text:
Trask v. Maguire/Opinion of the Court

The question presented for our determination in this case is, whether the property of the present St. Louis and Iron Mountain Railroad Company, a corporation created under the laws of Missouri, is, by an irrepealable legislative grant, forever exempted from all State and county taxes. Two corporations bearing that name have existed in Missouri, the second succeeding the first in the possession and ownership of its road and property. The first was created by an act of the legislature of the State, passed in March, 1851; the second was formed in July, 1867, under an act of the previous year authorizing the incorporation of the purchaser or purchasers of any railroad, or any part, section, or branch thereof, which had previously been, or might thereafter be, forfeited to or sold by the State.

The property of the first corporation was undoubtedly exempt from State and county taxes. The act of incorporation adopted as part of it a provision of another act, which declared in terms that the stock of the company should be thus exempt. It is true that at this time a statute was in existence, passed in 1845, which declared that the charter of every corporation subsequently granted should be subject to alteration, suspension, and repeal at the discretion of the legislature. But from the operation of this provision the company was expressly exempted by an act amendatory of its charter, passed in 1853. From that time at least the exemption of its stock from State and county taxation was placed beyond legislative interference. The amendatory act also declared that all the engines, cars, wagons, machines, and other property belonging to the company should be deemed a part of its capital stock, and be vested in its respective shareholders, according to their respective shares. All the property of the company was thus placed within the exemption which attached to the original stock; that designated was to be deemed a part of such stock, as well as that originally embraced by this term.

On the argument some attempt was made, from the use of the term stock in the original act, and the language of the amendatory act, that the property should be vested in the respective shareholders according to their respective shares, to establish the position that the exemption extended only to the separate shares of the individual stockholders. But the argument does not strike us as possessing much force. The terms 'stock of the company,' imported the capital stock of such company, the subscribed fund which the company held, as distinguished from the separate interests of the individual stockholders. The language of the amendatory act did not qualify this meaning; that only declared that other property of the company should also be deemed capital stock, and the additional provision that it should be vested in the respective shareholders, according to their respective shares, only meant that they should have the interest of shareholders in the property, according to their respective shares.

The corporation in question was created to construct a railroad from a point in the city of St. Louis to the Iron Mountain and Pilot Knob, in Missouri, with liberty to extend the road to the Mississippi River, or to the southern part of the State. This road was constructed from St. Louis to Pilot Knob, a distance of about eighty-seven miles, with a branch to Potosi. During the progress of the work, and in order to aid in its construction, the legislature of the State, previous to 1860, passed various acts providing for the loan of the bonds of the State to the company. All the acts referred for the terms of the loans to an act passed in 1851 to expedite the construction of the Pacific Railroad and of the Hannibal and St. Joseph Railroad. That act provided that no part of the bonds should be delivered to the company until it signified its acceptance of them to the secretary of state, by filing in his office a certificate of such acceptance under the corporate seal of the company and the signature of its president; that such acceptance should be recorded, and upon its record should become to all intents and purposes a mortgage of the road of the company, and every part and section thereof, and its appurtenances, to the people of the State, to secure the payment of the principal and interest of the bonds. That act authorized the governor, in case default was made in the payment of either the interest or principal of the bonds, to sell the road and its appurtenances at auction to the highest bidder, or to buy in the same at such sale for the use and benefit of the State, subject to such disposition in respect to the road or its proceeds as the legislature might thereafter direct.

Under the different acts bonds of the State to a large amount were issued to the company; its acceptance of them in proper form was given to the secretary of state, and the acceptance was duly recorded, and from the date of such record the State acquired, for the payment of the principal and interest of the bonds, a lien upon the road and every part and section thereof and its appurtenances.

The company failed to pay the interest on these bonds. It does not appear for how long a period the company was thus in default, nor is this material. It is sufficient to say that in 1865 the right of the State, under the provisions of the acts cited, to interfere and sell the property, had become complete. Before a sale, however, was made the legislature passed another act for the sale of this and other railroads by the governor, and the foreclosure of the State lien thereon. This act, which was approved in February, 1866, among other things required the governor to advertise for sale the different railroads, with their appurtenances, rolling stock, and property of every description, and all rights and franchises thereto belonging; and to sell the same at auction to the highest bidder, in pursuance of the several acts creating a lien thereon. It also provided for the appointment of three commissioners to attend the sale of the different roads as advertised, and to bid in the same for the use and benefit of the State for an amount not exceeding the respective liens thereon; and in case the roads were struck off and sold to them, to take possession of and hold the same, with their appurtenances and property, and again, after due advertisement, inviting proposals for the purchase of the different roads, their lands, appurtenances, and franchises, to resell the same. Under this act the St. Louis and Iron Mountain Railroad was advertised for sale, with its rights and privileges, and at the sale was bid in by the commissioners for the State. However broad the terms of the advertisement, the interest sold could not extend beyond the property upon which the State at the time held a lien, and this was the entire road of the company and its appurtenances. But as the property was sold to the State it is unnecessary to determine whether, if the sale had been made to a third party, the immunity from taxation possessed by the company would have passed to the purchaser. When the State became the purchaser the immunity ceased; the property stood in its hands precisely the same as any other unincumbered property of the State, exempt from taxation, not by virtue of any previous stipulation with the company, but as all property of the State is thus exempt. Subsequently the road and its appurtenances, and all the franchises, which, under the new constitution of Missouri, adopted in 1865, were transferable by the State, were sold by the commissioners to McKay, Vogel, and Simmons, who conveyed the same to Thomas Allen, who with others, in July, 1867, became incorporated under the name of the St. Louis and Iron Mountain Railroad Company. That company is still in existence, and is one of the defendants herein. To it Allen transferred all the rights and privileges acquired by him from his vendors, and all which they acquired from the State. The act under which the sale was made provided that the purchasers of the road should have all the rights, franchises, privileges, and immunities which were enjoyed by the defaulting company under its charter and laws amendatory thereof, subject to the limitations and conditions therein contained, and not inconsistent with the act authorizing the sale. The new company thus acquired all the immunity from taxation which the original company had possessed, if it were competent for the legislature at the time, under the new constitution, to confer this privilege. The question, therefore, is, whether the legislature was competent to grant the immunity claimed, under that constitution, which went into operation on the 4th of July, 1865, previous to the passage of any of the acts authorizing the proceedings under which the new company acquired its rights.

The sixteenth section of the eleventh article of that instrument provides that 'no property, real or personal, shall be exempt from taxation, except such as may be used exclusively for public schools and such as may belong to the United States, to this State, to counties, or to municipal corporations within this State;' and the twenty-seventh section of the fourth article declares that 'the General Assembly shall not pass special laws. . . exempting any property of any named person or corporation from taxation.'

These provisions require no explanation; they are absolute prohibitions against the grant of any new immunity from taxation, unless railroad companies of the State existing at the time are excepted from their operation. Such exception is claimed under the 'ordinance for the payment of State and railroad indebtedness,' which accompanied the constitution and was adopted with it. That ordinance first provides for the levy and collection from different railroads, and among others from the St. Louis and Iron Mountain Railroad Company, an annual tax of ten per cent. on all their gross receipts for the transportation of freight or passengers (not including amounts received from and taxes paid to the United States) from the 1st of October, 1866, to the 1st of October, 1868, and fifteen per cent. thereafter; and then enacts that the tax shall be collected from the companies only for the payment of the principal and interest on the bonds of the State issued for their benefit, or on bonds guaranteed by the State; that if any of the companies refuse or neglect to pay the tax thus required, and the principal or interest of any of the bonds, or any part thereof, remain due and unpaid, the General Assembly shall provide by law for the sale of the railroad and other property and the franchises of such company under the lien reserved to the State; and that whenever the State becomes the purchaser of any railroad or other property, or the franchises thus sold, the General Assembly shall provide by law in what manner the same shall be sold for the payment of the indebtedness of the company; that no railroad or other property or franchises purchased by the State, shall be restored to the defaulting company until it shall have first paid the interest due from it, and that no sale or other disposition of any such railroad or other property, or its franchises, shall be made without reserving a lien upon the property and franchises thus sold or disposed of for all sums remaining unpaid.

Now, the argument of the appellants is that as the ordinance authorizes the legislature to provide for the sale of the franchises of a defaulting corporation, it can transfer under that designation immunity from taxation, if the company ever possessed such immunity; and that this was the effect of the sale of the St. Louis and Iron Mountain railroad and its franchises to McKay, Vogel, and Simmons. And authority for this position is supposed to be found in the answers given by the judges of the Supreme Court of Missouri, in November, 1865, to certain questions propounded by the governor under a provision of the constitution authorizing him to take their opinion on important questions of constitutional law. The questions propounded were substantially these:

1st. Whether the provisions of the ordinance operated to suspend the right of the State to sell the roads named, or either of them, until there was a refusal or neglect to pay the tax imposed by the ordinance; or whether the State might order the sale of the railroads or either of them, prior to such refusal or neglect;

2d. If the judges were of opinion that a sale of the railroads might be ordered before such refusal or neglect, whether such sale could be made 'without reserving a lien upon all the property and franchises thus sold for all sums remaining unpaid,' or, in other words, whether this clause constituted a condition of all sales of railroads ordered by the State, or referred only to sales made under the ordinance for refusal and neglect to pay the tax.

3d. If the judges should be of opinion that all sales of railroads by authority of the State were subject to the restriction mentioned, whether the words 'all sums remaining unpaid' referred to the sums for which the railroad sold was in default, or to that portion of the purchase-money not paid in cash at the time of sale; and,

4th. Whether upon a sale of a railroad under a lien of the State the constitution authorized the State to receive, in payment of the purchase-money, preferred or other shares of stock issued by a corporation purchasing the road.

None of these questions, as will be perceived, call for any opinion as to the effect of the sale of the franchises of a road, or the meaning of that term. They call only for an opinion upon the power of the legislature to order a sale of the roads, the liens to be reserved, the payments to be made, and the right to receive shares of stock of a purchasing corporation. The answer of the judges stated that the fifth section of the ordinance related to all sales of railroads, whether in default for not paying the interest on the bonds of the State or not paying the tax levied; that when the State had become the purchaser of any railroad sold under the lien of the State, the General Assembly could provide in what manner such railroad could again be sold for the payment of the indebtedness which the State had incurred on account of bonds loaned to it or guaranteed for its benefit; that it would have had this power without the aid of the ordinance, but that no sale or other disposition of any such railroad, or other property, could be made by the State without reserving a lien upon the property sold for all sums remaining unpaid, and that the purchaser was required to make all payments therefor in money or in bonds or other obligations of the State; and then adds that the 'legislature is left unrestricted further as to the time, terms, and conditions of the sale.' This language is supposed to determine that in the sale of such property the legislature is not bound by the provisions of the constitution we have cited.

But we do not think the language used justifies any such conclusion, but was rather intended to indicate that the ordinance imposes no other restrictions than those designated, and has no reference whatever to the clauses of the constitution in respect to which no opinion was asked.

It seems to us that the plain meaning of the ordinance, when it says that the General Assembly shall provide by law in what manner the railroad and its franchises shall be sold, is that they shall be sold in conformity with such law as the legislature may constitutionally pass, not in conformity with any law which the legislature could devise if it had unlimited discretion in the matter. It would conflict with well-settled rules of construction to hold that the language used authorizes any legislation regardless of the provisions of the constitution. And there is nothing in the authority conferred to provide for the sale of its franchises with the road of the defaulting company, which requires immunity from taxation to be embraced within them. The language evidently refers to such franchises as are essential to the operation of the road sold, without which the ownership of the road would be comparatively valueless, such as the franchise to run cars, to take tolls, and the like.

But if we are mistaken in this particular, we are clear that it never was intended by the ordinance to sanction, by the sale of the franchises of a defaulting corporation, the renewal of an exemption which had once ceased to exist, and which the constitution had declared should never thereafter be created. The inhibition of the constitution applies in all its force against the renewal of an exemption equally as against its original creation; and this inhibition the legislature could not disregard in providing for the sale of the property which it had purchased.

JUDGMENT AFFIRMED.

title: Trask v. Maguire/Opinion of the Court


text: Talk:Trask v. Maguire/Opinion of the Court

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


text:
Tiffany v. National Bank of Missouri

ERROR to the Circuit Court for the District of Missouri.

Tiffany, trustee of Darby, a bankrupt, brought an action of debt in the court below against the National Bank of Missouri, a corporation organized under the National Banking Act of June 3d, 1864, to recover under the provisions of the thirtieth section of the act twice the amount of interest paid by the said Darby, on certain loans made by the bank to him before he was adjudged a bankrupt. The ground of the action was, that the interest reserved and paid was 9 per cent.; a rate averred to be greater than the amount allowed by law, to wit, 8 per cent.

The provisions of the thirtieth section of the act, under which the suit was brought, are as follows:

'Every association organized under this act, may take, receive, reserve, and charge on any loans. . . interest at the rate allowed by the laws of the State or Territory where the bank is located, and no more; except that where, by the laws of any State, a different rate is liited for banks of issue organized under State laws, the rate so limited shall be allowed every association organized in any such State under this act. And when no rate is fixed by the laws of the State or Territory, the bank may take, receive, reserve or charge a rate not exceeding 7 per centum. . ..

'And in case a greater rate of interest has been paid, the person or persons paying the same, or their legal representatives, may recover back, in any action of debt, twice the amount of interest thus paid from the association taking or receiving the same.'. ..

In Missouri, the banks of issue, organized under the State laws, are limited to 8 per cent., but the rate of interest allowed by the laws of the State generally is 10 per cent. As already signified, this bank had taken 9 per cent.

On demurrer the question was, whether the National banks in Missouri were allowed to charge more than 8 per cent. The court below adjudged that they were.

Mr. S. Knox, for the appellant; Mr. J. O. Broadhead, contra.

Mr. Justice STRONG delivered the opinion of the court.

title: Tiffany v. National Bank of Missouri


text: Talk:Tiffany v. National Bank of Missouri


text:
Tiffany v. National Bank of Missouri/Opinion of the Court

In an action like the present, brought to recover that which is substantially a statutory penalty, the statute must receive a strict, that is, a literal construction. The defendant is not to be subjected to a penalty unless the words of the statute plainly impose it. The question, therefore, is whether the thirtieth section of the act of Congress of June 3d, 1864, relative to National banking associations, clearly prohibits such associations in the State of Missouri from reserving and taking a greater rate of interest than 8 per cent., the rate limited by the laws of that State to be charged by the banks of issue organized under its laws. It is only in case a greater rate of interest has been paid than the National banking associations are allowed to receive that they are made liable to pay twice the interest. The act of Congress enacts that every such association 'may take, receive, reserve, and charge on any loan or discount made, or upon any note, bill of exchange, or other evidences of debt, interest at the rate allowed by the laws of the State or Territory where the bank is located, and no more; except that where, by the laws of any State, a different rate is limited for banks of issue, organized under State laws, the rate so limited shall be allowed for associations organized in any such State under the act.' What, then, were the rates of interest allowed in Missouri when the loans were made by the defendants that are alleged to have been usurious? It is admitted to have been 10 per cent. per annum, allowed to all persons, except banks of issue organized under the laws of the State, and they were allowed to charge and receive only 8 per cent.

The position of the plaintiff is, that the general provision of the act of Congress that National banking associations may charge and receive interest at the rate allowed by the laws of the State where they are located, has no application to the case of these defendants, and that they are restricted to the rate allowed to banks of issue of the State, that is, to 8 per cent. This, we think, cannot be maintained. The act of Congress is an enabling statute, not a restraining one, except so far as it fixes a maximum rate in all cases where State banks of issue are not allowed a greater. There are three provisions in section thirty, each of them enabling. If no rate of interest is defined by State laws, 7 per cent. is allowed to be charged. If there is a rate of interest fixed by State laws for lenders generally, the banks are allowed to charge that rate, but no more, except that if State banks of issue are allowed to reserve more, the same privilege is allowed to National banking associations. Such, we think, is the fair construction of the act of Congress, entirely consistent with its words and with its spirit. It speaks of allowances to National banks and limitations upon State banks, but it does not declare that the rate limited to State banks shall be the maximum rate allowed to National banks. There can be no question that if the banks of issue of Missouri were allowed to demand interest at a higher rate than 10 per cent. National banks might do likewise. And this would be for the reason that they would then come within the exception made by the statute, that is, the exception from the operation of the restrictive words 'no more' than the general rate of interest allowed by law. But if it was intended they should in no case charge a higher rate of interest than State banks of issue, even though the general rule was greater, if the intention was to restrict rather than to enable, the obvious mode of expressing such an intention was to add the words 'and no more,' as they were added to the preceding clause of the section. The absence of those words, or words equivalent, is significant. Coupled with the general spirit of the act, and of all the legislation respecting National banks, it is controlling. It cannot be doubted, in view of the purpose of Congress in providing for the organization of National banking associations, that it was intended to give them a firm footing in the different States where they might be located. It was expected they would come into competition with State banks, and it was intended to give them at least equal advantages in such competition. In order to accomplish this they were empowered to reserve interest at the same rates, whatever those rates might be, which were allowed to similar State institutions. This was considered indispensable to protect them against possible unfriendly State legislation. Obviously, if State statutes should allow to their banks of issue a rate of interest greater than the ordinary rate allowed to natural persons, National banking associations could not compete with them, unless allowed the same. On the other hand, if such associations were restricted to the rates allowed by the statutes of the State to banks which might be authorized by the State laws, unfriendly legislation might make their existence in the State impossible. A rate of interest might be prescribed so low that banking could not be carried on, except at a certain loss. The only mode of guarding against such contingencies was that which, we think, Congress adopted. It was to allow to National associations the rate allowed by the State to natural persons generally, and a highter rate, if State banks of issue were authorized to charge a higher rate. This construction accords with the purpose of Congress, and carries it out. It accords with the spirit of all the legislation of Congress. National banks have been National favorites. They were established for the purpose, in part, of providing a currency for the whole country, and in part to create a market for the loans of the General government. It could not have been intended, therefore, to expose them to the hazard of unfriendly legislation by the States, or to ruinous competition with State banks. On the contrary, much has been done to insure their taking the place of State banks. The latter have been substantially taxed out of existence. A duty has been imposed upon their issues so large as to manifest a purpose to compel a withdrawal of all such issues from circulation. In harmony with this policy is the construction we think should be given to the thirtieth section of the act of Congress we have been considering. It gives advantages to National banks over their State competitors. It allows such banks to charge such interest as State banks may charge, and more, if by the laws of the State more may be charged by natural persons.

The result of this is that the defendants, in receiving 9 per cent. interest upon the loans made by them, have not transgressed the act of Congress, consequently they are under no liability to the plaintiff.

JUDGMENT AFFIRMED.


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


text:
Eunson v. Dodge

APPEAL from the Circuit Court of the Southern District of New York; the case being this:

On the 23d of May, 1854, the United States granted to Myers et al. a patent for a sawing machine for fourteen years, in other words, till the 23d of May, 1868.

About two years after the grant of the patent, that is to say, in April, 1856, the patentees assigned to one Schureman, for himself, his legal representatives, and assigns, all their right, title, and interest in and to the same for, in, and to Hudson County, New Jersey, to the end of the term for which the patent had been granted.

In May, 1865, and subsequently to the assignment just mentioned, Dodge & Co., a firm of the same Hudson County, New Jersey, already mentioned, bought from strangers who had no right or license to make or vend it a sawing machine which was an infringement of the patent. Dodge & Co. used this machine for about fifteen months, in good faith and without knowledge that it was an infringement. When receiving notice from Schureman that it was so, and that he was assignee of the patent for Hudson County, they, on the 22d of September, 1866, purchased of him the letters and all his right and interest therein for the said county. This invested them, of course, with all the rights of the patentee, for Hudson County, during the term of the patent, in other words, till the 23d of May, 1868.

On the 13th of May, 1868, after the transfer by the patentees to Schureman and by him to Dodge & Co., the patent was extended to Myers and the other patentee, from the 23d of May, 1868, until the 23d of May, 1875.

Their right in this extension these parties transferred to Eunson et al.

Hereupon, in July, 1871, these last-named parties finding that Dodge & Co. were still using this machine, originally made as already said, without license and unlawfully, and conceiving that in thus using it, after the date when the original patent had expired and in the term of the extension which had been assigned to them, Dodge & Co. were infringing their rights, filed this bill to enjoin the use and to recover compensation.

Dodge & Co. set up that they were protected in the use of the machine by the terms of the eighteenth section of the Patent Act of July 4th, 1836. That act, after providing for renewals or extensions, enacts that—

'The benefit of such renewal shall extend to assignees and grantees of the right to use the thing patented, to the extent of their interest therein.'

The court below held that the defendants were thus protected, and a decree having been given accordingly, the complainants brought the case here.

Mr. F. H. Betts, for the appellants:

We concede that if the defendant's machine had been one which was lawfully constructed by or purchased from the patentees or their assignees, the defendants would be protected under the rule established in Wilson v. Rousseau, and other cases in this court.

This rule is founded upon the doctrine stated in one of these cases, that the patentee should 'be entitled to but one royalty for a patented machine, and consequently when a patentee has himself constructed the machine, or authorized another to construct and sell it, or to construct and use and operate it, and the consideration has been paid to him for that right, he has then to that extent parted with his monopoly and ceased to have any interest in the machine.' By the lawful sale of a machine, the right to use it has passed to the purchaser in perpetuity, or so long as the machine exists.

But this case is distinguished from the cases referred to by the absence of the very fact that in each of those cases brought these defendants within the permission of the statute, viz., the fact that the machine had been 'lawfully made,' and the patentee had sold it, and with it ipso facto the perpetual right to use it; in the present case the defendant's machine was not 'lawfully made.' It was 'built and sold without right or license under said patent.' The patentees never have been paid for the perpetual right to use it. The defendants, therefore, do not come within the terms of the eighteenth section, as construed by this court.

Mr. S. D. Law, contra.

Mr. Justice HUNT delivered the opinion of the court.

title: Eunson v. Dodge


text: Talk:Eunson v. Dodge

title: Talk:Eunson v. Dodge


text:
Eunson v. Dodge/Opinion of the Court

This court has decided many times that the eighteenth section of the Patent Act of 1836 gives to an assignee of the patent during the original term the right to continue during the extended term the use of a machine used by him during the original term.

The complainants seek to distinguish the present from the cases cited in this manner: In those instances they say the machines were lawfully constructed by the patentees, or purchased from the patentees or their assignees, whereas the machine purchased by the defendants in this case was not a lawfully made machine, and was never purchased from the owner of the patent.

We are of the opinion that this distinction is not well taken. That the purchase of the machine was made from an infringer, and a wrong done, is true. When informed of the offence, the purchaser at once corrected the evil by purchasing the entire right of the patentees for the county where his machine was then used, and where it has since been used. This was equivalent to an original lawful purchase or manufacture of the machine. By the purchase of the right for Hudson County, and from the moment of that purchase, the defendants held and used the machine by a lawful title, as perfect and complete against the patentees as if the original purchase had been from them. They then became, in the language of the statute, 'grantees of the right to use the thing patented,' so continued to the time of the expiration of the original patent, and the right so to use was, in the further language of the statute, 'the extent of their interest therein.'

We are of the opinion that the decree of the Circuit Court was correct, and that it should be.

AFFIRMED.

Mr. Justice STRONG took no part in this judgment, not having sat in the case.

title: Eunson v. Dodge/Opinion of the Court


text: Talk:Eunson v. Dodge/Opinion of the Court


text:
Ex parte State Insurance Company

ON petition for a mandamus to the Circuit Court for the Southern District of Alabama, at Mobile. The case was thus:

Between December 14th, 1819, when Alabama was admitted into the Union, and the 3d of March, 1873, various statutes were passed fixing the judicial districts of the State and the powers of District Courts established for them. Among them were two acts, one of March 10th, 1824, and the other of February 6th, 1839, whose conjoint effect apparently was to divide the State into three districts, a northern, a middle (this latter embracing Barbour County, one of the counties of Alabama), and a southern, whose terms and sessions were to be held at Mobile. These acts gave to these different District Courts, in general terms, the jurisdiction and powers of Circuit Courts.

With these various acts in force, one Kolb, a citizen of Barbour County, already mentioned as in the judicial district designated by Congress as the middle one, sued the State Insurance Company of Missouri, by process in attachment in a State court sitting at Euphala, in the county of Barbour aforesaid. On the 11th December, 1872, the insurance company applied to the said State court where the suit was brought, alleging its incorporation by and citizenship in Missouri, and praying for the removal of the suit 'into the next Circuit Court of the United States to be held in this the district where the suit is pending.' This petition was made, of course, pursuant to the right given in the twelfth section of the Judiciary Act, which says:

'If a suit be commenced in any State court. . . by a citizen of the State in which the suit is brought, against a citizen of another State,. . . and the defendant shall. . . file a petition for the removal of the cause from that into the next Circuit Court to be held in the district where the suit is pending, &c.,. . . the cause shall there proceed as if it had been brought there by original process.'

The State court, on the 11th of January, 1873, made an order that the cause be removed out of this court into the Circuit Court of the United States at Mobile, Alabama, that being the Circuit Court of the United States for this district. And, on the 18th following, the proper papers were filed with the clerk of the Southern District.

On the 3d of March, 1873, after all this had been done, Congress passed an act relating to the Circuit and District Courts for the Middle and Northern Districts of Alabama, one section of which enacted, 'that so much of any act or acts of Congress as vested in the District Court for the Middle District of Alabama,. . . the power and jurisdiction of a Circuit Court be and the same is hereby repealed.' The act, which in two places spoke of the Circuit Court at Mobile as the Circuit Court for the District of Alabama, made several important changes in previously existing things.

On the 23d of December, 1873-after the passage of the statute just mentioned-Kolb, the plaintiff in the suit, appeared in the Circuit Court and moved to have the case stricken from the docket for want of jurisdiction, which order was made by the court, the circuit judge presiding.

The insurance company now applied to this court for a mandamus to the said Circuit Court, requiring it to proceed to try and determine the case.

Messrs. P. Phillips and J. T. Morgan, for the petitioner, made an elaborate examination of different statutes, including specially that of March 3d, 1873, and argued that in view of this legislation the Circuit Court at Mobile had original circuit court jurisdiction over the entire State, or made the State, so far as said Circuit Court was concerned, but one district. The learned counsel conceded that the act of March 3d, 1873, did not, in express terms, confer such jurisdiction upon the Circuit Court at Mobile, nor expressly enact that the State should constitute but one district for circuit court purposes.

Mr. Justice MILLER delivered the opinion of the court.

title: Ex parte State Insurance Company


text: Talk:Ex parte State Insurance Company

title: Talk:Ex parte State Insurance Company


text:
Ex parte State Insurance Company/Opinion of the Court

Much argument is addressed to us on the construction of the act of March 3d, 1873, concerning the District and Circuit Courts of Alabama, especially whether by that act the Circuit Court sitting at Mobile has circuit court jurisdiction over the whole State or not. In the view we take of the present case it is not necessary for us to decide that question.

Prior to that time the District Court of the United States for the Middle District of Alabama was a court invested with circuit court powers: Among those powers, in our opinion, was that of receiving and exercising jurisdiction over cases removed from the State courts within its territorial limits. The case before us was of that class. No question is raised that the requirements of the law for the removal were complied with. The order for the removal was made on the 11th day of January, 1873, and the papers filed in the office of the clerk of the Circuit Court for the Southern District on the 18th day of the same month.

The order of the State court was that 'this cause be removed out of this court into the Circuit Court of the United States at Mobile, Alabama, that being the Circuit Court of the United States for this district.' The county of Barbour, in which the State court sat and made this order, was in the Middle District of Alabama, and as, in our judgment, the case, if to be removed at all, should have been removed to the District Court for that district, to be disposed of in the exercise of its circuit court powers, we think the order of the State court was void. That it conferred no jurisdiction of the case on the Circuit Court for the Southern District of Alabama, because it could take none as the law then stood. Whatever may by the effect of the subsequent act of March 3d, 1873, on the jurisdiction of all these courts, there is nothing in it which removes the difficulty in the present case.

The Circuit Court at Mobile was, therefore, right in refusing to hear the case, and ordering it to be stricken from the docket, and the mandamus now asked for is

DENIED.


text: Talk:Ex parte State Insurance Company/Opinion of the Court


text: 1911 Encyclopædia Britannica/Dumortierite


text:
Miltenberger v. Cooke

ERROR to the Supreme Court of Louisiana; the case being thus:

An act of August 6th, 1846, commonly known as the 'Independent Treasury Act,' thus enacts:

'SECTION 18. All duties, taxes,. . . debts, and sums of money accruing or becoming due to the United States,. . . shall be paid in gold or silver coin only, or in treasury notes.

'SECTION 19. Any receiving. . . officer or agent, who shall neglect, evade or violate the provisions. . . of the last preceding section of this act, shall by the Secretary of the Treasury be immediately reported to the President of the United States with the facts of such neglect, evasion, or violation, and also to Congress.'

Other sections of the act most carefully provide that no officers with whom money is deposited shall in any manner alter the condition of this money. They are not to use it, lend it, exchange it, deposit it with other persons or depositories except those described in the act. The sixteenth section of the act provides for exact entries of every official transaction of receipt, payment, or transfer, and provides that all irregular or unclean dealing with this public money shall be deemed a felony.

An act of July 13th, 1866, after enacting that subsequently to the 1st of August following 'there shall be paid. . . a tax of three cents per pound on cotton,' proceeds:

'And said tax shall be paid to the collector of internal revenue within and for the collection district in which said cotton shall have been produced, and before the same shall have been removed therefrom. And every collector to whom any tax upon cotton shall be paid shall mark the bales. . . upon which the tax shall have been paid in such manner as may clearly indicate the payment thereof, and shall give to the owner or other person having charge of such cotton a permit for the removal of the same, stating therein the amount and payment of the tax, the time and place of payment, and the weight and marks upon the bales. . . so that the same may be fully identified.'

These statutes being in force, Cooke, resident at Hazlehurst, Mississippi, some one hundred and fifty miles north of New Orleans, and collector of internal revenue for the district of Mississippi, in September, 1866-at which date, the rebellion having been suppressed only within about eighteen months, and the whole rural districts of Mississippi being still more or less in a disorganized and lawless condition, it was not desirable for either collectors in them or their deputies to have on hand large sums of money,-gave public notice in newspapers that the owners or holders of cotton in Mississippi might bring it to the usual shipping-places, adding that as the amount received for taxes on all this cotton would have to be deposited in New Orleans [which was the place of deposit for the Mississippi District], it would suit him and might afford facilities to shippers if he received the amount by draft of the shipper on the consignees in New Orleans, and that he would receive such drafts if the consignees would recognize them so as to make the amount available to him, the collector, at his place of deposit, New Orleans.

Thereupon, Caruthers & Co., residents at Osyka, in the interior of the State, and about half-way between Hazlehurst and New Orleans, having certain cotton which they wished to ship to Miltenberger & Co., their correspondents at New Orleans, wrote to these last:

'October 24th, 1866.

'Please to inform us whether it would suit you if we were to give a draft on you for the internal revenue tax; the collector here preferring the same to money.'

To this Miltenberger & Co., in two days after, replied:

'October 26th, 1866.

'We have no objection to your drafting to us in payment of the internal revenue tax on cotton shipped to us. Your drafts for same will, therefore, be duly honored.'

Hereupon Caruthers & Co., shipping cotton to Miltenberger & Co., at different times, did at or about these same times, draw on them to the order of Cooke, the deputy, some eight or ten drafts, most of them at sight, others at short date, for the taxes chargeable on it. These drafts were given to the deputy collector, he having seen the letter of Miltenberger & Co., promising to accept, &c.,-the bales were marked in the way that the above-quoted statute of 1866 required when the tax was paid, and a permit was given for the removal of the cotton to New Orleans. The collector charged himself with the tax as paid; reported it to the government as paid to him; and was charged with it by the government accordingly. His commissions were 5 per cent. on all amounts paid over. Caruthers & Co. shipped the cotton to Miltenberger & Co. at the city named, and advised them, as they drew the different drafts, of the fact that they had done so. All the drafts drawn were indorsed by the deputy collector, to whom they were given, to Cooke, the principal collector, and two of them went in at once and were paid; but either from the deputy's not sending them to his principal as he got them, or from the principal's not sending them on in regular course to New Orleans for collection, or from some other cause, six of them-drawn between October, 1866, and February, 1867-did not go in for payment till April of the latter year. Miltenberger & Co. then refused to pay, alleging that they now had no cotton belonging to Caruthers & Co., that the non-presentment of the drafts, in due course, had led them to suppose that Caruthers & Co. had themselves in some way taken them up, and that the account of the house had been settled upon that assumption.

Hereupon Cooke sued Miltenberger & Co. to recover on the drafts, and upon what was alleged to be an acceptance of them made in the letter of the said Miltenberger & Co., of October 26th, 1866.

Miltenberger & Co. set up as defence the matters already indicated, and more particularly:

That the laws of the United States did not authorize or permit the collectors of revenue to take or accept drafts for the payment of taxes, or any other thing, except the lawful money of the United States; but, on the contrary, particularly and explicitly prohibited the mode of collection set forth and described in the petition of the plaintiff, and that what had been done was a violation of the acts of Congress in this behalf.

The court below gave judgment for the plaintiff, and the defendants took this writ of error.

It was testified to by Cooke himself, on the trial of the case below, that while the Treasury Department had not 'sanctioned' what he had done, it authorized him 'to avail himself of exchange;' that he had collected, through drafts by shippers of cotton, on its consignees, nearly all the revenue of his district, $500,000 or more; that in the then condition of Mississippi he deemed it safer so to collect it than to collect it in any other way; and that the Treasury Department had left his account open to see whether he could get this money.

Messrs. J. A. and D. G. Campbell, for the plaintiff in error:

A collector of taxes charged with the duty of receiving gold or silver or treasury notes, or notes of the National banks, for the taxes imposed upon cotton, and upon the receipt of the amount, to enter the fact upon his books; stamp it upon the bales of cotton; declare it as a fact in the permit for the removal of the cotton from the district; and faithfully report it to the government,-neglects, evades, and violates his duty when he takes a draft on a commission merchant at a distance, upon a promise contained in a letter to a taxpayer, for the amount of the tax, and treats that draft as lawful money, and allows the removal of the cotton and facilitates its removal and sale by false stamps and false statements in his permits, and does not pay the taxes to the United States.

And the question is, whether a collector of the United States who neglects, evades, and violates his duty, can through the courts of the United States get the benefit of his neglect, evasion, and violation of duty, when he finds that they have failed to secure to him the benefits of compliance with, conformity to, and performance of duty?

The interest of the United States as declared in the acts of Congress is that the collecting, receiving, and disbursing officers of the United States shall know, that all the money which shall pass through their hands as public officers, belongs to the United States, and under no conditions or circumstances shall they presume to deal with it as if they had any sort of ownership, estate, or authority to make any other disposition of it than the law prescribes. The danger from persons in fiscal offices is their forgetfulness of this essential knowledge. The statutes permit no use of the government money, nor exertion of the powers for its collection, receipt or disbursement for any private object. A slight deviation from the austere and self-denying habit prescribed in the rule of the treasury is treated as an infamous offence, a felony. By the light of these statutes it is apparent that this collector's acts are reprobated acts. He has assumed to dispense with the fundamental principle of the acts of Congress relative to the currency in advance. He establishes commercial relations with mercantile partnerships, and the factors of country dealers, on behalf of the treasury of the United States. If he had farmed the revenues in his district from the government by contract, his control over the tax collections could not have been more decidedly that of an owner.

If Cooke had acted with motives the best, the most completely above suspicion, all these observations would apply. But it is not difficult to assign a motive for what was his confessedly irregular and illegal conduct. In the first place his commissions depended upon the amount of his collections and was not limited by a maximum; then there were incidental advantages, supposed to arise from a dispensation on his part, of the laws and the treasury regulations. We find that these drafts were not presented regularly or promptly.

Mr. O. D. Barret, contra

Mr. Justice SWAYNE delivered the opinion of the court.

title: Miltenberger v. Cooke


text: Talk:Miltenberger v. Cooke

title: Talk:Miltenberger v. Cooke


text:
Miltenberger v. Cooke/Opinion of the Court

The question presented for our determination is whether the securities upon which the judgment was recovered, are fatally tainted with illegality.

Cooke was the collector of internal revenue for one of the collection districts of Mississippi. Curtis was his deputy. New Orleans was the designated place of deposit for the revenue collected. In the state of things then existing in Mississippi, it was dangerous for the collector to have money about him. He, therefore, advertised that he would receive payment of the tax upon cotton by drafts upon New Orleans. He took such drafts instead of money as a matter of safety. Nearly all the revenue paid was thus collected. He received a half million of dollars or more in this way. All the drafts taken were paid, except those in question in this case and one or two others. None were received but such as were considered good. The collector was authorized to transmit to New Orleans the moneys collected by buying exchange. When the drafts were given the bales were marked as if the tax had been paid, and the requisite permit for their removal was delivered. The drafts in question were taken by Curtis, by the authority of Cooke, and indorsed by the former to the latter. They were all received for the tax not otherwise paid, upon cotton shipped to Miltenberger & Co. by Caruthers & Co., the drawers of the drafts. Caruthers & Co. drew them pursuant to a letter from the plaintiffs in error, which, under such circumstances, authorized them to be drawn, and promised to accept and pay them. Curtis took the drafts upon the faith of this letter. Miltenberger & Co. were advised at the time of the drawing of each draft and of the shipment of the cotton, upon which it was founded. Cooke, in these as in all other instances of the kind, reported the tax to the government as paid, and charged himself accordingly, and was so charged upon the books of the Treasury Department. He considered the tax paid by such transactions, and the drafts wholly at his risk. The proper officers of the revenue bureau, with knowledge of the facts, have left his account open as to the amount of these drafts, and given him time to collect them.

Such is the case upon the facts as presented in the record.

The act of August 6th, 1846, requires all taxes and duties accruing to the government to be paid in gold and silver, or treasury notes. The act of July 13th, 1866, imposed a tax of three cents per pound upon all cotton raised in the United States, and required the tax to be paid in the district where it was produced before its removal, with an exception which does not affect this case. The collector, upon receiving payment, was required to mark the bales and packages accordingly, and to give the owner or person in charge of the cotton a permit for its removal, stating the amount and payment of the tax, the time and place of payment, and the marks upon the bales and packages, so that they could be identified; and it was made his duty to keep an account of all cotton inspected and of the marks and identifications, and of all permits for removal issued, and of all his transactions in relation thereto, and to make full returns monthly to the Commissioner of Internal Revenue.

The judgment of the court below must be sustained upon several grounds:

As between the parties, the tax was paid by Cooke for Caruthers & Co. His marking the bales, giving the permit, charging himself with the amount, and reporting it to the government as paid, had that effect. The result was the same to Caruthers & Co. as if so much money had been advanced at their request, and so applied for their benefit. They were permitted to ship the cotton to the plaintiffs in error, in all respects as if the money had been actually paid and the requisite vouchers had been given upon the basis of such payment. The assumpsit of the collector supplied the place of the money. No demand has been made by the government against Caruthers & Co. They have had the full benefit of the arrangement. As between them and Cooke, the transaction is as if Cooke had lent Caruthers & Co. the amount in gold or silver, or treasury notes, with one hand, and received it back with the other. It has been held that promissory notes given under such circumstances can be enforced by the payee.

Conceding that the transaction was illegal, the statutory provisions relied upon by the plaintiffs in error are for the protection and benefit of the United States, and it was for the latter to object or not as they deemed proper. In this view of the case, they could have repudiated the transaction and called upon Caruthers & Co. for payment. With full knowledge of the facts they chose not to do so. The matter was one between them and their agent. The option to object belonged to the government and cannot be exercised by those who have not and could not have been injured.

The written promise of the plaintiffs in error to accept these drafts was equivalent to acceptance. No question is raised upon that subject by their counsel. After notice of the drawing of the drafts, and the sale of the cotton, they had so much money in their hands to be applied according to their engagement. There was no stipulation between them and Cooke. Their contract was with Caruthers & Co. When the money was received for the cotton they held it in trust for Cooke, and their sole duty and business in relation to it was to pay it over upon the drafts when called for, according to their agreement. If they paid it to Caruthers & Co. they did so in their own wrong. The fact in no wise affected their liability to Cooke and is not an element in the case to be considered. In no view can they be permitted to keep the money for their own use, or avail themselves of a payment made in violation of Cooke's rights and their duty. They can no more object to the consideration of the drafts than if the money were still in their hands. For the purposes of this case, it must be regarded as there when payment of the drafts was demanded.

It is a consideration of weight, though not controlling, that there is nothing disclosed which looks like fraud on the part of the defendant in error. There was neither concealment, indirection, nor oppression. Nothing beyond the tax was demanded or stipulated to be paid. Caruthers & Co. received in full the consideration upon which the drafts were drawn, and the defendants in full the consideration upon which they agreed to accept and pay them. It would be contrary to equity and good conscience, as well as the law, to permit the plaintiffs in error to cast upon the defendant in error the burden of the loss to which they have endeavored to subject him.

JUDGMENT AFFIRMED.


text: Talk:Miltenberger v. Cooke/Opinion of the Court


text:
Brent v. Maryland

ERROR to the Supreme Court of the District of Columbia.

Boteler, of Prince George County, Maryland, died possessed of considerable real estate and of some personalty; owing to one Warner a debt which the personalty was not sufficient to pay, and leaving a widow and minor children. Administration being taken by his widow upon his estate, a petition was filed by Warner, February, 1853, in accordance with the laws of Maryland, against the widow and children, to subject this real estate to the payment of the debts. Daniel Digges, Esquire, was the solicitor of the petitioner, and as such signed the petition praying for a decree of sale. The court made the decree prayed for, and appointed the said Digges, the solicitor, trustee to make it. He was required to give bond in $15,000 for the faithful performance of his duties as such trustee. This bond he gave with Norah Digges as one of his sureties; the bond being in the form usual in Maryland, that is to say, to the State, for the use of the parties interested in the real estate to be sold. By the decree ordering a sale the trustee was ordered to bring into court the money arising from such sale, and the bonds or notes taken for the same, all to be disposed of under the direction of the court. The trustee made sale and reported it to the court, but never brought into court the money, notes, or bonds.

In June, 1854-Digges still maintaining his relations to the case-an auditor was appointed to distribute the funds in the hands of the trustee. The auditor reported that of this fund there was due to each of the minor children the sum of $704.39 1/4. Thereupon the court, on the 11th of April, 1860-Digges still acting as solicitor-confirmed the report and ordered the trustee to pay over these sums to the parties entitled. The trustee did not pay over as ordered, and afterwards, in 1860 apparently, or 1861, died insolvent. His surety being also dead, and J. C. Brent being his executor, suit was brought at law, on the bond, against Brent, in the name of the State, by the children jointly. The auditor's report which was in the record did not mention that Daniel Digges, the solicitor in the case, had appeared before him or had notice of the report's being made. Nor did the declaration in the case aver or the evidence show that any service of any order to pay or any demand of payment had been specifically made on the said Daniel Digges, the trustee.

The defence was,

1. That the trustee, Daniel Digges, had no sufficient notice of the auditor's report and its confirmation.

2. That the plaintiffs could not jointly maintain their action.

3. That the remedy was in equity alone.

But the court overruled all the defences, and gave judgment for $15,000, the penalty of the bond, to be discharged upon payment of a sum specified to each of the plaintiffs therein. Thereupon the defendant brought the case here.

Mr. T. T. Crittenden, for the plaintiff in error:

1. The plaintiffs to sustain their suit ought to aver and prove a service of the order on the trustee, and a demand of payment of the sum specified therein. Nothing of that sort appears. It is, therefore, not pretended that Digges, the trustee, had notice of the auditor's report, yet he should have had it.

In Oyster v. Annan, the highest court of Maryland says:

'The trustee, as to the suit, is not in the situation of a common debtor who knows his liability, and whose business it is to look to a compliance with his engagement. The creditors are known to the trustee but through the medium of the court of chancery, where they file their respective demands to be adjusted by the auditor, and where disputes among them are disposed of by the chancellor, who finally determines what proportion of the sum of money reported is to be paid to each of them. This proceeding as to the trustee, is res inter alios acta, and it is but reasonable that when it terminates he shall be notified of the result, before any steps are taken against him, either by attachment or by action on his trustee's bond, against him and his sureties.'

The point which we here make is one of substance, and we present it as a chief point of our case.

2. The suit is joint. It should have been several. The report found that there was due to each child a sum certain, to wit, $704.39 1/4. Each person could, therefore, have sued for himself.

3. So too the proceeding should have been in equity. The death of the trustee having rendered it impossible to give notice to him or to make demand of him, the surety should not be placed in a position of responsibility which had not attached to the principal. The death of the trustee was such an accident as entitled the sureties to relief in equity. Such seems to be the doctrine of State v. Digges, and of Brooks v. Brooke, both of them Maryland cases of authority.

Mr. S. S. Hencle, contra:

1. All that is decided in Oyster v. Annan, is that the trustees should have notice. Digges, the trustee, had it. Numerous cases, English and American, some of them referring to Harris v. Ferrand, reported by Hardres, so far back as the time of Charles II, show that if a party is solicitor in the case he has notice as of course.

2. That in such a case as this the parties can sue jointly, appears also by many cases.

3. The third point of the opposite counsel rests on an assumption that the trustee had no notice. The assumption having been shown to be untrue the point disappears.

Mr. Justice HUNT delivered the opinion of the court.

title: Brent v. Maryland


text: Talk:Brent v. Maryland

title: Talk:Brent v. Maryland


text:
Brent v. Maryland/Opinion of the Court

The point chiefly insisted upon in the argument of the counsel for the plaintiff in error, is this: that Digges, the trustee, had no notice of the auditor's report and of its confirmation, and that for the want of such notice this action cannot be maintained. We are of the opinion that this point is not well taken. We recognize the soundness of the decision in Oyster v. Annan and other decisions in the State of Maryland, cited to us, that before a suit can be brought against a trustee, he must have had notice of the duty he is required to perform, and must have had an opportunity to perform it. In the case just named the court say: 'The trustee, as to the suit, is not in the situation of a common debtor who knows his liability, and whose business it is to look to a compliance with his engagements. . . . This proceeding, as to the trustee, is res inter alios acta, and it is but reasonable that when it terminates, he shall be notified of the result before any steps are taken against him, either by attachment or by action on his trustee's bond against him and his sureties.' These remarks are founded in good sense, and do not conflict with the authorities cited on the other side, to the effect that where the trustee is himself an actor in the transaction, and has full knowledge of his duties, such notice and demand are not required.

Daniel Digges, the principal in the bond sued on, was not only the trustee, but he was the solicitor or attorney who procured himself to be appointed trustee, and as such solicitor himself procured the court to grant and the clerk to enter the orders, out of which the liability arises. Thus, after he had obtained the orders for the sale of the property, had sold the same and received the proceeds thereof, he caused an order to be entered in November, 1853, ratifying all that he had done. In June, 1854, he caused an order to be entered, referring it to an auditor to make distribution of the trust fund among the creditors and parties thereto entitled. In the execution of this order, Mr. Hance reported, in 1859, that there was due and payable to each of the plaintiffs, the sum of $704.39 1/4. On the 11th of April, 1860, Mr. Digges causes an order to be entered, finally ratifying the auditor's report, and ordering that the trustee be directed to pay all the trust fund to the several parties named in the auditor's report. Here was a positive direction to the trustee to pay specific sums to persons named, and without qualification or delay. He became an absolute debtor to each of them for the amount payable to each. The order was of his procuring, made and entered through his agency. That it should be necessary to give a man notice of what he had himself done, or that a demand of performance should be required of that which he had himself directed should be done by himself at once and without condition, would be quite remarkable. No such necessity exists. The case falls within the other principle referred to, that notice and demand are not necessary where the trustee is himself an actor and has full knowledge of all that is required to be done. He was, in the language of the court in Oyster v. Annan, 'a common debtor who knows his liability, and whose business it is to look to a compliance with his engagements.' No case has been cited to support the views of the plaintiff in error, and we think none can be found. In State v. Digges, the court place their dismissal of the suit upon other grounds, and the circumstance that Mr. Digges was both the trustee and solicitor in the transaction, is not alluded to, either in the argument of counsel or in the opinion of the court.

The remaining objections, that the bond cannot be sued upon by the plaintiffs below jointly, and that the action cannot be maintained in a court of law, but that equity must be resorted to, are not sustained by the authorities. The suit in the present form in the name of the State, for the use of parties interested, is according to the practice in Maryland and in the District of Columbia.

In Brooks v. Brooke, it was decided that the action against the sureties upon the bond could properly be brought in a court of law; and the circumstance that the trustee died before notice was given to him, where notice was necessary, it was held would justify the interposition of a court of equity. To the same purport is the case of State v. Digges, where it was held that the death of the trustee without having received notice of the order and demand of payment, required the action to be brought in a court of equity. The case is not applicable to an instance like the present, where notice and demand is not required to be given.

JUDGMENT AFFIRMED.

title: Brent v. Maryland/Opinion of the Court


text: Talk:Brent v. Maryland/Opinion of the Court


text: Lucas v. Brooks

title: Lucas v. Brooks


text: Talk:Lucas v. Brooks

title: Talk:Lucas v. Brooks