Jeter v. Hewitt, 63 U.S. (22 How.) 352

John P. Jeter, Plaintiff in Error, v. James Hewitt, Mel ville Heron, and Mary Conrad.

Where a mortgage of land and slaves, in Louisiana, was made to the Bank of Louis iana, the property sold in the manner pointed out by the charter of the bank, the purchasers applied to the District Court, (State court,) under a statute of Louis iana, for a monition, citing all persons who objected to the sale to make their objection known; that court decided that the sale was null and void, but the Supreme Court reversed the judgment as to the widow, and those claiming under her; this judgment cuts off all the objections that apply to the manner of conducting the sale, and to the form of the judgment in the court below. The Supreme Court of the State decided that the courts below had jurisdiction of the case, and that decision is binding upon this court. The whole matter now in controversy has therefore been legally adjudicated by the courts of the State.

This case was brought up by writ of error from the Circuit Court of the United States for the eastern district of Louisiana.

It was an action brought by John P. Jeter, a citizen of Louisiana, resident in Hew Orleans, against James Hewitt and David Heron, citizens of the State of Kentucky, tempora rily within the jurisdiction of the Circuit Court for the district of Louisiana. . , ,

The nature and history of the case- are stated in the opinion of the court. It was submitted to the Circuit Court upon t e pleadings, depositions, oral testimony, and arguments of coun

sei, which found the facts substantially as they are narrated in the opinion of this court, and then dismissed the petition of the plaintiff. A writ of error was sued out, which brought the case up to this court.

It was argued by Mr. Carlisle, upon a brief filed by himself and Mr. Badger, for the plaintiff in error, and by Mr. Benjamin for the defendants.

As the judgment of this court turned upon the point that it was res judicata, only the arguments upon that subject will be reported.

The counsel for the plaintiff in error made the following points, amongst others:

VI. The validity of this title set up by the defendants is not resjudicata., as maintained by counsel in the court below. The monition suit on which this pretension is founded could have no such effect, if the proceedings'in the fifth District Court were a nullity. This seems clear upon principle.

5 Monition Act, B. and C.’s Dig., 586.

City Bank v. Walden, 1 Ann., 47.

16 Louisiana R., 596.

Besides, the court where the monition suit was prosecuted had no jurisdiction over the original suit, and could have none WGr that which was merely incidental.

Again: The judgment in the monition suit was not a judgment upon the merits, even against Mrs. Ford, and was not at ah against Jeter.

C. 0., 2265.

inally. The decree of homologation, in its terms, seems rea y to come to nothing, since it only confirms and homolot>a es the sale, “in so far as the same has not been opposed,” ' VTT 6 rec°5d ^ows that it was totally opposed. or t ' /eter * no^ est°pped to claim against the sheriff’s sale, based 8 °W nu^y Proceedings upon which it is

In this respect, this ease is in striking contrast with Erwin vol. XXII. 23

v. Lowry, in 7 Howard. There, Hector McNeill, under whom Lowry claimed, had actively participated in the proceedings at the sale, had joined in the selection of appraisers, had re quested the marshal to offer the land and negroes together, which was done, and all this in the presence of Erwin; and, upon the faith of this conduct, Erwin purchased. In the pres ent case, on the contrary, it is distinctly proven, by two wit nesses, that Jeter, “in a loud and audible tone,” announced “to the sheriff and the by-standers ” that he was the owner of the property, and forbade the sale of it; and this announce ment was made before the property was adjudicated to Hewitt & Heron.”

“He made his objections known publicly to the crowd.” The sheriff answered, that “he would proceed with the sale.”

The only facts relied on by the defendants, as creating an estoppel, are, first, that Jeter was present at the sale, and, when the property was first offered, bid for it $70,000, and it was knocked down to him; and secondly, that in 1852 he joined with Mrs. Ford in making a deed for forty arpens of the land, to Hewitt & Heron, for $2,000.

As to the first, his bid was for the protection of his own in terest, and to avoid litigation. He had already paid Mrs. Ford $5,000, and he had agreed to pay, not only the debts charged on this property, but all the debts. Such a fact, even if the other party had acted upon it, could create no estoppel.

Hearne v. Rogers, 17 Eng. C. L. Rep., 451, 452.

But Hewitt & Heron did not act upon it. The sheriff re fused Jeter’s draft on Hill, McLean, & Co., of New Orleans, with whom he had arranged for the money, and refused him time to go to New Orleans to produce the money, and c manded that he should pay in cash the amount of his bn within half an hour, or he would set up the property and se it again, which he did.” .

Then it was that Jeter gave notice of his title, and for a e the sale; and Hewitt & Heron purchased under this notice.

As to the deed made in 1852, so far from importing a yec®© nition of the title of Hewitt & Heron, it would rathei sign y

an admission by them that, at least as to this fragment of forty acres, it required confirmation by a deed from Jeter.

In no view of these facts can they operate an estoppel. The general current of authorities, English and American, estab lishes the principle that a declaration in pais shall not work an estoppel, unless it appears affirmatively that it was intended that the party for or to whom it is made should act on the faith of it, and that he actually did so act, and will be preju diced by the contrary assertion. If it be necessary to cite authorities for this, they will be found collected in Hare & Wallace’s note to Howard & Hudson, (2 Ell. and Bl., 13, Amer, ed.,) and in the principal case. Here there was express warn ing given.

Upon the question that the merits of the case were not open for review in this court, Mr. Benjamin made the following points:

I. This action, plainly, is based on the assumption that the proceedings in the State courts of Louisiana (under which the title of Ford’s succession to the property was divested, and the property was sold to defendants) are an absolute nullity.

It is an attempt, indirectly, to bring before the Federal courts jurisdiction of a question which, under the decisions of this court, cannot be examined by them.

Had the courts of Louisiana jurisdiction of the property ap pertaining to Ford’s succession, and have they exercised that jurisdiction by disposing of that property? Manifestly, yes.

How, then, can that disposition of the property be super vised or revised by the Federal courts ?

This court has always declined to permit the proceedings 0 even the inferior State courts to be attached collaterally before it.

Tarver v. Tarver, 9 Peters, 174.

Gaines v. Chew et al., 2 How., 619, 644.

Fonvergne et al. v. City of New Orleans, 18 How., 471. Hagan v. Preston, decided at present term. In this case, the plaintiff goes to the extravagant length of

calling on the court not to annul the proceedings of an inferior State court as irregular or illegal, but to treat the final decision of the Supreme Court of Louisiana as an absolute nullity.

The form chosen for the action (a simple petitory action or ejectment) is a transparent device used by plaintiff to avoid the necessity of bringing an action to set aside the judgment of the Supreme Court of Louisiana, he being conscious that such action would be utterly untenable.

II. Jeter was a party to the suit determined by the Supreme Court of Louisiana, and it forms res judicata.

It is true, he was not a party by name; but the opinion of the Supreme Court is explicit, that Mrs. Ford’s action as ex ecutrix was for the use of Jeter. Its language is: “We think it inequitable to permit this sale to be questioned by the ex ecutrix, whom we consider as merely attempting to aid Jeter, her vendee and agent, in a speculation, at the expense of these bona fide purchasers, under the guise of representing a small minority of the creditors, whom she personally and Jeter are bound to pay.”

But, aside from this decision, the record permits no doubt that the suit decided in Louisiana was Jeter’s suit. In the sale from Mrs. Ford to him, he exacted a promise that she would furnish him “ my letter of substitution to appear for me and in my stead, to appear and act in any court, * touching matters or interests in any manner connected with the active or passive properties, goods, or effects, of the afore said succession.”

She did give him just such a power; and, having sold to him her entire interest in the estate, and obtained his obliga tion to pay the debts, she withdrew from the whole business, leaving to Jeter, who alone had an interest, permission to use her name, and it was Jeter who brought the suit.

Having once litigated his rights through all the courts o Louisiana, the plaintiff cannot renew the contest in the e eral courts. The exceptio rei adjudicates is a complete bar o his suit.

HI. The monition, proceedings, and judgment on them, a in the nature of proceedings in rem, and bind all the wor,

even those ignorant of their pendency—a fortiori, do they bind one who, like Jeter, was not only conusant, but was active in opposition.

The monition law of Louisiana (Acts 1834, p. 125, Revised Statutes, 1852, p. 425) is a wise and beneficial statute, and should be liberally construed. It was passed for the protec tion of innocent purchasers at sheriff’s sales, and by the fourth section the court that issued the process had jurisdiction.

By the sixth section, the judgment is conclusive evidence that the proceedings of the court on the monition were regu lar; and by the seventh section, the judgment of the court confirming the sale operated as res judicata, and a com plete bar against all persons, whether of age or minors, whether present or absent; and the judgment is to be considered as “full proof, and conclusive that the sale was duly made in virtue of a judgment or order legally and regularly pronounced on the interests of parties duly represented.”

There is nothing in the 8th section which can release the plaintiff from the effect of this estoppel, because “notices cf the sale and appraisement were served by the sheriff, by leaving them on the plantation with the overseer, and plaintiff had notice of the sale, and was present at it, and bid for the property.”

Besides, plaintiff was in the place and stead of Ford, and had his rights, and no more. But Ford had confessed judg ment in the original mortgage, and had thereby waived cita tion to make defence.

When a mortgage is granted with confession of judgment, executory process issues at once without citation, (Code Prac tice, 734,) and is in the nature of the Ji. fa. that is issued on such judgments as are confessed in court.

IV. Jeter’s presence at the sale, his bidding, his failure to notify other bidders of any opposition to the sale, form a comP ete estoppel en pais, as well under the principles of equity jurisprudence as by the settled rules of the law of Louisiana.

Harris v. Denison, 8 L. R., 543.

Dozer v. Squires and al., 13 L. R., 130.

Walker v. Allen and al., 19 L. R., 308.

McMasters v. Commissioners, &c., 1 Annual, 11.

Muir, Syndic, v. Henry and al., 2 Annual, 593.

Moore v. Lambeth, 5 Annual, 67.

Bank of Louisiana v. Ford, 9 Annual, 299.

V. Both Mrs. Ford and Jeter were parties to a deed, by which, in consideration of $2,000, they ratified the title of the purchasers.

This deed was passed on the 11th April, 1851. It had reference to the property now in dispute. Compare descrip tion in deed with testimony of Robert Maurin, the plan H, the testimony of P. O. Ayraud, and T. Ayraud, Chapman’s testimony, and the description in the mortgage to Bank of Louisiana, the identity of'the tract will be apparent. Besides which, the recitals of the deed admit that the land which surrounds that described by its terms, on each side and in the rear, belongs to defendants. .

Mr. Justice CAMPBELL delivered the opinion of the court.

The plaintiff commenced this suit to recover a plantation and slaves, with the horses, mules, implements, and other things enumerated in the petition, destined to the use and convenience of the plantation, and for an account of rents and issues for a term of years. He deduces his title from Chris topher Ford, who was in possession of the plantation at his death, in 1849, through a conveyance from Louisa W. Ford, the widow, executrix, and instituted heir of her deceased husband, dated in November, 1850.

The defendants show, that in November, 1845, two banking corporations of Louisiana (Bank of Louisiana and New Or leans Canal and Banking Company) sold to Christopher Ford this plantation and twenty-eight slaves, for the price of $40,000, a portion of which was paid in cash, and for the remainder a credit was given, and that Ford mortgaged the property conveyed to him, and sixty-eight other slaves, whic he agreed to place on the plantation. On the same day,, e obtained from the Bank of Louisiana a loan of money, whic was secured by another mortgage on the same property.

the time of the death of Ford, he was in arrears for the debt and interest that had accrued.

In the mortgage to the Bank of Louisiana, Ford agrees not to alienate, deteriorate, or encumber, the property mortgaged, and confesses judgment for the sum of money to be paid. He renounces the benefit of the laws that require property seized on execution to be sold on credit or after appraisement, and agrees, that if the debt shall not be paid according to the tenor of the mortgage, then the banking company may obtain an order of seizure and sale, and sell the mortgaged premises and slaves by public auction, for cash, after an advertisement of thirty days. He waives his privilege to be sued in any other district than the first judicial district of the State, and agrees that process may issue from the District Court for the first district, or any other court in New Orleans having iurisdiction.

The charter of the bank provides, that upon all mortgages executed under the act, the bank shall have the right to seize the property mortgaged, in whatever hands it may be, in the same manner and with the same facilities that it could be seized in the hands of the mortgagor, notwithstanding any sale or change of the title or possession thereof, by descent or otherwise.

On the 16th December, 1850, after the conveyance of Mrs. Ford to the plaintiff, the Bank of Louisiana instituted a suit upon the second mortgage above mentioned; a writ of seizure and sale issued, and the property was advertised for sale the 1st February, 1851. Jeter was present at the sale that took place on that day, bid for the property the sum of seventy thousand dollars, and it was adjudicated to him at that price.

e offered a draft for the amount of the execution, on mer chants residing in New Orleans, and asked for time to go for e money; and these being refused, the ..property was again o ered for sale, and purchased by Heron & Hewitt for the price o sixty-six thousand dollars; and thereupon the sheriff execu-

TF t0 Purc^asers? conformably to the adjudication.

is sum being insufficient to discharge the encumbrances On e property, proceedings were taken for the seizure and

sale of other slaves, which were sold in September, 1851, and adjudicated to the defendants.

The defendants resist the claim of the plaintiff under these titles. The plantiff objects to them—

1. That Eord, the mortgagor, was dead at the commence ment of these proceedings, and that the notice issued to him was nugatory; that his heir and executrix was not notified at all, and did not reside in the parish of Ascension, nor have any title to the plantation at which the notices of the seizure were left; and that the plaintiff is not concluded by his pres ence at the sale and bid for the property, having forbade the sale before the offer at which the defendants became the pur chasers was made.

2. That the sale was irregular and illegal, in respect of the notice of the seizure, the advertisements, appraisement, and

refusal to allow the plaintiff time to complete his purchase.

3. That the fifth District Court was not authorized to enter tain a suit for a thing in the parish of Ascension; and that, if consent could give jurisdiction, the consent given by Ford in his mortgage was personal, and binding only in respect to his own privilege, and did not affect his heir or her assignee.

The purchasers, Heron & Hewitt, in April, 1852, applied to the District Court of Hew Orleans, under a statute of Lou isiana, for a monition, citing all persons who can set up any right to the property adjudicated, in consequence of any in formality in the order, decree, or judgment of the court, under which the sale was made, or any irregularity or illegality in the appraisements and advertisements, in time or manner of sale, or for any other defect whatsoever, to show cause why the sale so made should not be confirmed and homologated, an, after due proceedings in the premises, that the said sales be confirmed, homologated, and made the final judgment of the court.

The executrix (Louisa W. Ford) appeared to this monition, and made opposition to the homologation of the sale, an us closed at large the objections above specified, and prayed t a the sale be declared null and void, and that the proper y might be restored to her possession.

To this opposition Heron & Hewitt replied, that they were bona fide purchasers at a public sale by the sheriff of Ascen sion, under a writ from the court, without any knowledge of neglect, or illegality, or want of jurisdiction; that the oppo nent had sold her interest in the property, and was estopped to oppose the sale by her acts. They pleaded that the mort gage contained a confession of judgment, and no notice was necessary to any one to obtain a judgment; and assert there is no just cause to deny the homologation of the sales.

The District Court, at the November term, 1852, entered an order describing the property embraced in the sheriff’s deed, and reciting the facts relative to the grant of the monition, and the motion for the homologation of the sale, and con clude:

“ The court being satisfied, from inspection of the record and evidence adduced, that all the formalities of the law have been complied with; that the advertisements required have been inserted and published for the space of time and in the manner required by law; that the property has been correctly described, and the price at which it was purchased truly stated; and there being but one opposition filed thereto, to wit: by Mrs. Christopher Ford, it is adjudged and decreed that said sheriff’s sale be confirmed and homologated accord ing to law, in so far as the same has not been opposed.”

The cause was continued in the District Court, upon the opposition proceedings of Mrs. Ford.

In June, 1853, the District Court rendered the judgment upon this opposition, that the sale was null and void, for the reasons pleaded, and condemned the petitioners (Hewitt & Heron) to costs. An appeal was taken to the Supreme Court of Louisiana. That court rendered its judgment in 1854.

The court say: The appellants are bona fide purchasers at a judicial sale of the plantation and slaves, at the instance of a mortgage creditor, at a fair price, which has been paid, and possession taken, and improvements made. That, as executrix, rs. Ford had done nothing, except to obtain probate of the 1 1, and as heir she has sold her interest to Jeter in the estate, e covenanting to pay the debts, and that she gave him a power

to sell and administer the estate. That Jeter had failed to comply with his hid at the sheriff’s sale, and that then the appellants had become the purchasers, settled with mortgage creditors, and took possession. “Under these circumstances,” the court conclude, “we think it inequitable to permit this sale to be questioned by the executrix, whom we consider as merely attempting to aid Jeter, her vendee and agent, in a speculation, at the expense of these bona fide purchasers, under the guise of representing a small minority of the cred itors, whom she personally and Jeter are bound to pay. It is obvious, under the facts above stated, that neither of them, Jeter and Mrs. Ford, would be permitted personally to ques tion the sale, on account of the alleged informalities.” And thereupon the decree of the District Court was reversed, and the opposition dismissed, reserving to the creditors their right, if any, to sue for a rescission of the sale. Bank of Louisiana v. Ford, 9 Ann., 299.

The effect of the judgment confirming and homologating the sale is declared in the statute that authorizes the monition to issue, in favor of purchasers of property “at sheriffs sales, at those “made by the syndics of insolvents’ estates,” at those “made by the authority of justice,” or of courts, and to enable them “to protect themselves from eviction from the property so purchased,” and “from any responsibility to the possessors of the same.” It confers upon the order made by the court upon the monition, “the authority of res judicata” so as to operate “as a complete bar against all persons, whether of age or minors, whether present or absent, who may thereafter claim the property so sold, in consequence of all illegality or informality in the proceedings, whether before or after judg ment;” and the judgment of homologation is to be receive and considered “as full and conclusive proof that the sale was duly made according to law, in virtue of a judgment or or er legally and regularly pronounced on the interest of the paitie» duly represented,” saving and excepting, “that it sha no render a sale valid made in virtue of a judgment, when party cast was not duly cited to make defence. .

The judgment of the District Court homologating t e sa

concluded all parties except Mrs. Ford, who had filed oppo sition to the order. Subsequently the Supreme Court over ruled her opposition, assigning as the reason that the sale was fair, the purchasers bona fide, and the opponent had no inter est in the subject of contest. The plaintiff, whether we con sider him as acting independently or in connection with Mrs. Ford, and under the “guise of her name” and character, is affected by these orders.

By the very terms of the statute, all the objections that apply to the manner of conducting the sale and to the form of the judgment are cut off by the judgment of homologation.

The only question that the judgment leaves open is, whether the court that rendered the original judgment had jurisdiction of the person. But this question was presented to the District Court and the Supreme Court upon the opposition of Mrs. Ford, in the same manner in which it is presented to this court. The facts of the death of Ford, the probate of his will in the parish of Ascension before the order of seizure, the seizure within three days from the date of the order, the

notice directed to Ford, and left at the house of the overseer,

in the absence of Mrs. Ford, and after her sale to Jeter, the

presence of Jeter at the sale, the adjudication to him of the'

property upon his bid, and the resale upon his neglect to com

ply with the terms of the sale, and the purchase by Heron &

Hewitt, with the sheriff’s deeds to him, were presented to

those courts upon the evidence that has been submitted to

this court.

The decision of the Supreme Court of Louisiana was, that

as executrix, Mrs. Ford did not really and truly represent the

interest of the creditors of her husband in her opposition, and

that she used that title to protect her own interest and that of

Jeter, her agent and vendee—but that they would not be per

mitted “personally to question the sale, on the score of the

alleged irregularities.”

The authority of res judicata as a medium of proof is acknowl-

e ged in the civil code of Louisiana; and its precise effect in

e particular case under consideration is ascertained in the

statute that allows the proceeding by monition. Under the

system of that State, the maintenance of public order, the repose of society, and the quiet of families, require that what has been definitely determined by competent tribunals shall be accepted as irrefragable legal truth. So deeply is this prin ciple implanted in her jurisprudence, that commentators upon it have said, the res judicata renders white that which is black, and straight that which is crooked. Facit excurvo rectum, ex albo nigrum. No other evidence can afford strength to the presumption of truth it creates, and no argument can detract from its legal efficacy.

The jurisdiction of the courts of the United States, in cases like the present, is derived exclusively from the fact that the parties are citizens of different States. The rights of these parties originate in the law of Louisiana, and must be ascer tained by a reference to the principles adopted and adminis tered by her constituted authorities. We are not invested with power to review the sentences of her courts, except in a few cases arising under the Constitution and laws of the United States; nor is it our province to augment or diminish their value, or to place any different estimate upon them than they have in the municipal code of the State. They are entitled to the same force and effect here as they have in Louisiana.

The statement of the case of these parties shows conclusive ly that the whole subject of this controversy has been legally submitted to the tribunals of Louisiana, and that the adjudi cation was in favor of the defendants.

This was the decision of the Circuit Court of the United States in Louisiana, from whose judgment this writ of error has been taken. It remains for us only to affirm that judg ment.

Judgment affirmed.

William H. Aspinwall, Joseph W. Alsop, Henry Chauncey, Charles Gould, and Samuel L. M. Barbour, Plaintiffs, v. The Board of Commissioners of the County of Daviess.

The charter of the Ohio and Mississippi Railroad Company, passed by the Leg islature of Indiana in 1848, and a supplement in 1849, authorized the county

commissioners of a county through which the road passed to subscribe for stock and issue bonds, provided a majority of the qualified voters of the county voted, on the 1st of March, 1849, that this should be done. The election was held on the appointed day, and a majority of the voters voted that the subscription should be made. But before the subscription was made, the State adopted a new Constitution, which went into effect on the 1st November, 1851. One of the articles pro hibited such subscriptions, unless paid for in cash, and prohibited also a county from loaning its credit or borrowing money to pay such subscriptions. In 1852, the county commissioners of Daviess county subscribed for stock in the railroad company, and issued their bonds for the amount. The provisions of the railroad charter, authorizing the commissioners to sub scribe, conferred a power upon a public corporation or civil institution of Gov ernment, which could be modified, changed, enlarged, or restrained, by the legislative authority, the charter not importing a contract, within the meaning of the clause of the Constitution prohibiting a State from passing a law im pairing the obligation of contracts. The mere vote to subscribe did not, of itself, form such a contract with the rail road company as would be protected by the 10th section of the 1st article of the Constitution of the United States. Until the subscription was actually made, the contract was unexecuted. The bonds were issued in violation of the Constitution of Indiana, and are there fore void.

This case came up from the Circuit Court of the United States for the district of Indiana, on a certificate of division in opinion between the judges thereof.

The nature of the case and the certificate of division in opin ion are stated in the opinion of the court.

It was argued by Mr. Vinton and Mr. Benjamin for the plaintiffs, upon which side there was also a brief filed by Mr. Judnh, and by Mr. Porter, upon a brief filed by himself and tHr. McDonald, for the defendants.

The points for the plaintiffs were very much illustrated by . Vinton and Mr. Benjamin, in their arguments. Essen tially, however, they are stated in the brief of Mr. Judah, from w ich the following statement of them is taken: th (lue8^on on which the judges differed relates to e nature of the right granted by the act of incorporation, an y the amendment to that act to the railroad company, to

receive county subscriptions. In other words, was it a vested right, beyond the reach of a law or Constitution made after wards ?

There is no provision in the new Constitution of Indiana as to existing rights, either personal or corporate, except the ordinary declarations, “No man’s property shall be taken by law, without just compensation.”

Art. 1, sec. 21.

And “no law impairing the obligation of contracts shall ever be passed.”

Art. 1, sec. 24.

We assume that the property of private corporations is pro tected by section 21.

By the act of incorporation, a capital of five millions is con templated; but the company is allowed to organize on the subscription of two hundred thousand dollars, and a payment at the time of subscription is required. By the 12th section, counties are authorized to subscribe for stock, as, by the 6th section, all persons of lawful age and all corporations of the United States may subscribe. Does the power exist anywhere to restrain these rights, against the will of the company ? If the company may be deprived of one of these classes of sub scribers, it may be deprived of all; and thus its entire capacity may be destroyed, and itself in effect annihilated.

But it is argued that counties are municipal corporations, that municipal corporations are under the control of State leg islation; and that those who contract with them contract sub ject to this control. And we answer, it is true that muncipa corporations are subject to the control of the Legislature. That is the general rule. Is there not, in the nature of things, an exception ? If the Legislature creates a municipal corporation, and endows it with other powers—with powers “to contrac and be contracted with; ” with powers of a private and not o a political nature; with powers including the rights and uties and obligations of private corporations and individuals-- oes it not create an exception as to such rights, duties, an o i gations ? In such case, the Legislature may control, • solve the corporation, but the rights, the duties, an o ig

tions, will remain chargeable on its property. And we refer to the opinions of this court in at least two cases.

Mumma v. Potomac Co., 8 Peters, 280.

Curran v. State of Arkansas, 15 How., 310.

The second question on which the judges differed covers more ground than the first question.

The declaration states and the demurrer admits an election and vote in favor of subscription in March, 1849, before the new Constitution. The question is, whether, by virtue of the act of incorporation and the amendment, and the election, the railroad company acquired such right to the subscription as would be protected by the Constitution of the United States.

We submit that this question only differs from the first question in being, if anything, stronger than the first in favor of the plaintiffs. In the first, a mere right, dependent on a certain discretion, is claimed. In this a right is claimed, so perfected that nothing remained but the discharge of a minis terial duty.

The law is plain: “And if a majority of the votes given shall be in favor of subscription, the county board of said county shall subscribe.”

Sec. 2, act Jan. 15, 1849.

There is no discretion. There is only a duty; and this, by the law of Indiana, may be enforced by mandamus. Writs of mandate issue “to compel the performance of an act which the law specially enjoinsi.”

Section 739. •

And “ obedience to such writs may be enforced by attach-Dient, and fine or imprisonment, or both.”

Sec. 745, 2 Rev. Stat., 197, 198.

Hence, when the new Constitution took effect, there was an absolute vested right in the company to $30,000 subscription iom the county of Daviess, to be paid in bonds of a certain escription; and we submit, that this right is a matter of con

tract, secured by the Constitution of the United States.

Planters’ Bank v. Sharp, 6 How., 301.

Slack et al. v. Lex. and Maysville Railroad Co., 13 B, Munroe, 1.

And so in 12 Ben. Munroe, 150.

The counsel for the defendants, after stating the case, made the following points:

By the statutes of Indiana, county commissioners are bodies “corporate and politic.”

1R. S. of 1852, p. 225.

The declaration charges them as “ a corporation created by the State of Indiana.” Touching the matter in controversy, the first act which they performed—that of subscribing the stock—they performed as a corporation, on the 10th Septem ber, 1852. And the question is, did the Constitution of 1850 prohibit that act? We say it did. And in support of this view, we suggest the following considerations:

1. The constitutional prohibition is that “ no county shall subscribe for stock in any incorporated company, unless the same be paid for at the time of such subscription.” The spirit and intent of this clause seem very plain. Certainly the de sign was to prohibit counties from involving their people in debt for corporation stocks. And it is equally certain that any subscription by which such a debt is created is within the prohibition. Nor is it less clear that the prohibition applies to all such debts, whether created directly or indirectly for such stocks. The mischief intended to be guarded against was the burdening of the people with taxes to pay debts con tracted for corporation stocks. And the power to impose that burden in any manner is the thing prohibited.

2. Was the stock “paid for at the time of the subscrip tion ? ”

The existence of this suit is an answer to the question.

The phrase, “paid for at the time,” in the Constitution, certainly means more than the making of a promise or obliga tion to pay. The writer of the declaration in question no doubt intended, in drawing it, to escape the prohibition in t e Constitution by averring that “ in payment for the said stoc' the bonds were executed. But this is a mere evasion. The ma king of the coupon bonds could not be a payment within t meaning of the Constitution; at most, it was only an engage

ment to pay. If the Constitution tolerates such a mode of payment as that, its provision is utterly idle. For then every county may run in debt as much as it pleases for corporation stock by the mere trick of.saying the stock was “paid for at the time ” by making bonds. It is obvious that, upon such a construction, the very evil intended to be guarded against—burdening the county with debt — would still exist in full vigor; and that not only the chief object, but the sole object of the prohibition would be thwarted.

Payment is a technical term, and in strictness implies the discharge of a debt by the delivery of money. Thus, in plead ing, if the defence is that we have done what we engaged to do, we allege, in cases of engagements to do something be sides paying money, performance, and in cases of money debts, we plead payment. Every lawyer knows the distinction be tween the pleas of performance and payment. The Supreme Court of Indiana has held that a plea of payment in anything else than money is a bad plea.

Sinard v, Patterson, 3 Blackf., 353.

The two words debt and payment always refer to money. Thus we say we pay a debt, and we perform a contract for the delivery of property, or to do work.

The constitutional provision in question requires that the stock subscribed “ be paid for at the time of such subscrip tion. Payment must be simultaneous with the subscription. In this case, we contend that payment has not yet been made; but if even in this we were wrong, still it does not appear that t e payment alleged in the declaration was made “at the time of the subscription. The averment is, that “afterwards, to wit: on the day and year aforesaid, in payment for said stock,” the bonds were issued.

he “subscription” mentioned in the declaration must, in erms, have been a money subscription, an engagement to pay pOney for stock. The declaration says, that “in conformity ? <the said acts, the defendants subscribed for 600 shares,” J? of the value of $30,000.” The subscription, then, was m conformity with the acts.” These acts give the form of vol. xxii. 24

the subscription. It is found in the fifth section of the charter of 1848, thus:

“ We, whose names are subscribed hereto, do promise to pay to the president and directors of the Ohio and Mississippi Railroad Company the sum of fifty dollars for every share of stock set opposite to our names, respectively, in such manner, proportions, and times, as shall be determined by said company in pursuance of the charter thereof.”

This is the only form of subscription given in the two acts. Section 5 of the charter requires this form to be pursued. Both by the declaration and the charter, it must be supposed to have been pursued in the subscription under consideration. It was undoubtedly an engagement to pay money “ in such manner, proportions, and times,” as the company should after wards determine.

Now, as the engagement was to pay in money, the delivery of something else—bonds, for example—could not in any event amount to payment, unless accepted by the company as pay ment. It would indeed then be an accord and satisfaction, and not a payment. But even supposing that it might he re garded as payment, it certainly could not be so considered un less it was received as such by the company. This is the doc trine of Maze v. Miller, 1 Wash. C. C. R., 328.

Now, the declaration has no averment that the company ever received these bonds either as payment or in accord and satis faction. It therefore does not appear that payment for the stock was made “ at the time” of the subscription.

The Supreme Court of Indiana has given a construction to the prohibitory clause in the Indiana Constitution. They say, “ This section, by implication, concedes the power to counties to take stock, at all events by permission of the Legislature, in companies chartered to construct works of internal im provements, under the new Constitution, by making cas payment at the time.”

The City of Aurora v. West, 9 Ind. R., 78.

Cash payment is the meaning of the section.

Even if the stock was paid for at the time, still the transac tion was clearly in violation of that part of the Indiana Cons i

tution which declares that no county shall 11 loan its credit to any incorporated company.”

Undoubtedly the issuance of the bonds in question was lending the credit of the county to this railroad company. This was the prime object of the transaction. The bonds were drawn in the usual form to be put into the market. They were put into the market, or the plaintiffs would never have got them; and putting them in market was using the credit of the county which it had loaned to the company.

3. It is said by the plaintiffs that the vote to take stock, given by the people of Daviess county before the Constitution of 1850 took effect, amounts to a contract, the obligation of which is protected by the Federal Constitution against the prohibition in the Constitution of Indiana.

It is understood that the plaintiffs claim, first, that the vote amounted to a “ contract ” within the 10th section of the 1st article of the Federal Constitution; and, secondly, that the prohibition in the Indiana Constitution is in violation of the company s charter, which permits li the county commissioners of any county through which the railroad passes” to subscribe stock. Let us examine each of these points:

1. Did the vote of the people amount to a “contract,” which the Federal Constitution protects? We say, no; for that vote was not a contract at all. “ A contract is an agreement upon a sufficient consideration to do or not to do a particular thing.” An agreement” is the binding assent of both parties. This aggregatio mentium is indispensable to every contract. In this sense, the people of the county could not by vote enter into an agreement; ” for they are not a body politic, and they canaot be sued. It is the board of commissioners that can agree, not the voters. This contract is not alleged to have been made wit the voters, but with the commissioners. Not the voters, nt the commissioners, are sued. If the vote amounted to a con ract, it was the contract of the voters; and it will be time uoug, when these voters are sued, to inquire whether they contracted. It is, for the present, enough to know that the defendants, the board of commissioners, never conac e till after the Constitution of 1850 took effect.

And if the voters had power to make a contract by a vote to take stock, still their vote could not amount to a contract till the company also agreed. To a contract there must, of course, be the assent of both parties. Now, it does not appear by the record that the railroad company ever assented to this sup posed contract till the time of the subscription, which, as we have seen, was long after the constitutional prohibition took effect. As, then, there was no assent by both parties till after the first day of November, 1851, there could have been no contract till after that day. And as the making of the con tract after that day was prohibited by the Indiana Constitu tion, there could not have been, in the case, any contract pro tected by the Federal Constitution.

The case of the Baltimore and Susquehanna Railroad v. Nebit, 10 Howard, 395, is fully in our favor on this point. There the charter provided that the company might take land for the use of the road, upon having the damages to the ^wner assessed by a jury, and upon tender of such damages to the owner. Damages had been so assessed, and afterwards, and before a tender, the Legislature, by law, set aside the assess ment. The question was, did this violate a contract ? And it was held that it did not, because, there having been no ten der, no acceptance by the corporation, there was no contract. And the reasoning of Mr. Justice Daniel, on p. 399, supra, ap plies with full force to the present case.

Whether there was a subsisting contract at any time before November 1, 1851, may be tested by inquiring whether it could before that time have been enforced against the com pany. Suppose that before that date, and after the voting, t e county commissioners had insisted on their right to su ®cr^ pursuant to the vote, and the company had refused to ta e subscription, it is perfectly clear the company would not av been liable for such refusal. The obvious answer o an action for so refusing would have been, that the had never assented to the proposition presented by t e vo to take stock. . . . . i«tion

2. Is the prohibition in the Indiana Constitution in vi of the company’s charter, which provided that coun y

scriptions of stock might be taken ? In other words, since a charter is in some respects and in some sense a contract, is the provision in the charter of the Ohio and Mississippi Railroad Company, allowing counties to subscribe for stock therein, such a contract as is contemplated by the Federal Constitu tion ?

All the provisions of the charter and its amendments touch ing county subscriptions are above copied into thié brief. These provisions gave no vested right of property to the company; they merely bestow on counties the power to subscribe for stock—a power which, by the general laws of Indiana, did not before exist. They merely operate as enabling acts—as acts removing disabilities.

Touching the constitutional prohibition against the passage of laws “impairing the obligation of contracts,” Mr. Story says: “That the framers of the Constitution did not intend to restrain the States in the regulation of their civil institu tions, adopted for internal government, is admitted; and it has never been so construed.”

Story on the Constitution, sec. 1392. Undoubtedly, the Indiana Legislature might at any time re peal all laws incorporating counties and county boards, and thus disable them from subscribing for any stock or making any contract. Nor is it to be for a moment tolerated that the egislature of Indiana, by granting a charter to a railroad company, could have intended to abandon any portion of its egislative power over the counties of the State.

As every charter stands, all natural persons not laboring tto er disabilities may take stock. But who ever thought at the Legislature may not, after the grant of the charter, by aw impose disabilities on some of these natural persons? appose that at the time of the passage of a charter, married ^aW caPa^^e contracting by subscribing for oc, can it be said that the Legislature cannot afterwards aw impose on them the usual disability of femes covert ? o, we think it clear that the Constitution of Indiana might Pose on the counties the disability in question.

e case the Richmond, &c., Railroad Company v. the

Louisa Railroad Company, 13 Howard, 71, where the Legis lature of Virginia, in a charter, gave a pledge not to allow any other railroad to be constructed near the one chartered, and afterwards another railroad was chartered contrary to that pledge, it was held that the first charter was not violated within the meaning of the United States Constitution touching the obligation of contracts. That was certainly a much stronger case than the one now under discussion; and as long as it stands for law, surely the defendant in this case is safe.

The case of Covington and Lexington Railroad Company V. Kenton County Court, 12 B. Munroe, 144, is in point on this question. There the charter of the company had author ized the county court, under a certain vote of the people, to subscribe stock. The people had voted for it, but the County Court refused to subscribe, and in the mean time the Legisla ture repealed the provision of the charter authorizing county subscriptions. This repeal was held no violation of a con tract, because, “ until an actual subscription of the stock was made, no right to it vested in the company.”

Upon the whole, we submit that it is perfectly clear that the question propounded in this case, for the decision of the court, ought to be decided in the affirmative.

Mr. Justice NEL SOK delivered the opinion of the court.

The case comes up from the Circuit Court of the Unite States for the district of Indiana.

The suit was brought by the plaintiffs against the board o commissioners of the county of Daviess, to recover two in stalments of interest accruing upon certain bonds issue. y the board for stock subscribed to the Ohio and Mississippi Railroad Company; and on the hearing the following ques tions arose, upon which the judges of the court divide in opinion: .a \1. Whether, by the said act of incorporation of e s

railroad company, and the amendment thereto of January 1849, any such right to county subscriptions veste in company as would exclude the operation of the new ons

tion of Indiana, which took effect on the 1st day of November, 1851.

2. Whether, by virtue of the said acts, and of the said elec tion in the declaration set forth, the Ohio and Mississippi Kailroad Company acquired any such right to the subscription of the defendants as would be protected by the Constitution of the United States against the new Constitution of Indiana, which took effect on the 1st day of November, 1851.

The charter of the railroad company, passed February 14, 1848, provides that it should be lawful for the county com missioners through which the road passed to subscribe for stock on behalf of the county, at any time within five years after the opening of the books of subscription, if a majority of the qualified voters of said county, at an annual election, shall vote for the same.

The amended act of January 15, 1849, made the holding

of the election in the county peremptory on the first Monday

of March (then) next, to determine the question of subscrip

tion or not to the stock.

The election was held in pursuance of this law, and a ma

jority of the votes of the county cast in favor of the subscrip

tion. This was on the first Monday of March, 1849; and on

the 10th September, 1852, the board of commissioners, in

pursuance of the acts and of election aforesaid, subscribed for

six hundred shares of the stock of the railroad company, of

the value of $50 per share, in the whole amounting to $30,000,

aud in payment of said stock issued thirty bonds, of $1,000

each, duly signed and sealed by the president of the board

of commissioners, and attested by the auditor of the county,

and delivered the same to the president and directors of the

railroad company. By the terms of the obligations, they

were made payable at the North River Bank in the city of

ew York, twenty-five years from date, to the railroad com

pany or bearer, with interest at the rate of six per cent, per

annum, payable annually on the 1st March, at the bank afore-

®ai, upon the presentation and delivery of the proper coupons

a ched, signed by the auditor of the said county. The

P aintifls are the holders and owners of sixty of these coupons.

The new Constitution of the State of Indiana contains the following provision:

“ No county shall subscribe for stock in any incorporated company, unless the same be paid for at the time of such sub scription; nor shall any county loan its credit to any incorpo rated company, nor borrow money for the purpose of taking stock in any such company.” Sec. 6, art. 10, Constitution of Indiana.

This Constitution took effect on the 1st November, 1851. The subscription was not made nor bonds issued by the board of commissioners of the county, as we have seen, until the 10th September, 1852. The question therefore arises, whether the subscription and bonds, thus made and issued after the Constitution went into effect, were not forbidden by the 6th section of the 10th article above cited, and therefore null and void.

The precise question first presented by the court below, upon which the judges divided, is as follows:

Whether, by the said act of incorporation of said railroad company, and the amendment thereto of January 15, 1849, any such right to county subscriptions vested in said company as would exclude the operation of the new Constitution of Indiana, which took effect on the 1st November, 1851.

The question admits, at least by implication, that this sixth section of the Constitution applies to the acts of the board of commissioners, in making the subscription and issuing the bonds; but presents the question, whether, at the time it went into effect, there was not such a right to the subscription and bonds vested in the railroad company as could be upheld, notwithstanding the constitutional prohibition ?

This view is sought to be sustained by force of the 10th section of the 1st article of the Constitution of the United States, which provides that no State shall pass any law “im pairing the obligation of contracts.”

The argument is, that the provisions in the railroad charter and amendment, conferring power upon the board of com missioners of the county, and making it their duty to subscri e for stock, and issue bonds therefor, if a majority of the qua

ified voters of the county should determine at an election in favor of the same, import a contract with the railroad company on behalf of the State, which is protected by the clause refer red to in the Constitution of the United States; and hence the State constitutional prohibition is inoperative to annul the subscription or the bonds. That this right to the subscription and bonds, resting upon a contract in the charter, is unaffected by any subsequent statute or organic law of the State.

Without stopping to inquire whether or not the power con ferred upon the board of commissioners in the charter and amendments of the railroad company, in the form and with the conditions therein mentioned, constitutes a contract, the court is of opinion that, in view of the body upon which the power is conferred, and of the nature of the power itself, no such contract existed, if any, as is contemplated by this clause of the Federal Constitution. The power or authority con tained in the charter, and out of which the right in question is claimed to arise, is conferred upon the county, a public corporation or civil institution of government, and upon pub lic officers employed in administering its laws; and the power or authority7 itself concerns this body in its public political capacity.

Chief Justice Marshall observed, in Dartmouth College v. Woodward, (4 Wh., 627,) that the word contract, in its broad est sense, would comprehend the political relations between the Government and its citizens; would extend to offices held within a State for State purposes, and to many of those laws concerning civil institutions, which must change with circum stances and be modified by ordinary legislation, which deeply concern the public, and which, to preserve good government, t c public judgment must control. But, he observes, the framers of the Constitution did not intend to restrain the . tates in the regulation of their civil institutions adopted for internal government, and that the instrument they have given us is not to be so construed, (p. 629.) And Mr. Justice Wash ington observed, in the same case, (p. 663,) in respect to pub-corporations, which exist only for public purposes, such as ns, cities, &c., the Legislature may, under proper limitations,

change, modify, enlarge, or restrain them; securing, however, the property for the use of those for whom, and at whose ex pense, it was purchased. (See also pages 693, 694.)

It would be difficult to mention a subject of legislation of more public concern, or in a greater degree affecting the good government of the county, than that involved in the present inquiry. The power conferred upon the board of commis sioners by the provisions in the charter, among other things, embraced the power of taxation, this being the ultimate resort of paying both the principal and interest of the debt to be in curred in the subscription and issuing of the bonds.

The second question presented, upon which the judges dif fered, is as follows:

Whether, by virtue of said acts, and of the said election in the declaration set forth, the Ohio and Mississippi Railroad Company acquired any such right to the subscription of the defendants as would be protected by the Constitution of the United States against the new Constitution of Indiana, which took effect the 1st November, 1851.

The acts of 1848 and 1849, already referred to, made it the duty of the board of commissioners to subscribe for the stock, if a majority of the qualified voters at an election determined in favor of the subscription.

The election took place on the first Monday of March, 1849, when a majority of the votes was cast for the subscription. The Constitution of Indiana took effect 1st November, 1851. But the subscription was not made till the 10th September, 1852, and the bonds were issued after this date. It is insiste that the contract of subscription became complete when, at the election, a majority of the votes was cast in its favor, an did not require the form of a subscription on the books foi the stock of the railroad company to make it obligatory upon t e parties; and which, if true, it is agreed the contract woul e protected within the Constitution of the United States, as i would then have been complete before the constitutional pro hibition of Indiana. But the court is unable to concur in t is view. It holds, that a subscription was necessary to create a contract binding upon the county, on one side, to ta e

stock and pay in the bonds; and upon the other, to transfer the stock, and receive the bonds for the same. Until the sub scription is made, the contract is unexecuted, and obligatory upon neither party.

We have arrived at the conclusion that both of the questions presented to us by the court below must be answered in the negative with some reluctance, as, for aught that appears in the case, the subscription to the stock by the board of com missioners was made and the bonds issued in good faith to the railroad company, and also sold by it, and purchased by the plaintiff in confidence of their validity; but, after the best consideration the court has been able to give the case, it has been compelled to hold, for the reasons above stated, that the subscription was made, and the bonds issued, in violation of the Constitution of Indiana, and therefore without authority, and void.

We have not been able to find that the courts of Indiana have passed upon this clause of their Constitution, and have, therefore, been obliged to expound it with the best lights be fore us. We should have felt very much relieved, if a con struction had been given to it by the judicial authorities of the State, and have readily followed it.

ORDER.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the district of Indiana, and on the points or questions on which the judges of the said Circuit Court were opposed in opinion, and which were certified to this court for its opinion agreeably to the act of Congress in such case made and provided, and was argued by counsel. On consideration whereof, it is the opinion of this court:

1. That by the act of incorporation of the Ohio and Missis^PP1 Railroad Company of the 14th February, 1848, and the amendment thereto of January 15th, 1849, no such right to county subscriptions vested in said company as excluded the operation of the new Constitution of Indiana, which took c ect on the 1st day of November, 1851.

2. That by the virtue of the said acts, and of the said election in the declaration set forth, the Ohio and Mississippi Railroad Company acquired no such right to the subscription of the defendants as would be protected by the Constitution of the United States against the new Constitution of Indiana, which took effect on the 1st day of November, 1851. Where upon it is now here ordered and adjudged by this court, that it be so certified to the said Circuit Court.