text:
Barrett v. Holmes

ERROR to the Supreme Court of the State of Iowa.

This was an action for the recovery of real property, brought by the plaintiff in error Aug. 28, 1874, in the Circuit Court of Mills County, in the State of Iowa. He relied on a tax title based on the deed of the county treasurer to one Meads, dated Jan. 6, 1868, and recorded on the 28th of the same month; a deed from Meads to one Callanan, dated Feb. 1, and recorded March 12, 1873; and a deed from Callanan to himself, dated July 25, and recorded Aug. 3, 1874.

The defendant claimed under a bond for a deed, given by those who held the patent to the land. The bond was dated Feb. 12, 1872.

The law of Iowa prescribes how the deed of the treasurer or tax-collector for lands sold for taxes shall be executed, and its effect, as follows:--

'The deed shall be signed by the treasurer in his official capacity, and acknowledged by him before some officer authorized to take acknowledgments of deeds, and when substantially thus executed and recorded in the proper record of titles for real estate, shall vest in the purchaser all the right, title, interest, and estate of the former owner in and to the land conveyed, and all the right, title, interest, and claim of the State and county thereto, and shall be presumptive evi ence in all the courts of this State, in all controversies and suits in relation to the rights of the purchaser, his heirs and assigns, to the land thereby conveyed, of the following facts: that the real property conveyed was subject to taxation for the years stated in the deed, &c., and shall be conclusive evidence of the following facts: that all things whatever required by law to make a good and valid sale, and to vest the title in the purchaser, were done,' &c. Iowa Rev. 784; Code, 807.

The following statute of limitation was in force in Iowa when the tax deed under which the plaintiff in error claimed bore date, and when the suit was brought:--

'No action for the recovery of real property sold for the non-payment of taxes shall lie, unless the same be brought within five years after the treasurer's deed is executed and recorded as above provided (Rev. 784; Code, 807): Provided, that where the owner of such real estate sold as aforesaid shall, at the time of such sale, be a minor, or insane, or convict in the penitentiary; five years after such disability shall be removed shall be allowed such person, his heirs or legal representatives, to bring such action.' Iowa Rev. 700; Code, 902.

The defence was the limitation of five years prescribed by the statute above quoted.

Upon the trial of the cause in the State Circuit Court, the jury returned special findings, from which it appeared that Love, the ancestor, who was the only defendant when the suit was brought, and who had died after its commencement, took possession of the land in controversy in March, 1872, and continued in possession until the trial, in November, 1875, and that the parties who during that period held the tax title to the land had no knowledge of such possession until June, 1874. The land was unoccupied and unimproved until the possession taken by Love.

There was a general verdict for the defendant, upon which judgment was entered.

The plaintiff appealed to the Supreme Court of the State, where he claimed that upon the conceded facts of the case, as above recited, and the findings of the jury, the five years' Statute of Limitations above quoted did not begin to run until there was an adverse possession of the land by the former owner or one claiming under him, and that if not thus construed the statute was in conflict with the Constitution of the United States.

The Supreme Court of Iowa found that the constitutional question was involved, but upheld the statute, and affirmed the judgment of the State Circuit Court. This writ of error is prosecuted to reverse that judgment.

Mr. George G. Wright for the plaintiff in error.

The ruling of the court below, that the Statute of Limitation of five years began to run from the time the treasurer's deed was executed and recorded, irrespective of the question of adverse possession, and that the entry of the former owner at any time before that period has expired, bars the right of the purchaser at the tax sale, is inconsistent with the language and obvious meaning of the statute and the later decisions of that court. Iowa Rev. 790; Code, 902; Peck v. Sexton, 41 Iowa, 566; Lockridge v. Daggett, 47 id. 679; Moingona Coal Co. v. Blair, 51 id. 447.

It not only deprives the plaintiff in error of his property without due process of law, but impairs the contract of purchase from the State.

Since it is a universal rule that an action for the recovery of real property, whether called 'ejectment,' or 'an action of right,' or what else, cannot be brought unless there is an adverse possession, it is clear that this action could not be brought until there was a mature right to enforce it in the proper court, and by the appropriate remedy. It follows, therefore, that under the laws of Iowa there could not be such mature right, nor was the appropriate remedy afforded, until the plaintiff's right to possession was denied, either by an actual adverse holding, or some act equivalent thereto. Blackwell, Tax Titles, 566.

A title is not barred by the mere failure to bring suit within the time limited; but there must hav been an adverse possession. Neddy v. State, 8 Yerg. (Tenn.) 249; Smith v. McCall, 2 Humph. (Tenn.) 163; Rice v. Nelson, 27 Iowa, 148; Waln v. Shearman, 8 Serg. & R. (Pa.) 357.

A right without a remedy is unknown to the law. The statute cannot begin to run until there is an entry or possession which challenges the right of the owner. In other words, the entry must unequivocally denote an intent to take or assume actual possession. Altemas v. Campbell, 9 Watts (Pa.), 28.

There can be no such thing as an acquiescence in an adverse claim which will defeat a recovery, until such claim be asserted by entry. A party relying upon the bar of the statute must show that he has held the premises, not only by a possession actual, open, and adverse, but that he has maintained it as a right resulting from an exclusive property in and dominion over them for the time limited by the statute. 3 Wash. Real Prop. 483; McNamee v. Moreland, 26 Iowa, 96; Hollenbeck v. Riley, 35 id. 105; Larum v. Wilmer, id. 244.

The tax sale under the statute had the effect of giving to the purchaser an original title, divesting all former interest in the land, and vesting in him an independent and paramount legal and equitable title in fee. By it a new and perfect title was established. This results from the authority of the State to levy taxes on property within her limits, and coerce payment by subjecting it to sale. It is one of the necessary and inherent rights of the sovereign power. Rev. 2207; Code, 1928; Atkins v. Hinman, 7 Ill. 449; Dunlap v. Gallatin County, 15 id. 7; Irwin v. Trego, 22 Pa. St. 368; Luffborough v. Parker, 16 Serg. & R. (Pa.) 351.

The formal execution and record of the tax deed which is the source of the title of the plaintiff in error being for land unoccupied, drew after it the possession, and it was unnecessary for him to bring an action, or do anything to vindicate his title or right to possession until another challenged it by entering into actual possession, or doing something in law which is equivalent thereto. Dean v. Earley, 15 Wis. 100; Parish v. Eager, id. 532; Whitney v. Marshall, 17 id. 174; Gunnison v. Hoehne, 18 id. 268.

In declaring that 'no action for the recovery of real property sold for the non-payment of taxes shall lie unless brought within five years after the treasurer's deed is executed and recorded,' the legislature could not have intended to prevent an action after the expiration of five years, in cases in which it was impossible that any measures could be taken in this form of action for the recovery within that time. The term 'recovery' implies an adverse proceeding through the medium of the law, and the action for such recovery is utterly impracticable under the Iowa statute, except where there is an actual adverse possession. The owner of the tax title being by his purchase seised of the premises, theretofore and then unoccupied, could not be divested of the possession until entry by the former owner or some one claiming title. Until then an action for the recovery did not accrue. Waln v. Shearman, supra; Jackson v. Huntley, 5 Johns. (N. Y.) 60; Jackson v. McKee, 8 id. 429.

No counsel appeared for the defendant in error.

MR. JUSTICE WOODS, after stating the case, delivered the opinion of the court.

title: Barrett v. Holmes


text: Talk:Barrett v. Holmes

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

title: Talk:Barrett v. Holmes


text:
Barrett v. Holmes/Opinion of the Court

The Supreme Court of Iowa has, by several decisions, construed the five years' Statute of Limitations, which is set up as a defence in this case, to apply to an action brought by one claiming under a tax deed, as well as to one brought by the original owner of the land. Brown v. Painter, 38 Iowa, 456; Laverty v. Sexton, 41 id. 435. And the court so ruled in this case. See Barrett v. Love, 48 id. 103.

By these decisions the Supreme Court of the State has established a rule of property in the State of Iowa which is inding on this and other courts of the United States. Jackson v. Chew, 12 Wheat. 153; Beauregard v. New Orleans, 18 How. 497; Suydam v. Williamson, 24 id. 427; Nichols v. Levy, 5 Wall. 433; Williams v. Kirtland, 13 id. 306.

So far, therefore, as this point is concerned, it must be considered as settled.

But the court further held that the limitation began to run at the time of the execution and recording of the tax deed, irrespective of the question of adverse possession, so that, if at any time during the period of five years, no matter how near its close, the former owner takes actual possession, and holds until the expiration of the five years from the date of the execution and recording of the tax deed, the right of the purchaser at the tax sale is completely barred.

The plaintiff in error claims that when thus construed the statute is in conflict with the Constitution of the United States: first, because it deprives the purchaser at a tax sale of his property without due process of law; and, second, because it impairs the obligation of the contract of purchase, of which the statute in force when it was made forms a part. Art. 5, Amendments to the Constitution, and sect. 10, art. 1.

The argument of the plaintiff in error is that the purchaser at a tax sale cannot bring suit to recover the land purchased by him until the former owner, or some one else, takes adverse possession; and as no such possession may be taken until just before, or even after, the expiration of the five years, his right to the land is cut off without giving him his day in court, and the obligation of the contract contained in his deed, and the law under which it was executed, is impaired.

We do not think that the premise from which this conclusion is drawn is true in point of fact, nor, if it were, that the conclusion would follow.

The Iowa statute (Rev. 3601; Code, 3273) declares that 'an action to determine and quiet the title of real property may be brought by any one having or claiming an interest therein, whether in or out of possession of the same, against any person claiming title thereto though not in possession.'

The Supreme Court of Iowa, in this case, held that the bringing of an action under the section first quoted would be an action for the recovery of the property, and would interrupt the running of the five years' Statute of Limitation. Barrett v. Love, 48 Iowa, 103.

The fact, therefore, that the lands are unoccupied during the five years succeeding the execution and recording of the tax deed is no obstacle to the bringing of a suit which would interrupt the running of the limitation.

But even if no such action could be brought, we think that the purchaser at a tax sale is not deprived of any of the rights conferred on him by his purchase and deed, by reason of the construction put upon the five years' Statute of Limitation.

The right of the legislature to prescribe what shall be the effect of a tax sale and deed cannot be questioned. The legislature of Iowa, in the enactments brought to our notice in this case, has exercised that right with great liberality to the purchaser at the tax sale. It has made his deed presumptive evidence of certain facts and conclusive evidence of others; it has declared that it shall vest in him all the estate of the former owner and of the county and State in the premises. But it has also declared, in effect, that the deed shall not support an action for the recovery of the land unless the suit therefor is brought within five years after the treasurer's deed is executed and recorded. When, therefore, the purchaser at a tax sale receives the treasurer's deed, he takes it with all the advantages and disadvantages incident thereto. He knows precisely its effect, and what he must do to protect his title under it, for all this is plainly written in the law. If there should turn out to be an insuperable obstacle to his establishing his title to unoccupied lands, he cannot complain, for the whole subject was under the legislative control, the rules affecting his title were proclaimed in advance, and he bought with his eyes open. He took the risk of being able to make his deed effectual under the rule prescribed by the legislature. He gets all he bargained for. So that when the Statute of Limitation cuts him off, he having, as he imagined, been unable to bring his suit for want of a party in adverse possession, he has been deprived of no right which he ever possessed.

The legislature might have declared that the title of the purchaser at the tax sale should be divested without his consent by the repayment to him within a prescribed period, by the former owner, of the amount of his bid, or the tax and the interest and penalty thereon. The right to redeem the title of lands sold for taxes is one commonly reserved, and the right is favored by the policy of the law. Dubois v. Hepburn, 10 Pet. 1; Corbett v. Nutt, 10 Wall. 464; Gault's Appeal, 33 Pa. St. 94; Rice v. Nelson, 27 Iowa, 148; Schenk v. Peay, 1 Dill. 267; Masterson v. Beasley, 3 Ohio, 301; Jones v. Collins, 16 Wis. 594; Curtis v. Whitney, 13 Wall. 68. But it would scarcely be contended that such statute deprived the purchaser of his property without due process of law, or impaired the obligation of his contract of purchase.

But under the Iowa law the purchaser at a tax sale, who can find no one in possession against whom to bring his suit, has a plain way to make his title indefeasible, and that is by taking possession himself.

When the section prescribing the effect of the treasurer's deed and that prescribing the five years' limitation are considered together, the policy of the law is plain, and no cause of complaint is left the purchaser at tax sale. The effect of the two sections is this, that the party holding under the tax deed must within five years either himself take actual possession of the property, or within the same period bring a suit to recover possession; and, upon his failure to do either, his action upon his deed shall be barred.

When thus considered, the law violates no contract and deprives the purchaser at the tax sale of no estate or property to which he had a right. He bought subject to a condition, with explicit warning that if he did not comply with it, his deed should become ineffectual to support an action. Failing to perform the condition, he is left without remedy, but also without just ground for complaint.

We see no error in the record.

Judgment affirmed.

title: Barrett v. Holmes/Opinion of the Court


text: Talk:Barrett v. Holmes/Opinion of the Court


text:
White v. National Bank

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

The facts are stated in the opinion of the court.

Mr. S. V. White for the plaintiff in error.

Mr. Henry M. Teller, contra.

MR. JUSTICE MILLER delivered the opinion of the court.

title: White v. National Bank


text: Talk:White v. National Bank

title: Talk:White v. National Bank


text:
White v. National Bank/Opinion of the Court

This is an action by White, who was plaintiff below, for the sum of $60,000, against the Miner's National Bank of Georgetown, Colorado. The declaration contains twelve special counts, upon as many drafts, drawn by the Stewart Silver Reducing Company on Thomas W. Phelps, payable in the city of New York to the order of the defendant, and indorsed by J. L. Brownell, its president, to S. V. White, and duly protested for non-payment.

To these counts is added another, in this language: 'And for that also, heretofore, to wit, on the first day of April, A.D. 1876, at the said county of Clear Creek, the said defendant was indebted to plaintiff in $60,000, for so much money by the plaintiff, before that time, paid to the use of said defendant at its request, which said sum of money was to be paid to the plaintiff on request,' with an allegation of request and refusal.

To this declaration the defendant pleaded the general issue and several special pleas, which it is unnecessary to notice.

The case was tried by a jury. The plaintiff recovered $15,000 debt and $2,625 damages for inte est, on account of three of the drafts. His claim on the other drafts, and for money paid at defendant's request, was rejected. He, therefore, brings this writ, and assigns for error the rulings of the court in the progress of the trial, which are set forth in a bill of exceptions.

J. L. Brownell, a partner in the firm of J. L. Brownell & Brother, doing business as bankers and brokers in the city of New York, was also president of the defendant, and interested in the Stewart Silver Reducing Company during the time of the transactions involved in this suit. As such president, he sold or transferred the several drafts on which this suit is founded to White, and received of the latter for the use of the bank the amount of said drafts less the discount. They were not paid at maturity, but due demand, protest, and notice were made. Those on which plaintiff recovered need not be further noticed. The others were rejected by the court as evidence against the defendant, on account of the form of the indorsement.

As they were, in this respect, alike, the form of one will be given here as a specimen of the whole:-- '$5,000.] OFFICE OF THE STEWART SILVER REDUCING COMPANY,

[L. S.]

'GEORGETOWN, COL., Oct. 25, 1875.

'Four months after date pay to the order of the Miners'     National Bank, Georgetown, Colorado, payable at the Third      National Bank, New York City, five thousand dollars.

'STEWART SILVER REDUCING COMPANY,

'By J. OSCAR STEWART, President.

'To THOS. W. PHELPS, Esq.,

'Georgetown, Colorado.

Across the face, in red: 'Accepted-THOS. W. PHELPS.

'No. ___. Pay S. V. White or order for account Miners'     National Bank, Georgetown, Colorado. J. L. Bownell, p't.

'S. V. WHITE.'

Because of the words 'for account of Miners' National Bank of Georgetown, Colorado,' in this indorsement by Brownell, as president of the bank, the Circuit Court ruled that there arose out of the transaction no obligation on the part of the bank to pay the draft or return the money, although due demand of the acceptor and refusal to pay was proved, with notice to the bank. This is the principal question which we are to decide.

The plaintiff relies largely on two propositions to establish his right to recover against defendant on this indorsement.

The first of these is that these words are merely directory and capable of explanation, and when it is shown by parol testimony, as in this case, that the plaintiff bought and paid full value for the draft, with the understanding that he was buying it as commercial paper, with the usual incidents of such at transaction, the indorser is liable in the usual manner, notwithstanding the words we have quoted.

The other proposition is that such is the custom of bankers who deal in such paper in New York, where these drafts are payable, and that the custom must control the construction of the contract.

We are not satisfied that either of these propositions is sound.

The language of the indorsement is without ambiguity, and needs no explanation, either by parol proof or by resort to usage. The plain meaning of it is, that the acceptor of the draft is to pay it to the indorsee for the use of the indorser. The indorsee is to receive it on account of the indorser. It does not purport to transfer the title of the paper or the ownership of the money when received. Both these remain, by the reasonable and almost necessary meaning of the language, in the indorser. It seems to us that the court below correctly construed the effect of the indorsement to be to make White the agent of the bank for the collection of the money.

If this be a sound view of the legal effect of the written indorsement, neither parol proof nor custom can be received to contradict it.

But we are aware of the necessity of proceeding with great caution in a case of first impression in regard to questions affecting commercial transactions, and we do not, therefore, decide this one, because we do not think it absolutely necessary to the case. For assuming this to be correct, we think the plaintiff was still entitled to recover more than he did.

The court below seems to have paid but little attention to the issue on the count for money paid to the use of defendant.

It appears distinctly by the evidence, and is uncontradicted, that the money paid by plaintiff on account of these drafts was placed to the credit of the defendant with its corresponding bankers in New York, and paid out on checks of the defendant, so that there is no question that the latter received the money. There is also no question but that plaintiff thought he was buying these drafts and that they became his property by their delivery to him. It is also evident that Brownell, the president of the bank, thought he was selling him the drafts, and there is evidence that neither White nor Brownell noticed the restrictive words of the indorsement. But if the court below was correct in holding that the indorsement-the evidence in writing of what the parties did-only made White the agent of the bank, and left the bank the owner of the drafts, then both White and Brownell were mistaken, and the money was paid and received under a mutual mistake. If White paid his money as purchase-money of the drafts, he paid it without any consideration, for he did not purchase the drafts. He only burdened himself with the duty of collecting the money for the bank, and the bank received and used his money without giving him any consideration for it. So, also, if White did not become the owner of the drafts, and if, when he should collect the money on them, he would hold it, in the language of the indorsement, 'for the account of the bank,' the jury might have been left at liberty to presume that the money which he paid was a loan or advance on the security of the paper delivered to him at the time. Either of these views of the transaction would justify a recovery under the money count, in which the delivery of the money and the delivery of the drafts, with the qualified indorsement, would be evidence of the payment and receipt of the money and the circumstances which attended it.

This indorsement is treated by counsel here as an assignment of the paper without recourse, in which the title to the paper passed, but the right to recourse to the assignor was cut off. But this is evidently an error. If the court below was correct, neither the title to the paper nor the right to the money under it passed. The only effect was to justify the acceptor in paying to the indorsee for the account of the bank. The legal effect of the transaction, as evidenced by the writing, was merely to enable White to collect the money for the bank. Though a restricted indorsement, it was no assignment at all. It is not, therefore, a contradiction or a varying of the meaning of the written instrument to prove that, in the delivery of this paper to White, he and the bank were under a mistake as to the effect of it, or that he paid this money to the bank without any consideration, or that he advanced money to the bank in the idea that he was to be reimbursed out of the draft when collected.

The instructions given by the court, and the refusal of the prayer of plaintiff, fairly raised this question. All the drafts, except the three which had no such indorsement, were excluded from the jury. The jury were told that nothing else was before them.

The thirteenth instruction asked by plaintiff and refused by the court distinctly affirmed that if Brownell obtained from plaintiff sums of money on account of the drafts, which the court had refused as evidence, which money was placed to the credit of defendant in a New York bank, and afterwards drawn by defendant, the defendant was liable for such money.

The judgment will be reversed, and the case remanded with directions to set aside the verdict and grant a new trial; and it is

So ordered.

NOTE.-Third National Bank v. National Bank, error to the Circuit Court of the United States for the District of Colorado, was argued by Mr. William H. Scott for the laintiff in error, and by Mr. Henry M. Teller for the defendant in error.

MR. JUSTICE MILLER delivered the opinion of the court.

The action in the present case is brought against the same defendant on indorsements of drafts precisely similar to the indorsements in White v. National Bank, though by a different plaintiff. There is in that case the same money count joined with special counts on the drafts, and the same evidence that the money came to the use of the defendant.

In this case, however, the parties waived a jury, and the court found no facts, but rendered a general finding for the defendant. We have had some difficulty, therefore, in disturbing the judgment, as there is no charge to the jury, and no instructions asked and refused.

A bill of exceptions, however, embodies the evidence, and shows that the court refused to receive the drafts in evidence, although the accompanying evidence of the receipt of the money by defendant, and its payment by plaintiff, was the same as in the other case. To this ruling there was an exception.

We are of opinion that the drafts, the peculiar indorsement, and the payment of the money by the plaintiff, and its receipt and use by the defendant, were each and all parts of a transaction admissible as evidence of money paid by plaintiff to the use of defendant, to be repaid on request, and that the court erred in rejecting any part of it.

The judgment will therefore the reversed for that error, and the case remanded with directions to grant a new trial.

So ordered.


text: Talk:White v. National Bank/Opinion of the Court


text:
Third National Bank v. National Bank

MR. JUSTICE MILLER delivered the opinion of the court.

title: Third National Bank v. National Bank


text: Talk:Third National Bank v. National Bank


text:
Third National Bank v. National Bank/Opinion of the Court

The action in the present case is brought against the same defendant on indorsements of drafts precisely similar to the indorsements in White v. National Bank, though by a different plaintiff. There is in that case the same money count joined with special counts on the drafts, and the same evidence that the money came to the use of the defendant.

In this case, however, the parties waived a jury, and the court found no facts, but rendered a general finding for the defendant. We have had some difficulty, therefore, in disturbing the judgment, as there is no charge to the jury, and no instructions asked and refused.

A bill of exceptions, however, embodies the evidence, and shows that the court refused to receive the drafts in evidence, although the accompanying evidence of the receipt of the money by defendant, and its payment by plaintiff, was the same as in the other case. To this ruling there was an exception.

We are of opinion that the drafts, the peculiar indorsement, and the payment of the money by the plaintiff, and its receipt and use by the defendant, were each and all parts of a transaction admissible as evidence of money paid by plaintiff to the use of defendant, to be repaid on request, and that the court erred in rejecting any part of it.

The judgment will therefore the reversed for that error, and the case remanded with directions to grant a new trial.

So ordered.


text: Talk:Third National Bank v. National Bank/Opinion of the Court


text:
Page v. Burnstine

APPEAL from the Supreme Court of the District of Columbia.

The facts are stated in the opinion of the court.

Mr. William F. Mattingly, for the appellant.

Mr. Enoch Totten, contra.

MR. JUSTICE HARLAN delivered the opinion of the court.

title: Page v. Burnstine


text: Talk:Page v. Burnstine

title: Talk:Page v. Burnstine


text:
Page v. Burnstine/Opinion of the Court

This is an appeal from a decree of the Supreme Court of the District of Columbia, dismissing a bill, filed by the personal representative of Robert C. Page, for the purpose of securing for the estate of the decedent the benefit of a policy upon his life for $3,000, issued Nov. 22, 1866, by the American Life Insurance Company of Philadelphia. The bill conceded that the defendant Burnstine had an interest in the policy to the extent of any loans of money by him to the assured, and prayed an account for the ascertainment of such sums. The defendant resisted the rel ef asked, upon the ground that, at the death of the assured, he was the absolute owner, by assignment, of the policy, and, as such, entitled to receive, to his own use, the entire sum which might be realized thereon. The amount due on the policy, $2,676.33, was paid by the company into court, to abide the result of this suit.

Among the depositions taken in the case was that of Burnstine. He testified in reference to the alleged loans by him to Page and the several assignments which he claims were executed to him by the assured.

The preliminary question for our consideration is whether Burnstine, on his own motion, can testify as a witness in the cause. The contention of the appellant is, that no party to an action, by or against a personal representative, can testify against his adversary as to any transaction with, or statement by, the deceased, unless called to testify thereto by the opposite party, or required to testify thereto by the court. Rev. Stat., sect. 858. This rule, it is claimed, applies to the courts of the District of Columbia as fully as to the Circuit and District Courts of the United States. The contention of the appellee is, that his competency is to be determined by sects. 876 and 877 of the Revised Statutes relating to the District of Columbia. These positions require careful consideration; and it is essential to a clear understanding of the question, thus presented, to ascertain the history of the several provisions now incorporated as well in the Revised Statutes of the United States as in the Revised Statutes relating to the District of Columbia, upon the subject of the competency of witnesses in courts of justice.

To the third section of an act, approved July 2, 1864, making appropriations for sundry civil expenses of the government for the fiscal year ending June 30, 1865, a proviso is annexed, 'that in the courts of the United States there shall be no exclusion of any witness on account of color, nor in civil actions, because he is a party to, or interested in, the issue tried.' 13 Stat. 351.

An act, approved on the same day, July 2, 1864, entitled 'An Act relating to the law of evidence in the District of Columbia,' provides, 'that on the trial of any issue joined, or of any matter or question, or on any inquiry arising in any suit, action, or other proceeding in any court of justice in the District of Columbia, or before any person having by law, or by consent of parties, authority by hear, receive, and examine evidence within said District, the parties thereto, and the persons in whose behalf any such action or other proceeding may be brought or defended, and any and all persons interested in the same, shall, except as hereinafter excepted, be competent and compellable to give evidence, either viva voce or by deposition, according to the practice of the court, on behalf of either or any of the parties to the said action or other proceeding: Provided, that nothing herein contained shall render any person who is charged with any offence in any criminal proceeding competent or compellable to give evidence for a against himself or herself, or shall render any person compellable to answer any question tending to criminate himself or herself, or shall in any criminal proceeding render any husband competent or compellable to give evidence for or against his wife, or any wife competent or compellable to give evidence for or against her husband, or in any proceeding instituted in consequence of adultery; nor shall any husband be compellable to disclose any communication made to him by his wife during the marriage, nor shall any wife be compellable to disclose any communication made to her by her husband during the marriage.' 13 Stat. 374.

On the 3d of March, 1865, Congress passed another act upon the subject of the competency of witnesses, entitled 'An Act to amend the third section of an act, entitled 'An Act making appropriations for sundry civil expenses of the government for the year ending the thirtieth day of June, 1865, and for other purposes,' so far as the same relates to witnesses in the courts of the United States.' The act declares that said third section of the appropriation act of July 2, 1864, 'be, and the same hereby is, amended by adding thereto the following proviso: Provided, further, that in actions by or against executors, administrators, or guardians, in which judgment may be rendered for or against them, neither party shall be allowed to testify against the other as to any transaction with, or statement by, the testator, intestate, or ward, unless called to testify thereto by the opposite party, or required to testify thereto by the court.' Id. 533.

There is still another act which has an important bearing upon the question before us. We allude to that portion of sect. 34 of the act of Feb. 21, 1871, creating a government for the District of Columbia, which declares that 'the Constitution, and all the laws of the United States which are not locally inapplicable, shall have the same force and effect within the said District of Columbia as elsewhere within the United States.' 16 id. 426. This provision was not affected by the subsequent displacement of the District government organized under that act.

Thus stood the law up to the date when the two revisions-one the Revised Statutes of the United States, and the other the Revised Statutes relating to the District of Columbia-went into operation.

If it be true, as argued, that the Supreme Court of the District of Columbia, although organized under and by authority of the United States, and possessing the same powers and jurisdiction as the circuit courts of the United States (12 Stat. 763; Rev. Stat. Dist. Col., sect. 760), was not intended to be embraced by the proviso to the third section of the appropriation act of July 2, 1864, and if, as may be further argued, the act of March 3, 1865, being, in terms, amendatory only of that section, was not intended to modify the special act of the latter date relating to this District it is, nevertheless, quite clear that, from and after the passage of the act of Feb. 21, 1871, if not before, the act of March 3, 1865, became a part of the law of evidence in this District. The legal effect of the declaration that all the laws of the United States, not locally inapplicable, should have the same force and effect within this District as elsewhere within the United States, was to import into, or add to, the special act of July 2, 1864, relating to the law of evidence in the District, the exception, created by the act of March 3, 1865, to the general statutory rule, excluding parties as witnesses. This is manifestly so, unless it be that a statute affecting the competency of parties as witnesses in actions by or against personal representatives or guardians, in which judgment may be rendered for or against them, is 'locally inapplicable' to this District. But such a position cannot be maintained consistently with sound reason. The same considerations of public policy which would require the enforcement of such a statute, as that of March 3, 1865, in the Circuit and District Courts of the United States, without regard to the laws of the respective States on the same subject, would suggest its application in the administration of justice in the courts of this District. Congress no doubt felt that the general rule permitting parties to testify on their own motion put the representatives of deceased persons at a great disadvantage, if those proceedings against them by suit could, on their own motion, testify as to transactions with, or statements by, the decedent. To remedy that evil, the act of March 3, 1865, was passed, and it should not be held locally inapplicable to this District, simply because it enlarges the exceptions to the general rule established by the special act of July 2, 1864.

These views do not at all conflict with the previous decisions of this court, holding that certain provisions of the General Statutes of the United States relating to the practice and proceledings in the 'courts of the United States' are locally inapplicable to territorial courts. Those decisions, it will be seen, proceeded upon the ground, mainly, that the legislatures of the Territories referred to, in the exercise of power expressly conferred by Congress, had enacted laws covering the same subjects as those to which the General Statutes of the United States referred. It was, therefore, ruled that the territorial enactments, regulating the practice and proceedings of territorial courts, were not displaced or superseded by general statutes upon the same subject passed by Congress in reference to 'courts of the United States.' Clinton v. Englebrecht, 13 Wall. 434; Hornbuckle v. Toombs, 18 id. 648; Good v. Martin, 95 U.S. 90. No such state of case exists here. The reasons assigned for the conclusion reached in those cases have no application to the question before us.

Such being the law when the Revised Statutes of the United States and the Revised Statutes relating to the District of Columbia went into operation (which was on the same day), we are to inquire whether Congress by those revisions made, or intended to make, any change in the particular rule of evidence now under examination. We are of opinion that no alteration of the previous law was made or intended. The special act of July 2, 1864, relating to the law of evidence in this District, is reproduced, ipsissimis verbis, in two paragraphs, constituting sects. 876 and 877 of the District revision; the act of July 16, 1862 (12 Stat. 588, 589), the third section of the appropriation act of July 2, 1864, and the act of March 3, 1865, are consolidated into one paragraph, and, without the slightest material change of language, constitute sect. 858 of the Revised Statutes of the United States; and the provision already quoted from the act of Feb. 21, 1871, is reproduced in sect. 93 of the District revision. If we consulted alone sect. 876 and 877 of the Revised Statutes relating to the District, we should, perhaps, be constrained to hold that, in the courts of the District, parties could, upon their own motion, testify as well in actions by or against personal representatives as in any other action. But we cannot overlook the fact that, in the revisions, the language of the previous statutes have undergone no change whatever. We should not, therefore, permit the mere collocation or rearrangement of the previous statutes in the new revisions, adopted on the same day, to operate to change the law, and thereby defeat the will of Congress. Rev. Stat. Dist. Col., sect. 1296; Rev. Stat., sect. 5600.

For these reasons, we are of opinion that Burnstine could not, on his own motion, testify as to any transaction with, or statement by, the decedent, Page. His deposition as to such transactions and statements must be excluded from consideration.

Upon the merits of the case we waive any consideration of the question suggested in oral argument, as to whether Burnstine, consistently with public policy, could acquire by assignment any interest in the insurance upon the life of Page, beyond such amount as the latter actually owed him at the time of his death. No such question is raised in the pleadings, nor was it suggested or considered in the court below. We pass it by for the additional reason that its determination is unnecessary in the view which the court takes of this case.

The transactions between Page and Burnstine had their origin, it is conceded, in a loan of money by the latter to the former. To secure that loan an assignment was made of Page's interest in the policy to the extent of the sum borrowed. Each subsequent assignment shows, upon its face, a similar arrangement, until that of Jan. 7, 1873, was executed. The latter assignment, by itself, imports an absolute transfer to Burnstine of all the right, title, and interest of the assured in the policy, and to the payments made therefor, and all benefit and advantage to be derived therefrom. But the circumstances disclosed in the record indicate, with reasonable certainty, that the rea and only object of the execution of the assignment of Jan. 7, 1873, was to invest Burnstine with the entire control of the policy, to the end that, thereafter, the company might deal directly with him, and, upon the death of the assured, that he might be invested with full authority to receive the proceeds of the policy, and apply them in the repayment of such sum or sums as he had loaned to Page upon the security of the policy. In other words, the last assignment may be construed as simply appointing Burnstine, upon the death of the assured, to receive from the company such sum as would then be due on the policy, and, after reimbursing himself to the extent of his loans to Page, to pay the balance to the persons entitled thereto. A different construction of that instrument would place Burnstine in the position of being pecuniarily interested in the death of Page. Unless compelled to do so, we should not suppose that he had any desire or purpose to speculate upon the life of Page, or to do more than secure the repayment of the money actually loaned by him to the assured.

This construction of the assignment of Jan. 7, 1873, is fortified by other evidence. Cross, the local agent at Washington of the insurance company, drew the assignment. In his deposition, taken by the defendant, he testifies that Page admitted, about December, 1871, his inability to keep up the premiums. Burnstine was advised of these facts. Cross thereupon recommended to him that, in order to save himself, he should secure an absolute assignment of the policy. Nothing was said by the parties, upon the occasion when the assignment was drawn, as to its consideration. If the intention had been, upon the part of Page, to make an unconditional sale, and upon the part of Burnstine, to make an unconditional purchase, of the policy, something would have been then said indicating such an intention. That portion of the evidence, which we are at liberty to consider, tends to show that Burnstine acted upon the advice of Cross, and took an absolute assignment, with the object of saving himself,-a result which can be accomplished by awarding to him, out of the proceeds of the policy, such sum as will reimburse him for the loans made to Page.

This conclusion is strengthened by the language employed by Burnstine in his receipt of Oct. 2, 1868. In that paper, he acknowledges the receipt from Page of six orders, for $50 each, upon the disbursing clerk in the Post Office Department, and agrees that in the event Page dies before the orders are paid, and he, Burnstine, should receive from the insurance company the whole or a part of the amount due on the policy, he 'would make such a settlement with his [Page's] representatives as the case may require.'

This obligation of Burnstine was not, in terms, withdrawn or cancelled in any of the assignments thereafter executed, and the receipt of Oct. 2, 1868, should not, therefore, be overlooked in ascertaining the real purpose the parties had in the assignment of Jan. 7, 1873. Our conclusion is still further strengthened by the language in one of the conditions inserted in the policy (of which, it must be assumed, the parties were aware), to the effect that, 'in case of the assignments of a policy, whether as security or otherwise, satisfactory proofs of the assignee's interest in the insured life must be furnished with the proofs of death.' If the company, or Burnstine, understood that the latter, by the assignment of Jan. 7, 1873, became entitled to the whole sum due on the policy at the death of the assured, without reference to the amount Burnstine had actually paid out, it would have been an idle cere-mony for the latter to have furnished proofs of his interest in the assured life.

The decree must be reversed, and the cause remanded with directions that an account be taken, as well of the sums actually loaned or paid by Burnstine to Page upon the policy as security for its repayment, as of all sums paid by him for the purpose of keeping the policy in force, and for such decree as may be in conformit to this opinion; and it is

So ordered.

MR. JUSTICE BRADLEY.

I dissent from so much of the opinion in this case as holds that the act of Congress relating to the admission of parties to testify in the courts of the United States applies to the courts of the District of Columbia. The act relating to that subject in reference to judicial proceedings in the District covers the whole subject, and excludes the operation of any general law unless the latter is made specially applicable. The practice of admitting colored persons to testify prevailed in the District courts from the organization of the present Supreme Court of the District, and did not need the aid of the general statute. The admission of parties to testify in the courts of the District was provided for in a distinct and separate statute relating to the District alone.

I concur in the judgment of the court notwithstanding the evidence of the defendant.

title: Page v. Burnstine/Opinion of the Court


text: Talk:Page v. Burnstine/Opinion of the Court


text:
Hartman v. Greenhow

ERROR to the Supreme Court of Appeals of the State of Virginia.

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

William L. Royall for the plaintiff in error.

Mr. James G. Field, Attorney-General of Virginia, contra.

MR. JUSTICE FIELD delivered the opinion of the court.

title: Hartman v. Greenhow


text: Talk:Hartman v. Greenhow

title: Talk:Hartman v. Greenhow


text:
Hartman v. Greenhow/Opinion of the Court

The plaintiff in error, who is the petitioner in the court below, is a citizen and resident of the city of Richmond, State of Virginia; and on the 5th of April, 1878, was indebted to the State for taxes to the amount of twenty-six dollars and fifty-three cents. On that day he tendered to the treasurer of Richmond-who is by law charged with the duty of collecting the taxes of the State in that city-certain interest coupons, which were overdue, amounting to twenty-four dollars, cut from bonds of the State, issued under the provisions of an act of the General Assembly, passed March 30, 1871, commonly known as the Funding Act, and two dollars and fifty-three cents in lawful money of the United States, in payment of the taxes; but the treasurer refused to receive the coupons in discharge of the taxes without first deducting therefrom the taxes upon the bonds to which they were originally attached. The petitioner holding the coupons was not at the time the owner of such bonds. Upon this refusal he applied to the Supreme Court of Appeals of Virginia for a writ of mandamus to the treasurer to compel him to receive the coupons, with the money mentioned, in full discharge of the petitioner's taxes, without any deduction from the coupons for the taxes upon the bonds.

The court issued a rule or an alternative writ upon the treasurer, to which he answered, that the General Assembly of the State had, for many years, exercised the right to tax all bonds, choses in action, and other evidences of debt, including bonds of the State; that the taxes assessed upon the latter bonds were according to their market value, the amount being fixed at fifty cents on the one hundred dollars of such value; that the law required the taxes to be collected when the interest on the bonds was paid, and made it a high penal offence for any officer to receive coupons in payment of taxes without deducting from their face value the tax levied upon the bonds from which they were taken, and he referred to several acts of the legislature in support of this statement. He also answered, that at the time the coupons were tendered to him he proposed to deduct from them the amount of the taxes on the bonds to which they were originally attached, and demanded of the petitioner a like amount in money in addition to what was tendered; that he would not otherwise have been justified in giving a receipt in full for the taxes due; and that this additional amount the petitioner refused to pay. The respondent, therefore, denied that the petitioner was entitled to the writ, and prayed that his petition be dismissed.

The application was fully argued before the Supreme Court of Appeals by counsel for he petitioner, and by the attorney-general of the State for the treasurer. The judges of the court were equally divided in opinion upon it, and, as is usual in such cases, the application was denied, and judgment to that effect, with costs, was entered. To review this judgment the case is brought here on writ of error.

The principal question for determination, as thus seen, is the validity of the statute of the State requiring the tax levied upon its bonds to be deducted from the coupons for interest, originally attached to them, when the coupons are presented for payment, so far as it applies to coupons separated from the bonds and held by different owners.

To fully understand this question, it will be necessary to make a brief reference to the legislation of the State upon her indebtedness. But before doing this there is a question of jurisdiction to be considered. The judgment of the Supreme Court of Appeals being entered upon an equal division of opinion among its judges, it is argued that there is no such final adjudication of the State court as can be reviewed by this court.

The Revised Statutes, which express the statute law of the United States in force Dec. 1, 1873, provide, in sect. 709, embodying substantially the provisions of the twenty-fifth section of the Judiciary Act of 1789,-that a final judgment or decree, in any suit, of the highest court of a State in which a decision could be had, may be re-examined by the Supreme Court of the United States in three classes of cases. In all of them there must be a final judgment or decree of the highest court of the State, and the decision expressed by that judgment must have involved a question under the Constitution, laws, or treaties of the United States, and have been adverse to some right, privilege, or immunity claimed under them. Here the Supreme Court of Appeals certifies that on the hearing of the case there was drawn in question the validity of the statute of the State authorizing the tax upon the bonds and requiring its deduction from the coupons, on the ground of its repugnancy to the provision of the Constitution of the United States, prohibiting any legislation by the States impairing the obligation of contracts; and that the decision was in favor of the validity of the State statute and against the right claimed by the petitioner under the provision of the Constitution of the United States. That this certificate correctly states the question involved will more clearly appear from the legislation of the State, which we shall presently consider. The judgment denying the writ of mandamus was a final determination against the claim of the petitioner to have the coupons held by him received for taxes without a deduction from their face value of the amount of the tax levied on the bonds. A mandamus in cases of this kind is no longer regarded in this country as a mere prerogative writ. It is nothing more than an ordinary proceeding or action in which the performance of a specific duty, by which the rights of the petitioner are affected, is sought to be enforced. Says Mr. Chief Justice Taney: 'It undoubtedly came into use by virtue of prerogative power in the English crown, and was subject to regulations and rules which have long since been disused; but the right to the writ and the power to issue it have ceased to depend upon any prerogative power, and it is now regarded as an ordinary process in cases to which it is applicable. It was so held by this court in the cases of Kendall v. The United States, 12 Pet. 615, and Kendall v. Stokes et al., 3 How. 100.' Kentucky v. Dennison, 24 How. 66, 97. And such we understand to be the law of Virginia. The judgment, therefore, in the case, stands like the judgment in an ordinary action at law, subject to review under similar conditions. It is not the less expressive of the decision of the court upon the merits of the petitioner's claim in the case because it is rendered upon an equal division of opinion among the judges. The fact of division does not impair the conclusive force of the judgment, though it may prevent the decision from being authority in other cases upon the question involved. The judgment is that of the entire court, and is as binding in every respect as if rendered upon the concurrence of all the judges. Lessieur v. Price, 12 How. 59; Durant v. Essex County, 7 Wall. 107; s. c. 101 U.S. 555.

Nor does it matter that the judgment was rendered in an original proceeding in the Supreme Court of Appeals of Virginia, and not in a case pending before that court on appeal. It is enough for our jurisdiction that the judgment is by the highest tribunal of the State in which a decision could be had in the suit. When such a judgment is brought before us for review, involving in its rendition a decision upon a Federal question, we do not look beyond the action of that court. It is enough that we have its final judgment in the case, whether it be one of original jurisdiction or heard by it in the exercise of its own appellate power over the inferior courts of the State.

We proceed, therefore, to consider the legislation of the State upon her indebtedness. A brief sketch of it will perhaps enable us better than in any other way to exhibit the question for our determination, and indicate the solution it should receive.

It appears from the statutes to which we are referred-and we know the fact as a matter of public history-that prior to the late civil war Virginia had become largely indebted for moneys borrowed to construct public works in the State. The moneys were obtained upon her bonds, which were issued to an amount exceeding $30,000,000. Being the obligations of a State of large wealth, which never allowed its fidelity to its promises to be questioned anywhere, the bonds found a ready sale in the markets of the country. Until the civil war, the interest on them was regularly and promptly paid. Afterwards the payments ceased, and until 1871, with the exception of a few small sums remitted in coin during the war to London for foreign bondholders, or paid in Virginia in Confederate money, and a small amount paid in 1866 and 1867, no part of the interest or principal was paid. During the war a portion of her territory was separated from her, and by its people a new State, named West Virginia, was formed, and by the Congress of the United States was admitted into the Union. Nearly one-third of her territory and people were thus taken from her jurisdiction. But as the whole State had created the indebtedness for which the bonds were issued, and participated in the benefits obtained by the moneys raised, it was but just that a portion of the indebtedness should be assumed by that part which was taken from her and made a new State. Writers on public law speak of the principle as well established, that where a State is divided into two or more States, in the adjustment of liabilities between each other, the debts of the parent State should be ratably apportioned among them. On this subject Kent says: 'If a State should be divided in respect to territory, its rights and obligations are not impaired; and if they have not been apportioned by special agreement, their rights are to be enjoyed and their obligations fulfilled by all the parts in common.' 1 Com. 26. And Halleck, speaking of a State divided into two or more distinct and independent sovereignties, says: 'In that case, the obligations which have accrued to the whole before the division are, unless they have been the subject of a special agreement, ratably binding upon the different parts. This principle is established by the concurrent opinions of text-writers, the decisions of courts, and the practice of nations.' International Law, c. 3, sect. 27.

In conformity with the doctrine thus stated by Halleck, both States-Virginia and West Virginia-have recognized in their Constitutions their respective liability for an equitable proportion of the old debt of the State, and have provided that measures should be taken for its settlement. The Constitution of Virginia of 1870 declar d that the General Assembly should 'provide by law for adjusting with the State of West Virginia the proportion of the public debt of Virginia proper to be borne by the States of Virginia and West Virginia,' and should 'provide that such sums as shall be received from West Virginia shall be applied to the payment of the public debt of the State.' Art. 10, sect. 19.

The Constitution of West Virginia, which went into effect in 1863, declared that 'an equitable proportion of the public debt of the Commonwealth of Virginia, prior to the first day of January, 1861,' should 'be assumed' by the State, and that the legislature should 'ascertain the same as soon as practicable, and provide for the liquidation thereof by a sinking fund sufficient to pay the accruing interest and redeem the principal within thirty-four years.' Art. 8, sect. 8.

But notwithstanding these constitutional requirements and various efforts made to adjust the liabilities of West Virginia, nothing was accomplished up to March 30, 1871, and it is stated by counsel that nothing has been accomplished since. As might have been expected, the position of Virginia was not a pleasant one, being charged with the whole indebtedness which accrued before the formation out of her territory of a new State, and entitled to, without being able to obtain, a contribution from the new State of a part of it, corresponding proportionately to her extent and population. She, therefore, undertook to effect a separate adjustment with her creditors, and for that purpose, on the 30th of March, 1871, passed an act known as the 'Funding Act' of the State. It is entitled 'An Act to provide for the funding and payment of the public debt.' Its preamble recited that in the ordinance authorizing the organization of the State of West Virginia it was provided that she should take upon herself a just proportion of the public debt of the Commonwealth of Virginia, prior to Jan. 1, 1861, and that this provision had not been fulfilled, although repeated and earnest efforts in that behalf had been made by Virginia; and then declared that, 'to enable the State of West Virginia to settle her proportion of said debt with the holders thereof,' and to prevent any complications or difficulties which might be interposed to any other manner of settlement, and 'for the purpose of promptly restoring the credit of Virginia, by providing for the certain and prompt payment of the interest on her proportion of said debt, as the same shall become due,' the legislature enacted that the owners of the bonds, stocks, or interest certificates of the State (with a few exceptions) might fund two-thirds of the same and two-thirds of the interest due or to become due thereon up to July 1, 1871, in six per cent coupon or registered bonds of the State, to run thirty-four years,-the bonds to be made payable to order or bearer, and the coupons to bearer. The act declared that the coupons should be payable semi-annually, and 'be receivable at and after maturity for all taxes, debts, dues, and demands due the State,' and that this should be so expressed on their face. For the remaining one-third of the amount of the bonds thus funded the act provided that certificates should be issued to the creditors, setting forth the amount of the bonds not funded, with the interest thereon, and that their payment would be provided for in accordance with such settlement as might be subsequently had between the two States; and that Virginia would hold the bonds surrendered, so far as they were not funded, in trust for the holder or his assignees. The bonds of the State, with the accumulated interest, then amounted to over forty millions of dollars.

Under this act a large number of the creditors of the State, holding bonds amounting, including interest thereon, to about thirty millions of dollars, surrendered them and took new bonds with interest coupons annexed for two-thirds of their amount and certificates for the balance. A contract was thus consummated between the State and the holders of the new bonds, nd the holders of the coupons, from the obligation of which she could not, without their consent,' release herself by any subsequent legislation. She thus bound herself, not only to pay the bonds when they became due, but to receive the interest coupons from the bearer at and after their maturity, to their full amount, for any taxes or dues by him to the State. This receivability of the coupons for such taxes and dues was written on their face, and accompanied them into whatever hands they passed. It constituted their chief value, and was the main consideration offered to the holders of the old bonds to surrender them and accept new bonds for two-thirds of their amount.

In Woodruff v. Trapnall, reported in 10th Howard, a provision in an act of Arkansas, similar to this one, that the bills and notes of the Bank of the State of Arkansas, the capital of which belonged to the State, should 'be received in all payments of debts due to the State of Arkansas,' was held to be a contract with the holders of such notes which was binding on the State, and that the subsequent repeal of the provision did not affect the notes previously issued. 'The notes,' said the court, 'are made payable to bearer; consequently every bona fide holder has a right, under the twenty-eighth section' (the one making the notes receivable for dues to the State), 'to pay the State any debt he may owe it in the paper of the bank. It is a continuing guaranty by the State that the notes shall be so received. Such a contract would be binding on an individual, and is not the less so on the State.' 'And that the legislature could not withdraw this obligation from the notes in circulation at the time the guaranty was repealed, is a position which can require no argument.' In Furman v. Nichol, reported in the 8th Wallace, a similar provision in an act of Tennessee, declaring that certain notes of the bank of that State should be 'receivable' at the treasury of the State and by tax-collectors and other public officers, 'in all payments for taxes and other moneys due the State,' was held by this court unanimously to constitute a valid contract between the State and every person receiving a note of the bank. An attempt was made in the case to restrain the operation of the guaranty contained in the provision to the person who received the note in the course of his dealing with the bank, but the court said: 'The guaranty is in no sense a personal one. It attaches to the note, is part of it, as much so as if written no the back of it; goes with the note everywhere, and invites every one who has taxes to pay to take it.'

Yet notwithstanding the language of the act of March 30, 1871, providing that the interest coupons of the new bonds should 'be receivable at and after maturity for all taxes, debts, dues, and demands due the State,' and this was so expressed upon their face, the legislature of Virginia, less than one year afterwards (on the 7th of March, 1872), passed an act declaring that thereafter it should 'not be lawful for the officers charged with the collection of taxes or other demands of the State' than due or which should thereafter become due 'to receive in payment thereof anything else than gold or silver coin, United States Treasury notes, or notes of the national banks of the United States.' This act, as seen on its face, is in direct conflict with the pledge of the State of the previous year, and with the decisions of this court to which we have referred. Its validity, as might have been expected, was soon attacked in the courts as impairing the obligation of the contract contained in the Funding Act, and came before the Supreme Court of Appeals of the State for consideration in Antoni v. Wright, at its November Term of 1872. The subject was there most elaborately and learnedly treated. The cases above were cited by the court; and the provision of the Funding Act was shown, by reasoning perfectly conclusive, to be a contract founded upon valuable considerations and binding upon the State. It was arnestly pressed upon the court that it was not within the legitimate power of the legislature to make such a contract; that it would tend to embarrass the action of subsequent legislatures by depriving them of the proper control of the annual revenue, and might, by absorbing the prevenue, substantially annul the taxing power and put a stop to the wheels of government. But the court said, among other answers to this, that no rightful power of the State was surrendered by the legislation, but simply a provision made for the payment of the debts of the State; that the annual accruing interest on the debt of the State was in all well-regulated governments deemed an essential part of their annual expenses, and was always annually provided for. The act only made provision for an annual appropriation of a portion of the revenue, derived from taxation, to the payment of existing debts; and such legislation could not be deemed a great stretch of power, when the organic law of the State not only contemplated the punctual annual payment of the interest of her entire debt, but imperatively required, on the creation of a debt, that a sinking fund should be at once established, to be applied solely to its extinction. The organic law thus not merely authorized, but required the legislature which created the debt to bind all future legislatures, by the establishment of a fund to be applied solely to the extinction of the debt. And as to the objection that such legislation might, and probably would, result in crippling the power and resources of the State in time of war or other great calamity, the court said, that legislation cannot well be adapted in advance to extraordinary and exceptional cases; that such cases will occur at all times with all nations, and must be provided for by the wisdom and prudence of the government for the time being. 'At such a time, however,' said the court, in words full of wisdom, 'the honored name and high credit secured to a State by unbroken faith, even in adversity, will, apart from all other considerations, be worth more to her in dollars-incalculably more-than the comparatively insignificant amount of the interest on a portion of the public debt enjoyed by breach of contract.' The court thus expressed a great truth, which all just men appreciate, that there is no wealth or power equal to that which ultimately comes to a State when in all her engagements she keeps her faith unbroken.

These decisions of the Federal and State courts dispose substantially of the question presented in the case at bar. The act of March, 1872, being held to be invalid, the coupons were subsequently, and until March, 1873, received for all taxes due the State to their full amount. On the 25th of that month, the legislature passed an act providing that from the interest payable out of the treasury on bonds of the State, whether funded or unfunded, there should be retained a tax equal in amount to fifty cents on the one hundred dollars of their market value, on the first day in April of each year, and made it the duty of every officer of the Commonwealth, charged with the collection of taxes, to deduct from the matured coupons which might be tendered to him in payment of taxes, or other dues to the State, such tax as was then or might thereafter be imposed on the bonds. The act, in terms, applied to all bonds of the State, whether held by her own citizens or non-residents and citizens of other States or countries. In 1874, the legislature modified this provision so that the tax on the bonds should not be retained from the interest paid on them, when they were the property of non-residents of the Commonwealth. But this exemption was omitted in the act of 1876, providing for the assessment of taxes in the State, in which the provision of the act of 1873 was inserted. It is the validity of this provision requiring the tax levied on the bonds to be deducted from the coupons held by other parties, when tendered in payment of their taxes or other dues to the State, which is presented for our determination.

The power of the State to impose a tax upon her own obligations is a subject upon which there has been a difference of opinion among jurists and statesmen. On the one hand, it has been contended that such a tax is in conflict with and contrary to the obligation assumed; that the obligation to pay a certain sum is inconsistent with a right, at the same time, to retain a portion of it in the shape of a tax, and that to impose such a tax is, therefore, to violate a promise of the government. See Hamilton on the Public Credit, in his works, 3d vol., pp. 514-518.

On the other hand, it is urged that the bonds of every State are property in the hands of its creditors, and, as such, that they should bear a due proportion of the public burdens. In the case of Murray v. Charleston (96 U.S. 432) there are many pertinent and just observations on this subject which it is not material to repeat, for the question is not necessarily involved in the disposition of the case before us. Whatever may be the wise rule-looking at the necessity in a commercial country for its prosperity that its public credit should never be impaired-as to the taxability of the public securities, it is settled that any tax levied upon them cannot be withheld from the interest payable thereon. Such was the decision of this court in Murray v. Charleston. There the city had issued certificates of stock, whereby it promised to pay to the owners thereof certain sums of money, with six per cent interest, payable quarterly. Subsequently it imposed a tax of two per cent on the value of all property within its limits for the purpose of meeting the expenses of its government; and, treating its stock as part of such property, directed that the tax assessed upon it should be retained by the treasurer of the city from the interest due thereon. To recover the amount thus retained, which was one-third of the interest stipulated, suit was brought. The city defended its action on the ground that the tax on the stock was not higher than the tax on all other property of its citizens, and that all property in the city was subject to taxation; but the court answered that, by the legislation of the city, its obligation to its creditors was impaired, and, however great its power of taxation, it must be exercised, being a political agency of the State, in subordination to the inhibition of the Federal Constitution against legislation impairing the obligation of contracts. Until the interest was paid, no act of the State or of its political subdivisions, exercising legislative power by its authority, could work an exoneration from what was promised to the creditor. This decision would be decisive here, but the present case is still stronger for the creditor. The Funding Act made the bonds issued under it payable to order or bearer, and made the coupons payable to bearer. They were, so far, distinct and independent contracts, that they could be separated from each other and transferred to different hands.

In Clark v. Iowa City we had occasion to speak of bonds of municipal bodies and private corporations having similar coupons, and the language there used is applicable here. We said that most of such bonds 'are issued in order to raise funds for works of large extent and cost, and their payment is, therefore, made at distant periods, not unfrequently beyond a quarter of a century. Coupons for different instalments of interest are usually attached to such bonds in the expectation that they will be paid as they mature, however distant the period fixed for the payment of the principal. These coupons, when severed from the bonds, are negotiable and pass by delivery. They then cease to be incidents of the bonds, and become in fact independent claims; they do not lose their validity if for any cause the bonds are cancelled or paid before maturity, nor their negotiable character, nor their ability to support separate actions. . . . They then possess the essential attributes of commercial paper, as has been held by this court in repea ed instances. 20 Wall. 583, 589.

Here, also, the coupons held by the petitioner were distinct contracts imposing separate obligations upon the State. He was not the owner of the bonds to which they had been originally attached. In his hands they were as free and discharged from all liability on those bonds as though they had never been connected with them. And surely it is not necessary to argue that an act which requires the holder of one contract to pay the taxes levied upon another contract held by a stranger cannot be sustained. Such an act is not a legitimate exercise of the taxing power: it undertakes to impose upon one the burden which should fall, if at all, upon another.

The Funding Act stipulated that the coupons should be receivable for all taxes and dues to the State, that is, for taxes and dues owing by the holders of the coupons, and for their full amount; and upon this pledge the holders of the bonds of the State surrendered them, and took new bonds for two-thirds of their amount. The act of 1876 declares that the coupons shall not be thus received for taxes and dues owing by the holders of them for their full amount, but only for such portion as may remain after a tax subsequently levied upon the bonds, to which they were originally attached, is deducted, though the bonds be held by other parties. If this act does not impair the contract with the bondholder,-who was authorized to transfer to others the coupons with this quality of receivability for taxes annexed,-and also the contract with the bearer of the coupon written on its face that it should be received for all taxes to the State, it is difficult to see in what way the contract with either would be impaired, even though the tax on the bond should equal the whole face of its coupons. If, against the express terms of the contract, the State can take a portion of the interest in the shape of a tax on the bond, it may at its pleasure take the whole.

We are clear that this act of Virginia of 1876 (sect. 117), requiring the tax on her bonds, issued under the Funding Act of March 30, 1871, to be deducted from the coupons originally attached to them when tendered in payment of taxes or other dues to the State, cannot be applied to coupons separated from the bonds, and held by different owners, without impairing the contract with such bondholders contained in the Funding Act, and the contract with the bearer of the coupons. It follows that the petitioner was entitled to a writ of mandamus to compel the treasurer of the city of Richmond to receive the coupons, tendered to him in payment of taxes due the State, for their full amount.

The judgment of the Supreme Court of Appeals denying the writ must, therefore, be reversed, and the case remanded for further proceedings in accordance with this opinion; and it is

So ordered.

MR. JUSTICE MILLER dissenting.


text: Talk:Hartman v. Greenhow/Opinion of the Court


text:
Hartman v. Greenhow/Dissent Miller

MR. JUSTICE MILLER dissenting.

I dissent from the judgment of the court. In addition to the general proposition which I have always maintained, that no legislature of a State has authority to bargain away the State's right of taxation, I am of opinion that in issuing the bonds and coupons which are the subject of this controversy the legislature of Virginia, neither in terms nor by any just inference, made any contract that the bonds and coupons should not be subject to the same taxes as other property taxed by the State.

title: Hartman v. Greenhow/Dissent Miller


text: Talk:Hartman v. Greenhow/Dissent Miller

title: Talk:Hartman v. Greenhow/Dissent Miller


text:
Sharpe v. Doyle

ERROR to the Superior Court of the city of New York.

The case is stated in the opinion of the court.

Mr. Charles E. Whitehead for the plaintiff in error.

Mr. William Henry Arnoux, contra.

MR. JUSTICE MILLER delivered the opinion of the court.

title: Sharpe v. Doyle


text: Talk:Sharpe v. Doyle

title: Talk:Sharpe v. Doyle


text:
Sharpe v. Doyle/Opinion of the Court

Alfred E. Lagrave and James D. Otis, partners in trade, were, on a petition filed May 30, 1872, adjudicated bankrupts on the eighth day of the following June. On the first day of the latter month a warrant was issued under the seal of the District Court, in which the bankruptcy proceedings were pending, directed to the marshal of the district, which, after reciting that a previous order had been obtained for the possession of the bankrupts' goods, proceeded as follows:--

'You are therefore required and authorized, immediately upon receipt hereof, to take possession provisionally of all the property and effects of said Alfred E. Lagrave and James D. Otis, and safely keep the same until the further order of the court.'

Under this warrant the plaintiff in error, who was the marshal to whom the writ was directed, seized eight packages of goods. For this act he was sued in the Superior Court of the city of New York by the defendants in error, who recovered a judgment against him for their value, which was finally affirmed by the Court of Appeals.

The case was tried by a jury, the defendant's plea being that the goods were the property of the bankrupts, and were lawfully seized under the warrant for provisional possession.

While it is uncontradicted that the goods had been the property of the bankrupts, evidence was given tending to show that in fraud of the bankrupt law, they had been purchased a few days before by the plaintiffs in this action, and that, when seized by the marshal, they were in the possession of the plaintiffs, or of some one for them. The court gave the jury the following instruction:--

'As you know, the defendant is a United States marshal. He has certain powers given to him by statute. Under a warrant of the kind in evidence (the form of which it is unnecessary to read to you) he has authority to take goods belonging to a bankrupt and which are in his possession. He has no authority under such a warrant to take goods from a third person, having possession for himself of the goods and claiming as a matter of right to be entitled to their possession. If that be the case here, the defendant had no right to take these goods from Mr. Ketchum's warehouse. If Mr. Doyle was, as a matter of fact, in possession of these goods, claiming them as owner for himself, then the plaintiffs, Doyle and Adolphi, are entitled to recover for the value of the goods what you shall find it to be. Otherwise, the defendant is entitled to a verdict. It will be unnecessary for you to inquire as to the reasons of this; but I say to you, briefly, that such a rule of law as that does not finally determine the rights of the parties, because the defendant may only have limited rights to take possession under certain circumstances, while the assignee in bankruptcy for the creditors of Lagrave & Co. might try the question on different principles of law. This defendant is an officer of the law, with certain limited powers.'

This charge, to which an exception was taken, was decisive of the case, there being no doubt that persons other than the bankrupts had, under claim of title, the possession of the goods at the time they were seized under the warrant. The defendant asserted a right to them, under the laws of the United States, on the ground that the pretended purchase by the plaintiffs was a fraud upon the bankrupt law, and passed no title; that the ownership was by virtue of the bankruptcy proceedings, in the assignee; and that the plaintiffs were not entitled to recover. The right so claimed was decided adversely to the defendant. The instruction was affirmed in the court of last resort, and its soundness depends upon the authority conferred on him by the writ. The case is, therefore, a proper one for a writ of error from this court.

The writ in the marshal's hand is identical in its mandatory part with sect. 5024 of the Revised Statutes, and, if he did no more than it commanded him, was a sufficient justification for his act, unless the statute is unconstitutional. This is not pretended, either here or in the State courts.

It is a little difficult to see upon what principle the plaintiffs can maintain the suit, if they were not the rightful owners of the goods. It is true that, in a case of naked trespass without claim of right in the trespasser, the ossessor of the goods may recover, without regard to the state of the title. But such is not the case here. The defendant acted under a lawful writ from a court having jurisdiction to issue it. By his plea he took upon himself the burden of proving that the goods were subject to seizure under the writ; and in doing so he must, of course, prove that the plaintiffs were not the lawful owners of them. In other words, that the right of the assignee in bankruptcy, whose right he represented in that suit, was superior to that of plaintiffs.

But the court said: 'You shall not be permitted to prove that. If plaintiffs show that they were in possession, asserting ownership, you will not be allowed to contradict that assertion.'

Such a proposition is opposed to all the analogies of the law.

If a writ be sued out of a court of competent jurisdiction, directing an officer to seize specifically described property, as in admiralty, replevin, or ejectment cases, it is a protection to the officer, when he is sued in trespass for executing it. If, however, it in general terms directs or authorizes him to seize the property of an individual, without a special description of it, he exercises the authority conferred at his own risk as regards the ownership of the property, and its liability to seizure under that process. Such is the rule applicable to an ordinary writ of attachment, and to a fieri facias at common law.

When, however, some one other than the defendant sues the officer for a wrongful levy of the writ, it has never been doubted that the title to the property and the rightfulness of the seizure under the writ were open to inquiry, and that unless the plaintiff made out his case before the jury, he must fail. This subject is fully considered by the court in Buck v. Colbath, 3 Wall. 334.

No just distinction can be seen between this latter class of cases and the one now under consideration. The act of Congress was designed to secure the possession of the property of the bankrupt, so that it might be administered under the proceedings, in bankruptcy. Between the first steps initiating them and the appointment of the assignee, a considerable time often elapses, during which the effects of the bankrupt, especially in a case commenced by creditors, may be surreptitiously conveyed beyond the reach of the court or of the assignee, who, when appointed, is entitled to the possession of them. If the bankrupt does not voluntarily aid the court, or is inclined to defeat the proceedings, he can, with the aid of friends or irresponsible persons, sell his movable property and put the money in his pocket, or secrete his goods or remove them beyond the reach of the assignee or the process of the court, and thus defy the law. The evidence in this case shows the manner in which this can be done.

It was the purpose of the act of Congress to remedy this evil. It, therefore, provides that as soon as the petition in bankruptcy is filed, the court may issue to the marshal a provisional warrant, directing him to take possession of all the property and effects of the bankrupt, and hold them subject to the further order of the court. To have limited this right or duty of seizure to such property as he might find in the actual possession of the bankrupt would have manifestly defeated in many instances the purpose of the writ. There is, therefore, no such limitation expressed or implied. As in the writ of attachment, or the ordinary execution on a judgment for the recovery of money, the officer is authorized to seize the property of the defendant wherever found; so here it is made his duty to take into his possession the bankrupt's property wherever he may find it. It is made his duty to collect and hold possession until the assignee is appointed or the property is released by some order of court, and he would ill perform that duty if he should accept the statement of every man in whose custody he found property which he believed would belong to the assignee when appointed, as a sufficient reason for failing to take possession of it.

But he does this on his own responsibility for not only a faithful, but a correct, judgment in deciding what property to seize. He is liable to suit if by mistake he takes possession of property not liable to seizure under his warrant.

Such a suit was brought in this case; and we can see no reason why the issue made by the pleadings, namely, the true ownership of the property, should not have been fully submitted to the jury. It was the shortest way to determine the rights of the parties. It was the first time the issue was presented. It was before a court of competent jurisdiction.

To hold that the plaintiffs, by reason of their bare assertion of ownership connected with possession, must recover of the marshal the value of the property, and that the assignee could then have sued plaintiffs and recovered it from them, is a mode of doing justice that does not commend itself to our judgment, even if the assignee could be sure to find a responsible defendant when he came to sue.

We are of opinion that the Court of Appeals of New York was in error in its construction of the bankrupt law and in affirming the instruction of the inferior court.

Judgment reversed, and cause remanded for further proceedings in conformity with this opinion.

title: Sharpe v. Doyle/Opinion of the Court


text: Talk:Sharpe v. Doyle/Opinion of the Court


text:
County of Mobile v. Kimball

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

By an act of the General Assembly of Alabama, entitled 'An Act for the improvement of the bay and barbor of Mobile,' approved Feb. 21, 1860, the collector of customs for the port of Mobile, the mayor of the city of Mobile, and the president of the board of revenue for the county of Mobile, and their successors in office, were appointed ex officio a board to be styled the Board of Harbor Commissioners, for the purpose of causing the bay and harbor of Mobile to be deepened and improved. To aid the board in the performance of its powers and duties, the president and commissioners of revenue of the county were authorized and required from time to time, and as the same might be called for by the board, to issue the coupon bonds of the county, and to hand them over to the board to be sold. The proceeds were to be applied to the work as its necessities might require, and as authorized by the act. The whole amount of bonds was limited to $800,000. No steps were taken under the act. Another act was passed, Feb. 16, 1867, entitled 'An Act to provide for the improvement of the river, bay, and harbor of Mobile.' The president of the court of county commissioners of revenue of Mobile County, the mayor of Mobile, the president of the Bank of Mobile, the president of the Mobile Chamber of Commerce, and one citizen of the county of Mobile, to be appointed by the governor of the State, and their successors in office, were thereby constituted a board for the improvement of the river, harbor, and bay of Mobile. The president and commissioners of revenue of Mobile County were, by the second section, required to issue bonds for $1,000,000, payable as they might deem proper, to be delivered to the board whenever the latter might require them; and the court was required to levy and cause to be collected such tax as might be deemed proper to pay them.

The third and fourth sections are as follows:--

'SECT. 3. The said board for the improvement of the river, harbor, and bay of Mobile are hereby authorized to receive such bonds and apply them or the proceeds of them to the improvement, cleaning out, deepening, and widening of the river, harbor, and bay of Mobile, or any part thereof, or the making an artificial harbor, and such improvement, cleaning out, deepening and widening or any part thereof or all of it; or the making an artificial harbor shall be made in such manner as the said board may direct, and for that purpose they may make any rules and regulations and assess the dues or tolls to be collected on vessels or water-crafts, and do any act they may deem proper to effect the objects of this act.

'SECT. 4. That, in addition to the foregoing powers, the said commissioners are vested with the authority to purchase and condemn lands according to the provision of sect. 13 of an act for the improvement of the bay and harbor of Mobile, approved Feb. 21, 1860, and to take and receive all moneys, papers, books, records, and surveys, and all property pertaining to said commissioners, in said act, and the city of Mobile shall be vested with the title of all lands made by the deposits of all excavations in the progress of this work as provided for in said act, and the commissioners designated in this act, and all officers, clerks, and employees, shall be subjected to and be held liable to the duties, penalties, and punishments provided for in the fifteenth section of the said act.'

The harbor board was organized under the provisions of this act, and on the 24th of June, 1872, it entered into a contract with Kimball and Slaughter for dredging a channel through Dog River Bar, in the bay of Mobile. The work was to be commenced by the first day of August, 1872, and completed on or before June 1, 1873. The harbor board agreed to pay the contractors 49 1/2 cents per cubic yard of material excavated and removed, and payments were to be made in bonds of the county of Mobile issued under this act, at the rate of 82 1/2 cents on the dollar.

The work under the contract was completed March 15, 1873, and on the following day it was accepted by the engineer in charge, whose action was approved by the board.

Prior to June 1, 1873, the court of county commissioners had issued to the harbor board two hundred bonds of $1,000 each. The president of the harbor board admitted, June 5, 1873, that Kimball and Slaughter were then entitled to seventeen bonds of $1,000 each, and he delivered a written statement to that effect. The board delivered eleven bonds to them, July 29, 1873, leaving due to them six bonds.

Kimball and Slaughter, in their bill filed against the county of Mobile, claim and aver that, after the delivery to them of the eleven bonds, the board had neither bonds, money, nor other means to pay them, and that all the two hundred bonds delivered to it had been applied to the purposes for which they had been issued.

An act of the legislature of April 19, 1873, limited to the sum of $200,000 the issue of county bonds to the board, and required the latter to file a statement of its receipts and expenditures with the judge of probate of Mobile County.

On the 25th of November, 1873, the complainants presented to the court of county commissioners their claim for six bonds of $1,000 each, or their value in money at 82 1/2 cents on the dollar. The claim was rejected.

The bill avers that on the 8th of December, 1873, the complainants filed their bill in the Chancery Court at Mobile, against the county of Mobile, to compel it to deliver, through the commissioner of revenue, six bonds to them, or to require it to pay the moneyed value of the bonds, and the interest due thereon; that a decree was rendered for the complainants, which, on appeal to the Supreme Court of Alabama, was reversed, mainly upon the ground that it did not sufficiently appear that the harbor board had not fully accounted for the two hundred bonds, of $1,000 each, delivered to it by the court of commissioners of revenue of Mobile County. The Supreme Court adjudged that the bill be dismissed without prejudice.

The following act of the legislature of Alabama was passed:--

'An Act to close the Accounts and settle the Contracts made by the Board for the Improvement of the River, Harbor, and Bay of Mobile.

'SECT. 1. Be it enacted by the General Assembly of Alabama, that it shall be and is hereby made the duty of the president and commissioners of revenue of Mobile County to inquire into the validity and propriety of all claims which may be presented to them for work and labor done and materials furnished or services rendered on any contract or agreement with the said board, made or executed between the fifteenth day of June and the first day of July, in the year eighteen hundred and seventy-two, for the improvement of the river, harbor, and bay of Mobile, under the act approved February sixteenth, eighteen hundred and sixty-seven, entitled 'An Act to provide for the improvement of the river, bay, and harbor of Mobile:' Provided, such claim be presented to said president and commissioners within six months after the passage of this act; and upon the same being satisfactorily proved and shown to be still due and unpaid, it shall be the duty of said president and commissioners to provide for the payment thereof as of other claims against the county.

'Approved Feb. 23, 1876.'

Under this act the complainants, April 3, 1876, presented to the court of county commissioners their claim for six bonds, or their value at 82 1/2 cents on the dollar. The claim was rejected.

The complainants pray in their bill that the county be required to deliver to them six bonds of the county of $1,000 each, or pay their value at 82 1/2 cents on the dollar, with interest from the completion and acceptance of the work.

The cause came on to be heard upon the pleadings and proofs, and a decree was rendered in favor of the complainants. The county then appealed here.

The remaining facts and the assignment of errors are set forth in the opinion of the court.

Mr. John T. Morgan for the appellant.

Mr. C. W. Jones for the appellees.

MR. JUSTICE FIELD delivered the opinion of the court.

title: County of Mobile v. Kimball


text: Talk:County of Mobile v. Kimball

title: Talk:County of Mobile v. Kimball