text:
Wood v. Carpenter/Opinion of the Court

This action was brought Oct. 21, 1872. The amended complaint or declaration makes the following case: William L. Wood, the plaintiff, recovered judgments in the Vanderburg Circuit Court against Willard Carpenter upon sundry promissory notes and bills of exchange. The first judgment bore date on the 16th of May, 1860, and the last on the 22d of August in that year. In the aggregate they amounted to the sum of $8,557.079 At the dates of the notes and bills the defendant was the owner of real and personal estate of the value of $500,000. For the purpose of defrauding the plaintiff and others by depreciating the value of their claims against him, and of thereby inducing them to sell the claims to him for less than their face, the defendant, in the year 1858, entered into a fraudulent conspiracy with his brother, Alvin B. Carpenter, and others to the plaintiff unknown, to incumber his real estate and hide away the title so that the property should not be sold to pay his debts, but in the end inure to his benefit. In pursuance of this scheme he confessed sundry fraudulent judgments for large sums, and afterwards made a fraudulent assignment of all his property to William H. Walker and William D. Allis, and thereafter procured the title to all his real and personal estate to be vested in his brother, Alvin, and others, who held the property in secret trust for the defendant. In this way the title was so concealed that the plaintiff was prevented from levying executions issued upon his judgments. On the 14th of January, 1862, the plaintiff, in order to compel the defendant to pay his judgments, caused him to be arrested by the sheriff, in Massachusetts, upon final process. The defendant was taken before a master in chancery, and afterwards, before the master, took the insolvent debtor's oath according to the law of that State, and was thereupon discharged. Upon that occasion he falsely deposed and swore that he was not possessed of pecuniary means to the extent of twenty dollars, and that he had in good faith assigned all his property for the benefit of his creditors. From that time forward the defendant falsely pretended to the plaintiff and his other creditors that he was poor, and wholly unable to pay his debts, or any part of them. Having thus put his property beyond the reach of process upon the plaintiff's judgments, and procured his discharge from custody in Massachusetts, and led the plaintiff to believe he had no property out of which the judgments could be collected, the defendant afterwards, on the 1st of January, 1864, in further pursuance of the conspiracy, pretended and represented that his son-in-law, one D. C. Keller, would purchase the judgments with his own means, and so procured the plaintiff, who acted upon the belief of the truth of the representations and of the perjured statement of the defendant, to assign the judgments to Keller for fifty per cent of their principal and interest, amounting to $5,104.52, whereas, in fact, the judgments were bought by Keller with money furnished by the defendant, and they were held in trust by Keller for the defendant until June 1, 1873, when Keller, at the instance of the defendant, caused satisfaction to be entered. Before and since the rendition of the judgments the defendant owned property worth exceeding $200,000. The title was held in secret trust for him by his brother Alvin and others, and was fraudulently concealed from the plaintiff until long after the assignment of the judgments. Within twelve months past the property was all reconveyed to the defendant, and he holds it by an indefeasible title. The plaintiff had no knowledge of the ownership of the property by the defendant, nor of the secret trust, nor of the falsity of his representations, as alleged, until during the year 1872.

The defendant filed an answer consisting of three paragraphs: -

1. He denied all the allegations of the petition.

2. He alleged that the causes of action set forth in the petition did not accrue within six years.

3. He averred that he was not guilty of any of the grievances set forth in the complaint at any time within six years before the commencement of the action.

The plaintiff's reply to the second and third paragraphs averred as follows:--

The defendant concealed the facts, that the judgments confessed in favor of Chapman and others were fraudulent; that Alvin C. Carpenter held the said property, real and personal, in trust for the defendant; that the defendant had committed perjury before the master in Massachusetts; that Keller had bought the judgments with the defendant's money, and for the defendant's use and benefit; that the defendant was in fact the owner of the property, and that it was held by his brother and others in secret trust for him; and that his representations as to his insolvency were false and fraudulent.

It was averred further, that the concealment was effected by the defendant by means of fraud, perjury, and the other wicked devices set forth and described in the plaintiff's complaint herein; and that the plaintiff had no knowledge of the facts so concealed by the defendant until the year 1872, and a few weeks only before the commencement of this suit.

The defendant demurred to the last two paragraphs of the reply. The demurrer was sustained. The plaintiff not asking leave to amend, the court gave judgment against him, and he thereupon sued out this writ of error.

The only question presented for our consideration is whether the demurrer was properly sustained. The Statute of Limitations relied upon by the defendant declares:--

'The following actions shall be commenced within six years after the cause of action has accrued, and not afterwards.' 2 Rev. Stat. of 1876, p. 121. '. . . If any person liable to an action shall conceal the fact from the person entitled thereto, the action may be commenced at any time within the period of limitation after the discovery of the cause of action.' Id. 128, sect. 219. Both these provisions apply to actions for fraud. Musselman v. Kent and Others, 33 Ind. 453; Cravens v. Duncan, 55 id. 347. The statute begins to run when the fraud is perpetrated. Wynne et al. v. Cornelison et al., 52 id. 312.

In the case in hand, the specific wrong complained of, and the gravamen of the action, is the transfer of the judgments against Carpenter for the consideration of fifty cents on the dollar of principal and interest, when it is averred they were good for the entire amount, and which transfer, it is alleged, was brought about by the fraud and misrepresentations of the defendant and Keller. It is averred in the complaint that they were assigned on the 1st of January, 1864. The cause of action then accrued, and the statute began to run. The averments of fraud, aside from this transaction, are only matters of inducement. The bar of the statute became complete on the 1st of January, 1870, unless the reply brings the case within sect. 219, which declares that, where there is concealment, such actions may be brought within the time limited, after the discovery of the cause of action.

Statutes of limitation are vital to the welfare of society and are favored in the law. They are found and approved in all systems of enlightened jurisprudence. They promote repose by giving security and stability to human affairs. An important public policy lies at their foundation. They stimulate to activity and punish negligence. While time is constantly destroying the evidence of rights, they supply its place by a presumption which renders proof unnecessary. Mere delay, extending to the limit prescribed, is itself a conclusive bar. The bane and antidote go together.

The provision in the statute of which the plaintiff seeks to avail himself was originally established in equity, and has since been made applicable in trials at law. There is no trace of it in the English statute of limitations of the 21st of James I., which was adopted in most of the American colonies before the Revolution, and has since been the foundation of nearly all of the like legislation in this country.

Having been imported from equity, the adjudications of equitable and legal tribunals upon the subject are alike entitled to consideration.

Upon looking carefully into the reply, we find it sets forth that the concealment touching the cause of action was effected by the defendant by means of the several frauds and falsehoods averred more at length in the complaint. The former is only a brief epitome of the latter. There is the same generality of statement and denunciation, and the same absence of specific details in both. No point in the complaint is omitted in the reply, but no new light is thrown in which tends to show the relation of cause and effect, or, in other words, that the protracted concealment which is admitted necessarily followed from the facts and circumstances which are said to have produced it.

It will be observed also that there is no averment that during the long period over which the transactions referred to extended, the plaintiff ever made or caused to be made the slightest inquiry in relation to either of them. The judgments confessed were of record, and he knew it. It could not have been difficult to ascertain, if the facts were so, that they were shams. The conveyances to Alvin and Keller were also on record in the proper offices. If they were in trust for the defendant, as alleged, proper diligence could not have failed to find a clew in every case that would have led to evidence not to be resisted. With the strongest motives to action, the plaintiff was supine. If underlying frauds existed, as he alleges, he did nothing to unearth them. It was his duty to make the effort. It should be borne in mind that when the judgments were assigned to Keller the country was in the throes of the civil war. Lee had not surrendered. Gold and silver, in the currency of the time, were at a high premium. All real property was largely depreciated. The future was uncertain. A transaction which then seemed wise and fortunate, a year later might be deemed greatly otherwise. It is hard to avoid the conviction that the plaintiff's conduct marks the difference between forethought in one condition of things and afterthought in another.

The discovery of the cause of action, if such it may be termed, is thus set forth: 'And the plaintiff further avers that he had no knowledge of the facts so concealed by the defendant until the year A.D. 1872, and a few weeks only before the bringing of this suit.' There is nothing further upon the subject.

In this class of cases the plaintiff is held to stringent rules of pleading and evidence, 'and especially must there be distinct averments as to the time when the fraud, mistake, concealment, or misrepresentation was discovered, and what the discovery is, so that the court may clearly see whether, by ordinary diligence, the discovery might not have been before made.' Stearns v. Page, 7 How. 819, 829. 'This is necessary to enable the defendant to meet the fraud and the time of its discovery.' Moore v. Greene et al., 19 id. 69, 72. The same rules were again laid down in Baubien v. Baubien, 23 id. 190 and in Badger v. Badger, 2 Wall. 95.

A general allegation of ignorance at one time and of knowledge at another are of no effect. If the plaintiff made any particular discovery, it should be stated when it was made, what it was, how it was made, and why it was not made sooner. Carr v. Hilton, 1 Curt. C. C. 220.

The fraud intended by the section which shall arrest the running of the statute must be one that is secret and concealed, and not one that is patent or known. Martin, Assignee, &c. v. Smith, 1 Dill. 85, and the authorities cited.

'Whatever is notice enough to excite attention and put the party on his guard and call for inquiry, is notice of every thing to which such inquiry might have led. When a person has sufficient information to lead him to a fact, he shall be deemed conversant of it.' Kennedy v. Greene, 3 Myl. & K. 722. 'The presumption is that if the party affected by any fraudulent transaction or management might, with ordinary care and attention, have seasonably detected it, he seasonably had actual knowledge of it.' Angell, Lim., sect. 187 and note.

A party seeking to avoid the bar of the statute on account of fraud must aver and show that he used due diligence to detect it, and if he had the means of discovery in his power, he will be held to have known it. Buckner & Stanton v. Calcote, 28 Miss. 432, 434. See also Nudd v. Hamblin, 8 Allen (Mass.), 130.

In Cole v. McGlathry (9 Me. 131), the plaintiff had given the defendant money to pay certain debts. The defendant falsely affirmed he had paid them, and fraudulently kept the money. It was held that the plaintiff could not recover, because he had at all times the means of discovering the truth by making inquiry of those who should have received the money.

In McKown v. Whitmore (31 id. 448), the plaintiff handed the defendant money to be deposited for the plaintiff in bank. The defendant told the plaintiff that he had made the deposit. It was held that, if the statement were false and fraudulent, the plaintiff could not recover, because he might at all times have inquired of the bank. In Rouse v. Southard (39 id. 404), the defendant was sued as part owner of a vessel, for repairs, and pleaded the Statute of Limitations. The plaintiff offered evidence that the defendant, when called on for payment, had denied that he was such owner. It was held that, as the ownership might have been ascertained from other sources, the denial was not such a fraudulent concealment as would take the case out of the bar of the statute.

Numerous other cases to the same effect might be cited. They all show the light in which courts regard the qualification here in question, of the limitation which would otherwise apply.

The subject has been several times considered in the State of Indiana, whence this case came. In Boyd v. Boyd (27 Ind. 429), it was ruled that the concealment under sect. 219, which will avoid the statute, must go beyond mere silence. It must be something done to prevent discovery.

Stanley v. Stanton (36 id. 445) is instructive with reference to the case before us. In 1870, A. sued B. The complaint alleged that in 1848 B. falsely represented himself to A. to be the agent of C., to whom A. was indebted on a promissory note, and that A. paid the money to B. as such agent, and that B. promised to pay it over to C., which he had not done. B. pleaded the Statute of Limitations. A. replied that he paid the money to B. on his claim that he was the agent of C.; that B. was not such agent, but concealed the fact from A., and promised A. to pay the money to C., which he had not done, and that by reason of the concealment A. did not discover the cause of action until the fall of the year 1869. It was held that, the concealment being all previous to the accruing of the cause of action, something more than the silence of B. was necessary to prevent the running of the statute, and that the action was barred. The concealment, it was said, must be the result of positive acts.

Wynne et al. v. Cornelison et al. (supra) was a case growing out of an alleged fraudulent conveyance. There, as here, there was a demurrer to a paragraph of the reply setting up concealment to countervail the defence of the Statute of Limitations. The allegations were not unlike those in the case before us. The judgment of the court below sustaining the demurrer was affirmed. The court said: 'The Statute of Limitations is a statute of repose, and where its operation is sought to be avoided by the party liable to the action, the allegation and proof should bring the case clearly within the section. The allegation that the defendants pretended and professed to the world that the transactions were bona fide transactions, is too general to amount to any thing.' A wide and careful survey of the authorities leads to these results:--

The fraud and deceit which enable the offender to do the wrong may precede its perpetration. The length of time is not material, provided there is the relation of design and its consummation.

Concealment by mere silence is not enough. There must be some trick or contrivance intended to exclude suspicion and prevent inquiry.

There must be reasonable diligence; and the means of knowledge are the same thing in effect as knowledge itself.

The circumstances of the discovery must be fully stated and proved, and the delay which has occurred must be shown to be consistent with the requisite diligence.

The reply is clearly bad. It contains some vigorous declamation, but is wanting in the averment of facts, which are indispensable to give it sufficiency as a pleading, for the purpose intended. The complaint to which it refers does not help it. Further remarks are unnecessary. The demurrer was properly sustained by the Circuit Court.

Judgment affirmed.

title: Wood v. Carpenter/Opinion of the Court


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

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


text:
Pelton v. National Bank

APPEAL from the Circuit Court of the United States for the Northern District of Ohio.

The facts are stated in the opinion of the court.

Mr. John C. Grannis and Mr. S. O. Griswold for the appellant.

Mr. R. P. Ranney for the appellee.

MR. JUSTICE MILLER delivered the opinion of the court.

title: Pelton v. National Bank


text: Talk:Pelton v. National Bank

title: Talk:Pelton v. National Bank


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

The Commercial National Bank of Cleveland, Ohio, organized under the act of Congress of 1864, creating a national banking system, and by virtue thereof entitled to sue in the circuit courts of the United States, brought this bill in equity to enjoin Pelton, the treasurer of the county of Cuyahoga, in which the city of Cleveland is situate, from collecting a tax alleged to be illegal. The chief ground of objection to the tax set out in the bill, and that which is mainly relied on in argument here, is, that the act of the Ohio legislature of April 12, 1877, entitled 'An Act for the equalization of bank shares for taxation,' under which the tax complained of was finally assessed, is in conflict with the Constitution of Ohio on the subject of the uniformity of taxation, and therefore void.

It is also distinctly alleged that the tax, as assessed, is greater than that assessed on other moneyed capital in the hands of individuals, citizens of that State, and is, therefore, in conflict with sect. 5219 of the Revised Statutes of the United States.

The decree below was in favor of the complainant, and Pelton appealed to this court.

It is an appropriate duty, which this court is called upon to perform very often, to protect rights founded on the Constitution, laws, and treaties of the United States, when those rights are invaded by State authority. But it is a very different thing for this court to declare that an act of a State legislature, passed with the usual forms necessary to its validity, is void because that legislature has violated the Constitution of the State.

It has long been recognized in this court that the highest court of the State is the one to which such a question properly belongs; and though the courts of the United States, when exercising a concurrent jurisdiction, must decide it for themselves, if it has not previously been considered by the State court, it would be indelicate to make such a decision in advance of the State courts, unless the case imperatively demanded it. We will, therefore, inquire first whether the decree of the Circuit Court can be sustained on the other ground.

The bill states very distinctly that the principle on which the valuation of the shares of the bank for taxation is made 'destroys the uniformity of the rule fixed by the Constitution, and violates the obligation thereby imposed to treat all property alike, to the end that all property may bear an equal burden of taxation, and is subversive of the act of Congress allowing such shares to be taxed and intended to protect the owners thereof from greater burdens than were imposed on other moneyed capital at the place where the bank was located.' 'The necessary effect,' it is added, 'of the proceedings had in the assessment and levy of the taxes standing against the shareholders of your orator, and now about to be enforced, has been to deprive such shareholders, both in the matter of valuation and equalization, of all benefit of the Constitution and general laws of the State, by which only uniformity in the burden of taxation upon all descriptions of property could be secured, to take from them the security afforded by the limitation in the act of Congress and to impose upon them such excessive exactions as to make the franchises granted by said act comparatively useless.' The answer, by way of denial, says that 'the taxes mentioned in said complainant's bill, assessed upon the shares of said complainant's banking association, are not taxed at a greater rate than is imposed by the State of Ohio upon other moneyed capital in the hands of individual citizens of said State resident in the city of Cleveland, where said banking association is established and located.'

It is thus very clear that the question, whether the taxation of which the bank complained was a tax on its shares greater than that on other moneyed capital invested in Cleveland, was fairly raised by the pleading.

The argument is advanced here which we considered in People v. Weaver (100 U.S. 539), namely, that if the amount of tax assessed on these bank shares is governed by the same percentage on the valuation as that applied to other moneyed capital, the act of Congress is satisfied, though a principle of valuation is adopted by which inequality and injustice to the owners of them must necessarily result. We do not propose to go over that argument again. The cases were considered together in conference, because they involved that principle. It is sufficient to say that we are quite satisfied that any system of assessment of taxes which exacts from the owner of the shares of a national bank a larger sum in proportion to their actual value than it does from the owner of other moneyed capital valued in like manner, does tax them at a greater rate within the meaning of the act of Congress.

It is not asserted that any different percentage on the valuation established was applied to these two classes of capital. The bill very clearly shows that the source of the evil was in the unequal valuation.

Taking the answer, with the meaning which the counsel who drew it attaches in argument here to the words, 'taxed at a greater rate,' it may be said to amount, as a negative pregnant, to an admission that the valuation was unequal, as charged in the bill. Not only so, but it is not denied in argument that while all the personal property in Cleveland, including moneyed capital not invested in banks, was in the assessment valued far below its real worth, say at one-half or less, the shares of the banks, after deducting the real estate of the banks separately taxed, were assessed at their full value, or very near it. The only witness who testified on the subject in this case at all was the auditor of the county of Cuyahoga for the years 1876 and 1877 who had been for many years previously an employ e in the auditor's office. He says that, as county auditor, he was a member of the board of county equalization, and acted as such in equalizing during those years the valuation of the shares of the various national and other banks; that the valuation placed on the shares of national banks was higher in proportion than the valuation on other personal property, including banking capital. He says that the matter was talked over in the board, and it was their aim to make the valuation higher, and that their valuation of national bank shares was intentionally higher than the assessed value returned by private banks.

It is necessary here to examine into the mode of assessing the tax as provided in the act of 1877, which related solely to the tax on bank shares. The first section required the cashier of every incorporated bank to make report to the county auditor of the names and residences of its shareholders, the par value of each share, and other facts necessary to enable the auditor to ascertain the value of those shares. The second section required the auditor to assess them at their true value in money, after deducting the real estate, and to transmit the assessment with the report of the auditor to the annual board of equalization of the county in which the bank was located. This board was composed, in cities of the class to which Cleveland belonged, of the county auditor and six citizens appointed by the city council. By the third section this board was authorized to hear complaints and equalize the valuation of the shares of such banks or banking associations, as fixed by him, and with full authority to equalize such shares according to their true value in money. It is to be remembered that the witness whose testimony we have stated was the county auditor who made the first assessment or valuation of these shares, and he was a member of this city board which had authority to equalize that valuation. It was of this city board he was speaking when he said that they had assessed bank shares generally higher than other personal property, including, of course, other moneyed capital; and that they had assessed the shares of the national banks higher than private banks, and that it was their aim to do so. It is also important to observe in reference to another view of the question, presently to be considered, that this discrimination was neither an accident or a mistake, nor a rule applied only to this bank, but that it was a principle deliberately adopted to govern their action in the valuation of all the shares of national banks, and was applied to them all without exception. It appears by the testimony of this witness that there were seven national banks in the city of Cleveland whose shares, as equalized by the city board for taxation, amounted to $3,236,500, to all of which this rule of valuation, making their taxes much higher than on other moneyed capital, was applied, and that this was done for two years at least, and probably many more.

This act of 1877, however, provided another board of equalization, composed of the auditor of state, treasurer of state, and attorney-general, to whom all the assessments of bank shares made by the county and city boards were to be referred, and to whom no other property was referred, for an equalization, which included the whole State. This board could do no more than increase or diminish the valuation of such shares for each county and city, so as to make them conform to some standard of equality among themselves which that board might adopt. But the result of their action must be such that it did not increase or diminish the aggregate value of the amount returned by the county auditors of the whole State more than $100,000.

This board, for the taxes now in contest, increased the valuation of the shares of the complainant $250,000 above the sum of $912,000, at which it had been assessed by the county board, and it increased the valuation of the shares of all the national banks of Cleveland from the sum of $3,236,500 to $4,046,045.

It is thus seen that the auditor and the city board of equalization valued these shares higher in proportion to other moneyed capital in Cleveland to an extent which the witness does not state, but which may be supposed to be thirty per cent, as it is shown to be in comparison with real estate; and the State board added about one-fourth to that, so that the tax on the national bank shares, against which relief is sought in this suit, is between fifty and sixty per cent on its real value greater than on other moneyed capital, and, therefore, to that extent forbidden by the act of Congress.

For this injustice and this violation of the law there ought to be some remedy. To the specific one of an injunction by a suit in chancery, and, indeed, to any remedy by the bank, many objections are raised; but as all of them have been considered and overruled in the case of Cummings v. National Bank (infra, p. 153), which was argued at the same time this case was, it is unnecessary to repeat here what is said in that case.

As the complainant has paid so much of the tax as was not in violation of the act of Congress, we think the decree of the Circuit Court enjoining the collection of the remainder was right.

Decree affirmed.

MR. CHIEF JUSTICE WAITE dissented.


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


text:
Worthington v. Mason

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

This was an action brought by Martha W. Mason against Edward T. Worthington and Isaac M. Worthington, administrators of Elisha Worthington, deceased, to recover for work and labor done and services rendered to the intestate. The jury rendered a verdict for the plaintiff in the sum of $12,000, for which there was judgment, and the administrators sued out this writ of error.

The facts are sufficiently stated in the opinion of the court.

Mr. Augustus H. Garland for the plaintiffs in error.

Mr Albert Pike, Mr. Albert N. Sutton, and Mr. Luther H. Pike for the defendant in error.

MR. JUSTICE MILLER delivered the opinion of the court.

title: Worthington v. Mason


text: Talk:Worthington v. Mason

title: Talk:Worthington v. Mason


text:
Worthington v. Mason/Opinion of the Court

The errors assigned in this case relate solely to prayers for instructions refused by the court and to exceptions to its charge. The bill of exceptions shows a paper signed by the defendants' counsel, in which the court is asked to affirm a series 'of propositions of law as governing the case,' seven in number. They were presented as a whole, refused as a whole, and excepted to in the same manner. If any one of them was rightfully rejected no error was committed, because it was not the duty of the court to do any thing more than pass upon the prayer as an entirety. Beaver v. Taylor et al., 93 U.S. 46; Transportation Line v. Hope, 95 id. 297. We shall presently see why there is no error in the rejection of this prayer.

The charge of the court in full is embodied in the record, and to this the defendant took two exceptions. They are thus stated:--

'And the defendant excepted at the time said charge was given by the court to the following parts thereof, to wit, to so much of said charge as states the law to be that if Colonel Worthington, the owner of the plaintiff as a slave, took the plaintiff to Oberlin, in the State of Ohio, and there placed her in school to be educated, the Constitution and laws of Ohio immediately dissolved the relation of master and slave previously existing between Colonel Worthington and the plaintiff, and that the plaintiff thereby became a free woman, and could never thereafter lawfully be claimed or held by Colonel Worthington as his slave in virtue of his previous ownership of her, and that the subsequent return of the plaintiff from the State of Ohio to the residence of the intestate in this State did not affect her liberty or rights as a free woman which she had acquired by the voluntary action of the intestate and by the operation of the Constitution and laws of the State of Ohio.

'And defendants, also, at the time excepted to the following clause of said instructions, to wit, 'And in considering the question of what would be reasonable and just compensation to the plaintiff for her services, you are at liberty to take into consideration any evidence tending to establish the special agreement heretofore referred to, and if you find such special agreement a contract was made, that is, that the intestate, for the purpose of inducing the plaintiff to remain with him and render the services alleged to have been rendered, agreed to convey or devise to the plaintiff in payment for such services specified portions or parcels of his estate, and that the plaintiff did remain with the intestate and perform the required services until the death of the intestate, then, as throwing light on the transactions between the parties, and as tending to show the value the parties themselves placed upon the services of the plaintiff, you are at liberty to take into consideration the value as disclosed by the evidence of such specific parcels of real estate which you may find the intestate agreed to convey or devise to plaintiff for such services, and considering the special contract (if you find it proven) for this purpose only, it rests with you under your oaths and judgments, considering all the facts and circumstances in the case disclosed by the evidence, to say what would be a fair, reasonable, and just compensation to the plaintiff for her services, but in no event can you allow the plaintiff a greater sum than the value of the specific property which plaintiff claims was to be conveyed or devised to her therefor."

There is in no part of this bill of exceptions any statement of the evidence. There is no statement that any evidence was offered, or that any was objected to. With the exception of the reference to it in the charge of the court, there is nothing to show what was proved, or what any of the evidence tended to prove. The prayers for instruction, therefore, may have been hypothetical and wholly unwarranted by any testimony before the jury.

The exceptions to the charge of the court, just recited, are in the same condition. The principal one, to which the argument of the plaintiffs in error is chiefly directed, is that the court erred in telling the jury that 'if Colonel Worthington, the owner of the plaintiff as a slave, took her to Oberlin, in the State of Ohio, and placed her in school to be educated, the Constitution and laws of Ohio immediately dissolved the relation of master and slave previously existing between Colonel Worthington and the plaintiff, and that the plaintiff thereby became a free woman,. . . and her subsequent return to the residence of Worthington in Arkansas did not affect her rights to freedom.'

The plaintiff nowhere states in her petition that she was ever the slave of Worthington, though she alleges that she was his natural daughter.

As none of the evidence given or offered on the trial is set out in the bill of exceptions, we cannot presume against the verdict that plaintiff ever was the slave of Worthington.

The defendant in error raises this objection, and the very learned counsel of the plaintiffs in error, who did not try the case below, admits this objection to be fatal to his effort to reverse the judgment, unless we can hold, from language used by the judge in his charge to the jury, that the fact was proved.

It is certainly true that the judge does say, in that part of his charge which relates to that subject, that the former slavery was a conceded fact in the case. His language, in addressing the jury, while discussing the proposition of the defendants' counsel, is as follows:--

'Among the conceded facts in the case are these: That the mother of the plaintiff was a slave, and the property of Colonel Worthington at the date of plaintiff's birth, and that the plaintiff is the natural daughter of Colonel Worthington. The mother of the plaintiff having been a slave at the date of the plaintiff's birth, it results that she was born a slave, and at her birth was the property of Colonel Worthington, her natural father.'

But we do not look to the charge of the judge for the state of the evidence on which that very charge is to be held right or wrong. The judge cannot be permitted to cure the error of his law propositions by assuming as facts what may not have been proved. This very part of the charge was excepted to by the plaintiffs in error on the ground that its law was erroneous. If the verdict had been for them, the plaintiff below might have excepted, because the facts thus stated were not conceded. As we understand the principles on which judgments here are reviewed by writ of error, that error must appear by some ruling on the pleadings, or on a state of facts presented to this court. Those facts, apart from the pleadings, can only be shown here by a special verdict, an agreed statement duly signed and submitted to the court below, or by bill of exceptions. When in the latter, complaint is made of the instructions of the court given or refused, it must be accompanied by a distinct statement of testimony given or offered which raises the question to which the instructions apply.

This is not to be sought for, however, in the comments of the court to the jury on the testimony.

The proof of the facts which make the charge erroneous must be distinctly set forth, or it must appear that evidence was given tending to prove them.

It is not sufficient to show that the judge assumed this in his charge to the jury, it must be certified to this court distinctly under his hand.

It would be very dangerous to permit verdicts fairly rendered to be reversed in this court on the recitation of facts supposed to be proved, found only in a long comment of the judge on the testimony.

This would be to usurp the function of the jury, and the verdict might be set aside in this court because the court below understood the evidence in one way, and the jury in another; or, as in the present case, because the judge was of opinion that a fact was proved which the judge refused to believe.

When, therefore, the question is on the soundness of the judge's law as given to the jury, he must, on his due responsibility, certify to the appellate court, and not to the jury, the evidence on which he pronounced the law.

We are not furnished by counsel with any case precisely in point. Probably no bill of exceptions was ever certified to an appellate court before, which contained nothing but the charge and the objections made to it.

Judgment affirmed.


text: Talk:Worthington v. Mason/Opinion of the Court


text:
Cummings v. National Bank

APPEAL from the Circuit Court of the United States for the Northern District of Ohio.

The facts are stated in the opinion of the court.

Mr. J. K. Hamilton for the appellant.

Mr. Wager Swayne for the appellee.

MR. JUSTICE MILLER delivered the opinion of the court.

title: Cummings v. National Bank


text: Talk:Cummings v. National Bank

title: Talk:Cummings v. National Bank


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

The Merchants' National Bank of Toledo, a banking association organized under the national banking law of the United States, brought its bill in equity to enjoin the treasurer of Lucas County, within the limits of which it is established, from collecting a tax wrongfully assessed against the shares of its stockholders, payment of which was demanded of the bank. The feature of the assessment to which the complainant objects is that in the valuation of the shares of the bank for the purpose of taxation they were estimated at a much larger sum in proportion to their real value than other property, real and personal, in the same city, county, and State, and that this was done under a statute of the State, and by a rule or system deliberately adopted by the assessors for the avowed purpose of discriminating against the shares of all bank stock. Though there is in the argument of counsel an attempt to invoke the aid of the act of Congress relating to the taxation of the shares of the national banks, we are unable to see, either in the original or supplemental bill, any sufficient allegation on that subject. One clause of the bill asserts that the law of the State (which is the principal subject of complaint), and the tax and assessments under it, are in violation of the Constitution of Ohio and the act of Congress; but the vice charged against the assessment is that it is 'three times the proportionate amount which is charged to real property, moneys, and credits listed for taxation in said county of Lucas and charged upon said duplicate.'

The standard of comparison in the act of Congress is, 'other moneyed capital in the hands of individual citizens of the State.' We do not think we are called on to decide whether a tax which is assailed on the ground of violating that statute is void for that reason until the case, by positive averment, or by necessary implication of such averment, is shown to be within the prohibitory clause.

But the bank has the same right under the laws and Constitution of Ohio to be protected against unjust taxation that any citizen of that State has, and by virtue of its organization under the act of Congress it can go into the courts of the United States to assert that right. If, therefore, the assessment on its shares was a violation of the constitutional provision of that State concerning uniformity of taxation, the Circuit Court had jurisdiction of that question, concurrent with the State courts, and we must review its decision.

It is, however, manifest from the form of the bill in this case and the tenor of the argument in this court, that its object is to have a decision that the State statute of 1876, which provides specifically for taxation of bank shares, and for nothing else, is void as a violation of the Constitution of that State, as the case of Pelton v. National Bank (supra, p. 143) against the treasurer of Cuyahoga County by the bank at Cleveland is designed to test the subsequent statute of 1877, which is a substitute for that of 1876.

The two cases were advanced on our docket out of their order, and heard at the same time by this court, on the ground that they both involved the revenue law of the State. We have expressed in that case the reasons which induced us to avoid deciding that question, if it can be done without prejudice to the rights of the parties involved, and we shall see as we progress in the examination of this case whether it can be done.

But we must dispose of some preliminary questions, the first of which is the supposed incapacity of the bank to sustain this or any other action for the alleged grievance, because, as the persons taxed are the individual shareholders, the damage, if any, is theirs, and they alone can sue to recover for it or to prevent the collection of the tax.

The statutes of Ohio under which these taxes are assessed require the officers of the bank to report to the county auditor who makes the original assessment, the names of all its stockholders, their places of residence, and the amount held by each of them, and all the other facts necessary to a fair assessment.

It also authorizes the bank to pay the tax on the shares of its stockholders and deduct the same from dividends or any funds of the stockholders in its hands or coming afterwards to its possession, and it forbids the bank to pay any dividends on such stock, or to transfer it or permit it to be transferred on their books, so long as the tax remains unpaid.

In National Bank v. Commonwealth (9 Wall. 353), we held that a statute of Kentucky, very much like this, which enabled the State to deal directly with the bank in regard to the tax on its shareholders, was valid, and authorized a judgment against the bank which refused to pay the tax. It is true, the statute of Kentucky went further than the Ohio statute, by declaring that the bank must pay the tax, while the latter only says it may. But the Ohio statute, by the remedies it provides, places the bank in a condition where it must pay the tax, or encounter other evils of a character which create a right to avoid them by instituting legal proceedings to ascertain the extent of its responsibility before it does the acts demanded by the statute.

It is next suggested that since there is a plain, adequate, and complete remedy by paying the money under protest and suing at law to recover it back, there can be no equitable jurisdiction of the case.

The reply to that is that the bank is not in a condition where the remedy is adequate. In paying the money it is acting in a fiduciary capacity as the agent of the stockholders,-an agency created by the statute of the State. If it pays an unlawful tax assessed against its stockholders, they may resist the right of the bank to collect it from them. The bank as a corporation is not liable for the tax, and occupies the position of stakeholder, on whom the cost and trouble of the litigation should not fall. If it pays, it may be subjected to a separate suit by each shareholder. If it refuses, it must either withhold dividends, and subject itself to litigation by doing so, or refuse to obey the laws, and subject itself to suit by the State. It holds a trust relation which authorizes a court of equity to see that it is protected in the exercise of the duties appertaining to it. To prevent multiplicity of suits, equity may interfere.

But the statute of the State expressly declares that suits may be brought to enjoin the illegal levy of taxes and assessments or the collection of them. Sect. 5848 of the Revised Statutes of Ohio, 1880; vol. liii. Laws Ohio, 178, sects. 1, 2. And though we have repeatedly decided in this court that the statute of a State cannot control the mode of procedure in equity cases in Federal courts, nor deprive them of their separate equity jurisdiction, we have also held that, where a statute of a State created a new right or provided a new remedy, the Federal courts will enforce that right either on the common law or equity side of its docket, as the nature of the new right or new remedy requires. Van Norden v. Morton, 99 U.S. 378. Here there can be no doubt that the remedy by injunction against an illegal tax, expressly granted by the statute, is to be enforced, and can only be appropriately enforced on the equity side of the court.

The statute also answers another objection made to the relief sought in this suit, namely, that equity will not enjoin the collection of a tax except under some of the well-known heads of equity jurisdiction, among which is not a mere overvaluation, or the illegality of the tax, or in any case where there is an adequate remedy at law. The statute of Ohio expressly provides for an injunction against the collection of a tax illegally assessed, as well as for an action to recover back such tax when paid, showing clearly an intention to authorize both remedies in such cases.

Independently of this statute, however, we are of opinion that when a rule or system of valuation is adopted by those whose duty it is to make the assessment, which is designed to operate unequally and to violate a fundamental principle of the Constitution, and when this rule is applied not solely to one individual, but to a large class of individuals or corporations, that equity may properly interfere to restrain the operation of this unconstitutional exercise of power. That is precisely the case made by this bill, and if supported by the testimony, relief ought to be given.

Art. 12, sect. 2, of the Constitution of the State of Ohio declares that 'laws shall be passed taxing by a uniform rule all moneys, credits, investments in bonds, stocks, joint-stock companies, or otherwise; and also all the real and personal property, according to its true value in money;' and sect. 3, that 'the General Assembly shall provide by law for taxing the notes and bills discounted or purchased, moneys loaned, and all other property, effects, or dues of every description-without deduction of all banks now existing, or hereafter created, and all bankers, so that all property employed in banking shall bear a burden of taxation equal to that imposed on the property of individuals.'

In construing this provision of the Constitution the Supreme Court of Ohio has said that 'taxing by a uniform rule requires uniformity not only in the rate of taxation, but also uniformity in the mode of the assessment upon the taxable valuation. Uniformity in taxing implies equality in the burden of taxation, and this equality of burden cannot exist without uniformity in the mode of the assessment, as well as in the rate of taxation. But this is not all. The uniformity must be coextensive with the territory to which it applies. If a State tax, it must be uniform over all the State; if a county, town, or city tax, it must be uniform throughout the extent of the territory to which it is applicable. But the uniformity in the rule required by the Constitution does not stop here. It must be extended to all property subject to taxation, so that all property must be taxed alike, equally, which is taxing by a uniform rule.' Exchange Bank of Columbus v. Hines, 3 Ohio St. 15.

We are not aware that this decision has ever been overruled. It will be seen also that the Constitution requires all property to be taxed 'according to its true value in money.' It is said that the various statutes for assessing the taxes are all based upon this principle of valuation, and a statute of May, 1868, is cited in the brief as enacting that all property of every description within the State shall be entered for taxation at its true money value. If this principle, so clearly embodied in the Constitution as expounded by the Supreme Court, had been made the rule of action by those who have charge of the administration of the laws for assessing taxes, there could be no place for the complaint of the bank.

The State, however, by her legislation has adopted a system of valuation of property into which we must look for a moment to enable us to appreciate the effect of the evidence as to the actual valuation of which complaint is made in this case.

Instead of having all property subject to taxation valued by one commission or authorized body, there are at least four different bodies acting independently of each other in regard to as many different classes of property in the process of final estimate of values for taxation.

The first of these concerns real estate, which is valued once in each decade, that valuation remaining unchanged during the whole ten years, except that what is called the new constructions of each year is added to the original sum. The assessments of real estate by the district assessors in the county, and the ward assessors in the large cities, is first submitted to a county or city board of equalization, and this again to a State board of equalization, to be elected once in ten years by the electors of each senatorial district. Of this board the auditor of state is a member. The functions of this final board seem to be to increase or decrease the county valuations of real estate returned to them, according as they are found to be above or below the true money value of the property. But in doing this they only act on a county or city valuation as a whole, and not on the particular pieces of property assessed, and they cannot reduce or increase the entire valuation for the State more than twelve and a half per cent of the aggregate.

Personal property (other than bank shares and railroad property) and the new constructions in real estate are assessed annually by district and ward assessors in the counties and cities, and their assessment is returned to a county or city board of equalization, and we are not aware that this valuation is subject to any further equalization or submitted to any further correction. This assessment, of course, includes all personal property, money, credits, and investments of capital other than those in banks and railroads. In regard to railroads, there is a submission of all of them to a State board of equalization, which finally passes upon the assessments of the counties. In reference to banks, which are first assessed by the county auditor, there is also a State board of equalization, whose function is limited to equalizing throughout the State the valuation of the shares of incorporated banks.

We thus see that one board of equalization has charge of the valuation of the real estate of the whole State once in every ten years, another has charge of the valuation of railroad property every year, and a third has charge of the valuation of shares of incorporated banks every year, and the amount fixed by these State boards is in every instance the final basis of taxing that species of property for State and county purposes.

We are asked to decide that, as to this final board of equalization of bank shares, whose function is to equalize the valuation of those shares, as among themselves, throughout the State, with no power to consider the valuation of real estate which comes before another board only once in ten years, or other personal property and invested capital which never comes before any State board, that its operations must necessarily produce inequality in valuation as it regards other property, and is therefore void, as in conflict with the State constitutional rule of uniformity, and with the third section of the same article of the Constitution, declaring 'that all property employed in banking shall bear a burden of taxation equal to that imposed on the property of individuals.'

But there are two reasons why we cannot so hold. First, It might be that in every instance the result would be the valuation of bank shares at a lower ratio in proportion to its real value than that of any other property, and therefore plaintiff would have no ground of complaint. And, secondly, what is more important, if these original valuations and equalizations are based always, as the Constitution requires, on the actual money value of the property assessed, the result, except as it might be affected by honest mistakes of judgment, would necessarily be equality and uniformity, so far as it is attainable. So that while it may be true that this system of submitting the different kinds of property subject to taxation to different boards of assessors and equalizers, with no common superior to secure uniformity of the whole, may give opportunity for maladministration of the law and violation of the principle of uniformity of taxation and equality of burden, that is not the necessary result of these laws, or of any one of them; and a law cannot be held unconstitutional because, while its just interpretation is consistent with the Constitution, it is unfaithfully administered by those who are charged with its execution Their doings may be unlawful while the statute is valid.

The evidence, we are compelled to say, shows this to be true of the case before us.

It may be summed up in the statement, that the assessors of real property, the assessors of personal property, and the auditor of Lucas County, in which is the city of Toledo, concurred in establishing a rule of valuation by which real and personal property, except money, was assessed at one-third of its actual value, and money or invested capital at six-tenths of its value, and that the assessment of the shares of incorporated banks, as returned by the State board of equalization for taxation to the auditor of Lucas County, was fully equal to the selling prices of said shares and to their true value in money. This is shown by the testimony of four or five district assessors, by the auditor of the county for the year 1876, and for several previous years, who had been long an employ e in that office. It is also shown by this witness that at one time the auditor of Lucas County held a conference with the auditors of the counties of Fulton, Williams, Defiance, Henry, Paulding, Ottawa, Wood, Sandusky, Seneca, and Van Wirt, and that the rule by which property was valued in Lucas was the result of this conference, and was to be applied in all these counties. The district assessors, whose duty it was to make this primary valuation of all personal property (except bank stocks and railroad property), also testify that for the year 1876 they had a meeting, and adopted that rule of valuation as their guide, and so applied it. All this is uncontradicted. Nor is there any question that while the auditor probably returned the bank shares of Toledo at six-tenths of their value, or thereabouts, the State board of equalization increased it so that, as the cashier of this bank swears, its shares were assessed at their full cash value.

The testimony before us in the case argued with this shows that the same rule of valuation was adopted in Cuyahoga County with the same effect on the shares of the incorporated banks of Cleveland. It probably pervades the system of assessment for the entire State of Ohio, and may have caused the necessity of boards of equalization quite as much as mistakes of judgment or other sources of inequality which these boards are designed to remedy. But while these separate boards, acting upon returns of different classes of property, and limited in each case to equalizing the value as between the same class in different counties, have no common or united action among themselves, and no common power to equalize the valuation of the different classes of property in relation to each other, it is obvious that their capacity to produce the uniformity which the Constitution was intended to effect is very small indeed. They have no power at all to affect the valuation of real estate except once in ten years. They have no power over the valuation of personal property, including all money capital, except bank shares, as it is fixed by the county and city boards; and these being beyond their control, the effort of the State board to raise the assessment of the shares of banks to their value in money only increases the glaring inequality arising from the valuation of the county boards.

It is proper to say, in extenuation of the rule of primary valuation of different species of property developed in this record, that it is not limited to the State of Ohio, or to part of it. The constitutions and the statutes of nearly all the States have enactments designed to compel uniformity of taxation and assessments at the actual value of all property liable to be taxed. The phrases 'salable value,' 'actual value,' 'cash value,' and others used in the directions to assessing officers, all mean the same thing, and are designed to effect the same purpose. Burroughs, Taxation, p. 227, sect. 99. But it is a matter of common observation that in the valuation of real estate this rule is habitually disregarded.

And while it may be true that there has not been in other States such concerted action over a large district of country by the primary assessors in fixing the precise rates of departure from actual value, as is shown in this case, it is believed that the valuation of real estate for purposes of taxation rarely exceeds half of its current salable value. If we look for the reason for this common consent to substitute a custom for the positive rule of the statute, it will probably be found in the difficulty of subjecting personal property, and especially invested capital, to the inspection of the assessor and the grasp of the collector. The effort of the land-owner, whose property lies open to view, which can be subjected to the lien of a tax not to be escaped by removal, or hiding, to produce something like actual equality of burden by an undervaluation of his land, has led to this result. But whatever may be its cause, when it is recognized as the source of manifest injustice to a large class of property around which the Constitution of the State has thrown the protection of uniformity of taxation and equality of burden, the rule must be held void, and the injustice produced under it must be remedied so far as the judicial power can give remedy. The complainant having paid to defendant, or into the Circuit Court for his use, the tax which was its true share of the public burden, the decree of the Circuit Court enjoining the collection of the remainder is

Affirmed.

MR. CHIEF JUSTICE WAITE dissenting.

I feel compelled to withhold my assent to this judgment. There can be no doubt that the shares of this bank were overvalued as compared with other property in the city; but if a State provides by a valid law for the valuation of property for taxation, and furnishes appropriate tribunals for the correction of errors before a tax is assessed if complaint is made, I think it is not within the power of a court of equity to enjoin the collection of the tax simply because of an inequality in valuation,-and this as well when the error arises from the adoption by the valuing officers of a wrong rule applicable to many cases, as from a mistake in judgment as to a single case. The valuation as finally fixed by the proper officers, or equalizing board, under the law, is, in my opinion, conclusive when there had been no fraud. As it seems to me, this case comes within the operation of this principle.


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


text:
United States v. Lawson

APPEAL from the Court of Claims.

The facts are stated in the opinion of the court.

The Solicitor-General for the United States.

Mr. John Scott, Jr., for the appellee.

MR. JUSTICE CLIFFORD delivered the opinion of the court.

title: United States v. Lawson


text: Talk:United States v. Lawson

title: Talk:United States v. Lawson


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

Compensation to collectors of the customs from the organization of the government to the present time has been chiefly derived from certain enumerated fees, commissions, and allowances, to which is added a prescribed sum, called salary, much less than a reasonable compensation for the service required of the officer. 1 Stat. 64, 316, 627, 786.

Sufficient appears to show that by these several acts certain enumerated fees and commissions were made payable to the collectors of the customs, and that they were also entitled to certain proportions of fines, penalties, and forfeitures. By the same acts they were required to keep accurate accounts of all fees and official emoluments by them received, and of all expenses for rent, fuel, stationery, and clerk-hire, and to report the same annually to the Comptroller of the Treasury, but they were allowed to retain to their own use the whole amount of the emoluments collected from those sources, without any limitation. Maximum rate of compensation was subsequently prescribed, which was $5,000, and it was made applicable to all collectors without any discrimination. 2 id. 172.

It was provided by that act that whenever the annual emoluments of any collector, after deducting the expenses incident to the office, amounted to more than $5,000, the surplus should be accounted for and paid into the treasury. Districts for the collection of the customs were, at a later period, divided into two classes, usually denominated the enumerated and the non-enumerated ports, and the maximum rate of compensation to collectors was diminished. 3 id. 695.

Under that act the maximum for the enumerated ports was $4,000 and for the non-enumerated ports $3,000, and the provision in respect to both classes was that the excess, after deducting the expenses incident to the office, should be paid into the treasury as public money.

For a considerable period of time these regulations were satisfactory, but when the policy was changed, the free list much enlarged, and the rates of duty reduced, experience showed that the emoluments of collectors from those sources were not sufficient to give them a reasonable compensation. Temporary expedients were resorted to for several years by the passage of an annual compensation act, as will be seen by reference to the acts of Congress during that period. United States v. Walker, 22 How. 299-308; United States v. Macdonald, 5 Wall. 647, 655.

Importers, under various antecedent acts of Congress, were allowed to place certain goods in the public stores under bond, at their own risk, without the payment of the duties, until the goods were withdrawn. Public stores were accordingly rented, and as the business increased, the rent and storage received by the collector of the merchants making deposits in the stores exceeded the amount paid to the owners of the same, and there was no law requiring the collector to account for the excess. Congress interposed and regulated the subject. 5 Stat. 432; Rev. Stat., sect. 2647.

By that enactment collectors are required to include in their quarterly accounts all sums received for rent and storage in the public stores beyond the rents which are paid to the owner, and if the excess in any one year exceeds $2,000, it is made their duty to pay such excess into the treasury as part and parcel of the public money. United States v. Macdonald, 2 Cliff. 270, 282.

Two thousand dollars of the amount, under the act of Congress then in force, might be retained by the collector in addition to the amount received from other lawful sources of emolument, provided the latter did not exceed the maximum rate allowed to the office. Receipts from the other sources of emolument were to be accounted for as before; but the effect of the new provision was to add $2,000 to the compensation of a collector, if his office earned that amount from rent and storage. Custom dues of every kind received by a collector are now required to be credited in his quarterly accounts, no matter from what source of emolument the money is derived; and the provision is, that whenever the emoluments of any collector, other than one of the enumerated ports, 'shall exceed $3,000, the excess shall in every such case be paid into the treasury for the use of the United States; but the provision does not extend to fines, penalties, or forfeitures, or the distribution thereof.' Rev. Stat. 2691.

Apply the rule prescribed in that provision to the case before the court, and it is clear that the collector, if the compensation he received from other sources of emolument, after deducting the incidental expenses of his office, amounted to $3,000, would not have a right to retain any portion of the excess received for rent and storage beyond what he paid to the owners of the stores rented. His right in such a case, provided the aggregate of his receipts from the other sources of emolument, after deducting the incidental expenses of his office, was insufficient to give him the maximum compensation allowed, would be to retain enough from the amount derived from that source to make up the deficit.

Judgment was rendered in favor of the petitioner, and the United States appealed to this court. No formal assignment of errors is filed, but the proposition submitted in argument is that the petitioner voluntarily paid the amount claimed into the treasury, and that he cannot now maintain any action to recover it back.

Nothing appears in this case to warrant the conclusion that the petitioner ever collected any thing for rent and storage, or that any such matters are in controversy in this case, as will hereafter more fully appear.

Special findings were made by the court to the effect following: That the petitioner held the office of collector of the port of Crisfield from April 19, 1867, to April 1, 1875, and that he received from the United States during that period a salary at the rate of $1,200 per annum; that on the 18th of July subsequent to his appointment the Commissioner of Customs wrote him, acknowledging the letter of the petitioner of a prior date, and stated that the $1,200 salary given him by the act creating his district constituted his entire compensation, and that he was required to account for all fees.

Directions could hardly be more peremptory; and the Court of Claims finds that in consequence of that letter the petitioner accounted for and paid into the treasury all moneys collected by him as duties on imports and tonnage, except what was expended for office-rent, fuel, and expenses, and for the services of his deputy and clerks.

During his term of office he collected as fees $9,066.43, of which he paid out $623.48 for office-rent, fuel, and expenses, and $2,492.29 for the services of his deputy and clerks, for which sums he was allowed credit in his accounts.

None of these matters can be controverted; and the fifth finding of the court below shows the balance of the sum collected as fees, to wit, the sum of $5,950.66, was by him, without protest, paid into the treasury of the United States. All of the facts are stated in the findings of the court; and they also find that the petitioner, under the acts of Congress, collected tonnage taxes to the amount of $11,839.23, and that he paid the same to the government.

It appears that the district in which the petitioner is collector was formed out of a part of a district created by the original collection act, and that it was continued as such until the passage of the act abolishing it, and that the act creating the new district provided that the collector of the same shall receive an annual salary of $1,200. 1 Stat. 33; 14 id. 410.

Much discussion of the proposition that the petitioner would have been entitled to all he demands if he had seasonably claimed it or made the payment, when it was officially required, under protest, is certainly not required, as it is not denied in argument; but if it were required to give the authority for the conceded right, the effort would not be attended with much difficulty. Express provision was made by the second section of the Compensation Act, that collectors might demand and receive the fees therein prescribed. They were also given a salary of $250, and were required to keep an accurate account of all fees and official emoluments and all expenditures for rent, fuel, stationery, and clerk-hire, and to transmit the same under oath to the Comptroller of the Treasury. 1 id. 706-708. Corresponding provision is now contained in the Revised Statutes which is applicable to the case under consideration. Rev. Stat., sect. 2654.

Percentages for the collection of duties of import and tonnage were also allowed by the original act, and are contained in the Revised Statutes. Sect. 2659. Three per cent is allowed to the collector of this port, and he is also entitled to a salary of $200 by the original act, which for certain purposes may still be regarded as in force. Accounts are still required to be rendered by the officer under oath. Sects. 2639, 2641.

Instances may perhaps be cited where it would be reasonable to conclude that Congress intended to make the salary of the collector his entire compensation, by using appropriate words to manifest such intention; but it is clear to a demonstration that the general rule is the other way, as appears from all the compensation acts passed since the Treasury Department was organized. Salary in all the acts is one of the allowances, but it will be found in every such act that fees, commissions, other allowances, or percentages are also included in the list. Proof of that proposition is found in the Revised Statutes as well as in the acts of Congress which were the subject of revision. If more be needed to confirm the proposition, it will be found in the decisions of this court, to which reference has already been made. It is not even suggested that the acts of Congress allowing fees, percentages, and commissions are repealed, and, if not, it may well be that such allowances were intended, as heretofore, to supplement the small salaries prescribed in cases like the present.

Suppose that is so, still it is contended by the United States that the payments were voluntarily made, and that the money cannot be recovered back. Confessedly, the order was official and peremptory, and under such circumstances it may well be inferred that the party felt that, if he refused to obey, the refusal would cost him his commission. Had he refused to comply with the order or entered a protest, his act might have been regarded as contumacious, and have proved as injurious in its consequences to the incumbent of the office as if he had declined to discharge the ordinary duties of the collector. Viewed in the light of the attending circumstances, and especially of the fact that the order came from the Commissioner of the Customs, to whom he was immediately responsible, we cannot hold that the payments were voluntary, within the meaning of the judicial rule which, in consequence of the payment, denies to the party making the same the right to recover it back.

Beyond all question, the money was wrongfully exacted, and it is equally certain that in equity and good conscience it ought to be returned, or so much of it as is not barred by the Statute of Limitations. It was demanded of him by his official superior, and the act of Congress exporsed him to a penalty if he refused to comply. 14 Stat. 187; Rev. Stat., sect. 3619.

Comment upon the plea of limitations is unnecessary, as the charges barred by the statute were excluded from the judgment.

Governed by these views, we hold, as the court below held, that the petitioner is entitled to recover the fees paid into the treasury after May 22, 1869, as stated in the opinion of the court, less $2.30 of tax paid on his salary, making, as properly adjusted in the opinion of the court below, the sum of $5,605.38, for which the judgment was rendered.

Judgment affirmed.


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


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United States v. Ellsworth

APPEAL from the Court of Claims.

The facts are stated in the opinion of the court.

The Solicitor-General for the United States.

Mr. J. W. Douglass, contra.

MR. JUSTICE CLIFFORD delivered the opinion of the court.

title: United States v. Ellsworth


text: Talk:United States v. Ellsworth

title: Talk:United States v. Ellsworth


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

Goods imported at the period mentioned in the declaration might be stored, under the warehouse acts, in the public stores legally established at the port of which the petitioner is collector.

Due indemnity to the United States was given by the railroad company, at whose request the public stores in this case were established, against loss arising from decay, waste, or damage to the goods there deposited.

Moneys to a large amount, as specified in the declaration, were paid to the petitioner, as such collector, to reimburse the treasury for the salaries of inspectors having charge of the goods deposited in such stores. Pursuant to the act of Congress, the collector rendered, under oath, a quarter-yearly account to the treasury of the sums of money collected for rent and storage beyond the rent paid for the stores to their owners. 5 Stat. 432; Rev. Stat., sect. 2647.

Statutory requirement also exists elsewhere that all moneys received by collectors for the custody of goods in bonded warehouses shall be accounted for as storage, under the fifth section of the prior act. 14 Stat. 188. Such requirement is enforced by a penalty, as follows: That every officer or agent who neglects or refuses to comply with the same 'shall be subject to be removed from office, and to forfeit to the United States any share or part of the moneys withheld to which he might otherwise be entitled.' Rev. Stat., sect. 3619.

Yearly payments of the same, as the petitioner alleges, were made by him through mistake, and that he made application to the commissioner for leave to correct his account; but the commissioner refused the request, and declined in advance to repay the petitioner any part of the said moneys. What the petitioner alleges in that regard is that a part of the money derived from that source, not exceeding $2,000 in any one year, belonged to him, under the act requiring accounts as to rent and storage.

Annual payments on that account were made by the petitioner, as he alleges, for the period of eight years during which he held the office, amounting in all to the sum of $14,535.23. Maximum compensation of his office is $4,500, as follows: Salary, fees, and commissions not exceeding $2,500. Rev. Stat., sect. 2675. Nor exceeding $2,000 in any one year from rent and storage. Id., sect. 2647.

Out of the annual receipts for rent and storage the plaintiff claims an amount not exceeding $2,000 in any one year, to which he adds the entire receipts from all other sources of emolument, and from the aggregate of these receipts he deducts the amount of his yearly compensation, and by that mode of computation his claim is as stated in the declaration.

Two pleas were filed in behalf of the United States: 1. They deny each and every allegation of the petition. 2. They allege that the petition was not filed within six years after the claim first accrued.

Charges barred by the Statute of Limitations were rejected, and the court below rendered judgment in favor of the petitioner for the balance, amounting to the sum of $11,954.73, as appears by the transcript.

Special findings of fact were duly filed in the record, as required by the rules of the court, to the effect following: That the petitioner was collector of the port from March 5, 1870, to Jan. 25, 1878, and the act of Congress shows that the maximum of his compensation was as stated in his petition; that two freight depots are located at that port, and that from the time the petitioner became collector, to June 15, 1877, the apartments of the depots were constantly and exclusively used for the storage of goods in bond, seized goods, and goods unclaimed.

Compliance with the treasury regulations in establishing such depots is also shown by the findings of the court, and that two inspectors were constantly kept there in charge of goods stored in those depots during that period, and that the amount of their salaries was annually reimbursed to the United States through the collector by the railroad companies at whose request the depots were established, as shown by the statement exhibited in the fifth finding of the court. All these amounts were duly entered in the quarterly accounts of the petitioner, and were paid to the treasurer of the United States in compliance with official instructions.

Peremptory instructions were given to the officer that all moneys of every description, not received by warrant on the treasury, must be actually deposited, as they would be charged in the collector's account. His compensation, as received, was derived wholly from the other statutory sources of emolument, the findings of the court showing that he was not paid any thing out of the yearly amounts collected from rent and storage. Due credit was given for the annual amounts he received from the other sources of emolument during the six years, within the Statute of Limitations, as exhibited in the seventh finding of the court; and the same finding also contains a statement showing the additional amounts required for each of those years to bring up the compensation of the collector to the maximum rate.

Argument to show that the aggregate received from all sources of emolument, including the receipts from rent and storage, is sufficient to justify the claim of the petitioner is certainly unnecessary, as it is clear to a demonstration that the computations of the court below are correct. Plainly it follows from those computations that the collector is entitled to that rate of compensation, unless it be denied that the receipts from rent and storage, as explained in the opinion in United States v. Lawson (supra, p. 164), are not properly included in that aggregate.

Sums received for rent and storage, not exceeding $2,000 in any one year, if duly included in the quarterly accounts of collectors, are as much due to such officers of the non-enumerated ports as to the incumbents of the larger offices, and their right to the same rests on the same foundation. Actual necessity has always existed, since the Treasury Department was estab lished, for more storehouses for the deposit and safe-keeping of imported merchandise than the United States owned, and it cannot be doubted that all such as have been placed under the statutory control of collectors and have been used for that purpose according to law are, during the period they are so controlled, used, and occupied, public storehouses, within the meaning of the act of Congress requiring collectors to include receipts from that source in their quarterly accounts, and allowing them to retain out of the same a sum not exceeding $2,000 in any one year. United States v. Macdonald, 5 Wall. 647, 659; s. c. 2 Cliff. 270, 282.

None of these matters are controverted by the Solicitor-General; but he insists that the payments were voluntary, and that the accounts having been settled cannot be opened, even if it appears that the demand and payments were both made under a mistake of law. Responsive to the first suggestion, the same answer may be given to it as that given by the court to a similar suggestion in the preceding case.

You will also bear in mind, said the commissioner, that all moneys of every description, not received by warrant on the treasury, must be actually deposited. Had he added, If you fail to comply, the law will be enforced, his meaning could not be misunderstood, as the act of Congress provides that the gross amount of all moneys received from whatever source for the use of the United States, with an exception immaterial in this case, shall be paid by the officer or agent receiving the same into the treasury at as early a day as practicable, without any abatement, &c. Rev. Stat., sect. 3617.

Penalties are prescribed for a non-compliance with that re quirement, as follows: Every officer or agent who neglects or refuses to comply with that provision shall be subject to be removed from office and to forfeit any part or share of the moneys withheld, to which he might otherwise be entitled. 14 Stat. 187; Rev. Stat., sect. 3619.

Viewed in the light of these penal provisions, the payments in question made under the peremptory order of the commissioner cannot be regarded as voluntary in the sense that the party making them is thereby precluded from maintaining an action to recover back so much of the money paid as he was entitled to retain. Call it mistake of law or mistake of fact, the principles of equity forbid the United States to withhold the same from the rightful owner.

Judgment affirmed.


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


text:
Wright v. Blakeslee

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

The facts are stated in the opinion of the court.

Mr. A. C. Miller for the plaintiff in error.

The Solicitor-General, contra.

MR. JUSTICE BRADLEY delivered the opinion of the court.

title: Wright v. Blakeslee


text: Talk:Wright v. Blakeslee

title: Talk:Wright v. Blakeslee


text:
Wright v. Blakeslee/Opinion of the Court

This is an action brought by B. Huntington Wright, the plaintiff in error, against Blakeslee, the defendant, formerly collector of internal revenue for the twenty-first revenue district of New York, to recover the amount of a succession tax collected from the plaintiff and his sister in 1867, the latter having assigned her interest to the plaintiff.

A jury was waived, and the cause was tried by the court. From the findings the following facts appear: Henry Huntington, of Oneida County, New York, died in October, 1846, leaving a will, by which, amongst other things, he devised to his executors certain real estate, in trust, to receive the rents and profits, and apply the same to the sole and separate use of his daughter Henrietta (if a feme covert at his death) during the term of her natural life, and at her decease, if she should leave issue surviving, the testator gave and devised the said real estate to such issue absolutely and in fee. When the testator died, his daughter Henrietta was the wife of one Benjamin H. Wright, and had two children living, B. Huntington Wright (the plaintiff) and a daughter. Henrietta died in September, 1865, leaving her said two children and her husband surviving. In June, 1867, the plaintiff and his sister were notified by the assessor to make return, as required by the fourteenth section of the Internal Revenue Act of June 30, 1864 (13 Stat. 226); and they both refused and declined to make any return, or give any knowledge or information as to the quantity, location, or value of the real estate, and thereupon they were summoned to appear before the assessor in relation thereto. They appeared accordingly, and claimed that the estate was not liable to assessment for a succession tax. The assessor decided against them, and assessed a tax of one per cent on the full value of the property, and added thereto a penalty of fifty per cent and expenses, making in all $595.59. In June, 1867, the assessor notified the parties of the tax imposed, the value of the property, and the penalty affixed. The assessment or tax, with the penalty, was placed upon the assessment roll, and delivered to the collector (the defendant) for collection, and he notified the parties to pay the tax.

On the 31st of July, 1867, the parties paid the tax under protest, the tax paid amounting to $595.59, of which $389.56 was tax, $194.78 was penalty, and $11.25 was the expenses for making the assessment and valuation. The amount assessed upon each, viz. B. Huntington Wright and Henrietta H. Wright, was $297.29.

On the 5th of October, 1872, the Commissioner of Internal Revenue wrote the parties that the claim to have the tax refunded had not been submitted to the department, and forwarded them a blank to be filled up and transmitted to the department, and they would then pass upon the case upon its merits.

About the 3d of January, 1873, the appeal was perfected and filed with the commissioner.

On the 3d of July, 1873, the commissioner rendered his decision upon the merits, rejecting the whole claim, and gave notice thereof.

On the 15th of June, 1875, Henrietta D. Wright, one of the parties against whom one-half of the tax had been levied and collected, transferred her claim to the plaintiff.

On the same day a summons was delivered to the sheriff of New York to serve on defendant.

On the 24th of June, 1875, the summons was actually served on defendant. The action was originally brought in the State court, but was removed into the Circuit Court of the United States, upon proceedings had under the statute.

Upon these facts the court decided, as matter of law, that the tax and penalty were properly assessed and collected, and that the plaintiff ought not to recover.

The first and principal question in the case is whether the devolution of the property to the children of Henrietta Wright on her death in September, 1865, was a 'succession,' within the meaning of sect. 127 of the Internal Revenue Act then in force. 13 Stat. 287. The language of that section is as follows:--

'That every past or future disposition of real estate by will, deed, or laws of descent, by reason whereof any person shall become beneficially entitled, in possession or expectancy, to any real estate or the income thereof, upon the death of any person dying after the passing of this act, shall be deemed to confer on the person entitled by reason of any such disposition a 'succession;' and the term 'successor' shall denote the person so entitled, and the term 'predecessor' shall denote the grantor, testator, ancestor, or other person from whom the interest of the successor has been or shall be derived.'

Comparing the terms of the devise of Henry Huntington with the language of this section, we do not see where there is any room for doubt. The will clearly gave to the trustees an estate for the life of Henrietta Wright, with remainder in fee to her children surviving her. At her death, in 1865, those children did 'become beneficially entitled in possession,' and every condition of the law was fulfilled. There was a 'past' 'disposition of real estate by will,' 'by reason whereof' the children of Henrietta Wright became 'beneficially entitled, in possession,' to the property devised, 'upon the death of [a] person dying after the passage of this act.' We think the case is directly within the terms and meaning of the act. Up to the moment of Henrietta Wright's death her children had no interest in the land except a bare contingent remainder expectant upon her death and their surviving her. At her death it came to them as an estate in fee in possession absolute. We cannot imagine a plainer case of devo lution within the description of the law.

It is suggested that as the act refers to the acquisition of estates 'in possession or expectancy,' it cannot mean to embrace estates which had already accrued as estates 'in expectancy' before the act was passed. But such an implication cannot be allowed to prevail against the express words of the act, which include all estates to which a person should become beneficially entitled upon the death of any person dying after the passage of the act. In the present case, the children of Henrietta Wright first became 'beneficially entitled' to the property in question at their mother's death. They then became 'beneficially entitled in possession.'

It is also suggested that the case is more aptly described in sect. 128 of that act, which is as follows:--

'That where any real estate shall, at or after the passage of this act, be subject to any charge, estate, or interest, determinable by the death of any person, or at any period ascertainable only by reference to death, the increase or benefit accruing to any person upon the extinction or determination of such charge, estate, or interest shall be deemed to be a succession accruing to the person then entitled beneficially to the real estate or income thereof.'

We do not assent to this view. This section is evidently intended to meet the cases of estates burdened by determinable incumbrances, such as rent-charges, leases for years, and qualified interests, which do not suspend the taking effect of the estate in the land, but only subject it to some burden. Where, however, a remainder is dependent upon a life-estate in the land, it does not take effect as an estate in possession until the life-estate is determined. Till then, it is a mere expectancy. The present case is one of this kind, and we think clearly comes within the description of sect. 127.

Another point made by the plaintiff against the assessment relates to the fifty per cent added to the amount of the succession tax, and exacted by way of penalty for refusing to make a return as required by the statute. This penalty we think was erroneously imposed. The assessor evidently thought that he was authorized to impose the penalty prescribed by the fourteenth section of the act of 1864 (as amended by the act of July 13, 1866), which was, it is true, a penalty of fifty per cent of the tax for refusal or neglect to make a list or return. But an inspection of that section and of the context to which it belongs shows that it related to the annual and monthly lists and returns to be made by parties taxable under the law. So sect. 118 (as amended by the act of March 2, 1867), which also imposed a penalty of fifty per cent for such neglect and refusal, and was relied on by the court below, related only to the income tax. But the penalty for failing to return and give notice of a succession tax is provided for in a distinct section, to wit, sect. 148 of the act of 1864 (as amended by the act of 1866), which is found in immediate collection with the sections relating to the succession tax. This section declares that if any person required to give such notice [of a succession] should wilfully neglect to do so within the time required by law, he should be liable to pay to the United States a sum equal to ten per cent upon the amount of tax payable by him. This is the specific penalty provided for the special case, and necessarily excludes any other. We are satisfied, therefore, that the penalty of fifty per cent which was actually imposed was wrong, and ought not to have been exacted. There is, therefore, no doubt of the plaintiff's right to recover the amount of this penalty, if, when paid, the protest against its exaction was sufficient.

On this point it is to be observed that the case stands on a different ground from that of the illegal exaction of duties on imports. To recover these, the statute makes it necessary that the party interested should give notice in writing to the collector, if dissatisfied with his decision, setting forth distinctly and specifically the grounds of his objection thereto. Act of June 30, 1864, sect. 14; 13 Stat. 214; Rev. Stat., sect. 2931; Westray v. United States, 18 Wall. 322; Barney, Collector, v. Watson et al., 92 U.S. 449; Davies v. Arthur, 96 id. 148. No such written notice or protest is required of a party paying illegal taxes under the internal revenue laws. He must pay under protest in some form, it is true, or his payment will be deemed voluntary. City of Philadelphia v. The Collector, 5 Wall. 720; The Collector v. Hubbard, 12 id. 1. But whilst a written protest would in all cases be most convenient, there is no statutory requirement that the protest shall be in writing. In the present case, the court merely finds that the payment of the tax and penalty was made under protest, which may have been either written or verbal. We think that this finding is sufficient to show that the payment was not voluntary. It is apparent from the findings, it is true, that the objection of the parties was particularly made against the legality of the tax, and not against the penalty as distinct therefrom. But, of course, the objection included the penalty as well as the tax; and as the latter was clearly illegal, we think that the plaintiff should have had judgment for the amount thereof, unless barred by the Statute of Limitations.

We think that the defence of the Statute of Limitations cannot be maintained. Under the nineteenth section of the act of July 13, 1866 (14 Stat. 152), no suit could be maintained for the recovery of a tax illegally collected until appeal should have been duly made to the Commissioner of Internal Revenue, and his decision had thereon. The act contained other provisions not material to this case. In July, 1867, when the tax was paid, there was no statutory limitation of time for presentating claims for remission of taxes to the Commissioner of Internal Revenue.

On the 6th of June, 1872, an act was passed, by the forty-fourth section of which it was provided that all suits for the recovery of any internal tax alleged to have been erroneously assessed or collected, or any penalty claimed to have been collected without authority, should be brought within two years next after the cause of action accrued, and not after; and all claims for refunding any internal tax or penalty should be presented to the commissioner within two years next after the cause of action accrued, and not after: Provided, that actions for claims which had accrued prior to the passage of the act should be commenced in the courts or presented to the commissioner within one year from the date of such passage: And provided further, that where a claim should be pending before the commissioner, the claimant might bring his action within one year after such decision, and not after. 17 Stat. 257. When this act was passed, the claim in the present case had not been formally presented to the commissioner, and so did not come within the last proviso; but, for the purpose of presentation to the commissioner, it was embraced in the first proviso. The parties, therefore, had by the act one year to present their claim to the commissioner; and it was thus presented on the third day of January, 1873, within the time allowed for that purpose.

The commissioner rendered his decision on the third day of July, 1873, and then, for the first time, the parties had a right to bring suit against the collector. Then their cause of action first accrued against him. It is manifest, therefore, that the cause of action against the collector was not embraced within either the first or the second proviso of the section just cited; and that it stood upon the primary enactment of that section, requiring that suit should be brought within two years next after the cause of action accrued. This would give the plaintiff until the 3d of July, 1875, to bring his action.

Thus the matter stood when the Revised Statutes went into effect on the 22d of June, 1874, and there is nothing in them to change the plaintiff's right. The forty-fourth section of the act of 1872 is substantially re-enacted in sect. 3227 of the Revised Statutes, which contains no modifications of phraseology that affect the present case. And as it appears from the findings of the court that this suit was commenced by delivery of the summons to the sheriff on the 15th of June, 1875, it is apparent that the defence of the Statute of Limitations cannot be maintained.

The judgment of the Circuit Court will be reversed, and the case remanded with instructions to enter judgment in favor of the plaintiff for the amount of the penalties exacted from the plaintiff and Henrietta H. Wright, with interest and costs; and it is

So ordered.


text: Talk:Wright v. Blakeslee/Opinion of the Court


text:
People's Bank v. National Bank

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

The facts are stated in the opinion of the court.

Mr. Charles W. Thomas for the plaintiff in error.

No counsel appeared for the defendant in error.

MR. JUSTICE SWAYNE delivered the opinion of the court.

title: People's Bank v. National Bank


text: Talk:People's Bank v. National Bank

title: Talk:People's Bank v. National Bank