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Low v. Austin/Opinion of the Court

The simple question presented in this case for our consideration is, whether imported merchandise, upon which the duties and charges at the custom-house have been paid, is subject to State taxation, whilst remaining in the original cases, unbroken and unsold, in the hands of the importer.

The decision of this court in the case of Brown v. The State of Maryland furnishes the answer to the question. The distinction between that case and the present case does not affect the principle affirmed, which equally governs both.

In that case the question arose whether an act of the legislature of Maryland requiring importers of foreign goods by the bale or package, to pay the State a license tax before selling them in the form and condition in which they were imported, was valid and constitutional. The court held the act in conflict with the provision of the Constitution which declares that no State shall, without the consent of Congress, lay any impost or duty on imports or exports, except what may be absolutely necessary for executing its inspection laws.

In the elaborate opinion of Mr. Chief Justice Marshall the whole subject of the power of Congress over imports is considered, and the line marked where the power of Congress over the goods imported ends, and that of the State begins, with as much precision as the subject admits. After observing that the prohibition of the Constitution upon the States to lay a duty on imports, and their acknowledged power to tax persons and property may come in conflict, he says, speaking for the court: 'The power, and the restriction on it, though quite distinguishable when they do not approach each other, may yet, like the intervening colors between white and black, approach so nearly as to perplex the understanding, as colors perplex the vision in marking the distinction between them. Yet the distinction exists, and must be marked as the cases arise. Till they do arise, it might be premature to state any rule as being universal in its application. It is sufficient for the present to say, generally, that when the importer has so acted upon the thing imported that it has become incorporated and mixed up with the mass of property in the country, it has, perhaps, lost its distinctive character as an import, and has become subject to the taxing power of the State; but while remaining the property of the importer, in his warehouse, in the original form or package in which it was imported, a tax upon it is too plainly a duty on imports to escape the prohibition in the Constitution.'

In that case it was also held that the authority given to import necessarily carried with it a right to sell the goods in the form and condition, that is, in the bale or package, in which they were imported; and that the exaction of a license tax for permission to sell in such case was not only invalid as being in conflict with the constitutional prohibition upon the States, but also as an interference with the power of Congress to regulate commerce with foreign nations.

The reasons advanced by the Chief Justice not only commend themselves, by their intrinsic force, to all minds, but they have received recognition and approval by this court in repeated instances. Mr. Chief Justice Taney, who was at the time eminent at the bar, as he was afterwards eminent on the bench, argued the case on behalf of the State of Maryland; and in the License Cases, he referred to his position and observed that, at that time, he persuaded himself that he was right, and thought that the decision of the court restricted the powers of the State more than a sound construction of the Constitution of the United States would warrant. 'But farther and more mature reflection,' the great judge added, 'has convinced me that the rule laid down by the Supreme Court is a just and safe one, and perhaps the best that could have been adopted for preserving the right of the United States on the one hand, and of the States on the other, and preventing collision between them. The question, I have already said, was a very difficult one for the judicial mind. In the nature of things the line of division is, in some degree, vague and indefinite, and I do not see how it could be drawn more accurately and correctly, or more in harmony with the obvious intention and object of this provision in the Constitution. Indeed, goods imported, while they remain in the hands of the importer, in the form and shape in which they were brought into the country, can, in no just sense, be regarded as a part of that mass of property in the State usually taxed for the support of the State government.'

The Supreme Court of California appears, from its opinion, to have considered the present case as excepted from the rule laid down in Brown v. The State of Maryland, because the tax levied is not directly upon imports as such, and consequently the goods imported are not subjected to any burden as a class, but only are included as part of the whole property of its citizens which is subjected equally to an ad valorem tax. But the obvious answer to this position is found in the fact, which is, in substance, expressed in the citations made from the opinions of Marshall and Taney, that the goods imported do not lose their character as imports, and become incorporated into the mass of property of the State, until they have passed from the control of the importer or been broken up by him from their original cases. Whilst retaining their character as imports, a tax upon them, in any shape, is within the constitutional prohibition. The question is not as to the extent of the tax, or its equality with respect to taxes on other property, but as to the power of the State to levy any tax. If, at any point of time between the arrival of the goods in port and their breakage from the original cases, or sale by the importer, they become subject to State taxation, the extent and the character of the tax are mere matters of legislative discretion.

There are provisions in the Constitution which prevent one State from discriminating injuriously against the products of other States, or the rights of their citizens, in the imposition of taxes, but where a State, except in such cases, has the power to tax, there is no authority in this court, nor in the United States, to control its action, however unreasonable or oppressive. The power of the State, except in such cases, is absolute and supreme.

The argument for the tax on the wines in the present case, that it is not greater than the tax upon other property of the same value held by citizens of the State, would justify a like tax upon securities of the United States, in which form probably a large amount of the property of some of her citizens consists; yet it has been repeatedly held that such securities are exempted from State taxation, whether the tax be imposed directly upon them by name or upon them as forming a part in the aggregate of the property of the taxpayer. The rule is general that whenever taxation by a State is forbidden, or would interfere with the full exercise of a power vested in the government of the United States over the same subject, it cannot be imposed. Imports, therefore, whilst retaining their distinctive character as such, must be treated as being without the jurisdiction of the taxing power of the State.

It follows that the judgment of the Supreme Court of California must be

REVERSED.

title: Low v. Austin/Opinion of the Court


text: Talk:Low v. Austin/Opinion of the Court

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

title: Talk:Low v. Austin/Opinion of the Court


text:
United States v. Clyde

APPEAL from the Court of Claims.

Clyde presented his petition in that court, claiming, by one count of it (the first), compensation for the use of his ferry-boat Tallacca.

The facts found by the court were, that on the 16th of November, 1862, the Tallacca, owned by the claimant and at the time lying at Alexandria, was chartered by Captain Ferguson, an assistant quartermaster of the United States army, at the rate of $115 per day, for every day she might be employed in the service of the United States, and until returned to the port whence taken; and that the said boat continued in the service of the government from the date of the charter-party until the 31st of July, 1863, and was paid at the agreed rate up to the last of February, 1863, without objection; but that, on the 13th of May, 1863, the Quartermaster-General disapproved of the charter-party by the following order:

'The charter of the Tallacca is disapproved by the Quartermaster-General. She will be paid for only at the rate of $75 per day from the date of her charter, so long as she may be retained in the service. The excess of $40 per day already paid will be deducted on the present settlement for her services from March 1st, 1863, &c.'

The claimant received notice of the contents of this order during the month of May. He refused to consent to the reduction, but did not show to the Court of Claims whether, on receiving notice of this order, he determined to allow his boat to remain in the service at the reduced rate, or sought to take her out of it. The boat in fact remained in the service until July 31st, 1863. No further payment was made until December, 1863, when the quartermaster stated the account at the reduced rate, deducted the excess of $40 per day paid on the former settlements, and paid the claimant the balance. The claimant receipted for this balance as 'in full of the above account.'

Upon these facts the Court of Claims decided that the claimant was entitled to be paid at the rate named in the charter-party until he received notice of the reduction made by the Quartermaster-General, and after that, at the reduced rate.

From this decision both parties appealed; the United States on the ground that the payment received and receipt given by Clyde was a bar to any further claim upon the government-a position for which they relied on the United States v. Child et al., decided at the last term-the claimant on the ground that he was entitled to have the full amount stipulated for in the charter-party.

Messrs. B. H. Bristow and C. H. Hill, for the United States; Messrs. C. F. Peck and T. J. Durant, contra, for the claimant.

Mr. Justice BRADLEY delivered the opinion of the court.

title: United States v. Clyde


text: Talk:United States v. Clyde

title: Talk:United States v. Clyde


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

On the principles determined by this court in the late case of the United States v. Child et al., we think that the Court of Claims erred in the decision made. From the time that the order of the Quartermaster-General was made, disapproving of the charter-party and razeeing the rate for the whole period of service, the case was clearly one of dispute, at least, if not one of acquiescence on the part of the claimant. Notwithstanding this order he permitted his boat to remain in the service until the 31st of July, knowing the change of terms which the Quartermaster-General had made. It cannot be pretended that there were two lettings, or two charter-parties, of the vessel. There was only one; and as to this one the government determined to allow one rate, and the claimant insisted on another. The government stood on the order of the superior officer and insisted that this should govern the contract; the claimant insisted the contrary. Under these circumstances the final determination of the latter to take the balance of the account as made out on the basis contended for by the government, and his giving a receipt in full, is clear evidence that he agreed to take that balance in satisfaction of the claim; and this fact, under the circumstances of the case, concludes him from making any further demand.

Judgment reversed, and the record remitted with directions to enter a decree of dismissal as to this first count in the petition.

Mr. Justice FIELD dissented from this judgment.

[See the next case.]


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


text:
Clyde v. United States

APPEAL from the Court of Claims; the case being argued and disposed of at the same time with the preceding one.

Clyde, the claimant in the preceding case, presented his petition in that court, the same petition mentioned in that case, claiming by the second count of it compensation for the use of his barge William Hunt, as he had in the former appeal, claimed by the first count, compensation for the use of the Tallacca.

The Court of Claims dismissed the claim on the ground that it was not presented in conformity with a rule of practice which the court then had, but which has since been abrogated. This rule required that where the case was such as is ordinarily settled in any executive department, the petition should show that application for its allowance had been made to that department, and without success, and its decision thereon.

From the action of the court, Clyde, the claimant, appealed to this court.

Messrs. C. F. Peck and T. J. Durant, for the appellant, argued that the rule in question was one both arbitrary and without authority.

Messrs. B. H. Bristow and C. H. Hill, contra, contended that it was both useful and proper; and that not having been complied with, the court below properly refused to hear the case.

Mr. Justice BRADLEY delivered the opinion of the court.

title: Clyde v. United States


text: Talk:Clyde v. United States

title: Talk:Clyde v. United States


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

However useful and proper such a rule as that complained of by the appellant may have been prior to the enactment of the law passed June 25th, 1868, which requires the Attorney-General to obtain from the proper department, and the department to furnish, such facts, circumstances, and evidence as it might be in possession of in relation to any claim prosecuted in the Court of Claims, we are of opinion that it was not competent for the Court of Claims to impose it as a condition of presenting a claim in that court. Instead of being a rule of practice, it was really an additional restriction to the exercise of jurisdiction by that court. It required the claimant to do what the acts giving the court jurisdiction did not require him to do before it would assume jurisdiction of his case.

The act of 1855, which created the court, declares that it shall 'hear and determine all claims founded upon any law of Congress, or upon any regulation of an executive department, or upon any contract, express or implied, with the government of the United States, which may be suggested to it by a petition filed therein.' The rule adopted by the court required that the claimant should not only have such a claim as stated in the act, but should have first gone through the department which might have entertained it, before he would be permitted to prosecute in that court. This was establishing a jurisdictional requirement which Congress alone had the power to establish.

This judgment of dismissal is therefore reversed, and the record remitted with directions to proceed to a hearing on the second count.


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


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Toof v. Martin Assignee Etc

ERROR to the Circuit Court for the District of Arkansas; the case being thus:

The 35th section of the bankrupt act of 1867, thus enacts:

'That if any person, being insolvent, or in contemplation of insolvency, with a view to give a preference to any creditor or person having a claim against him. . . makes any assignment, transfer, or conveyance of any part of his property. . . (the person receiving such assignment, transfer, or conveyance, having reasonable cause to believe such person is insolvent, and that such assignment or conveyance is made in fraud of the provisions of this act), the same shall be void, and the assignee may recover the property, or the value of it, from the person so receiving it or so to be benefited.'

With this enactment in force, Martin, assignee in bankruptcy of Haines and Chetlain, filled a bill in the District Court for the Eastern District of Arkansas, against J. S. Toof, C. J. Phillips, and F. M. Mahan, trading as Toof, Phillips & Co. (Haines and Chetlain being also made parties), to set aside and cancel certain conveyances alleged to have been made by these last in fraud of the above-quoted act.

Haines and Chetlain were, in February, 1868, and had been for some years before, merchants, doing business under the firm name of W. P. Haines & Co., at Augusta, Arkansas. On the 29th of that month they filed a petition for the benefit of the bankrupt act, and on the 28th of May following were adjudged bankrupts, and the complainant was appointed assignee of their estates. On the 18th of the previous January, which was about six weeks before the filing of their petition, they conveyed an undivided half-interest in certain parcels of land owned by them at Augusta, to Toof, Phillips & Co., who were doing business at Memphis, in Tennessee, for the consideration of $1876, which sum was to be credited on a debt due from them to that firm. At the same time they assigned to one Mahan, a member of that firm, a title-bond which they held for certain other real property at Augusta, upon which they had made valuable improvements. The consideration of this assignment was two drafts of Mahan on Toof, Phillips & Co., each for $3034, one drawn to the order of Haines, and the other to the order of Chetlain. The amount of both drafts was credited on the debt of Haines & Co. to Toof, Phillips & Co., pursuant to an understanding to that effect made at the time. There was then due of the purchase-money of the property, for which the title-bond was given, about $700. This sum Mahan paid, and took a conveyance to himself from the obligor who held the fee.

The bill charged specifically that at the time these conveyances were made the bankrupts were insolvent or in contemplation of insolvency; that the conveyances were made with a view to give a preference to Toof, Phillips & Co., who were the creditors of the bankrupts; that Toof, Phillips & Co. knew, or had reasonable cause to believe, that the bankrupts were then insolvent, and that the conveyances were made in fraud of the provisions of the bankrupt act.

It also charged that the assignment of the title-bond to Mahan was in fact for the use and benefit of Toof, Phillips & Co., for the purpose of securing the property or its value to them in fraud of the rights of the creditors, and that this purpose was known and participated in by Mahan.

The answer, admitting a large amount of debts at the time of the conveyances in question, denied that the bankrupts were then 'insolvent,' asserting, on the contrary, 'that at the time aforesaid said Haines & Co. had available assets in excess of their indebtedness to the extent of $16,000.' It also denied that there was a purpose to give a preference; asserting that the conveyances of the land were made because Haines & Co., not having cash to pay the debt due Toof, Phillips & Co., were willing to settle in property; and it denied that the title-bond was assigned to Mahan for the benefit of Toof, Phillips & Co., or that they paid for the same; but on the contrary averred that Mahan bought the property and paid for it himself, and for his own use and benefit, out of his own funds.

Appended to the bill were several interrogatories, the first of which inquired whether at the time of making the transfers to Toof, Phillips & Co. the indebtedness of W. P. Haines & Co. was not known to be greater than their immediate ability to pay; and to this Toof, Phillips & Co. answered that at the time of making these transfers they did not believe Haines & Co. were able to pay their debts in money, but that they were able to do so on a fair market valuation of the property they owned, and of their assets generally.

Chetlain, one of the bankrupts, testified that on the 18th of January, 1868, Haines & Co. could not pay their notes as they came due; that previous to this time they had contemplated bankruptcy, and that he had had several conversations with Mr. F. M. Mahan, relative to their finances, and had told him the amount, or near the amount, of their debts. His advice was to get extensions, and he would help them get through; that after his promises to advance them more goods, they concluded not to go into bankruptcy, but to go on in business; that he told Mahan that Haines & Co. could not pay out; and in a conversation with him previous to the transfer of the real estate, he, Chetlain, told Mahan that such was the state of the finances of Haines & Co. that if he would assume their liabilities, and give them a receipt, Haines & Co. would turn over all their assets to him. He did not accept.

He also testified that about the 1st of January, 1868, the sheriff levied on the goods belonging to Haines & Co., in their storehouse in Augusta, on an execution in favor of one Weghe, which caused them to suspend business for a few days, until the levy was dissolved by order of the sheriff, at or about the 15th day of January, 1868. Mahan was in Augusta at the time of this levy, and Haines & Co. had an interview with him in regard to it.

During the entire autumn and winter preceding these transfers, Haines & Co. did not pay, except to Toof, Phillips & Co., more than $500 on all their debts; and in the latter part of December, 1867, and the first part of January, 1868, some of the creditors sent agents to collect money from them, but got none, because Haines & Co. had no funds to pay them.

A witness, Frisbee, testified that he had assisted Mr. Haines in making up his balance-sheet 'about the 1st of January, 1868, and that the result was that their available assets were not sufficient to pay their debts.'

Another witness, an agent for an express company, testified that he received, about the last of December, 1867, or January, 1868, notes from Toof, Phillips & Co. and another firm against Haines & Co. for collection; that he presented them for payment to Haines & Co., and that they said they could not pay them at that time. They did not pay them to him. He knew something of the financial condition of Haines & Co., and of their debt to Toof, Phillips & Co., and of complaints of other parties, and something of their business through the country, and from all these facts he thought it doubtful about their being able to pay their debts. This was during the months of December, 1867, and January, 1868; and he wrote to Toof, Phillips & Co. that he thought they had better look to their interests, as his conviction was that it was doubtful about their being able to collect their debt from Haines & Co. Shortly after writing this letter Mahan came round to look after the matter.

The property described in the title-bond assigned to Mahan, which he stated that he purchased as an investment on private account for $7000, was shown by the testimony of Chetlain to have been worth only $4000, and by the testimony of a witness, Hamblet, to have been worth only $3500, and it was valued by the bankrupts in their schedules at $4000. Both of the bankrupts testified that it was understood at the time the title-bond was assigned to Mahan, that the amount of the two drafts given by him on Toof, Phillips & Co. for it, should be credited to Haines & Co. on their indebtedness to that firm.

The schedules of the bankrupts annexed to their petition showed that their debts at the time of their transfers to Toof, Phillips & Co. exceeded $59,000, while their assets were less than $32,000.

On the other hand there was some testimony to show that some persons thought that they could get through, &c., &c.

The District Court decreed the conveyances void, and that the title of the property be vested in the assignee, the latter to refund the amount of the purchase-money advanced by Mahan to obtain the deed of the land described in the title-bond, less any rents and profits received by him or Toof, Phillips & Co. from the property. This decree the Circuit Court affirmed.

In commenting upon the answer of Toof, Phillips & Co., already mentioned, which, in reply to the interrogatory, 'whether at the time of the transfer to them the indebtedness of Haines & Co. was not greater than their ability,' admitted that they did not believe Haines & Co. 'able to pay their debts in money,' the Circuit Court said:

'Here is a direct confession of a fact that in law constitutes insolvency, and it is idle for the defendants to profess ignorance of the insolvency of the bankrupts in face of such a confession. If the bankrupts could not pay their debts in the ordinary course of business, that is, in money, as they fell due, they were insolvent, and if the defendants did not know that this constituted insolvency within the meaning of the bankrupt act, it was because they were ignorant of the law.'

But that court examined all the testimony, and in affirming the decree of the District Court rested that case upon it, as well as upon this answer. From the decree of the Circuit Court, Toof, Phillips & Co. brought the case here.

Mr. A. H. Garland, for the plaintiffs in error:

1. Did the inability of Haines & Co. to pay their debts in money, as they fell due, constitute 'insolvency' within the meaning of the bankrupt act, on their part? Now 'insolvency' does not mean inability to pay in money. An insolvent is one who cannot pay, or who does not pay, his debts, or whose debts cannot be collected out of his means by legal process. By the universal acceptation of the word in this country and in England, if a party's available means, which he can use in paying his debts, exceed those debts, he has never been deemed insolvent. If even there are debts due which the party is unable to meet, yet if by arrangements made with his creditors, their promises to aid him, his assets overbalancing his debts, his credit good, and his prospects in business for the future encouraging, he still goes on in his business, he is not insolvent.

2. How does the case in this view stand on the evidence? When the witness, Frisbee, says that in December, 1867, he aided in making up a balance-sheet, and he found Haines & Co. were not able to pay, he states a fact, which, if limited to paying in money, we do not deny; but if he states that their debts exceeded their property in value, he is not sustained by the other witnesses. Other persons had confidence that with extension the firm would get through. The answer of defendants states, in response to an inquiry on this point, that the assets of Haines & Co. were in excess of their liabilities by $16,000.

3. Were these conveyances made with a view to give a preference to appellants over the other creditors of Haines & Co.? To constitute a preference here, not only must Haines & Co. have been insolvent, but Toof, Phillips & Co. must have known them to be so, and must have intended to have received, and actually have received a preference. Toof, Phillips & Co. swear that Haines & Co. were not insolvent, but on the contrary had a surplus. As for Haines & Co., it is impossible to suppose that they supposed themselves insolvent.

Messrs. Watkins and Rose, contra.

Mr. Justice FIELD delivered the opinion of the court.

title: Toof v. Martin Assignee Etc


text: Talk:Toof v. Martin Assignee Etc

title: Talk:Toof v. Martin Assignee Etc


text:
Toof v. Martin Assignee Etc/Opinion of the Court

The bill presents a case within the provisions of the first clause of the thirty-fifth section of the bankrupt act. That clause was intended to defeat preferences to a creditor, made by a debtor when insolvent or in contemplation of insolvency. It declares that any payment or transfer of his property made by him whilst in that condition, within four months previous to the filing of his petition, with a view to give a preference to a creditor, shall be void if the creditor has at the time reasonable cause to believe him to be insolvent, and that the payment or transfer was made in fraud of the provisions of the bankrupt act. And it authorizes in such case the assignee to recover the property or its value from the party who receives it.

Under this act it is incumbent on the complainant, in order to maintain the decree in his favor, to show four things:

1st. That at the time the conveyances to Toof, Phillips & Co. and Mahan were made the bankrupts were insolvent or contemplated insolvency;

2d. That the conveyances were made with a view to give a preference to these creditors;

3d. That the creditors had reasonable cause to believe the bankrupts were insolvent at the time; and, 4th. That the conveyances were made in fraud of the provisions of the bankrupt act.

1st. The counsel of the appellants have presented an elaborate argument to show that inability to pay one's debts at the time they fall due, in money, does not constitute insolvency, within the provisions of the bankrupt act. The argument is especially addressed to language used by the district judge when speaking of the statement of the appellants in answer to one of the interrogatories of the bill, to the effect that at the time the transfers were made they did not believe the bankrupts were able to pay their debts in money, but were able to do so on a fair market valuation of their property and assets. The district judge held that this was a direct confession of a fact which in law constitutes insolvency, and observed that 'if the bankrupts could not pay their debts in the ordinary course of business, that is, in money, as they fell due, they were insolvent.'

The rule thus laid down may not be strictly correct as applied to all bankrupts. The term insolvency is not always used in the same sense. It is sometimes used to denote the insufficiency of the entire property and assets of an individual to pay his debts. This is its general and popular meaning. But it is also used in a more restricted sense, to express the inability of a party to pay his debts, as they become due in the ordinary course of business. It is in this latter sense that the term is used when traders and merchants are said to be insolvent, and as applied to them it is the sense intended by the act of Congress. It was of the bankrupts as traders that the district judge was speaking when he used the language which is the subject of criticism by counsel.

With reference to other persons not engaged in trade or commerce the term may perhaps have a less restricted meaning. The bankrupt act does not define what shall constitute insolvency, or the evidence of insolvency, in every case.

In the present case the bankrupts were insolvent in both senses of the term at the time the conveyances in controversy were made. They did not then possess sufficient property, even upon their own estimation of its value as given in their schedules, to pay their debts. These exceeded the estimated value of the property by over twenty thousand dollars. And for months previous the bankrupts had failed to meet their obligations as they matured. Creditors had pressed for payment without success; their stock of goods had been levied on, and their store closed by the sheriff under an execution on a judgment against one of them. It would serve no useful purpose to state in detail the evidence contained in the record which relates to their condition. It is enough to say that it abundantly establishes their hopeless insolvency.

2d. That the conveyances to Toof, Phillips & Co. were made with a view to give them a preference over other creditors hardly admits of a doubt. The bankrupts knew at the time their insolvent condition. A month previous they had made up a balance sheet of their affairs which showed that their assets were insufficient to pay their debts. They had contemplated going into bankruptcy in December previous, and were then pressed by numerous creditors for payment. Their indebtedness at the time exceeded $50,000, and except to Toof, Phillips & Co. they did not pay upon the whole of it over $500 during the previous fall and winter. Making a transfer of property to these creditors, under these circumstances, was in fact giving them a preference, and it must be presumed that the bankrupts intended this result at the time. It is a general principle that every one must be presumed to intend the necessary consequences of his acts. The transfer, in any case, by a debtor, of a large portion of his property, while he is insolvent, to one creditor, without making provision for an equal distribution of its proceeds to all his creditors, necessarily operates as a preference to him, and must be taken as conclusive evidence that a preference was intended, unless the debtor can show that he was at the time ignorant of his insolvency, and that his affairs were such that he could reasonably expect to pay all his debts. The burden of proof is upon him in such case, and not upon the assignee or contestant in bankruptcy.

No such proof was made or attempted in this case. But, on the contrary, the evidence shows that the conveyances were executed upon the expectation of the bankrupts, and upon the assurance of Toof, Phillips & Co., that in consequence of them they would continue to sell the bankrupts goods on credit, as they had previously done; and that no arrangement was made by the bankrupts with any other of their creditors, either for payment or security, or for an extension of credit.

The fact that the title bond was assigned, and the property for which it was given was conveyed to Mahan alone, and not to Toof, Phillips & Co., does not change the character of the transaction. Mahan was a member of that firm, and the conveyance was made to him with the understanding that the sum mentioned as its consideration should be credited on the indebtedness of the bankrupts to them. Both of the bankrupts testified that such was the understanding at the time. The pretence that Mahan bought the lots as an investment on private account will not bear the slightest examination. It is in proof that the lots at the time were only worth $4000 at the outside, yet the consideration given was nearly $7000. Toof, Phillips & Co. might well have been willing to credit this amount on their claim against insolvent traders in consideration of obtaining from them the possession of property of much less value, but it is incredible that an individual, seeking an investment of his money, would be careless as to the difference between the actual value of the property and the amount paid as a consideration for its transfer to him.

3d. From what has already been said it is manifest not only that the bankrupts were insolvent when they made the conveyances in controversy, but that the creditors, Toof, Phillips & Co., had reasonable cause to believe that they were insolvent. The statute, to defeat the conveyances, does not require that the creditors should have had absolute knowledge on the point, nor even that they should, in fact, have had any belief on the subject. It only requires that they should have had reasonable cause to believe that such was the fact. And reasonable cause they must be considered to have had when such a state of facts was brought to their notice in respect to the affairs and pecuniary condition of the bankrupts as would have led prudent business men to the conclusion that they could not meet their obligations as they matured in the ordinary course of business. That such a state of facts was brought to the notice of the creditors is plainly shown. Chetlain, one of the bankrupts, testifies that previous to the execution of the conveyances he had several conversations with Mahan respecting their finances, and told him the amount or near the amount of their indebtedness, and that they could not pay it. Mahan advised them to get extensions, and said that he would help them to get through. Chetlain also testifies that such was the state of the finances of the bankrupts that on one occasion, in conversation with Mahan, they offered to turn over to him their entire assets if he would assume their liabilities and give them a receipt, and that he declined the offer.

It also appears in evidence that the levy by the sheriff upon the stock of goods of the bankrupts, already mentioned, which was made in January, 1868, caused a temporary suspension of their business, and that Mahan was in Augusta at the time and had an interview with the bankrupts on the subject of the levy.

It also appears that about the last of December, 1867, or the first of January, 1868, Toof, Phillips & Co. sent notes of the bankrupts which they held to an agent in Augusta for collection. The agent presented the notes for payment to the bankrupts and was told by them that they could not pay the notes at that time. The agent then wrote to Toof, Phillips & Co. that they had better look to their interests, as his conviction was that it was doubtful whether they would be able to collect their debts. Shortly after this Mahan went to Augusta to look after the matter, and whilst there the conveyances in controversy were made.

It is impossible to doubt that Mahan ascertained, while thus in Augusta, the actual condition of the affairs of the bankrupts. The facts recited were sufficient to justify the conclusion that they were insolvent, or at least furnished reasonable cause for a belief that such was the fact.

4th. It only remains to add that the creditors, Toof, Phillips & Co., had also reasonable ground to believe that the conveyances were made in fraud of the provisions of the bankrupt act. This, indeed, follows necessarily from the facts already stated. The act of Congress was designed to secure an equal distribution of the property of an insolvent debtor among his creditors, and any transfer made with a view to secure the property, or any part of it, to one, and thus prevent such equal distribution, is a transfer in fraud of the act. That such was the effect of the conveyances in this case, and that this effect was intended by both creditors and bankrupts, does not admit, upon the evidence, of any rational doubt. A clearer case of intended fraud upon the act is not often presented.

DECREE AFFIRMED.

Mr. Justice BRADLEY was absent from the court when this cause was submitted, and consequently took no part in its decision.


text: Talk:Toof v. Martin Assignee Etc/Opinion of the Court


text: Wheeler v. Harris

title: Wheeler v. Harris


text: Talk:Wheeler v. Harris

title: Talk:Wheeler v. Harris


text:
Wheeler v. Harris/Opinion of the Court

THIS was a motion by Mr. Donohue to dismiss an appeal from the Circuit Court for the Southern District of New York, on the ground that a prior appeal had been taken and was pending in the same suit.

The Judiciary Act, by its 22d section, gives a writ of error to this court, from final decrees in the Circuit Courts, and enacts that:

'Every judge signing a citation on any writ of error, shall take good and sufficient security that the plaintiff in error shall prosecute his writ to effect, and answer all damages and costs, if he fail to make his plea good.'

The 23d section of the same act, enacts that the writ of error

'Shall be a supersedeas, and stay execution in cases only where the writ of error is served by a copy thereof being lodged for the adverse party in the clerk's office, where the record remains, within ten days, Sundays exclusive, after. . . passing the decree complained of. Until the expiration of which term of ten days, executions shall not issue in any case where a writ of error may be a supersedeas.'

The act of March 3d, 1803, amendatory of the said act, gives by its 2d section an appeal in all 'final judgments and decrees in the Circuit Courts, in any cases of admiralty and maritime jurisdiction, declaring that such appeals shall be subject to the same rules, regulations, and restrictions as are prescribed in law, in cases of writs of error.'

With these statutory provisions in force, Harris, on libel filed in the District Court at New York, obtained a decree for advances made to a vessel of the respondent. From that decree the respondent appealed to the Circuit Court. The cause was there tried, and on the 19th of March, 1870, a decree made in these words:

'This cause coming on to be heard on the appeal herein taken by S. G. Wheeler, after hearing, and due deliberation had; it is now ordered, adjudged, and decreed that the judgment herein be affirmed, with the costs to be taxed.'After more than ten days-there having as yet been no taxation of costs nor decree in more form than as above given-the respondent appealed to the Supreme Court of the United States, giving a bond duly approved and sufficient in form and in amount to operate as a stay of execution. The libellants, notwithstanding such appeal, having caused their costs in the Circuit Court to be taxed, issued execution. Thereupon, the respondent moved to set aside the execution, insisting:

1st. That no execution could regularly issue upon a mere order of affirmance.

2d. That the respondent had ten days after a judgment in form awarding to the libellants a recovery of some amount ascertained and settled by the terms of a final decree.

On the other hand, it was argued by the libellants, that the order of affirmance was the final decree, within the meaning of the acts of Congress, and that the appeal was, therefore, too late; that such order of affirmance was frequently the only order made in the Circuit Court for New York, and that appeals had in many cases been heard in the Supreme Court of the United States, when no other order or judgment of the Circuit Court appeared in the record; that Silsby v. Foote was a signal instance of this; that there an appeal in equity had been taken to the Supreme Court within ten days after the decision of the Circuit Court was announced and entered in the minutes, and before a decree was settled and entered; and that after such formal decree was made, another appeal was taken. But that on a motion to dismiss, the court declared that either appeal was regular, in view of the differing practice prevailing in different circuits; but, as it was not proper that there should be two appeals in the same case, they dismissed the latter and allowed the former to stand. The counsel for the libellants, therefore, insisted in the Circuit Court below that the execution was regular.

The circuit judge, in passing upon the motion to set aside the execution, said as follows:

'The 22d section of the act of 1789, and the 2d section of the act of 1803, are held to require the judge, on signing the citation, on appeal, to require security in a sum sufficient to cover the whole judgment, damages, and costs, as well as the costs in error. The inference is at least plausible, that until some actual award of damages and costs to a definite amount, the party appealing does not know, and the judge taking the security does not know what should be the amount of the bond, nor in what amount the sureties should justify; and that no judgment can be said to be rendered, and more especially no decree in admiralty can be said to be passed, until some actual award of recovery by the libellant is made.

'If the case was not ripe for an appeal, then such appeal would be dismissed, and it necessarily follows that it can have no influence on the present motion; that is to say, if it was premature and would be dismissed by the Supreme Court, then it cannot stay the libellant's proceedings. If it was not premature, but will operate to give the Supreme Court jurisdiction, still, not having been taken within ten days after the entry of the order appealed from, it cannot stay execution, unless I should hold that an appeal may be taken before the ten days begin to run, within which it must be taken. In view of the decision in Silsby v. Foote, I prefer to leave it to the Supreme Court to say whether the ten days begin to run so soon as the time arrives when an appeal may be taken; and whether, if the respondent waits until the actual entry of a decree which settles definitely all the details, his appeal, if taken within ten days thereafter, will stay execution.

'Here, an execution has been issued when there is no judgment or decree awarding to the libellants a recovery, or awarding to them any execution or other means of giving effect to the decision of the court. I am informed that it has not been unusual in this circuit, to issue execution in cases in admiralty, when no other judgment than an order of affirmance has been made or entered, the proctor, for that purpose, taking the amount of damages to be collected from the decree in the District Court, and the costs of appeal from the taxation by the clerk. I think such a practice both loose and irregular, and I am not aware of any like practice anywhere.'

The circuit judge accordingly set the execution aside, thus implying, of course, that the first appeal was premature, and in consequence of this opinion and the action of the court a decree was thus entered on the 27th day of May, 1871:

'A decree of affirmance having been entered herein on the 19th day of March, 1870, by which the decree of the District Court was in all things affirmed with costs to be taxed, which costs were taxed on the 21st day of April, 1870, at $640.61; now, on motion of the proctors for the appellees, it is ordered, adjudged, and decreed, that the appellee have judgment against said S. G. Wheeler, appellant, for the amount so decreed then, together with the costs so taxed, amounting, with interest, to the sum of $5444.69, for which judgment is hereby entered against him, the said appellant, and that the appellees have execution therefor.'

From this judgment a petition of appeal to this court was filed on the 7th day of June, 1871, and on the same day a citation issued.

The present motion was made to dismiss this last appeal.

Silsby v. Foote has passed on this very question. Under that decision the first appeal is good, and the question whether it stays proceedings or not does not change this matter. In the present matter, therefore, the case is before the court, on the first appeal; and two appeals are not allowable in the same case on the same question.

The statute giving the party an appeal gives the defeated party the right to appeal from the rendering or passing of the judgment or decree complained of. He has his choice, and when he takes it, and his appeal is good, his further right or appeal in that case is gone.

Both contingencies on which an appeal rest had occurred. When the first appeal was taken the judgment had passed and the decree had been rendered; all that remained to be done was to make up the amount,-a merely clerical operation.

Messrs. Goodrich and Wheeler, contra, argued that in view of the whole case, if either appeal was to be dismissed it should be the first.

It is quite true that two appeals are not allowed in the same case on the same question. We must determine which one of the two should be dismissed. It may be that the first appeal was from a decree which might be taken as final, if the second decree had not been rendered. But it is obvious that the circuit judge did not regard it as final, and it was certainly defective. The second decree was rendered, not by inadvertence, but in view of the rendition of the first decree; and, in order to settle the practice in the Circuit Court for the Southern District of New York, that a decree of affirmance, without taxation of costs and without specifying the sum for which it is rendered, is not to be regarded as a final decree.

We think this the better practice, and therefore hold that the first appeal must be

DISMISSED AS IRREGULAR.

title: Wheeler v. Harris/Opinion of the Court


text: Talk:Wheeler v. Harris/Opinion of the Court


text:
Bevans v. United States

ERROR to the Circuit Court for the Eastern District of Arkansas; the case being this:

Prior to February, 1860, Bevans had been appointed a receiver of public money for the district of lands, subject to sale at Balesville, Arkansas, and gave bond conditioned that he 'should have truly and faithfully executed and discharged, and should continue truly and faithfully to execute and discharge all the duties of the said office.'

These duties are defined by acts of Congress and by Treasury Regulations enacted in pursuance of them.

The 6th section of the act of May 10th, 1800, made it the duty of all such receivers to transmit to the Secretary of the Treasury accounts of all public moneys by them received, within thirty days in case of public sale, and quarterly in case of private sales, and to transmit the money received by them within three months after its receipt. The act of August 6th, 1846, however, and subsequent acts made it the duty of such receivers 'to keep safely, without loaning, using, depositing in banks, or exchanging for other funds than as allowed by the act, all the public money collected by them, or otherwise at any time placed in their possession and custody, till the same is ordered, by the proper department or officer of the government, to be transferred, or paid out, and when such orders for transfer, or payment, are received, faithfully and promptly to make the same as directed.' Following these acts were the Treasury Regulations of July 18th, 1854 (in force when this receiver was in office), which required all receivers to deposit in the treasury all public money in their hands, as follows:

1. When their weekly receipts exceed $10,000, they were required to deposit at the termination of each week.

2. When the weekly receipts were less than $10,000, but exceeded $5000, they were required to deposit at the close of each period of two weeks.

3. When the monthly receipts were more than $2000, and less than $20,000, they were required to deposit at the end of each month.

4. When the monthly receipts were less than $2000, they were required to deposit at the end of each quarter.

In this state of things the United States, on the 27th September, 1867, brought suit against Bevans, and his sureties on his official bond, as above mentioned, conditioned for the faithful performance of all the duties of the office of receiver according to law. The breaches assigned were that the principal obligor had failed to account for the money he had received, in his official capacity, on behalf of the United States, from the time of his appointment, January 17th, 1860, to the 30th of April, 1861, and that he had failed to pay over such money, although required by law to account for the same and to pay it over. At the trial the plaintiffs gave in evidence duly certified transcripts of official settlements of the receiver's accounts, from which it appeared that he had in hand of public money, received by him between the 17th of January, 1860, and the 31st of March, 1861, the sum of $19,737.26; that on the 31st day of March, 1860, he held an unpaid balance of $4116.05; that on the 30th of June, 1860, the balance against him was $6535.26; on the 30th of September, 1860, $8346.34; on the 31st of December, 1860, $19,662.66; and on the 30th of April, 1861, $19,737.26, the unpaid balances at the end of each quarter being carried forward into the account of the next succeeding quarter. No attempt was made to impeach the correctness of these official settlements; but the defendants offered to prove that on the 6th day of May, 1861, Bevans, the receiver, was residing at Independence, in the State of Arkansas; that on that day the people of the State, legally assembled in convention, passed 'a secession ordinance,' whereby the State of Arkansas was withdrawn from the Union; that such ordinance became of force and effect, and was binding on all the citizens of the State; that the convention then passed an ordinance prohibiting all officers of the United States from paying out any money of the United States in their hands, and requiring them to hold such money subject to the further order of the convention, and that immediately after the passage of this second ordinance he was notified thereof before he had time to account to the United States, or to remit the money in his hands as receiver. In connection with this the defendants further offered to prove that subsequently the State of Arkansas was attached to what was called the 'Southern Confederacy,' and that in order to insure performance of her duties as a member of said confederacy, the convention aforesaid, and the legislature of the State made provision for seizing, and did actually seize the money in the hands of the said Bevans, as receiver; that under the said acts and ordinances he paid to the agents of the State all the money he had in his possession belonging to the United States, as he was forced and compelled to do, the State being organized as a member of the confederacy, she and the confederacy having armed troops in her territory to compel him to pay, the acts and ordinances being compulsory, and the agents and officers of the State threatening that if he declined to pay they would punish him by imprisonment, or otherwise, and that in consequence of such menaces he did, on the 1st day of January, 1862, pay over to such agents and officers all the money he had in his hands as a receiver, which was placed in the treasury of the State in aid of the war against the United States, at a time when he could not remit the same to the Treasury Department at Washington. These facts had been pleaded in bar.

The evidence thus offered by the defendants the Circuit Court refused to receive, being of opinion that if all the facts which it tended to prove were proved, they would not amount to a defence, and the court accordingly directed the jury to find for the plaintiffs the amount claimed, in and by the papers read in evidence by the plaintiffs, viz.: $19,737, with interest from October 4th, 1861.

Verdict and judgment having gone accordingly for the United States, Bevans and the sureties brought the case here; the decision of the court upon the evidence offered, and which it refused to receive, being the principal error assigned; the absolute form of the direction to the jury as to their finding being also a matter excepted to.

The case was twice argued.

Mr. A. H. Garland, for the plaintiff in error, on the first point went into an able and learned argument, citing various adjudged cases, to show that where the condition of a bond became impossible to be performed by great overpowering force and fear, then the obligation was saved.

On the second point he submitted that the direction of the court to the jury, unqualified as it was, took out of their hands all that there was for them to do, and was thus erroneous; that the instruction should have been, 'if the jury believe,' &c.

Mr. B. H. Bristow, Solicitor-General, and Mr. W. A. Field and Mr. C. H. Hill, Assistant Attorneys-General, contra.

Mr. Justice STRONG delivered the opinion of the court.

title: Bevans v. United States


text: Talk:Bevans v. United States

title: Talk:Bevans v. United States


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

It is to be observed that the defence attempted in this case, was not a denial of the receiver's obligation to pay all the public money in his hands to the United States, according to the condition of his bond and the requirements of the acts of Congress, nor was it an assertion of performance of his obligation, but it was setting up an excuse for non-performance. Was the receiver then in a condition to avail himself of the excuse which he persented? It may be a grave question whether the forcible taking of money belonging to the United States from the possession of one of her officers, or agents lawfully holding it, by a government of paramount force, which at the time was usurping the authority of the rightful government, and compelling obedience to itself exclusively throughout a State, would not work a discharge of such officers or agents, if they were entirely free from fault, though they had given bond to pay the money to the United States. This question has been thoroughly argued, but we do not propose now to consider it, for its decision is not necessary to the case. The bond of a receiver of public money is given to insure the performance of all his duties, and those duties are defined by the acts of Congress and by Treasury Regulations made under the acts. [The learned justice here quoted the acts of Congress and the Treasury Regulations, in the language already given on page 58, setting out the duties of receivers of public moneys, to the performance of which they are bound by their official bonds, and continued:] In view of the fact that the duties of this receiver, to the performance of which he was bound by his bond, were thus prescribed, it is plain that it was not in consequence of the Arkansas ordinances and acts of assembly, or in consequence of any action of the usurping government alone, that the money in the receiver's hands was not paid to the United States. Hence the evidence offered by the defendants came short of meeting the case, for it was the default of the receiver that exposed the money to seizure by the usurping power which for a time excluded the authority of the government. The condition of the bond was broken long before the ordinance of secession was passed. It was the duty of Bevans to pay over the money in his hands, in large part, more than a year before any obstacle came in the way of his payment. Had he performed his duty, all of it would have been paid into the treasury by the 1st of April, 1861. He was, therefore, a defaulter when the alleged seizure was made, and it was his default which concurred with the acts of the public enemy, and contributed to, or facilitated, the wrong which was perpetrated, or, at least, rendered it possible. Since then his bond had become absolute by his failure to perform its conditions, and since the evidence offered tended to show at most an excuse for non-performance after May 6th, 1861, it is manifest that it presented an insufficient defence to the action. Seeking relief, which in its nature was equitable, as the receiver did, it was incumbent upon him to come with clean hands, and to place the obligees in the bond in as good a situation as they would have held had he made no default.

It is not to be overlooked that Bevans was not an ordinary bailee of the government. Bailee he was undoubtedly, but by his bond he had insured the safe-keeping and prompt payment of the public money which came to his hands. His obligation was, therefore, not less stringent than that of a common carrier, and in some respects it was greater. In United States v. Prescott, it was said by this court: 'Public policy requires that every depositary of public money should be held to a strict accountability. Not only that he should exercise the highest degree of vigilance, but that he should keep safely the moneys which come to his hands. Any relaxation of this condition would open the door for frauds which might be practiced with impunity.' These observations apply in full force to the present case. It cannot be allowed that a depositary of public money, who has not only assumed the common obligations of a bailee, but has given bond to keep safely the money in his hands, and to pay it over promptly, as required by law, may, by making a default, throw upon the government the risk of loss of the money by the intervention of a public enemy. We are, therefore, of opinion that the evidence offered by the defendants in the court below tended to show no sufficient defence to the claim of the plaintiffs, and that it was properly rejected.

The objection that the jury was instructed to find for the plaintiffs the amount claimed by the papers given in evidence (viz., the official settlements), with interest thereon, is entirely without merit. There was no evidence to impeach the accounts stated, or to show set-off, release, or payment. The instruction was, therefore, in accordance with the legal effect of the evidence, and there were not disputed facts upon which the jury could pass.

JUDGMENT AFFIRMED.

The CHIEF JUSTICE and Mr. Justice CLIFFORD dissented from the judgment, because they thought that the plea in bar set up a valid defence.

At the same time, with the preceding case, was heard another, in its chief point identical with it, but embracing also a minor point of evidence. It was the case of


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


text:
Halliburton v. United States

THIS case, like the former, came here on error to the Circuit Court for the Eastern District of Arkansas.

The action was debt upon a marshal's bond, conditioned for faithful performance of all the duties of the office of marshal. The breaches assigned were that on the 1st day of April, 1861, Halliburton, the marshal, was indebted to the United States in the sum of $3946.65 for money had and received by him for the use of the plaintiffs, and upon an account then stated, and for money which had previously come into his hands as marshal, which it was his duty to pay over, but which he had converted to his use. Among other defences set up, the defendants pleaded the ordinance of secession passed by the convention of Arkansas on the 6th of May, 1861; the ordinance of the same convention passed May 7th, 1861, requiring all persons having money of the United States in their hands to hold the same subject to future action of the convention, and a subsequent ordinance of June 1st, 1861, requiring all persons having money, as aforesaid, to pay the same over to the treasurer of Arkansas, under severe penalties of fine and long imprisonment. The plea further averred that the convention, and the government organized thereunder, had the physical power to enforce its laws and decrees, and did enforce them, as fully as any organized government might do for a long period of time, to wit, one year, and that the defendant, Halliburton, yielding to the force and compulsion of the said government, so organized, and having at that time no protection from the government of the United States, and not being able in anywise to resist the execution of the ordinance of the convention, did pay the money mentioned in the declaration mentioned to the treasurer of Arkansas on the 21st day of June, 1861. The plea still further averred that after the 7th of May, 1861, Halliburton had no opportunity to pay the money to the United States, and that he was prevented from paying the same by public hostilities. To this plea there was a demurrer, and judgment was given against the defendants, which was one error-the principal one-insisted on.

There was, however, another error assigned, to wit, that the Circuit Court refused to admit evidence of payments made and of an alleged set-off. This refusal of the court was apparently founded on the fourth section of the act of Congress of March 3d, 1797, which enacts that in suits between the United States and individuals, no claim for a credit shall be admitted upon trial, but such as shall appear to have been presented to the accounting officers of the Treasury for their examination, and by them disallowed, in whole or in part, unless it shall be proved to the satisfaction of the court that the defendant is, at the time of trial, in possession of vouchers not before in his power to procure, and that he was prevented from exhibiting a claim for such credit at the Treasury by absence from the United States or some unavoidable accident. It did not appear that the evidence offered and rejected came within the provision of this statute.

Judgment having been given for the United States, the marshal, Halliburton, and his sureties, brought the case here.

It was twice argued and by the same counsel and on the same briefs as the preceding one.

Mr. Justice STRONG delivered the opinion of the court.

title: Halliburton v. United States


text: Talk:Halliburton v. United States

title: Talk:Halliburton v. United States


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

What we have said in the case just decided leads to the conclusion that the judgment in this case must be affirmed.

Looking to the declaration and the plea it appears that the bond had become absolute more than a month before the ordinance of secession was passed, and that all that time Halliburton was in default. The plea does not aver that there was any obstacle in the say of payment at the time when by law the payment was required to be made, or for a considerable period thereafter. If, then, it were sufficiently averred that after the 1st of June, 1861, payment was prevented by public enemies, there would still appear a default of the obligors, for which no excuse is offered, a fault which led directly to the loss of the public money. All the reasons, therefore, which have been mentioned in the case of Bevans v. United States, why the evidence there offered was insufficient to establish a defence, concur in justifying the judgment given upon this demurrer.

This disposes of the principal error insisted on. To the other error assigned-namely, the refusal of the court to admit evidence of payments made and of an alleged set-off-the fourth section of the act of Congress of March 3d, 1797, is a sufficient answer. What was offered and rejected was not any claims presented to the accounting officers of the Treasury, and by them disallowed. And it was not pretended that the defendants were at the trial in possession of vouchers not before in their power to procure. The evidence was, therefore, properly rejected.

JUDGMENT AFFIRMED.

The CHIEF JUSTICE and Mr. Justice CLIFFORD dissented in this case, as in the former one, and for the same reason, to wit, that they thought the plea in bar set up a valid defence.

[See supra, p. 17, Boyden et al. v. United States.]


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


text:
Rice v. Houston

ERROR to the Circuit Court for the Middle District of Tennessee; the case being thus:

A. W. Vanleer, a citizen of Tennessee, having died at Nashville, letters of administration were granted by the proper authority there to one Houston, on his estate. It seemed to be admitted by counsel that, at this time, Houston was a citizen of Tennessee. But he afterwards, it was equally admitted, was in Kentucky and domiciled there. Thus domiciled he brought two suits in the court below, the Circuit Court for the Middle District of Tennessee, to recover from Rice on certain notes given to his decedent, Vanleer. In these suits he described himself in his narr. as 'a citizen of the State of Kentucky and administrator of the estate of A. W. Vanleer, deceased.' The defendant craved oyer of the letters. This disclosing that the letters were granted in Tennessee, the defendant pleaded that 'by the said letters of administration it appears that the administrator of the estate of the said A. W. Vanleer is the creature of the law of Tennessee, and has no existence as such outside of the State of Tennessee.' To this plea the plaintiff demurred, and the demurrer being held good and judgment given for the plaintiff, the defendant brought the case here. The point involved was of course the jurisdiction of the Circuit Court.

Mr. R. A. Crawford, for the plaintiff in error:

Of course the Circuit Court has no jurisdiction between citizens of the same State. But here Houston was the domestic administrator, and in point of fact, it will be conceded, though not so asserted in the record, a citizen of Tennessee, when he got his letters; he having afterwards removed to Kentucky. Independently of this, since, personally, he is a stranger to the suit, his personal domicil in Kentucky cannot be looked to. By his letters, he represented the sovereignty of Tennessee, regardless of personal alienship.

Messrs. F. B. Fogg and H. Maynard, contra.

Mr. Justice DAVIS delivered the opinion of the court.

title: Rice v. Houston


text: Talk:Rice v. Houston

title: Talk:Rice v. Houston


text:
Rice v. Houston/Opinion of the Court

The question of jurisdiction is the only point in the case.

Although in controversies between citizens of different States, it is the character of the real and not that of the nominal parties to the record which determines the question of jurisdiction, yet it has been repeatedly held by this court that suits can be maintained in the Circuit Court by executors or administrators if they are citizens of a different State from the party sued, on the ground that they are the real parties in interest, and succeed to all the rights of the testator or intestate by operation of law. And it makes no difference that the testator or intestate was a citizen of the same State with the defendants, and could not, if alive, have sued in the Federal courts; nor is the status of the parties affected by the fact that the creditors and legatees of the decedent are citizens of the same State with the defendants.

In this state of the law on this subject, it is not perceived on what ground the right of Houston to maintain these suits can be questioned. He was a citizen of Kentucky, had the legal interest in the notes sued on, by virtue of the authority conferred on him by the court in Tennessee, and, therefore, had a right to bring his action in the Federal or State courts at his option.

It is to be presumed, in the absence of an averment in the pleadings to the contrary, that Houston, when appointed administrator, was a citizen of Kentucky, and if so the appointment was legal, for the laws of Tennessee do not forbid the probate courts of that State to intrust a citizen of another State with the duties of administering on the estate of a person domiciled at the time of his death in Tennessee.

But if the fact be otherwise, as seems to be admitted in argument, and Houston were a citizen of Tennessee at the time he got his letters of administration, the liability of the defendants to be sued in the Federal courts remains the same, because there is no statute of Tennessee requiring an administrator not to remove from the State, and the general law of the land allows any one to change his citizenship at his pleasure. After he has in good faith changed it, he has the privilege of going into the United States courts for the collection of debts due him by citizens of other States, whether he holds the debts in his own right or as administrator.

JUDGMENT AFFIRMED.

title: Rice v. Houston/Opinion of the Court


text: Talk:Rice v. Houston/Opinion of the Court


text:
Curtis v. Whitney

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

Mary Curtis brought suit under a statute of Wisconsin to have her title to a certain piece of land, which she claimed under a deed made on a sale for taxes, established and quieted as against the defendants.

The sale for taxes took place on the 11th day of May, 1865, and she received a certificate stating the sale, and that she would 'be entitled to a deed of conveyance of said land in three years from that date unless sooner redeemed according to law,' by payment of the amount bid, with interest and penalties; and accordingly, on the 12th day of May, A.D. 1868, she received the deed which she now sought to establish as the title to the land.

But the legislature of Wisconsin, on the 10th of April, 1867, enacted that in all such cases where land had been or should thereafter be sold for taxes, and any person should have been in the actual occupancy or possession of such land for thirty days or more within six months preceding the time when the deed should be applied for, the deed should not be issued unless a written notice should have been served on the owner orr occupant by the holder of the tax certificate, at least three months prior thereto. The act required that this notice should set forth a copy of the certificate, and state who was the holder and the time when the deed would be applied for.

In the present case there was such occupancy and no notice was served, and the court held that tax-deed void for want of it; overruling the objection of plaintiff, that the statute requiring notice was void as applied to her case, because it impaired the obligation of her contract evidenced by the certificate of sale.

The case having thus gone against the plaintiff, she brought the case here, setting up the same point that she set up below.

Mr. E. H. Ellis, for the plaintiff in error:

A tax sale of which the tax certificate is the evidence has been decided, by the courts of Wisconsin, to be a contract between the State of Wisconsin and the county making the sale on the one part and the purchaser on the other. By the provisions of this contract Mrs. Curtis was entitled to a deed in three years from the date of the sale (May 11th, 1865), subject only to one condition, viz.: 'unless sooner redeemed.' Nearly two years thereafter, viz., April 10th, 1867, an act of the legislature was passed by which the party of the second part was required to perform an additional service, involving both time, labor, and expense, in order to obtain the fulfilment of her contract. This requirement did, in our opinion, impair the obligation of the contract made at the time of the tax-sale.

Mr. T. O. Howe argued that no contract was violated.

Mr. Justice MILLER delivered the opinion of the court.

title: Curtis v. Whitney


text: Talk:Curtis v. Whitney

title: Talk:Curtis v. Whitney


text:
Curtis v. Whitney/Opinion of the Court

Did the requirement of the statute of the 10th of April, 1867, that the holder of a certificate of tax-sale should give notice to whoever might be found in possession of the land before taking a deed impair the obligation of the contract made at the sale?

It must be conceded by all who are familiar with the vast disproportion between the value of the land and the sum for which it is usually bid off at such sales, and the frequency with which the whole proceeding is conducted to the making of the conveyance intended to pass the title without any knowledge on the part of the real owner, that the requirement is an eminently just and proper one. Nor is it one difficult to comply with, as it is only made necessary where some one is found on the land, on whom the notice can be served, and the cost of serving the notice must be paid by any party offering to redeem.

That a statute is not void because it is retrospective has been repeatedly held by this court, and the feature of the act of 1867, which makes it applicable to certificates already issued for tax-sales, does not of itself conflict with the Constitution of the United States. Nor does every statute which affects the value of a contract impair its obligation. It is one of the contingencies to which parties look now in making a large class of contracts, that they may be affected in many ways by State and National legislation. For such legislation demanded by the public good however it may retroact on contracts previously made, and enhance the cost and difficulty to performance, or diminish the value of such performance to the other party, there is no restraint in the Federal Constitution, so long as the obligation of performance remains in full force.

In the case before us the right of plaintiff to receive her deed is not taken away, nor the time when she would be entitled to it postponed.

While she had a right to receive either her money or her deed at the end of three years, the owner of the land had a right to pay the money and thus prevent a conveyance. These were the coincident rights of the parties growing out of the contract by which the land was sold for taxes.

The legislature, by way of giving efficacy to the right of redemption, passed a law which was just, easy to be complied with, and necessary to secure in many cases the exercise of this right. Can this be said to impair the obligation of plaintiff's contract, because it required her to give such notice as would enable the other party to exercise his rights under the contract?

How does such a requirement lessen the binding efficacy of plaintiff's contract? The right to the money or the land remains, and can be enforced whenever the party gives the requisite legal notice. The authority of the legislature to frame rules by which the right of redemption may be rendered effectual cannot be questioned, and among the most appropriate and least burdensome of these is the notice required by statute.

In the case of Jackson v. Lamphire, this court said: 'It is within the undisputed province of State legislatures to pass recording acts by which the elder grantee shall be postponed to a younger if the prior deed is not recorded within the limited time, and the power is the same, whether the deed is dated before or after the recording act. Though the effect of such a law is to render the prior deed fraudulent and void against a subsequent purchaser, it is not a law impairing the obligation of contracts. Such, too, is the power to pass acts of limitations, and their effect. Reason and sound policy have led to the general adoption of laws of both descriptions and their validity cannot be questioned.'. . . 'Cases may occur,' says the court, 'where the provisions of a law on those subjects may be so unreasonable as to amount to a denial of a right, and call for the intervention of the court; but the present is not one of them.'

So we think of the case now under consideration, and we therefore.

AFFIRM THE JUDGMENT OF THE STATE COURT.

title: Curtis v. Whitney/Opinion of the Court


text: Talk:Curtis v. Whitney/Opinion of the Court


text:
Johnson v. Towsley

ERROR to the Supreme Court of Nebraska; the case being this:

By an act of Congress, approved September 4th, 1841, and entitled 'An act to appropriate the proceeds of the public lands, and to grant pre-emption rights,' it was enacted:

'SECTION 10. That from and after the passage of this act, every person, &c., who since the 1st day of June, A.D. 1840, has made or shall hereafter make a settlement in person on the public land. . . which has been, or shall have been, surveyed prior thereto, and who shall inhabit and improve the same, and who has or shall erect a dwelling thereon, shall be, and is hereby, authorized to enter with the register of the land office for the district in which such land may lie, by legal subdivisions, any number of acres not exceeding 160, or a quarter-section of land, to include the residence of such claimant, upon paying to the United States the minimum price of such land, subject, however to the following limitations and exceptions: No person shall be entitled to more than one pre-emptive right by virtue of this act,' &c., &c.

'SECTION 11. That when two or more persons shall have settled on the same quarter-section of land, the right of pre-emption shall be in him or her who made the first settlement, &c.; and all questions as to the right of pre-emption arising between different settlers shall be settled by the register and receiver of the district within which the land is situated, subject to an appeal to and a revision by the Secretary of the Treasury of the United States.'

'SECTION 14. That this act shall not delay the sale of any of the public lands of the United States beyond the time which has been, or may be, appointed by the proclamation of the President, nor shall the provisions of this act be available to any person or persons who shall fail to make the proof and payment, and file the affidavit required before the day appointed for the commencement of the sales as aforesaid.

'SECTION 15. That whenever any person has settled or shall settled and improve a tract of land, subject at the time of settlement to private entry, and shall intend to purchase the same under the provisions of this act, such person shall in the first case, within three months after the passage of the same, and in the last within thirty days next after the date of such settlement, file with the register of the proper district a written statement, describing the land settled upon, and declaring the intention of such person to claim the same under the provisions of this act; and shall, where such settlement is already made, within twelve months after the passage of this act, and where it shall hereafter be made, within the same period after the date of such settlement, make the proof, affidavit, and payment therein required; and if he or she shall fail to file such written statement as aforesaid, or shall fail to make such affidavit, proof, and payment, within the twelve months aforesaid, the tract of land so settled and improved shall be subject to the entry of any other purchaser.'

A subsequent act, that of March 3d, 1843, entitled 'An act to authorize the investigation of alleged frauds under the pre-emption laws, and for other purposes,' thus enacts:

'SECTION 4. That where an individual has filed, under the late pre-emption law, his declaration of intention to claim the benefits of said law for one tract of land, it shall not be lawful for the same individual at any future time, to file a second declaration for another tract.

'SECTION 5. That claimants under the late pre-emption law, for land not yet proclaimed for sale, are required to make known their claims, in writing, to the register of the proper land office,. . . within three months from the time of the settlement,. . . giving the designation of the tract, and the time of settlement; otherwise his claim to be forfeited, and the tract awarded to the next settler, in the other of time, on the same tract of land, who shall have given such notice and otherwise complied with the conditions of the law.'

Finally came an act, of June 12th, 1858:

'SECTION 10. That the 11th section of the act of Congress, approved 4th September, 1841, entitled 'An act to appropriate the proceeds of the public lands, and to grant pre-emption rights,' be so amended that appeals from the decisions of the district officers, in cases of contest between different settlers for the right of pre-emption, shall hereafter be decided by the Commissioner of the General Land Office, whose decision shall be final, unless appeal therefrom be taken to the Secretary of the Interior.'

With these provisions of law in force, one Towsley, on the 15th of June, 1858, settled, as he alleged, on the W. 2/1 S.W. quarter-section 3, township 15 N., range 13 east, lying near the city of Omaha, and made improvements upon the same; and on the 4th of February, 1859, filed with the register of the land office his declaratory statement of an intention to claim the land under the provisions of the act of September 4th, 1841; claiming his settlement from June 15th, 1858. On the 5th of October, 1860, one Johnson, also setting up a settlement, improvement, &c., filed a declaratory statement of his intention to pre-empt the same land under the act of 1841.

The same Towsley had previously, to wit, on the 2d of April, 1858, filed a declaratory statement giving notice that he had settled, March 25th, 1858, upon other land, described in the usual manner, and claimed a pre-emption right therein; which land had not yet been offered at public sale and thus rendered subject to private entry. From this land he withdrew claim early in the following June, and waived all claim to it in favor of an opposing settler.

An investigation as to the respective rights of the two parties was had before the local office, which resulted in a decision in favor of Towsley. This decision was affirmed by the Commissioner of the General Land Office; and on the 20th of September, 1862, Towsley received a patent. The dispute between the parties being taken by appeal before the Secretary of the Interior, that officer on the 11th of July, 1863, as appeared from a statement of the Assistant Secretary, decided in favor of Johnson, on the ground that Towsley, previously to filing his declaratory statement claiming the land in question, had filed a declaratory statement claiming the other lands.

After this, Johnson entered on the lands, and a patent was issued to him.

In this state of things Towsley, relying on his patent and on different acts of Congress regulating the public lands, filed his bill in one of the inferior courts of Nebraska, against Johnson and others, his grantees, to compel them to surrender their title to him, the existing evidence of which cast a cloud on his own. The court in which the bill was filed decreed such a surrender, and the Supreme Court of the State on appeal affirmed that decree. Johnson now brought the case here under the 25th section of the Judiciary Act of 1789; or, if the reader prefer so to consider, under the 2d section of the act of February 5th, 1867, reenacting with some change that so well-known section.

Three questions arose here:

1. Whether, conceding that the courts of Nebraska had jurisdiction in the case, this court had any under the Judiciary Act of 1789 or 1867.

2. Admitting, upon the concession stated, that it had, whether in view of the language of the 10th section of the act of June 12th, 1858 (quoted, supra, p. 75), as to the effect of decisions by the Commissioner of the General Land Office, in cases of contest between different settlers for the right of pre-emption, either of the courts below had any jurisdiction. Since if they had not, this court would have none now.

3. Whether, admitting that all three courts had jurisdiction, and that the matter was now properly here for review, the decision of the Supreme Court of Nebraska, affirming the validity of Towsley's patent, was correct.

Mr. Lyman Trumbull, for the plaintiff in error:

I. A question of jurisdiction under the 25th section has been suggested in a case similar to this. But we rely more on other points, one of which includes merits. We assert, therefore, that

II. The act of 1858, in plain terms makes the decision of the Commissioner of the General Land Office 'final,' unless appeal therefrom be taken to the Secretary of the Interior; when, of course, the decision of this officer must be equally so.

But independently of this, though courts of equity may interpose in cases of fraud, or to correct mistakes made in the disposition of the public lands by the officers charged with that duty, they cannot supervise the decisions of those officers when no fraud or mistake is alleged, other than in arriving at a wrong conclusion, after a full hearing of all the parties in interest.

The cases of Lytle v. State of Arkansas, and Garland v. Wynn, arose under pre-emption acts prior to 1841, and before the law vested the land officers with authority to settle questions arising between different pre-emptors, or made their decisions final. In these cases, as well as in the subsequent ones of Minnesota v. Bachelder, and Lindsey v. Hawes, fraud and misrepresentation were alleged, and in most of them the proceedings before the land officers had been ex parte. In none of them had there been a decision between conflicting claimants after a full hearing on notice and final appeal to the Secretary of the Interior, as in this case.

III. But if this is not so, and if the ordinary courts can re-examine such cases as this, Towsley has no case.

1. He filed April 2d, 1858, his declaratory statement, giving notice that he had, on th 25th day of March preceding, settled upon certain lands-different from those he now claims-and would claim a pre-emption right therein. It was not until after this, to wit, the 15th of August, 1858, that he tendered his declaratory statement for the land in controversy. This alone is fatal to his case.

The prohibition of the 4th section of the act of March 3d, 1843, against filing a second declaration, is not limited to filings on lands which were subject to private entry, but extends as well to lands of the class in question which have not been proclaimed for sale, the only difference being that in the one case the law requires the declaratory statement to be filed within thirty days, and in the other within three months from the date of settlement. But the law prohibits the same individual who has filed a declaration claiming one tract of land, from afterwards filing a second declaration for another tract, as much in the one case as the other.

The section is not limited to declarations which had been filed at the date of its passage, but applies to every case where an individual 'at any future time' shall offer to file a second declaration. If he has filed under the late pre-emption law for one tract of land, at the 'future time,' when he seeks to file a second declaration for other land, the second filing is invalid. The same reason applies for confining a pre-emption to one filing on lands not proclaimed for sale as on those which had been.

To allow a pre-emptor to file as many declaratory statements on as many different tracts of land as he pleases, would put it in his power to keep the public lands from being taken and settled by others, which would be contrary to public policy as well as the statute. The policy of the government has always been to sell its lands to actual settlers, and not let them fall into the hands of speculators. Hence, it has often delayed proclaiming lands for sale that actual settlers might take them; but this policy would be thwarted if a single pre-emptor could file declaratory statements for as many tracts as he pleased.

2. But a stronger, and, we think, a plainly unanswerable argument against his case remains. By the 5th section of the act of June 3d, 1843, a claimant is required to file his declaratory statement 'within three months from the time of the settlement, otherwise his claim to be forfeited, and the tract awarded to the next settler in the order of time, on the same tract of land, who shall have given such notice, and otherwise complied with the conditions of the law.' This is statute law, and imperative. Towsley neither filed nor offered to file his declaratory statement within the three months from the time of his settlement upon the land, and his claim as a pre-emptor thereby became forfeited. If, after having occupied the land nearly a year, he was at liberty to file a declaratory statement, asserting his settlement to have been within three months, then he could occupy the land indefinitely, and need never file his declaratory statement, and the law requiring him to do so within the three months becomes nugatory. No other individual could settle upon the land and pre-empt it, because Towsley, as soon as such an attempt should be made, would have it in his power to defeat him by filing a declaratory statement, dating his settlement, not at the time it was actually made, but at any time within three months which should be anterior to that of the other claimant. Towsley's declaratory statement, filed February 4th, 1859, claiming a settlement June 15th, 1858, was a nullity.

By the act of 1841, individuals settling on lands not proclaimed for sale were not required to file declaratory statements, and in case of dispute between pre-emptors, the right of pre-emption was declared to be in him who made the first settlement; but the act of 1843 declared the claim of the first settler forfeited unless he filed a declaratory statement within three months from the time of settlement. Towsley having failed to file his declaratory statement as required by law, the land was properly awarded to Johnson, who was the next settler, and complied with the pre-emption laws.

[There were some other questions presented in the brief of the learned counsel, such as supposed defects in the bill, and whether on the evidence Towsley made the necessary settlement and owned the improvements, which this court declared were not within its cognizance. It was also argued that Towsley forfeited his right by entering into contracts, by which his title should enure to the benefit of others than himself, in violation of the 13th section of the act of 1841; but as the court considered that no such matter was put in issue in the pleadings, and that it could not be considered here, the reporter makes no further mention either of the questions or the matter referred to.]

Mr. J. M. Woolworth, contra.

Mr. Justice MILLER delivered the opinion of the court.

title: Johnson v. Towsley


text: Talk:Johnson v. Towsley

title: Talk:Johnson v. Towsley