left to the discretion of any one. In respect to the country at large the plan adopted was different. There it was left for the people to determine for themselves how much the subscription should be, and for the county and the company to agree when it should be paid. In this way the tax might be extended over a series of years; but as stock was to be issued by the company for all payments made, it could not have been intended to tax beyond the actual amount of the subscription. Consequently, if time was given by the company to make the payment, it must be without interest.

This construction of the act is strengthened by what actually happened. The revived and amended charter was passed in 1867, and the subscription voted in 1869. When the subscription was made does not appear, but certain it is that no bonds were issued to make the payment until after the policy of the State in respect to funding this class of liabilities was changed by the act of 1872. Then, although confessedly that act did not apply to this case and its provisions were not followed, the subscription was paid by binding the tax-payers of the county to pay in the aggregate $390,000, instead of $150,000, as was voted. This we think could not be done.

It is further argued that, because the seventh section of the act of 1859 authorized the railroad company to sell any bonds it might receive as donations or in payment of subscriptions, the power of counties to issue bonds in payment of their subscriptions must be inferred. We cannot so understand that provision. This gave power to sell bonds if in the course of business they should get to be the property of the company, but the implied prohibition against their issue by counties still remains.

It is also said that the provision in sect. 18 for giving individual tax-payers stock for the amount of their taxes paid cannot be considered as in any manner precluding an implication of the power to issue bonds, because the same provision is found in sect. 4 of the act of 1872. There is this difference between these provisions of the two acts: in that of 1852 the railroad company is to issue the stock to the tax-payer, while that of 1872 simply says that certificates of shares shall be issued, without saying by whom. But it is not for us at this time to determine the legal effect of that part of the act of 1872. Power to issue bonds is given in express terms by that act, and stock was to be issued to all persons 'paying taxes for the principal and interest of said bonds;' while in the act of 1852 the tax was to be collected 'for the payment of the capital stock so subscribed,' and stock was to be issued by the company to the persons holding certificates of the payment of this tax.

On the whole, we think the court below was right in holding that the issue of bonds in this case was not authorized by law. Different questions will arise if the railroad company, or any one who has been subrogated to the rights of the company, shall attempt to enforce the payment of the original subscription by the county.

Judgment affirmed.


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


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Ogden v. County of Daviess

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

The facts are stated in the opinion of the court.

Mr. Joseph E. Merryman for the plaintiff in error.

Mr. Willard P. Hall, contra.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.

title: Ogden v. County of Daviess


text: Talk:Ogden v. County of Daviess

title: Talk:Ogden v. County of Daviess


text:
Ogden v. County of Daviess/Opinion of the Court

On the 4th of January, 1860, the General Assembly of Missouri incorporated the Platte City and Des Moines Railroad Company, now, by statutory change of name, the Chicago and Southwestern Railway Company. Sect. 7 of the charter is as follows:--

'SECT. 7. Upon the presentation of a petition of the     president and directors of said company to the county court      of any county through which said road may be located, praying      that a vote may be taken in any strip of country through      which it may pass, not to exceed ten miles on either side of      said road; that the inhabitants thereof are desirous of      taking stock in said road and of voting upon themselves a tax      for the payment of the same,-it shall be the duty of said      county court to order an election therein, and shall      prescribe the time, place, and manner of holding said      election; and if a majority of the taxable inhabitants shall      determine in favor of the tax, it shall be the duty of said      court to levy and collect from them a special tax, which      shall be kept separate from all other funds and appropriated      to no other purposes, and as fast as collected shall cause      the same to be paid to the treasurer of said company.' On the 4th of July, 1865, a new constitution of Missouri went into effect, sect. 14, art. 11, of which is as follows:--

'The General Assembly shall not authorize any county, city,     or town to become a stockholder, in, or to loan its credit      to, any company, association, or corporation, unless      two-thirds of the qualified voters of such county, city, or      town, at a regular or special election to be held therein,      shall assent thereto.'

By an act to facilitate the construction of railroads, passed March 23, 1868, municipal townships in any county of Missouri were authorized to subscribe, through the county court of the county, to the stock of railroad companies, with the assent of two-thirds of the qualified voters of the township, and to pay their subscriptions with bonds in the name of the county, payable out of a special tax to be levied on the real estate of the township. On the 24th of March, 1870, the General Assembly amended this law by adding the following as sect. 7:--

'In all cases where, by the provisions of the charter of any     railroad company organized under the laws of this State, the      taxable inhabitants of a portion of a municipal township of      any county in this State have voted, or may hereafter vote,      to take stock in such railroad company, they are hereby      declared entitled to, and shall have, all the privileges,      rights, and benefits in said act conferred upon counties or      townships, and the county court of such county shall exercise      the same powers and perform the same duties in issuing bonds,      levying, collecting, and paying over the taxes which it is      required to in the case of a county or township under the      provisions of said act: Provided, however, that no part of      such township outside the limits of the district voting shall      be taxed to pay any of the bonds or coupons so issued by the      county court. This act shall take effect from its passage.'

After the passage of this act, the Daviess County Court, on the petition of the Chicago and Southwestern Railway Company, ordered an election on the twenty-first day of June, 1870, to obtain the assent of the 'taxable inhabitants living within a strip of five miles on each side of the line of said railway to be built through the county of Daviess,. . . to the subscription by the county of Daviess, for and on behalf of the taxable inhabitants of said strip, of the sum of $60,000 of the capital stock of said railway company, on such terms and conditions as' the court 'should deem proper.' Thereupon the court fixed, as one of the conditions of the subscription, that 'in payment of said subscription sixty bonds shall be issued by said county to the Chicago and Southwestern Railway Company,. . . of $1,000 each, payable ten years after date, with interest at the rate of eight per cent per annum, evidenced by semi-annual coupons,' &c. The election was held, and resulted in five hundred and sixty-eight votes for the subscription and four hundred against it. The county court subscribed the stock, and to pay the subscription issued and delivered to the company bonds in the following form:--

'UNITED STATES OF AMERICA.

'$1,000.] State of Missouri, County of Daviess. [$1,000.

'Daviess County Ten-year Bond, No. 3.

'Know all men by these presents, that the county of Daviess,     in the State of Missouri, acknowledges itself to owe and be      indebted to, and promises to pay the bearer the sum of one      thousand dollars, on the first day of August, in the year of      our Lord one thousand eight hundred and eighty, for value      received, negotiable and payable without defalcation or      discount at the Metropolitan National Bank, in the city and      State of New York, with interest thereon from the first day      of August, A. D. 1870, at the rate of eight per centum per      annum until paid, which interest shall be due and payable      semi-annually on the first day of February and August in each      year, on the presentation of the proper interest coupon, as      annexed hereto, attested by the signature of William M.      Bostaph, clerk at the said Metropolitan National Bank. This     is one of sixty bonds of like date, amount, and effect,      numbered from one to sixty, both numbers inclusive, issued in      payment of the indebtedness of said county of Daviess to the      Chicago and Southwestern Railway Company, incurred on account      of an election held in said county on the twenty-first day of      June, A. D. 1870, by certain taxable inhabitants of said      county.

'In testimony whereof, the said county of Daviess, by order     of its county court, has caused these presents to be executed      by the signature of the presiding justice of said court,      attested by the clerk thereof, with the seal of said county affixed, at      office in Gallatin, Daviess County, Missouri, this      twenty-seventh day of July, A. D. 1870.

'PETER BEAR, Presiding Justice.

'Attest: WILLIAM M. BOSTAPH, Clerk.'

{SEAL OF DAVIESS COUNTY COURT, MO.}

The coupon is in words and figures following, to wit:--

'$40.] GALLATIN, MO., July 27, 1870.

'County of Daviess, in the State of Missouri, will pay to the     bearer forty dollars on the first day of February, 1873, at      the Metropolitan National Bank, in the city and State of New      York, for value received, being the semi-annual interest due      on bond No. 3 of said county, issued to Chicago and      Southwestern Railway Company.

'WILLIAM M. BOSTAPH, Clerk.'

When the delivery of the bonds was made, the interest coupons were cancelled to Sept. 1, 1871. The coupons for 1873 were not paid, and this suit was brought to recover what was due on that account. The plaintiff is a bona fide holder of the coupons. On the trial the judges of the Circuit Court were divided in opinion on several questions which have been certified here, the principal of which is whether there was lawful authority for the issue of the bonds. The presiding judge being of the opinion that there was not, judgment was given in favor of the county, and to reverse that judgment this writ of error was brought.

We think the presiding judge was right in the view he took of the controlling question in this case. Without doubt, sect. 7. of the charter of the company authorized the taxable inhabitants of the 'strip of country' designated to vote a tax upon themselves to take stock, and required the county court to levy and collect such a tax, if voted, and pay over the money as fast as collected to the treasurer of the company; but in this we find no authority for the county to issue bonds in anticipation of the tax. The taxable inhabitants of the strip of country could not themselves make a bond, and all the county court could do was to collect and pay over the tax they voted. The inhabitants were not even organized by themselves, much less made a body politic for any purpose. They could vote the tax, if called upon to do so by the county court, but that was all. The effect of their vote was nothing more than to authorize the county court to levy, collect, and pay over to the treasurer of the company the special tax they had determined upon. The requirement of the law-that the money, when collected, should be paid over to the treasurer of the company-is entirely inconsistent with any idea that the obligations to be met in this way were to be in the form of negotiable paper afloat on the market as commercial securities. Under the provisions of sect. 6 of the charter, counties, towns, and cities were expressly authorized to issue bonds in payment of their subscriptions. The omission of any such power in sect. 7 is conclusive evidence that nothing of the kind was intended in case of 'strip' subscriptions. In this particular the case is even stronger than that of Wells v. Supervisors, supra, p. 625.

Neither did the act of March 24, 1870, give the power to issue bonds. That was an act amending what is commonly known as the 'township aid law' of Missouri, which related only to subscriptions by municipal townships. The amendment granted no new power of subscription, but simply provided that where, under the charter of any railroad company, the taxable inhabitants of a portion of a municipal township had voted or might vote to take stock in the company, the county court might issue bonds for the stock so taken, to be paid out of taxes levied on property within the limits of the district voting. In the charter of the Chicago and Southwestern Company, authority was not given the taxable inhabitants, of any portion of a township to take stock, but to the taxable inhabitants of any strip of country through which the road might pass, not exceeding ten miles on either side. This strip was not necessarily part of a township. It might include parts of several townships, or the whole of some and parts of others. As the act amended related entirely to municipal townships as such, and there had before been legislation in relation to strips of country without any reference to townships, it must be presumed that the amendment applied only to parts of townships separately, and not to the aggregation of townships or parts of townships whch would almost necessarily be included in a strip of country twenty miles wide or less along a railroad as it runs through a county. The bonds which this statute authorizes were to be issued on behalf of a portion of a township, not on behalf of a 'strip of country.' Under the charter, the taxable inhabitants of the strip were to take the stock, and they were to be taxed. We cannot, without a perversion of language, apply the act of 1870 to this provision of this charter. It follows that neither in the charter nor in the amending act relied on can there be found authority to issue the bonds in question.

On the 24th of March, 1868, the General Assembly of missouri passed an act 'to enable counties, cities, and incorporated towns to fund their respective debts.' Sect. 1 of that act is as follows:--

'That the various counties of this State be, and they are     hereby, authorized to fund any and all debts they may owe,      and for that purpose may issue bonds bearing interest at not      more than ten per centum per annum, payable semi-annually,      with interest coupons attached; and all counties, cities, or      towns in this State which have or shall hereafter subscribe      to the capital stock of any railroad company, may in payment      of such subscription issue bonds bearing interest at not more      than ten per centum per annum, payable semi-annually, with      interest coupons attached. The bonds authorized by this act     shall be payable not more than twenty years from date      thereof.'

It is claimed that authority for the issue of the bonds can be found in this law. We do not agree to this. Neither the county, nor a city, nor a town took the stock now in question. The county did not owe any debt. The taxable inhabitants of the 'strip of country' had authority to vote to tax themselves for the stock. In this way they could bind themselves; but that did not create a debt of the county, as such, for which funding bonds might be issued. The debt, if any, was of the 'strip' only, and not the county. As no bond could be issued under the original vote, the county assumed no obligation whatever. The county court and other officers of the county could be compelled to levy, collect, and pay over the tax, but that was all the county or its officers were required to do.

We have always held that every holder of a municipal bond is chargeable with notice of the provisions of the law by which the issue of his bond was authorized. If there was no law for the issue there can be no valid bond. On the face of these bonds it appears that they were issued to the Chicago and Southwestern Company on account of an election held by 'certain taxable inhabitants of the county.' This clearly connects the bonds with the Chicago and Southwestern charter, and indicates unmistakably that they were put out on accout of a 'strip' subscription. The holder is, therefore, chargeable with notice of the want of legal authority for their issue.

The principal question certified is answered in the negative, and, without specially replying to the others, further than may be implied from this opinion, the judgment is

Affirmed.


text: Talk:Ogden v. County of Daviess/Opinion of the Court


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Kahn v. Smelting Company

APPEAL from the Supreme Court of the Territory of Utah.

The facts are stated in the opinion of the court.

Mr. John R. McBride and Mr. George H. Williams for the appellant.

Mr.Samuel Shellaburger and Mr. Jeremiah M. Wilson, contra.

MR. JUSTICE FIELD delivered the opinion of the court.

title: Kahn v. Smelting Company


text: Talk:Kahn v. Smelting Company

title: Talk:Kahn v. Smelting Company


text:
Kahn v. Smelting Company/Opinion of the Court

This is a suit to compel the defendants to account for the proceeds of a mining claim in Utah, known as the Montreal claim, and to pay over to the plaintiff the amount to which he may be entitled upon such accounting. The complaint alleges that on the 14th of December, 1874, the plaintiff and two other persons, by the name of Deronso and Berassa, were the owners and tenants in common of the claim, each having an undivided third; that they then entered into an arrangement to work the claim for the ores and metals it contained, and from that time until February, 1876, they were a mining partnership engaged in working the mine, bearing the expenses and sharing the profits equally, Deronso and Berassa having the immediate direction, control, and management of its working; that on the 1st of February, 1876, his associates sold and transferred their interest in the mine, and in the tools, implements, and appurtenances connected therewith, to the defendant, Isador Morris, through whom the other defendants immediately acquired all the rights they possess; that from that time until the 10th of April, 1876, the defendants were in full charge and possession of the property, and extracted from the mine and sold about sixteen hundred tons of ores, worth about $45,000, the expense of extracting and marketing of which did not exceed $10,000; that since the 1st of February the plaintiff has been a partner with the defendants in the mining claim and is entitled to his share of the profits made,-being one-third of the whole,-and has demanded of the defendants a statement of their work and an accounting, but they have refused to comply with his demand, or to give him any information on the subject or any share of the profits, and have denied him access to the books of account of the concern, and that the profits amount, according to his information and belief, to about $35,000. He therefore prays for a decree establishing the partnership between him and the defendants, and directing an accounting from them and the payment of the amount found due to him upon such accounting; and for such other and further relief as to the court may seem meet and equitable.

The answer of the defendants traverses the allegations of the complaint, and avers that on the 31st of January, 1876, the defendant, Isador Morris, found Deronso and Berassa in the actual possession of a portion of the Montreal mine, of which they claimed to own two-thirds; that, believing they owned such interest, Morris paid to them $25,000 for it and received a quitclaim deed from them; that on the following day, for the like sum, he conveyed, by a similar deed, that interest to one Wadsworth in trust for such persons as a majority of the members of the Sandy Smelting Company of Salt Lake City might direct, and that afterwards such majority conveyed the same to the defendant, the Central Smelting Company, remaining, however, in the possession of and working the mine until about March 1, 1876, when the smelting company took possession of it and afterwards held it exclusively until the 1st of April following. The answer further avers that a short time prior to this last date the mine was claimed by another company, called thd Old Telegraph Company, under an older location; that thereupon the Central Smelting Company and its vendors caused the prior location and the mining claim to be carefully examined by experienced miners, and upon that examination they became satisfied that the older location and the Montreal mine were one and the same vein or lode, and that the Montreal mine was owned by the holders of the earlier location; that having become thus satisfied of this fact, the Central Smelting Company abandoned the Montreal mine, and has not since held, used, or occupied the same, or exercised any acts of ownership over it.

The answer further avers that the defendants never worked the Montreal mine or extracted ore from it, under any agreement with the plaintiff, or by his advice or consent, or in conjunction with him or as his mining partners; that they have always refused to recognize him as a party in any work, labor, or management, or business of the mine; that the proceeds of the mine received by the Central Smelting Company and its immediate vendors, after deducting the expenditures, show a net profit of about $12,000, which the defendants hold until the determination of suits now pending between the plaintiff and the owners of the alleged earlier location; that those suits are brought to determine whether the Montreal mine and the earlier location are one and the same lode, and which of the parties is entitled to its possession, and the proceeds; and the defendants pray for their protection that the prosecution of this suit may be restrained until those suits are determined.

On the trial, evidence was produced by both parties, and from it the court found as facts,--

First, That there was no partnership between the plaintiff and the defendants, as charged in the complaint.

Second, That there was no such co-tenancy between them in the mine in controversy as entitled the plaintiff to an accounting; and held, as a conclusion of law, that he had no right to recover in the action, and that the suit should be dismissed.

These findings were filed Nov. 21, 1877, and judgment upon them was entered the same day. From this judgment the plaintiff appeals to this court. Fourteen days after its entry the judge who heard the case, at the request of the plaintiff, filed further findings of fact. It does not appear that any notice was given to the defendants of any intended application to the court to make any findings in addition to those originally filed; and to make such findings without such notice was irregular. The practice, if permitted would lead to great abuses. It is not absolutely necessary in any case that the findings should accompany the announcement of the decision of the court; but, when they are required,-and by the practice established in Utah they are required in all cases where issues of fact are tried without a jury,-they should be filed before the entry of the judgment or decree, as in such cases upon them the judgment or decree rests. If either party is dissatisfied with them and desires more full or additional ones, he should, within a reasonable time during the same term, and before an appeal is taken or a writ of error sued out, apply to the court, upon proper notice to the adverse party, to make such fuller or additional findings; and if the application is granted, the additional findings should show on their face why they are made. The additional findings in this case not having been thus made, were properly stricken from the transcript. Taking, then, the original findings, let us examine whether they meet the issues raised by the pleadings and support the decree; for under the practice of Utah, where, in a case seeking equitable relief, the facts are found by the court (and not by a master or a jury where the findings are merely advisory) they will be taken as its conclusions upon the evidence, and their sufficiency for the decree rendered will be considered.

The plaintiff avers that his association with his co-tenants of the mine was a mining partnership, and seeks to enforce his rights as a member of such partnership, and to obtain such other and further relief as he may be equitably entitled to. The opinion of the judge before whom the case was heard shows that he did not recognize the existence of any partnership in mines differing from ordinary partnerships, and his finding that there was no partnership, as alleged, between the plaintiff and the defendants, necessarily followed. The allegations of the complaint, whilst asserting a mining partnership, show that no other partnership existed after the sale of Deronso's and Berassa's interest. Such sale would have ended any ordinary partnership.

Mining partnerships as distince associations, with different rights and liabilities attaching to their members from those attaching to members of ordinary trading partnerships, exist in all mining communities; indeed, without them successful mining would be attended with difficulties and embarrassments, much greater than at present. In Skillman v. Lockman, the question of the relation existing between parties owning several interests in a mine came before the Supreme Court of California, and that court said that 'whatever may be the rights and liabilities of tenants in common of a mine not being worked, it is clear that where the several owners unite and co-operate in working the mine, then a new relation exists between them; and, to a certain extent, they are governed by the rules relating to partnerships. They form what is termed a mining partnership, which is governed by many of the rules relating to ordinary partnerships, but also by some rules peculiar to itself, one of which is that one person may convey his interest in the mine and business without dissolving the partnership.' 23 Cal. 203. The same doctrine is asserted in numerous other cases, not only in that court, but in the courts of England. Associations for working mines are generally composed of a greater number of persons than ordinary trading partnerships; and it was early seen that the continuous working of a mine, which is essential to its successful development, would be impossible, or at least attended with great difficulties, if an association was to be dissolved by the death or bankruptcy of one of its members, or the assignment of his interest. A different rule from that which governs the relations of members of a trading partnership to each other was, therefore, recognized as applicable to the relations to each other of members of a mining association. The delectus personoe, which is essential to constitute an ordinary partnership, has no place in these mining associations. Duryea v. Burt, 28 Cal. 569; Settembre v. Putnam, 30 id. 490; Taylor v. Castle, 42 id. 367. There are other consequences resulting from this peculiarity of a mining partnership, particularly as to the power of individual members to bind the association, upon which there is no occasion now to express any opinion. Skillman v. Lockman, supra; Dockinson v. Valpy, 10 B. & C. 128; Ricketts v. Bennett, 4 C. B. 686.

But if the relation of the plaintiff to his associates could not be considered as one of a mining partnership, he was still entitled to an accounting from them, if, as alleged by him, he was joint owner with them in the mine. They went into possession of the property under a conveyance from his co-tenants, and admit that whatever proceeds they have received from it were taken under a claim of ownership derived from that source. They have, upon their own averments, only a claim, in any event, to tow-thirds of the proceeds; and if the plaintiff was a tenant in common with them, they can only refuse his demand to the other third by repudiating their own right to any portion. If a co-tenant, he had a right to call for an accounting, whatever might be the ultimate result of the claim of third parties to the whole proceeds as the owners of the mine under a prior location. He was, therefore, entitled to a finding on the question of his co-tenancy. The judge of the District Court seemed to recognize this position, for, after finding that there was no partnership,-following in this respect his peculiar notions as to the non-existence of such an association as a mining partnership,-he passed upon the claim to an accounting as a tenant in common of the mine with the defendants, and found 'that there was no such co-tenancy between the plaintiff and defendants in the mine in controversy as entitled the plaintiff to an account.' This is not a sufficient finding of fact upon which to base a decree; it does not state that there was no co-tenancy between the parties; it implies that there was a co-tenancy; it only states that there was not such a one as entitled the plaintiff to an accounting. This is a mere legal inference, not the finding of a fact. If a co-tenancy of any kind existed, it is a question of law whether or not it entitles one co-tenant to an accounting from the others.

In considering the whole case, we think that justice will be subserved by a new hearing. The defendants recognize the possibility of the plaintiff ultimately establishing his right to a portion of the proceeds of the mine in their hands against the claimants of the alleged earlier location. They aver that they hold the proceeds subject to the determination of pending suits between those parties. The present decree, if affirmed, would cut off any claim of the plaintiff even should he prevail in that litigation.

The decree will be, therefore, reversed, and the cause remanded with direction to the Supreme Court of the Territory to send it to the District Court for a new hearing, the parties to be at liberty to produce new proofs; and it is

So ordered.


text: Talk:Kahn v. Smelting Company/Opinion of the Court


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Trimble v. Woodhead

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

The facts are stated in the opinion of the court.

Mr. John G. Carlisle for the appellant.

Mr. Stanley Matthews and Mr. William M. Ramsey, contra.

MR. JUSTICE MILLER delivered the opinion of the court.

title: Trimble v. Woodhead


text: Talk:Trimble v. Woodhead

title: Talk:Trimble v. Woodhead


text:
Trimble v. Woodhead/Opinion of the Court

The ppellant, James S. Trimble, who was complainant below, brought his bill in chancery, which was dismissed on final hearing upon it, the answer, replication, and proofs.

Its substance is that Joshua Woodhead was largely indebted to the complainant for government bonds and money loaned, and that the judgment which had been rendered against him therefor proved unavailing; that Ann Woodhead, his wife, held the legal title to certain valuable lands, which were purchased with his money, and conveyed to her with intent to defraud his creditors; and that valuable improvements had been placed on the lands, the payment for which was made with his money. It prayed that the lands be subjected to sale for the payment of the judgment.

The answer of Ann denied all this, and also set up as a bar to the relief prayed a former suit in one of the State courts concerning the same subject between the same parties. The record of the proceedings in the State court is set out in full, and much evidence on both sides as to the main allegation of fraud alleged in the bill in the present suit is found in the record, all of which, in the view we take of the case, is immaterial.

The defendant, Joshua, answered 'that long before the bringing of this suit this defendant had filed his petition in this honorable court under the bankrupt law of the United States, and the said orator, the said James S. Trimble, was duly notified of the same, and the claim of the said orator was therein set forth, and after the proper proceedings as prescribed in said law, this defendant was on his petition adjudged a bankrupt, and by a judgment of this court he was finally discharged from all of his indebtedness, and the claim of the orator was one of the debts from which he was thus discharged; he files herewith a copy of his judgment of discharge as part hereof.'

The proceedings in bankruptcy are not set forth in this record, nor have we been able to find in it a copy of Woodhead's discharge; but his answer is sworn to. The complainant also filed an amended bill, making John T. Levis, the alleged assignee in bankruptcy of Joshua, a defendant, and he says that the judgment in the State court was rendered in his favor after Joshua's discharge as a bankrupt.

It may, therefore, be accepted as established by the pleadings that Woodhead was regularly discharged of all his debts by proceedings in bankruptcy, and that in those proceedings John T. Levis was made the assignee with the usual effect of such an appointment.

It is as well to observe here that while the amended bill of the complainant made Levis a defendant in his character of assignee, and the record shows an order of court for process to issue, no writ, nor any other notice to him, nor the entry of his appearance in person or by attorney, is found in the record. As to him, therefore, and the rights which he represented, the bill is of no effect.

The case of Glenny v. Langdon (98 U.S. 20) conclusively establishes the proposition that the rights asserted in this bill passed to the assignee in bankruptcy, and that a creditor of Woodhead cannot assert them in his own name.

In that case the complainant sought to avoid this difficulty by alleging that he had requested the assignee to bring suit or assert the right in some other way, who had refused to do so. That made a stronger case than the present one, where no such application was made. The abortive effort to make the assignee a party without the service of process or an appearance for him does not help the case.

Nor can we attach much importance to the allegation in the amended bill, that two years had elapsed without suit by the assignee; for he might not have discovered the fraud, or if brought judicially into court might have asserted his right not only against the complainant but against Mrs. Woodhead, for the benefit of all her husband's creditors.

We do not see on what principle the failure of the assignee to sue within two years transfers his right of action to the complainant.

The r ght was certainly in the assignee, and, if barred by the Statute of Limitations, would, if it had any effect on the title, make good the title of defendant. Meeks v. Olpherts, 100 U.S. 564. It seems to be well settled that, in regard to real estate, the undisturbed possession of the wrong-doer for the time necessary to bar the action vests of itself a good title in the party holding such possession.

It would be a curious application of this principle in the present case, which concerns real estate, to hold that this same lapse of time, instead of making good the defendant's title, or acting as a bar to the right to bring suit, transfers that right to another unimpaired by the lapse of time.

Nor is the creditor of a bankrupt without remedy in such a case as the present. If he is aware of the existence of property or credits, which should rightfully go to the assignee for the benefit of the creditors, he should inform the assignee of all he knows on the subject, and request him to proceed, by suit if necessary, to recover it. If he declines, a petition to the court of original jurisdiction would, if a proper case was made, compel the assignee to proceed. Glenny v. Langdon, supra. Indeed, the whole question is so fully considered in that case that little more need be said.

We may, however, suggest consequences readily to be seen if any other doctrine were held.

The primary object of the bankrupt law is to secure the equal distribution of the property of the bankrupt of every kind among his creditors. This can only be done through the rights vested in the assignee and by the faithful discharge of his duties. Let us suppose, however, that a creditor is aware of the existence of property of the bankrupt sufficient to satisfy his own debt, which has not come to the possession or knowledge of the assignee. He has but to keep silence for two years, and then bring suit in his own name against the fraudulent holder of this property, and make his debt really at the expense of the other creditors; or he may have an understanding with the bankrupt, who, after two years, and after his own discharge from all his debts, may confess judgment to this creditor and furnish him the evidence to prove the fraud, and thus secure him a preference forbidden by the act itself.

In the present case, if any right exists to subject this property in the hands of Ann Woodhead to the payment of the debts of her husband, which existed prior to the bankruptcy proceedings, that right is in the assignee, and such right is not divested by anything shown in this case.

The bill of the appellant was, therefore, properly dismissed.

Decree affirmed.


text: Talk:Trimble v. Woodhead/Opinion of the Court