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Morris's Cotton/Opinion of the Court

Forfeiture of the property seized in this case is claimed in the libel of information, as amended, upon several distinct grounds, of which the following are the most material: 1. Because the owner purchased the cotton of an inhabitant of a State or district in insurrection, as lawfully declared by the President in his proclamation to that effect, and in violation of the provision which prohibited 'all commercial intercourse between such States or districts' so long as such hostilities should continue.

2. Because the property was owned by a person who knowingly used or employed, or consented to the use or employment of the same, in aiding, abetting, or promoting said insurrection and resistance to the laws.

3. Because the owner of the property, being engaged in armed rebellion against the United States, or in aiding or abetting such rebellion, at the time when the President issued his proclamation upon the subject, did not, within sixty days thereafter, cease to aid, countenance, and abet such rebellion, and return to his allegiance.

Process of monition issued, and the marshal, on the eleventh of May, 1866, seized one hundred and fifty-four bales of cotton, as appears by his return. Appearance was entered by the claimant on the ninth of June following, as the agent of the bank, and he alleges in behalf of the bank that none of the material allegations of the libel of information are true. On the contrary, he alleges that the cotton was purchased by the bank, and was held by their agent as their property until the same was attached by a creditor of the bank, and that the bank had ample authority to transport the funds with which the cotton was purchased into that district, and he utterly denies that the purchase was made in violation of any act of Congress, or of any commercial regulations of the United States. Many other defences are set up in the answer, but in the view taken of the case, it is not important to enter further into those details.

Testimony was taken in the case, and, on the twentieth of December, 1866, a decree was entered in the District Court that the cotton seized be forfeited to the United States for the value thereof, estimated at $25,069.70, together with costs, against the stipulators and claimants. Dissatisfied with the decree, the claimants appealed to this court.

By the findings of the court it appears-(1.) That the cotton was grown on a plantation in the State of Alabama, and that it was purchased by the agent of the Bank of Louisiana during the period when both of those States were in rebellion against the United States. (2.) That the agent of the bank, in going from Louisiana to Alabama, passed through our military lines, and that he purchased the cotton in the latter State for the bank, and with the funds which he transported through our military lines. (3.) That neither the agent nor the bank had any license or permit from the President to trade or hold any commercial intercourse in that State or district, and that his acts in trading for, and making the purchase of, the cotton were contrary to the act of Congress prohibiting all such trade and commercial intercourse.

None of these matters, however, can be re-examined in this court, as the District Court had no jurisdiction of the cause in admiralty to render any decree upon the merits. Where the seizure is made on navigable waters, within the ninth section of the Judiciary Act, the case belongs to the instance side of the District Court; but where the seizure was made on land, the suit, though in the form of a libel of information, is an action at common law, and the claimants are entitled to trial by jury.

Seizures, when made on waters which are navigable from the sea by vessels of ten or more tons burden, are exclusively cognizable in the District Courts, subject to appeal, as provided by law; but all seizures on land or on waters not navigable, and all suits instituted to recover penalties and forfeitures incurred, except for seizures on navigable waters, must be prosecuted as other common-law suits, and can only be removed into this court by writ of error.

Want of jurisdiction in the court below, however, does not prevent this court from assuming jurisdiction on appeal for the purpose of reversing the decree rendered by that court, and of vacating any unwarranted proceedings of that court, which necessarily stand in the way of a new trial there, in a case where, in the judgment of this court, a new trial ought to be granted. Where the court below has no jurisdiction of the case, in any form of proceeding, the course of this court is to direct the cause to be dismissed, if the judgment or decree was for the defendant or claimant, but if the judgment or decree was for the plaintiff or libellant, the court here will reverse the judgment or decree, and remand the cause, with directions to the court below to dismiss the proceeding.

Unless the practice were as explained, great injustice would be done in all cases where the judgment or decree was in favor of the party who instituted the suit, as he would obtain the full benefit of a judgment or decree, rendered by a court in his favor, which had no jurisdiction to hear and determine the controversy. Hence, this court will, in all such cases, reverse the judgment or decree, and direct the proceedings to be dismissed, or remand the cause, with directions to allow the pleadings to be amended, and to grant a new trial, according to law. But the fund in this case, having been distributed, a new trial would be useless, unless the fund is restored to the registry of the court, where it was deposited before the decree of distribution was executed. Although the District Court has no jurisdiction in such a case, still, this court has full jurisdiction on appeal to reverse the action of that court, and to dismiss the proceedings; or, in a case where a new trial is required, to remand the cause, and give directions to that effect, and also, to direct that a writ of restitution issue to the proper parties, to cause the fund to be restored to the registry of the court, from which it was erroneously withdrawn.

DECREE REVERSED, and the cause remanded, with directions to allow the pleadings to be amended, and to grant a new trial, and issue a writ of restitution,

IN CONFORMITY TO THE OPINION OF THE COURT.

title: Morris's Cotton/Opinion of the Court


text: Talk:Morris's Cotton/Opinion of the Court

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


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Carpenter v. Dexter

ERROR to the Circuit Court for the Northern District of Illinois.

The action was ejectment to recover the possession of certain real property, situated in the county of Bureau, in the State of Illinois. Both parties claimed title from the same source,-a patent of the United States, issued to William T. Davenport, in May, 1818. The points in dispute arose upon the deraignment of title from the patentee.

The plaintiff produced in evidence the patent; a deed from the patentee to one Hawley, dated in September, 1818; a deed from Hawley to Thaddeus Munson, dated in December, 1818; and a deed from Munson to William James, dated in February, 1819; all of which embraced the demanded premises. The deeds were inscribed upon the record, in the proper register's office, in May, 1819. Those from Davenport to Hawley, and from Hawley to Munson, contained this indorsement (unsigned by the recorder) of the fact:

'RECORDER'S OFFICE,

EDWARDSVILLE, May 17th, 1819.

'I certify the within deeds, together with the certificates of acknowledgment, are this day recorded and examined in my office, in Book V, p. 353 and 354.'

William James died in 1832, leaving several heirs-at-law. The premises in controversy were allotted in severalty to John B. James, by a decree of one of the Circuit Courts of the State, in a suit for partition between him and his coheirs. John B. James died in 1844, leaving a will, by which he devised the premises to the plaintiff. The record of partition, and the record of the will and of its probate were produced in evidence.

The defendants, also relying upon the patent of the United States to Davenport, introduced in evidence a conveyance of the premises, from the patentee, to one De Witt, bearing date in August, 1818, and a conveyance from the heirs of De Witt to himself, bearing date in July, 1861. The first of these deeds was recorded in December, 1861, and the other was recorded in February, 1862.

Beginning with the plaintiff's case. The deed from Davenport to Hawley concluded with the following attestation clause:

'In witness of all the foregoing, I have hereunto fixed my hand and seal, at Albany, in the county of Albany, and State of New York, this first day of September, one thousand eight hundred and eighteen.

'WM. T. DAVENPORT, [L. S.]

'Signed, sealed, and delivered in the presence of

'WM. D. WOOSTER,

H. WENDELL, JR.'

The certificate of acknowledgment following immediately after the above clause, was thus:

'STATE OF NEW YORK,

COUNTY OF ALBANY, ss.

'Be it remembered, that on the first day of September, 1818, the above-named William T. Davenport, who has signed, sealed, and delivered the above instrument of writing, personally appeared before me, the undersigned justice of the peace, and acknowledged, in due form of law, the same to be his free act and deed, for the purposes therein set forth, and also gave his consent, that the same should be recorded wherever it might be deemed necessary. In witness of all of which, the said justice has hereunto affixed his hand and seal, and undersigned the same.

title: Carpenter v. Dexter


text: Talk:Carpenter v. Dexter

title: Talk:Carpenter v. Dexter


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Carpenter v. Dexter/Opinion of the Court

'H. WENDELL, JR., [L. S.] Justice of the Peace.'

[The reader will note that the magistrate who takes the acknowledgment was a subscribing witness to the execution, but that nothing is said as to the grantor's being known to him, as the real party who signed the deed.]

A certificate of the official character of Wendell as a justice of the peace, at the time he took the above acknowledgment, from a clerk of a court of record of New York, accompanied the above certificate.

In addition to the record of acknowledgment there was upon this deed from Davenport a certificate (by the same magistrate who took the acknowledgment) of the proof of execution by the person who with him had attested the execution as a subscribing witness. That certificate ran thus, no particular city or town being given as the place where it was made:

'STATE OF NEW YORK:

'On this second day of September, 1818, before me came William D. Wooster, one of the subscribing witnesses to the within indenture, to me known, who being sworn, saith, that he saw the within-named grantor, William T. Davenport, duly execute and acknowledge the within indenture, and that he knows him to be the same person named and described in, and who acknowledged duty to have executed the same as his free act and deed. I allow the same to be recorded.

'H. WENDELL, JR., Commissioner, &c., &c.'

[The magistrate taking this probate, it will be observed, signs himself Commissioner, &c. By the statute of New York in force on the 2d of September, 1818, commissioners of deeds were authorized to take the acknowledgment and proof of deeds for the county where they resided.]

A certificate of the official character of Wendell as a commissioner of deeds, and of his authority to take the proof of deeds at the time when the above-mentioned proof was taken, accompanied the certificate just mentioned.

So far as respected the deed from Davenport.

The commencement of the deed from Munson to James, was as follows:

'This indenture, made the thirteenth day of February, in the year of our Lord one thousand eight hundred and nineteen, between Thaddeus Munson, of the city and county of Albany, and State of New York, of the first part, and William James, of the city, county, and State aforesaid, of the second part, witnesseth, &c.'

The certificate of acknowledgment to this was with the same general form of place of making as was the last deed.

'STATE OF NEW YORK, ss.

'Be it remembered, that on this thirteenth day of February, in the year of our Lord one thousand eight hundred and nineteen, came before me the above-named Thaddeus Munson, to me well known, and acknowledged to have signed, sealed and delivered the above deed for the uses and purposes therein expressed. All which I certify according to law, and allow the same to be recorded.

'ESTES HOWE,

Judge, Albany Common Pleas, Counsellor, &c., ex-officio performing the duties of a Judge of the Supreme Court at Chambers, &c.'

This certificate was unaccompanied by any evidence of the official character of this judge, or that his certificate was in conformity with the laws of New York.

To the introduction of the several deeds produced by the plaintiff, objection was made on the ground that they had not been duly proved. No specification was made of the particulars in which the proof failed.

How far certain objections made on the argument here, and which may perhaps be assumed to have been the true ground of objections below, were well founded, depended upon certain statutes of Illinois now to be mentioned.

A statute of 1845, which enacts that all deeds and other instruments, relating to or affecting the title to real property, shall be recorded in the county where the same was enacted, in regard to the acknowledgment, &c. (prior acts as to acknowledgments not having required a certificate of personal knowledge, &c.), as follows:

'No judge or other officer shall take the acknowledgment to any deed unless the person offering to made such acknowledgment shall be personally known to him to be the real person who executed the deed, and in whose name such acknowledgment is proposed to be made, or shall be proved to be by a credible witness; and the judge or officer taking such acknowledgment shall in his certificate thereof, state that such person was personally known to him to be the person whose name is subscribed to such deed, as having executed the same, or that he was proved to be such by a credible witness.'

The statute further provided that the fact of such personal knowledge or proof should be stated in the certificate.

At the time of this act, justices of the peace could not take acknowledgments.

An act of February 27th, 1847, provided, however, that all deeds of land lying within the State might be acknowledged or proved before any commissioner of deeds and 'before any justice of the peace,' but it enacted that:

'If such justice of the peace reside out of this State, there shall be added to the deed a certificate of the proper clerk, setting forth that the person, before whom the proof or acknowledgment was made, was a justice of the peace at the time of making the same;'--

'All deeds and conveyances which have been, or may be, acknowledged or proved in the manner prescribed by this section, shall be entitled to record, and be deemed as good and valid in law, in every respect, as if the same had been acknowledged or proved in the manner prescribed,' by a previous law.

'That deeds of lands situated within the State, which have been or may hereafter be executed without this State and within the United States, and which have been, or may hereafter be acknowledged or proved, in conformity with the laws of the state, territory, or district, in which they were executed, shall be admitted to record in the county wherein the lands are situated; and such deeds, &c., acknowledged or proved as aforesaid, when so recorded, may be used as evidence, without further proof of the execution thereof.'

It was agreed between the parties that the statutes of New York and of Ohio were to be considered as evidence.

The court admitted the deeds notwithstanding the forms of acknowledgment and proof.

When the record of partition in the suit between James and his coheirs was produced, objection was made by the defendant, on the alleged ground that it did not show jurisdiction of the persons and subject-matter, but the objection was overruled, and exception was taken. No particulars in which the record failed to show jurisdiction were stated with the objection. The record itself showed, however, that some of the heirs were minors and that the guardian ad litem for these having filed his answer, and set up no opposition to the prayer of the bill, the bill had been taken pro confesso.

The court instructed the jury that if the heirs of William James, living at the time the proceedings for partition were commenced, were made parties to that suit, then whatever title William James had, at his death, passed, by the operation of the decree, in that case, to John B. James, and the court left the question, whether his heirs were made parties to the partition proceedings, to the jury, to be determined from the evidence.

To that part of the instructions of the court which left it to the jury to say under what circumstances the decree in partition was to vest title in John B. James, the defendant excepted.

Another question perhaps involved, or at least one which was discussed here, was whether, admitting the deed from Davenport to Hawley to have been in fact inscribed in the official record-books in the recorder's office, they were, with such acknowledgment and proof as they had, to be considered as being recorded in law, so as to give constructive notice to purchasers. And this matter depended in part on certain provisions of the already quoted act of 1845, thus:

'All deeds, &c., which are required to be recorded, shall take effect and be in force from and after the time of filing the same for record, and not before, as to all creditors and subsequent purchasers without notice; and all such deeds and title-papers shall be adjudged void as to all such creditors and subsequent purchasers without notice, until the same shall be filed for record.

'Deeds, &c., shall be deemed, from the time of being filed for record, notice to subsequent purchasers and creditors, though not acknowledged or proven according to law.'

The blank certificate (not signed) on the back of the deeds by Davenport to Hawley, and from Hawley to Munson, was read on the trial of the case, without any objection thereto as evidence of the said recording; and no objection was made that the said blank certificate was not signed by the clerk or recorder, and no exception was taken to the instruction of the court, that the said deeds were recorded May 17th, 1819.

On this part of the matter the court instructed the jury that the deed from Davenport to Hawley was recorded in the proper office, under the laws of Illinois, before the deed from Davenport to De Witt, and if Hawley was a purchaser for a valuable consideration, without notice of the unrecorded deed from Davenport to De Witt, then Hawley, and those claiming under him, acquired a good title as against De Witt, and those claiming under him. The court was of the opinion, from the circumstances proven in this case, that the law would presume that the deed to Hawley was made upon and for a valuable consideration. The court left the question to the jury to decide whether Hawley had such notice, and they were to determine whether there was notice or not from the evidence.

To that part of the instructions which left it to the jury to say whether or not Hawley was a bona fide purchaser, without notice of any other deed from Davenport, the defendant excepted.

The jury rendered a verdict for the plaintiff, and judgment in his favor was entered thereon.

Mr. A. Garrison, for the plaintiff in error:

I. The deed of Davenport to Hawley of September 1st, 1818, was not proved.

(1.) The acknowledgment before a justice of the peace at that time, is no proof of execution. The laws of Illinois did not then allow justices of the peace out of the State to take acknowledgments of deeds to be recorded in this State.

(2.) The acknowledgment is in form defective because it does not state that the grantor was personally known to the officer, which was required by the laws of New York and Illinois then in force, and is an indispensable condition.

(3.) The certificate of proof by one of the subscribing witnesses is defective.

(a.) It has no assignable locality; the venue being simply 'State of New York, ss.' The case of Vance v. Schuyler, is in point. The Supreme Court of Illinois there held an acknowledgment null, because it had no other mention of place than Lincoln v. Wiscasset.

(b.) It does not state that the affiant Wooster was known to the officer to be a subscribing witness, nor was there any proof of that fact.

(c.) It does not state that the affiant declared that he became a subscribing witness at the request of the grantor, or signed the deed at the time of its execution.

II. The deed from Hawley to Munson, dated December 12th, 1818, is not proved, because,

(a.) To the certificate there is no assignable locality. 'State of New York, ss.' is not sufficient.

Commissioners of deeds in New York had no jurisdiction to take acknowledgments beyond the county in which they resided.

Nor does this certificate identify the person described in the deed, as the same person who executed the same must be certified or proved.

(b.) The laws of Illinois, at that time, did not authorize commissioners to take acknowledgments of deeds to be recorded in this State.

III. The deed from Munson to William James, of February 13th, 1819, is not proved, because—

(a.) The certificate of acknowledgment has no assignable locality. 'State of New York, ss.' is not sufficient. Estes Howe could not act out of the county of Albany.

(b.) Nor was he authorized to take acknowledgments by the laws of Illinois.

(c.) There is no certificate that the acknowledgment was made before a proper officer, or that his certificate was in conformity to the laws of New York.

IV. There is no evidence that the deeds from Davenport to Hawley, and from Hawley to Munson, were ever recorded. The certificate of the recorder, indorsed on the deeds, but not signed by him, is not evidence.

The foregoing defects in the title of the defendant in error are palpable and fatal; and even had the title been proved, it was defeated by the title of De Witt, through which the plaintiff in error claims, first in date and first of record. Accordingly, the court erred, in stating to the jury that the deeds from Davenport to Hawley, and Hawley to Munson, were recorded May 17th, 1819, and before the deed to De Witt. The court should have left it to the jury to say, which deeds were recorded first; and if they found that the De Witt title was first recorded, they should have been instructed to find for the defendant below.

V. The defendant in error sought to connect himself with the title of William James, by showing a decree of the Circuit Court of Pike County, Illinois, for the partition of certain lands; by the terms of which, this land was allotted to John B. James, of whom defendant in error is the devisee.

The court allowed this decree to go to the jury, against the objection of the plaintiff in error to the jurisdiction of the court.

1. The Circuit Court of Pike County, Illinois, had no jurisdiction to make the decree of partition as against the infant heirs of William James, without full proof. Against infants, nothing can be taken pro confesso. No proof was made, and this goes to the jurisdiction.

2. A decree of partition of the Pike County Circuit Court (and this was such) without the execution of deeds in pursuance thereof, and recorded where the land lies, could not affect lands beyond the county, nor does it change the legal title in the county, and should have been rejected as evidence.

It is decided in Chickering v. Failes, 'that whilst this is a proceeding in equity, a good and sufficient partition, which a court of equity will recognize and enforce between the parties to the bill, it is not such a partition as vested in the parties a legal title to the shares assigned to each of them, for want of mutual releases;' and the court say:

'It is a settled doctrine of the court, that to vest the title in the parties to the shares allotted to each, they must execute releases for the portions not assigned to them.'

There were no deeds of this kind proved, or introduced in evidence.

Mr. Goudy, contra.

Mr. Justice FIELD delivered the opinion of the court.

To the introduction of the several deeds produced by the plaintiff, objection was taken that they were not duly proved, but in what particulars the proof failed, the objection does not specify, and it is only by the brief of counsel that we are informed.

General objections of this character are too vague to serve any useful purpose, and under them particular defects in evidence, or in proceedings, cannot be urged upon our notice, if their consideration, for want of specification, be opposed by the adverse party. Here, however, no such opposition is made, and we will, therefore, proceed to the consideration of the points raised in the brief of counsel.

The deed from Davenport to Hawley was executed in New York, and was acknowledged on the day of its date, before a justice of the peace of that State. The certificate of acknowledgment states, that the person who 'signed, sealed, and delivered' the instrument, 'personally appeared' before the justice, but does not, in terms, state that he was personally known to that officer. The justice himself was one of the subscribing witnesses.

There is also attached to the deed, a certificate of the proof of its execution by the other subscribing witness. This certificate is signed by the same person who took the acknowledgment, but not in his capacity as justice of the peace, but as commissioner of deeds. The certificate does not state that the commissioner knew that the affiant was one of the subscribing witnesses, nor does the affiant declare that he became such witness at the request of the grantor.

The objections taken in the brief of counsel to the proof of the deed bearing these certificates are, in substance, as follows:

1st. That the justice of the peace had no authority, at the time, to take the acknowledgment;

2d. That the certificate of acknowledgment is defective in not stating that the grantor was personally known to the officer; and

3d. That the certificate of proof by one of the subscribing witnesses is defective in not having any assignable locality, and in not stating that the affiant was known to the officer to be a subscribing witness, or that the affiant declared that he became such at the request of the grantor.

It is true, that at the time the acknowledgment was taken, in 1818, a justice of the peace was not authorized by the laws of Illinois to take the acknowledgment or proof of deeds without the State. The only officers thus authorized were 'mayors, chief magistrates, or officers of the cities, towns, or places,' where the deeds were executed. But this want of authority of the justice of the peace was remedied by a statute passed on the 22d of February, 1847. The first section of that statute provides that all deeds and conveyances of land lying within the State may be acknowledged or proved before certain officers named, and among others before any commissioner of deeds and 'before any justice of the peace,' but enacts that 'if such justice of the peace reside out of this State, there shall be added to the deed a certificate of the proper clerk, setting forth that the person, before whom such proof or acknowledgment was made, was a justice of the peace at the time of making the same;' and then declares that 'all deeds and conveyances which have been, or may be, acknowledged or proved in the manner prescribed by this section, shall be entitled to record, and be deemed as good and valid in law, in every respect, as if the same had been acknowledged or proved in the manner prescribed' by a previous law providing for the acknowledgment and proof of conveyances before certain officers both within and without the State.

The law of Illinois in force in 1818 did not require the officer taking the acknowledgment of a deed to certify, from his personal knowledge, to the identity of the party making the acknowledgment with the grantor. It did not require the acknowledgment to be certified in any particular form, except in case of a married woman. A certificate, without declaring such identity, or even personal knowledge of the parties making the acknowledgment, was held by the Supreme Court of that State to be as full and exact as was contemplated by the law of 1819, a law which was identical in terms, so far as it relates to the point under consideration, with the law in force in 1818, except that the word 'Territory' was changed to that of 'State.'

But, it may be said that the object of the act of 1847 was simply to give authority to additional officers to take the acknowledgment and proof of deeds, and to cure their defect of authority in cases where they had previously acted, and not to remedy defects in certificates already given by them; and that, therefore, the statute can only avail where the certificate conformed to the requirements of the law then in force. If this be the correct interpretation of the statute, we answer that the certificate to the deed in question did, in substance, conform, when read in connection with the deed itself, to the requirements of that law. In aid of the certificate reference may be had to the instrument itself, or to any part of it. It is the policy of the law to uphold certificates when substance is found, and not to suffer conveyances, or the proof of them, to be defeated by technical or unsubstantial objections.

The law of Illinois in force in 1847, upon the manner of taking acknowledgments, provides that no officer shall take the acknowledgment of any person, unless such person 'shall be personally known to him to be the real person who [executed the deed], and in whose name such acknowledgment is proposed to be made, or shall be proved to be such by a credible witness,' and such personal knowledge, or proof, shall be stated in the certificate.

Looking, now, to the deed itself, we find that the attestation clause states that it was 'signed, sealed, and delivered' in the presence of the subscribing witnesses. One of these witnesses was the justice of the peace before whom the acknowledgment was taken; and he states in his certificate following immediately after the attestation clause, that the 'above-named William T. Davenport, who has signed, sealed, and delivered the above instrument of writing, personally appeared' before him and acknowledged the same to be his free act and deed. Read thus with the deed the certificate amounts to this: that the grantor personally appeared before the officer, and in his presence signed, sealed, and delivered the instrument, and then acknowledged the same before him. An affirmation, in the words of the statute, could not more clearly express the identity of the grantor with the party making the acknowledgment.

But if we lay aside this acknowledgment as evidence, there remains the certificate of proof made on the 2d of September, the day following the execution of the instrument, before a commissioner of deeds in the State of New York. At that time commissioners of deeds were authorized by a law of New York to take the acknowledgment and proof of deeds; and by the third section of the statute of Illinois of 1847, deeds previously, or which might be subsequently, executed without the State and within the United States, acknowledged or proved in conformity with the law of the State where executed, are admissible to record in the counties of Illinois in which the property is situated, and 'when so recorded,' may be used as evidence without further proof of their execution. The terms, 'when so recorded,' apply, we think, equally to past records as to those which might be subsequently made.

Now, the certificate of proof produced in this case shows a substantial conformity with the law of New York of 1813 on the subject, which was in force when the certificate was made. The venue to it is simply 'State of New York,' and it is objected that the certificate has no assignable locality, and is, therefore, fatally defective. In support of this position the case of Vance v. Schuyler is cited. In that case the Supreme Court of Illinois held a certificate insufficient to authorize the admission of a deed without proof of its execution, because the only means of determining where it was acknowledged was the venue, 'Lincoln v. Wiscassett.' This is a different case from the one at bar. The words, 'State of New York,' present some definite locality, at least, while there can be none to the words 'Lincoln v. Wiscasset.' The commissioner of deeds, in New York, had authority to act only in his county; and it will be presumed, although the State be named, that the officer exercised his office within the territorial limits for which he was appointed. But if such were not the presumption, the defect in this particular is supplied by reference to the deed and the previous certificate of acknowledgment by the same person. In the attestation clause of the deed the grantor declares that he has affixed his hand and seal to the instrument, 'at Albany, in the county of Albany, and State of New York;' and the venue of the certificate of acknowledgment taken on the previous day, is 'State of New York, county of Albany.'

As already stated, courts will uphold a certificate, if possible, and for that purpose will resort to the instrument to which it is attached. Thus, in Brooks v. Chaplin, the certificate of acknowledgment did not show in what State the acknowledgment was taken, and the omission was supplied by reference to the deed, in which the grantor described himself as a 'resident of Suffield, in the county of Hartford, and State of Connecticut.' The acknowledgment was taken two days after the date of the deed, having as its venue simply 'Hartford County'-and the court said that it was a fair presumption, in the absence of evidence to the contrary, that the deed was executed at the time it bore date and at the place of the grantor's residence, and that, finding the acknowledgment taken so soon afterwards in the county of Hartford, it could intend no other than the same county of Hartford where the deed was supposed to have been executed. 'It is not indispensable,' said the court, 'that the place of taking should fully appear from the acknowledgment itself, provided it can be discovered with sufficient certainty by inspection of the whole instrument.' There is good sense in this decision, and it answers the particular objection of counsel just stated, and the further objection that the certificate does not state that the officer knew that the party produced was a subscribing witness. The deed shows that Wooster was a subscribing witness with the officer, and the certificate states that 'Wooster, one of the subscribing witnesses,' to the officer known, came before him, and being sworn, said that he saw the grantor execute and acknowledge the indenture. When the officer, being a subscribing witness himself with Wooster, certifies that 'Wooster, one of the subscribing witnesses,' came before him and was known to him, he does, in fact, certify that he knew Wooster to be a subscribing witness as plainly as if he had added those words. There is here a compliance, in substance if not in form, with the statute, and that is all which is required. In Luffborough v. Parker, the certificate of proof stated that A. B. appeared before the officer, and made oath that he saw the grantor sign, seal, execute, and deliver the deed, without stating that A. B. was a subscribing witness; but as it appeared upon the deed that A. B. was a subscribing witness, the court held the certificate sufficient. The statute of Pennsylvania, under which the certificate was given, required the proof of deeds to be made by one or more of the subscribing witnesses. 'The act,' said the court, 'must be substantially complied with; but when substance is found, it is neither the duty nor the inclination of the court to defeat conveyances by severe criticism on language.'

The remaining objection to the certificate, that it does not appear from it, that the subscribing witness became such, at the request of the grantor, or signed his name, at the time the deed was executed, is answered by the fact that the statute of New York, under which the certificate was made, did not require any statement to that effect. Besides, the fact that the witness was present at the execution, which is all that is necessary, does sufficiently appear from the deed, with which the certificate is to be read. In the one, the declaration is made that the instrument was signed in his presence, and, in the other, that he saw the grantor execute the deed.

After a careful consideration of the several objections, presented by counsel, we are satisfied, that the certificate of the commissioner was sufficient, under the act of New York of 1813, to entitle the deed to be admitted to record in that State, had the land been there situated, and to be read in evidence in her courts, without further proof of execution; and was entitled to like record in the State of Illinois, and to be received in evidence in like manner, in her courts, under the third section of the statute of 1847.

The several objections urged by counsel to the other two deeds produced by the plaintiff are, with one exception, sufficiently met by what has already been said in answer to those taken to the deed from Davenport. The certificate of acknowledgment to the deed, from Munson to James, is given by the 'judge of the Albany Common Pleas,' an officer authorized at the time to take the acknowledgment and proof of deeds by the laws of New York; and the objection referred to, not already met, is, that the certificate of this judge is not accompanied by any evidence of his official character, or that his certificate was in conformity with the laws of that State.

The answer to this objection is brief and conclusive. Unless the statute requires evidence of official character to accompany the official act which it authorizes, none is necessary. And, where one State recognizes acts done in pursuance of the laws of another State, its courts will take judicial cognizance of those laws, so far as it may be necessary to determine the validity of the acts alleged to be in conformity with them. In this case, also, the laws of New York are, by stipulation of parties, considered as evidence.

When the record of partition in the suit between James and his coheirs was produced, objection was made by the defendant, on the alleged ground, that it did not show jurisdiction of the persons and subject-matter, but wherein it failed to show such jurisdiction, the objection does not indicate, and it is no part of our duty to act as counsel for the party, and search for particulars to give point to his objection. As it now stands, it is as vague and pointless as would be a general objection to either party's right of recovery. If the proof against the infant heirs was not as full as a due regard for their rights should have exacted, it will be time for us to consider that matter, when they, or parties representing them, are before the court. It is not a matter which defeated the jurisdiction of the local tribunal in the partition, and it is not a matter of any concern to the defendant, who was a stranger to, and in no way interested in, the proceeding.

There was no necessity for mutual releases between the parties, in order to clothe John B. James in severalty with the entire ownership of the premises in controversy. The suit for partition was under the statute of Illinois, which dispensed with the necessity of mutual releases, and authorized the court to invest, by its decree, the several parties with the title to the parcels respectively allotted to them, without requiring conveyances. And the decree rendered in the case declared, that the land allotted should be held by the parties respectively, in fee simple, in lieu of all their respective rights and interests previously enjoyed in common in the entire tract.

The law of Illinois, relating to the record of deeds, and other instruments affecting the title to real property, differs materially from the law of nearly every other State in the Union. In most States, these instruments can only be recorded after they have been acknowledged or proved before certain designated officers, and the certificate of such acknowledgment or proof is attached. An inscription upon the books of record of an instrument, without such authentication, is considered a mere unofficial entry of the register, constituting no record, and imparting no notice to purchasers or creditors.

But, in Illinois, the law requires all 'deeds and other instruments, relating to, or affecting the title to, real property,' with or without such authentication, to be recorded; provides that they shall not take effect, as to creditors and subsequent purchasers without notice, until they are filed for record; and enacts, that 'they shall be deemed, from the time of being filed for record, notice to subsequent purchasers and creditors, though not acknowledged or proven according to law; but the same shall not be read as evidence, unless their execution be proved in manner required by the rules of evidence applicable to such writings, so as to supply the defects of such acknowledgment or proof.'

Upon this state of the law, after the proof of the deeds of the parties, and of their record, and the production of the record of partition, and of the probated will of John B. James, there could only be two matters of inquiry: one respecting the identity of the heirs of William James, deceased, with the parties to the partition suit; and the other, whether there was notice to Hawley, at the time he received his conveyance, of the unrecorded deed from Davenport to De Witt. These matters were left to the jury to determine, and rightly so left.

No question was raised in the court below upon the sufficiency of the evidence, that the deeds produced by the plaintiff were recorded, at the time indicated by the indorsement thereon, in May, 1819; nor was any exception taken to the instruction of the court, that the deed from Davenport to Hawley was recorded in the proper office, before the deed from Davenport to De Witt; nor was any question raised, or ruling asked, upon the will produced of William James, and, therefore, no point is presented thereon for our consideration.

We perceive no substantial error in the record, and the judgment of the court below must, therefore, be

AFFIRMED.


text: Talk:Carpenter v. Dexter/Opinion of the Court


text:
Veazie Bank v. Fenno

ON certificate of division for the Circuit Court for Maine.

The Constitution ordains that:

'The Congress shall have power—

'To lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defence and general welfare of the United States; but all duties, imposts, and excises shall be uniform throughout the United States.

'To regulate commerce with foreign nations, and among the several States, and with the Indian tribes.

'To coin money, regulate the value thereof, and of foreign coin.'

It also ordains that:

'Direct taxes shall be apportioned among the several States. . . according to their respective numbers.'

'No capitation or other direct tax shall be laid, unless in proportion to the census or enumeration hereinbefore directed to be made.'

'The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.'

With these provisions in force as fundamental law, Congress passed, July 13th, 1866, an act, the second clause of the 9th section of which enacts:

'That every National banking association, State bank, or State banking association, shall pay a tax of ten per centum on the amount of notes of any person, State bank, or State banking association, used for circulation and paid out by them after the 1st day of August, 1866, and such tax shall be assessed and paid in such manner as shall be prescribed by the Commissioner of Internal Revenue.'

Under this act a tax of ten per cent. was assessed upon the Veazie Bank, for its bank notes issued for circulation, after the day named in the act.

The Veazie Bank was a corporation chartered by the State of Maine, with authority to issue bank notes for circulation, and the notes on which the tax imposed by the act was collected, were issued under this authority. There was nothing in the case showing that the bank sustained any relation to the State as a financial agent, or that its authority to issue notes was conferred or exercised with any special reference to other than private interests.

The bank declined to pay the tax, alleging it to be unconstitutional, and the collector of internal revenue, one Fenno, was proceeding to make a distraint in order to collect it, with penalty and costs, when, in order to prevent this, the bank paid it under protest. An unsuccessful claim having been made on the commissioner of internal revenue for reimbursement, suit was brought by the bank against the collector, in the court below.

The case was presented to that court upon an agreed statement of facts, and, upon a prayer for instructions to the jury, the judges found themselves opposed in opinion on three questions, the first of which-the two others differing from it in form only, and not needing to be recited-was this:

'Whether the second clause of the 9th section of the act of Congress of the 13th of July, 1866, under which the tax in his case was levied and collected, is a valid and constitutional law.'

The case coming here, Messrs. Reverdy Johnson and C. Cushing, for the Veazie Bank, contended:

1. That the tax in question was a direct tax, and that it had not been apportioned among the States agreeably to the Constitution.

In explanation of the nature of direct taxes they relied largely upon the writings of Adam Smith, and upon other treatises, English and American, of political economy.

2. That the act imposing the tax impaired a franchise granted by the State, and that Congress had no power to pass any law which could do that.

Mr. Hoar, Attorney-General of the United States, argued the case fully, contra; he relying upon the case of Hylton v. The United States, as conclusive of the question independently of principle; and referring to the brief recently published of General Hamilton, by whom the case was argued, to explain and support his view of what was there decided; a case confirmed recently, the Attorney-General observed, in Pacific Insurance Company v. Soule.

In reply, it was contended that Hylton v. The United States adjudged one point alone, which was that a tax on carriages was not a direct tax, and that from the dicta of the judges, in the case, it was obvious that the great question of what were direct taxes was but crudely considered.

The arguments at the bar, by which these views of the respective counsel were maintained, are not presented, the views of both sides of the case being fully presented from the bench, in the opinion of the court, and in the dissent from it.

The CHIEF JUSTICE delivered the opinion of the court.

title: Veazie Bank v. Fenno


text: Talk:Veazie Bank v. Fenno

title: Talk:Veazie Bank v. Fenno


text:
Veazie Bank v. Fenno/Opinion of the Court

The necessity of adequate provision for the financial exigencies created by the late rebellion, suggested to the administrative and legislative departments of the government important changes in the systems of currency and taxation which had hitherto prevailed. These changes, more or less distinctly shown in administrative recommendations, took form and substance in legislative acts. We have now to consider, within a limited range, those which relate to circulating notes and the taxation of circulation.

At the beginning of the rebellion the circulating medium consisted almost entirely of bank notes issued by numerous independent corporations variously organized under State legislation, of various degrees of credit, and very unequal resources, administered often with great, and not unfrequently, with little skill, prudence, and integrity. The acts of Congress, then in force, prohibiting the receipt or disbursement, in the transactions of the National government, of anything except gold and silver, and the laws of the States requiring the redemption of bank notes in coin on demand, prevented the disappearance of gold and silver from circulation. There was, then, no National currency except coin; there was no general regulation of any other by National legislation; and no National taxation was imposed in any form on the State bank circulation.

The first act authorizing the emission of notes by the Treasury Department for circulation was that of July 17th, 1861. The notes issued under this act were treasury notes, payable on demand in coin. The amount authorized by it was $50,000,000, and was increased by the act of February 12th, 1862, to $60,000,000.

On the 31st of December, 1861, the State banks suspended specie payment. Until this time the expenses of the war had been paid in coin, or in the demand notes just referred to; and, for some time afterwards, they continued to be paid in these notes, which, if not redeemed in coin, were received as coin in the payment of duties.

Subsequently, on the 25th of February, 1862, a new policy became necessary in consequence of the suspension and of the condition of the country, and was adopted. The notes hitherto issued, as has just been stated, were called treasury notes, and were payable on demand in coin. The act now passed authorized the issue of bills for circulation under the name of United States notes, made payable to bearer, but not expressed to be payable on demand, to the amount of $150,000,000; and this amount was increased by subsequent acts to $450,000,000, of which $50,000,000 were to be held in reserve, and only to be issued for a special purpose, and under special directions as to their withdrawal from circulation. These notes, until after the close of the war, were always convertible into, or receivable at par for bonds payable in coin, and bearing coin interest, at a rate not less than five per cent., and the acts by which they were authorized, declared them to be lawful money and a legal tender.

This currency, issued directly by the government for the disbursement of the war and other expenditures, could not, obviously, be a proper object of taxation.

But on the 25th of February, 1863, the act authorizing National banking associations was passed, in which, for the first time during many years, Congress recognized the expediency and duty of imposing a tax upon currency. By this act a tax of two per cent. annually was imposed on the circulation of the associations authorized by it. Soon after, by the act of March 3d, 1863, a similar but lighter tax of one per cent. annually was imposed on the circulation of State banks in certain proportions to their capital, and of two per cent. on the excess; and the tax on the National associations was reduced to the same rates.

Both acts also imposed taxes on capital and deposits, which need not be noticed here.

At a later date, by the act of June 3d, 1864, which was substituted for the act of February 25th, 1863, authorizing National banking associations, the rate of tax on circulation was continued and applied to the whole amount of it, and the shares of their stockholders were also subjected to taxation by the States; and a few days afterwards, by the act of June 30, 1864, to provide ways and means for the support of the government, the tax on the circulation of the State banks was also continued at the same annual rate of one per cent., as before, but payment was required in monthly instalments of one-twelfth of one per cent., with monthly reports from each State bank of the amount in circulation.

It can hardly be doubted that the object of this provision was to inform the proper authorities of the exact amount of paper money in circulation, with a view to its regulation by law.

The first step taken by Congress in that direction was by the act of July 17, 1862, prohibiting the issue and circulation of notes under one dollar by any person or corporation. The act just referred to was the next, and it was followed some months later by the act of March 3d, 1865, amendatory of the prior internal revenue acts, the sixth section of which provides, 'that every National banking association, State bank, or State banking association, shall pay a tax of ten per centum on the amount of the notes of any State bank, or State banking association, paid out by them after the 1st day of July, 1866.'

The same provision was re-enacted, with a more extended application, on the 13th of July, 1866, in these words: 'Every National banking association, State bank, or State banking association, shall pay a tax of ten per centum on the amount of notes of any person, State bank, or State banking association used for circulation, and paid out by them after the first day of August, 1866, and such tax shall be assessed and paid in such manner as shall be prescribed by the Commissioner of Internal Revenue.'

The constitutionality of this last provision is now drawn in question, and this brief statement of the recent legislation of Congress has been made for the purpose of placing in a clear light its scope and bearing, especially as developed in the provisions just cited. It will be seen that when the policy of taxing bank circulation was first adopted in 1863, Congress was inclined to discriminate for, rather than against, the circulation of the State banks; but that when the country had been sufficiently furnished with a National currency by the issues of United States notes and of National bank notes, the discrimination was turned, and very decidedly turned, in the opposite direction.

The general question now before us is, whether or not the tax of ten per cent., imposed on State banks of National banks paying out the notes of individuals or State banks used for circulation, is repugnant to the Constitution of the United States.

In support of the position that the act of Congress, so far as it provides for the levy and collection of this tax, is repugnant to the Constitution, two propositions have been argued with much force and earnestness.

The first is that the tax in question is a direct tax, and has not been apportioned among the States agreeably to the Constitution.

The second is that the act imposing the tax impairs a franchise granted by the State, and that Congress has no power to pass any law with that intent or effect.

The first of these propositions will be first examined.

The difficulty of defining with accuracy the terms used in the clause of the Constitution which confers the power of taxation upon Congress, was felt in the Convention which framed that instrument, and has always been experienced by courts when called upon to determine their meaning.

The general intent of the Constitution, however, seems plain. The General Government, administered by the Congress of the Confederation, had been reduced to the verge of impotency by the necessity of relying for revenue upon requisitions on the States, and it was a leading object in the adoption of the Constitution to relieve the government, to be organized under it, from this necessity, and confer upon it ample power to provide revenue by the taxation of persons and property. And nothing is clearer, from the discussions in the Convention and the discussions which preceded final ratification by the necessary number of States, than the purpose to give this power to Congress, as to the taxation of everything except exports, in its fullest extent.

This purpose is apparent, also, from the terms in which the taxing power is granted. The power is 'to lay and collect taxes, duties, imposts, and excises, to pay the debt and provide for the common defence and general welfare of the United States.' More comprehensive words could not have been used. Exports only are by another provision excluded from its application.

There are, indeed, certain virtual limitations, arising from the principles of the Constitution itself. It would undoubtedly be an abuse of the power if so exercised as to impair the separate existence and independent self-government of the States, or if exercised for ends inconsistent with the limited grants of power in the Constitution.

And there are directions as to the mode of exercising the power. If Congress sees fit to impose a capitation, or other direct tax, it must be laid in proportion to the census; if Congress determines to impose duties, imposts, and excises, they must be uniform throughout the United States. These are not strictly limitations of power. They are rules prescribing the mode in which it shall be exercised. It still extends to every object of taxation, except exports, and may be applied to every object of taxation, to which it extends, in such measure as Congress may determine.

The comprehensiveness of the power, thus given to Congress, may serve to explain, at least, the absence of any attempt by members of the Convention to define, even in debate, the terms of the grant. The words used certainly describe the whole power, and it was the intention of the Convention that the whole power should be conferred. The definition of particular words, therefore, became unimportant.

It may be said, indeed, that this observation, however just in its application to the general grant of power, cannot be applied to the rules by which different descriptions of taxes are directed to be laid and collected.

Direct taxes must be laid and collected by the rule of apportionment; duties, imposts, and excises must be laid and collected under the rule of uniformity.

Must diversity of opinion has always prevailed upon the question, what are direct taxes? Attempts to answer it by reference to the definitions of political economists have been frequently made, but without satisfactory results. The enumeration of the different kinds of taxes which Congress was authorized to impose was probably made with very little reference to their speculations. The great work of Adam Smith, the first comprehensive treatise on political economy in the English language, had then been recently published; but in this work, though there are passages which refer to the characteristic difference between direct and indirect taxation, there is nothing which affords any valuable light on the use of the words 'direct taxes' in the Constitution.

We are obliged, therefore, to resort to historical evidence, and to seek the meaning of the words in the use and in the opinion of those whose relations to the government, and means of knowledge, warranted them in speaking with authority.

And, considered in this light, the meaning and application of the rule, as to direct taxes, appears to us quite clear.

It is, as we think, distinctly shown in every act of Congress on the subject.

In each of these acts, a gross sum was laid upon the United States, and the total amount was apportioned to the several States, according to their respective numbers of inhabitants, as ascertained by the last preceding census. Having been apportioned, provision was made for the imposition of the tax upon the subjects specified in the act, fixing its total sum.

In 1798, when the first direct tax was imposed, the total amount was fixed at two millions of dollars; in 1813, the amount of the second direct tax was fixed at three millions; in 1815, the amount of the third at six millions, and it was made an annual tax; in 1816, the provision making the tax annual was repealed by the repeal of the first section of the act of 1815, and the total amount was fixed for that year at three millions of dollars. No other direct tax was imposed until 1861, when a direct tax of twenty millions of dollars was laid and made annual; but the provision making it annual was suspended, and no tax, except that first laid was ever apportioned. In each instance, the total sum was apportioned among the States, by the constitutional rule, and was assessed at prescribed rates, on the subjects of the tax. These subjects, in 1798, 1813, 1815, 1816, were lands, improvements, dwelling-houses, and slaves; and in 1861, lands, improvements, and dwelling-houses only. Under the act of 1798, slaves were assessed at fifty cents on each; under the other acts, according to valuation by assessors.

This review shows that personal property, contracts, occupations, and the like, have never been regarded by Congress as proper subjects of direct tax. It has been supposed that slaves must be considered as an exception to this observation. But the exception is rather apparent than real. As persons, slaves were proper subjects of a capitation tax, which is described in the Constitution as a direct tax; as property they were, by the laws of some, if not most of the States, classed as real property, descendible to heirs. Under the first view, they would be subject to the tax of 1798, as a capitation tax; under the latter, they would be subject to the taxation of the other years as realty. That the latter view was that taken by the framers of the acts after 1798, becomes highly probable, when it is considered, that in the States where slaves were held, must of the value which would possessed within the land passed into the slaves. If, indeed, the land only had been valued without the slaves, the land would have been subject to much heavier proportional imposition in those States than in States where there were no slaves; for the proportion of tax imposed on each State was determined by population, without reference to the subjects on which it was to be assessed.

The fact, then, that slaves were valued, under the acts referred to, far from showing, as some have supposed, that Congress regarded personal property as a proper object of direct taxation under the Constitution, shows only that Congress, after 1798, regarded slaves, for the purposes of taxation, as realty.

It may be rightly affirmed, therefore, that in the practical construction of the Constitution by Congress, direct taxes have been limited to taxes on land and appurtenances, and taxes on polls, or capitation taxes.

And this construction is entitled to great consideration, especially in the absence of anything adverse to it in the discussions of the Convention which framed, and of the conventions which ratified, the Constitution.

What does appear in those discussions, on the contrary, supports the construction. Mr. Madison informs us, that Mr. King asked what was the precise meaning of direct taxation, and no one answered. On another day, when the question of proportioning representation to taxation, and both to the white and three-fifths of the slave inhabitants, was under consideration, Mr. Ellsworth said: 'In case of a poll tax, there would be no difficulty;' and, speaking doubtless of direct taxation, he went on to observe: 'The sum allotted to a State may be levied without difficulty, according to the plan used in the State for raising its own supplies.' All this doubtless shows uncertainty as to the true meaning of the term direct tax; but it indicates, also, an understanding that direct taxes were such as may be levied by capitation, and on lands and appurtenances; or, perhaps, by valuation and assessment of personal property upon general lists. For these were the subjects from which the States at that time usually raised their principal supplies.

This view received the sanction of this court two years before the enactment of the first law imposing direct taxes eo nomine.

During the February Term, 1796, the constitutionality of the act of 1794, imposing a duty on carriages, came under consideration in the case of Hylton v. The United States. Suit was brought by the United States against Daniel Hylton, to recover the penalty imposed by the act for not returning and paying duty on a number of carriages, for the conveyance of persons, kept by the defendant for his own use. The law did not provide for the apportionment of the tax, and, if it was a direct tax, the law was confessedly unwarranted by the Constitution. The only question in the case, therefore, was, whether or not the tax was a direct tax.

The case was one of great expectation, and a general interest was felt in its determination. It was argued, in support of the tax, by Lee, Attorney-General, and Hamilton, recently Secretary of the Treasury; in opposition to the tax, by Campbell, Attorney for the Virginia District, and Ingersoll, Attorney-General of Pennsylvania.

Of the justices who then filled this bench, Ellsworth, Paterson, and Wilson had been members, and conspicuous members, of the Constitutional Convention, and each of the three had taken part in the discussions relating to direct taxation. Ellsworth, the Chief Justice, sworn into office that morning, not having heard the whole argument, declined taking part in the decision. Cushing, senior Associate Justice, having been prevented, by indisposition, from attending to the argument, also refrained from expressing an opinion. The other judges delivered their opinions in succession, the youngest in commission delivering the first, and the oldest the last.

They all held that the tax on carriages was not a direct tax, within the meaning of the Constitution. Chase, Justice, was inclined to think that the direct taxes contemplated by the Constitution are only two: a capitation or poll tax, and a tax on land. He doubted whether a tax by a general assessment of personal property can be included within the term direct tax. Paterson, who had taken a leading part in the Constitutional Convention, went more fully into the sense in which the words, giving the power of taxation, were used by that body. In the course of this examination he said:

'Whether direct taxes, in the sense of the Constitution, comprehend any other tax than a capitation tax, and tax on land, is a questionable point. If Congress, for instance, should tax, in the aggregate or mass, things that generally pervade all the States in the Union, then, perhaps, the rule of apportionment would be the most proper, especially if an assessment was to intervene. This appears from the practice of some of the States to have been considered as a direct tax. Whether it be so, under the Constitution of the United States, is a matter of some difficulty; but as it is not before the court, it would be improper to give any decisive opinion upon it. I never entertained a doubt that the principal-I will not say the only-objects that the framers of the Constitution contemplated as falling within the rule of apportionment, were a capitation tax and a tax on land.'

Iredell, J., delivering his opinion at length, concurred generally in the views of Justices Chase and Paterson. Wilson had expressed his opinion to the same general effect, when giving the decision upon the circuit, and did not now repeat them. Neither Chief Justice Ellsworth nor Justice Cushing expressed any dissent; and it cannot be supposed if, in a case so important, their judgments had differed from those announced, that an opportunity would not have been given them by an order for reargument to participate in the decision.

It may be safely assumed, therefore, as the unanimous judgment of the court, that a tax on carriages is not a direct tax. And it may further be taken as established upon the testimony of Paterson, that the words direct taxes, as used in the Constitution, comprehended only capitation taxes, and taxes on land, and perhaps taxes on personal property by general valuation and assessment of the various descriptions possessed with the several States.

It follows necessarily that the power to tax without apportionment extends to all other objects. Taxes on other objects are included under the heads of taxes not direct, duties, imposts, and excises, and must be laid and collected by the rule of nuiformity. The tax under consideration is a tax on bank circulation, and may very well be classed under the head of duties. Certainly it is not, in the sense of the Constitution, a direct tax. It may be said to come within the same category of taxation as the tax on incomes of insurance companies, which this court, at the last term, in the case of Pacific Insurance Company v. Soule held not to be a direct tax.

Is it, then, a tax on a franchise granted by a State, which Congress, upon any principle exempting the reserved powers of the States from impairment by taxation, must be held to have no authority to lay and collect?

We do not say that there may not be such a tax. It may be admitted that the reserved rights of the States, such as the right to pass laws, to give effect to laws through executive action, to administer justice through the courts, and to employ all necessary agencies for legitimate purposes of State government, are not proper subjects of the taxing power of Congress. But it cannot be admitted that franchises granted by a State are necessarily exempt from taxation; for franchises are property, often very valuable and productive property; and when not conferred for the purpose of giving effect to some reserved power of a State, seem to be as properly objects of taxation as any other property.

But in the case before us the object of taxation is not the franchise of the bank, but property created, or contracts made and issued under the franchise, or power to issue bank bills. A railroad company, in the exercise of its corporate franchises, issues freight receipts, bills of lading, and passenger tickets; and it cannot be doubted that the organization of railroads is quite as important to the State as the organization of banks. But it will hardly be questioned that these contracts of the company are objects of taxation within the powers of Congress, and not exempted by any relation to the State which granted the charter of the railroad. And it seems difficult to distinguish the taxation of notes issued for circulation from the taxation of these railroad contracts. Both descriptions of contracts are means of profit to the corporations which issue them; and both, as we think, may properly be made contributory to the public revenue.

It is insisted, however, that the tax in the case before us is excessive, and so excessive as to indicate a purpose on the part of Congress to destroy the franchise of the bank, and is, therefore, beyond the constitutional power of Congress.

The first answer to this is that the judicial cannot prescribe to the legislative departments of the government limitations upon the exercise of its acknowledged powers. The power to tax may be exercised oppressively upon persons, but the responsibility of the legislature is not to the courts, but to the people by whom its members are elected. So if a particular tax bears heavily upon a corporation, or a class of corporations, it cannot, for that reason only, be pronounced contrary to the Constitution.

But there is another answer which vindicates equally the wisdom and the power of Congress.

It cannot be doubted that under the Constitution the power to provide a circulation of coin is given to Congress. And it is settled by the uniform practice of the government and by repeated decisions, that Congress may constitutionally authorize the emission of bills of credit. It is not important here, to decide whether the quality of legal tender, in payment of debts, can be constitutionally imparted to these bills; it is enough to say, that there can be no question of the power of the government to emit them; to make them receivable in payment of debts to itself; to fit them for use by those who see fit to use them in all the transactions of commerce; to provide for their redemption; to make them a currency, uniform in value and description, and convenient and useful for circulation. These powers, until recently, were only partially and occasionally exercised. Lately, however, they have been called into full activity, and Congress has undertaken to supply a currency for the entire country.

The methods adopted for the supply of this currency were briefly explained in the first part of this opinion. It now consists of coin, of United States notes, and of the notes of the National banks. Both descriptions of notes may be properly described as bills of credit, for both are furnished by the government; both are issued on the credit of the government; and the government is responsible for the redemption of both; primarily as to the first description, and immediately upon default of the bank, as to the second. When these bills shall be made convertible into coin, at the will of the holder, this currency will, perhaps, satisfy the wants of the community, in respect to a circulating medium, as perfectly as any mixed currency that can be devised.

Having thus, in the exercise of undisputed constitutional powers, undertaken to provide a currency for the whole country, it cannot be questioned that Congress may, constitutionally, secure the benefit of it to the people by appropriate legislation. To this end, Congress has denied the quality of legal tender to foreign coins, and has provided by law against the imposition of counterfeit and base coin on the community. To the same end, Congress may restrain, by suitable enactments, the circulation as money of any notes not issued under its own authority. Without this power, indeed, its attempts to secure a sound and uniform currency for the country must be futile.

Viewed in this light, as well as in the other light of a duty on contracts or property, we cannot doubt the constitutionality of the tax under consideration.

The three questions certified from the Circuit Court of the District of Maine must, therefore, be answered

AFFIRMATIVELY.

Mr. Justice NELSON, with whom concurred Mr. Justice DAVIS, dissenting.


text: Talk:Veazie Bank v. Fenno/Opinion of the Court


text:
Veazie Bank v. Fenno/Dissent Nelson

Mr. Justice NELSON, with whom concurred Mr. Justice DAVIS, dissenting.

I am unable to concur in the opinion of a majority of the court in this case.

The Veazie Bank was incorporated by the legislature of the State of Maine, in 1848, with a capital of $200,000, and was invested with the customary powers of a banking institution; and, among others, the power of receiving deposits, discounting paper, and issuing notes or bills for circulation. The constitutional authority of the State to create these institutions, and to invest them with full banking powers, is hardly denied. But, it may be useful to recur for a few moments to the source of this authority.

The tenth amendment to the Constitution is as follows: 'The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.' On looking into the Constitution, it will be found that there is no clause or provision which either expressly, or by reasonable implication, delegates this power to the Federal Government, which originally belonged to the States, nor which prohibits it to them. In the discussions on the subject of the creation of the first Bank of the United States, in the first Congress, and in the Cabinet of Washington, in 1790 and 1791, no question was made as to the constitutionality of the State banks. The only doubt tax existed, and which divided the opinion of the most eminent statesmen of the day, many of whom had just largely participated in the formation of the Constitution, the government under which they were then engaged in organizing, was, whether or not Congress possessed a concurrent power to incorporate a banking institution of the United States?

Mr. Hamilton, in his celebrated report on a National bank to the House of Representatives, discusses at some length the question, whether or not it would be expedient to substitute the Bank of North America, located in Philadelphia, and which had accepted a charter from the legislature of Pennsylvania, in the place of organizing a new bank. And, although he finally came to the conclusion to organize a new one, there is not a suggestion, or intimation, as to the illegality or unconstitutionality of this State bank.

The act incorporating this bank, passed February 25th, 1791, prohibited the establishment of any other by Congress, during its charter, but said nothing as to the State banks. A like prohibition is contained in the act incorporating the Bank of the United States of 1816. The constitutionality of a bank incorporated by Congress was first settled by the judgment of this court in McCulloch v. The State of Maryland, in 1819. In that case both the counsel and the court recognize the legality and constitutionality of banks incorporated by the States.

The constitutionality of the Bank of the United States was again discussed, and decided in the case of Osborn v. United States Bank. And, in connection with this, was argued and decided a point in the case of The United States Bank v. The Planters' Bank of Georgia, which was common to both cases. The question was, whether the Circuit Courts of the United States had jurisdiction of a suit, brought by the United States Bank against the Planters' Bank of Georgia, incorporated by that State, and in which the State was a stockholder.

The court held in both cases that it had. Since the adoption of the Constitution, down to the present act of Congress, and the case now before us, the question in Congress and in the courts has been, not whether the State banks were constitutional institutions, but whether Congress had the power conferred on it by the States, to establish a National bank. As we have said, that question was closed by the judgment of this court in McCulloch v. The State of Maryland. At the time of the adoption of the Constitution, there were four State banks in existence and in operation-one in each of the States of Pennsylvania, New York, Massachusetts, and Maryland. The one in Philadelphia had been originally chartered by the Confederation, but subsequently took a charter under the State of Pennsylvania. The framers of the Constitution were, therefore, familiar with these State banks, and the circulation of their paper as money; and were also familiar with the practice of the States, that was so common, to issue bills of credit, which were bills issued by the State, exclusively on its own credit, and intended to circulate as currency, redeemable at a future day. They guarded the people against the evils of this practice of the State governments by the provision in the tenth section of the first article, 'that no State shall' 'emit bills of credit,' and, in the same section, guard against any abuse of paper money of the State banks in the following words: 'nor make anything but gold and silver coin a tender in payment of debts.' As bills of credit were thus entirely abolished, the paper money of the State banks was the only currency or circulating medium to which this prohibition could have had any application, and was the only currency, except gold and silver, left to the States. The prohibition took from this paper all coercive circulation, and left it to stand alone upon the credit of the banks.

It was no longer an irredeemable currency, as the banks were under obligation, including, frequently, that of its stockholders, to redeem their paper in circulation, in gold or silver, at the counter. The State banks were left in this condition by the Constitution, untouched by any other provision. As a consequence, they were gradually established in most or all of the States, and had not been encroached upon or legislated against, or in any other way interfered with, by acts of Congress, for more than three-quarters of a century-from 1787 to 1864.

But, in addition to the above recognition of the State banks, the question of their constitutionality came directly before this court in the case of Briscoe v. The Bank of the Commonwealth of Kentucky.

The case was most elaborately discussed, both by counsel and the court. The court, after the fullest consideration, held that the States possessed the power to grant charters to State banks; that the power was incident to sovereignty; and that there was no limitation in the Federal Constitution on its exercise by the States. The court observed that the Bank of North America and of Massachusetts, and some others, were in operation at the time of the adoption of the Constitution, and that it could not be supposed the notes of these banks were intended to be inhibited by that instrument, or, that they were considered as bills of credit within its meaning. All the judges concurred in this judgment, except Mr. Justice Story. The decision in this case was affirmed in Woodruff v. Trapnall; in Darrington v. The Bank of Alabama; and in Curran v. State of Arkansas.

Chancellor Kent observes, that Mr. Justice Story, in his Commentaries on the Constitution, seems to be of opinion that independent of the long-continued practice, from the time of the adoption of the Constitution, the States would not, upon a sound construction of the Constitution, if the question was res integra, be authorized to incorporate banks with a power to circulate bank paper as currency, inasmuch as they are expressly prohibited from coining money. He cites the opinions of Mr. Webster, of the Senate of the United States, and of Mr. Dexter, formerly Secretary of War, on the same side. But the Chancellor observes, that the equal, if not the greater, authority of Mr. Hamilton, the earliest Secretary of the Treasury, may be cited in support of a different opinion; and the contemporary sense and uniform practice of the nation are decisive of the question. He further observes, the prohibition (of bills of credit) does not extend to bills emitted by individuals, singly or collectively, whether associated under a private agreement for banking purposes, as was the case with the Bank of New York, prior to its earliest charter, which was in the winter of 1791, or acting under a charter of incorporation, so long as the State lends not its credit, or obligation, or coercion to sustain the circulation.

In the case of Briscoe v. The Bank of the Commonwealth of Kentucky, he observes, that this question was put at rest by the opinion of the court, that there was no limitation in the Constitution on the power of the States to incorporate banks, and their notes were not intended nor were considered as bills of credit.

The constitutional power of the States, being thus established by incontrovertible authority, to create State banking institutions, the next question is, whether or not the tax in question can be upheld, consistently with the enjoyment of this power.

The act of Congress, July 13th, 1866, declares, that the State banks shall pay ten per centum on the amount of their notes, or the notes of any person, or other State bank, used for circulation, and paid out by them after the 1st of August, 1866. In addition to this tax, there is also a tax of five per centum per annum, upon all dividends to stockholders, besides a duty of one twenty-fourth of one per centum, monthly, upon all deposits, and the same monthly duty upon the capital of the bank. This makes an aggregate of some sixteen per cent. imposed annually upon these banks. It will be observed, the tax of ten per centum upon the bills in circulation is not a tax on the property of the institutions. The bills in circulation are not the property, but the debts of the bank, and, in their account of debits and credits, are placed to the debit side. Certainly, no government has yet made the discovery of taxing both sides of this account, debit and credit, as the property of a taxable person or corporation. If both these items could be made available for this purpose, a heavy National debt need not create any very great alarm, neither as it respects its pressure on the industry of the country, for the time being, or of its possible duration. There is nothing in the debts of a bank to distinguish them in this respect from the debts of individuals or persons. The discounted paper received for the notes in circulation is the property of the bank, and is taxed as such, as is the property of individuals received for their notes that may be outstanding.

The imposition upon the banks cannot be upheld as a tax upon property; neither could it have been so intended. It is, simply, a mode by which the powers or faculties of the States, to incorporate banks, are subjected to taxation, and, which, if maintainable, may annihilate those powers.

No person questions the authority of Congress to tax the property of the banks, and of all other corporate bodies of a State, the same as that of individuals. They are artificial bodies, representing the associated pecuniary means of real persons, which constitute their business capital, and the property thus invested is open and subject to taxation, with all the property, real and personal, of the State. A tax upon this property, and which, by the Constitution, is to be uniform, affords full scope to the taxing power of the Federal government, and is consistent with the power of the States to create the banks, and, in our judgment, is the only subject of taxation, by this government, to which these institutions are liable.

As we have seen, in the forepart of this opinion, the power to incorporate banks was not surrendered to the Federal Government, but reserved to the States; and it follows that the Constitution itself protects them, or should protect them, from any encroachment upon this right. As to the powers thus reserved, the States are as supreme as before they entered into the Union, and are entitled to the unrestrained exercise of them. The question as to the taxation of the powers and faculties belonging to governments is not new in this court. The bonds of the Federal Government have been held to be exempt from State taxation. Why? Because they were issued under the power in the Constitution to borrow money, and the tax would be a tax upon this power; and, as there can be no limitation to the extent of the tax, the power to borrow might be destroyed. So, in the instance of the United States notes, or legal tenders, as they are called, issued under a constructive power to issue bills of credit, as no express power is given in the Constitution, they are exempt from State taxation for a like reason as in the case of government bonds; and, we learn from the opinion of the court in this case, that one step further is taken, and that is, that the notes of the National banks are to be regarded as bills of credit, issued indirectly by the government; and it follows, of course, from this, that the banks used as instruments to issue and put in circulation these notes, are also exempt. We are not complaining of this. Our purpose is to show how important it is to the proper protection of the reserved rights of the States, that these powers and prerogatives should be exempt from Federal taxation, and how fatal to their existence, if permitted. And, also, that even if this tax could be regarded as one upon property, still, under the decisions above referred to, it would be a tax upon the powers and faculties of the States to create these banks, and, therefore, unconstitutional.

It is true, that the present decision strikes only at the power to create banks, but no person can fail to see that the principle involved affects the power to create any other description of corporations, such as railroads, turnpikes, manufacturing companies, and others.

This taxation of the powers and faculties of the State governments, which are essential to their sovereignty, and to the efficient and independent management and administration of their internal affairs, is, for the first time, advanced as an attribute of Federal authority. It finds no support or countenance in the early history of the government, or in the opinions of the illustrious statesmen who founded it. These statesmen scrupulously abstained from any encroachment upon the reserved rights of the States; and, within these limits, sustained and supported them as sovereign States.

We say nothing, as to the purpose of this heavy tax of some sixteen per centum upon the banks, ten of which we cannot but regard as imposed upon the power of the States to create them. Indeed, the purpose is scarcely concealed, in the opinion of the court, namely, to encourage the National banks. It is sufficient to add, that the burden of the tax, while it has encouraged these banks, has proved fatal to those of the States; and, if we are at liberty to judge of the purpose of an act, from the consequences that have followed, it is not, perhaps, going too far to say, that these consequences were intended.

title: Veazie Bank v. Fenno/Dissent Nelson


text: Talk:Veazie Bank v. Fenno/Dissent Nelson