The Sovereign alone can object.
Patterson, 5 Oreg. 177; Pac. R. Co. v. Seely, 45 | perial Gas Light & C. Co. 4 Barn. & Ad. 815. Mo. 212; Bestor v. Wathen, 60 Пl. 138; Linder 7. Carpenter, 62 Ill. 309; Marsh v. Fairbury, P. & N. W. R. Co. 64 Ill. 414; St. Louis, J. & C. R. Co. v. Mathers, 71 Ill. 592; Dudley v. Cilley, 5 N. H. 558; Dudley v. Butler, 10 N. H. 281; Cook v. Sherman, 16 Am. & Eng. R. R. Cas. 561; Davison v. Seymour, 1 Bosw. 88; Union Pac. R. Co. v. Durant, 8 Dill. 343, 1 Cent. L. J. 581; Western U. Teleg. Co. v. Union Pac. R. Co. 3 Fed. Rep. 1; Elkhart Co. Lodge v. Crary, 98 Ind. 238; Noel v. Drake, 28 Kan. 265; Byrd v. Hughes, 84 Ill. 174; Smith v. Applegate, 23 N. J. L. 352; Callagan v. Hal- lett, 1 Caines, 104; Wardell v. Union Pac. R. Co. 103 U. S. 651 (26:509); Koehler v. Black River Falls Iron Co. 67 U. S. 2 Black, 715 (17: 339).
The contract is ultra vires.
Pa. R. Co. v. Canal Comrs. 21 Pa. 22; Rice v. Minn. & N. W. R. Co. 66 U. S. 1 Black, 380 (17:153); MacGregor v. Deal & D. R. Co. 16 Eng. Law & Eq. 180; Madison W. & M. Pl. Road Co. v. Watertown & P. Pl. Road Co. 7 Wis. 59; Cent. R. & Bkg. Co. v. Smith, 76 Ala. 572; Pearcev. Madison & I. R. Co. 62 Ú. S. 21 How. 441 (16:184); Morris & E. R. Co. v. Sussex R. Co. 20 N. J. Eq. 542.
The doctrine of estoppel cannot be held to apply.
Marion Sav. Bank v. Dunkin, 54 Ala. 473; Chambers v. Falkner, 65 Ala. 448; Grand Lodge of Ala. v. Waddill, 36 Ala. 318; Ex parte Burnett, 30 Ala. 461; Montgomery v. Montgomery &W. Pl. Road Co. 31 Ala. 76; Eufaula v. McNab, 67 Ala. 588; Cent. R. & Bkg. Co. v. Smith, 76 Ala. 572; State v. Stebbins, 1 Stew. Ala. 308. Mr. H. C. Tompkins, for defendant in er
The demurrers raise every question that could be raised.
Chambers Co. v. Clews, 88 U. S. 21 Wall. 317 (22:517); Junction R. Co. v. Bank of Ashland, 79 U. S. 12 Wall. 226 (20: 385); Hanrick v. An drews, 9 Port. 9; Pitman v. Kintner, 5 Blackf. 250; Rodgers v. Brazeale, 34 Ala. 515; Craig v. Missouri, 29 U. S. 4 Pet. 410 (7: 903); Mason v. Eldred, 73 U. S. 6 Wall. 231 (18: 783); Mut. L. Ins. Co. v. Harris, 97 U. 8. 831 (24: 959). The contract was ultra vires.
Thomas v. West Jersey R. Co. 101 U. S. 85-86 (25:953); Union Nat. Bank v. Matthews, 98 U. S. 621 (25:188); Rider L. Raft Co. v. Roach, 97 N. Y. 378; Chicago & A. R. Co. v. Derkes, 1 West. Rep. 553, 103 Ind. 520; Ward v. Johnson, 95 Ill. 215; Darst v. Gale, 83 Ill. 136; Oil Creek & A. R. R. Co. v. Pa. Transp. Co. 83 Pa. 160; Camden & A. R. Co. v. May's Landing & E. H. C. R. Co. 4 Cent. Rep. 801, 48 N. J. L. 530; Wright v. Pipe Line Co. 101 Pa. 204; Memphis & L. R. R. Co. v. Dow, 19 Fed. Rep. 388; Bissell v. Michigan Southern & N. 1. R. Co. 22 N. Y. 258; Parish v. Wheeler, 22 N. Y. 494; Sturgeon v. Daviess Co. 65 Ind. 302; Green's Brice, Ultra Vires, 729, note a; 2 Morawetz, Corp. 689-696.
The stockholders cannot, after a third party has carried out in good faith his part of the contract, repudiate the liability of the corpora tion thereon.
Sheldon Hat Blocking Co v. Eickemeyer Hat Blocking Mach. Co. 90 N. Y. 607; Stewart v. Erie & W. Transp. Co. 17 Minn. 372; Watts' App. 78 Pa. 370; 2 Morawetz, Corp. § 625; Chicago, R. 1. & P. R. Co. v. Howard, 74 U. S. 7 Wall. 392 (19:117); Olcott v. Fond du Lac Co. 83 U. S. 16 Wall. 678 (21:382); Oates v. First Nat. Bank, 100 U. S. 239 (25: 580).
This court will not be bound by the decisions of the state courts on questions of general law. Russell v. Southard, 53 U. S. 12 How. 147-8 (13: 930, 931); Neves v. Scott, 54 U. S. 13 How. 268 (14: 140); Boyce v. Tabb, 85 U. S. 18 Wall. 546 (21: 757); Burgess v. Seligman, 107 U. S. 20 (27:359).
A company has the right to locate its line where it will and take advantage of such right to obtain such premises.
Cedar Rapids & St. P. R. Co. v. Spafford, 41 Iowa, 292; McClure v. Mo. River, Ft. S. & G. R. Co. 9 Kan. 373; Chicago & A. R. Co. v. Derkes, 1 West. Rep. 553, 103 Ind. 520; Spartanburg & U. R. Co. v. DeGraffenreid, 12 Rich. L. 675; McMillan v. Maysville & L. R. Co. 15 B. Mon. 218; Rhey v. Ebensburg & S. Pl. Road Co. 27 Pa. 261; Jewett v. Lawrenceburgh & U. M. R. Co. 10 Ind. 539; Martin v. Pensacola & G. R. Co. 8 Fla. 370; Taggart v. Western Md. R. Co. 24 Md. 563, 581-2; Des Moines Valley R. Co. v. Graff, 27 Íowa, 99; First Nat. Bank v. Hur
Ala. Gold L. Ins. Co. v. Cent. A. & M. Ass0. 54 Ala. 77; Green's Brice, Ultra Vires 89; Callaway Min. & Mfg. Co. v. Clark, 82 Mo. 305;|ford, 29 Iowa, 579; Detroit, L. & L. M. R. Co. Moss v. Averell, 10 N. Y. 455.
Corporations are bound by contracts duly entered into by their directors, for purposes which they have treated as within the objects of their acts and which cannot be clearly shown not to fall within them.
v. Starnes, 38 Mich. 698; Bucksport & B. R. Co. v. Brewer, 67 Maine, 295; Cumberland Val ley R. Co v. Baab, 9 Watts, 458, 2 Am. R. Cas. 187; International & G. N. R. Co. v. Dawson, 62 Tex. 260; Chapman v. Mad River & L. E. R. Co. 6 Ohio St. 120; Pixley v. Gould, 13 Bradw. 565; 2 Wood, R. Law, § 267.
The contract, even if voidable, is not so at the instance of the third party.
Twin-Lick Oil Co. v. Marbury, 91 U. S. 587 (23: 328); Thomas v. Brownville, Ft. K. & P. R. Co. 109 U. S. 522 (27:1018); Pneumatic Gas Co. v. Berry, 113 U. S. 322 (28:1003).
Shrewsbury & B. R. Co. v. North Western R. Co. 6 H. L. Cas. 113, 124; Green's Brice, Ultra Vires, 88 and n. a; Watts' App. 78 Pa. 370, 392; 1 Waterman, Corp. 598-600; Whitman Gold & S. Min. Co. v. Baker, 3 Nev. 386; 1 Morawetz, Corp. § 862-4; Merchants Nat. Bank v. Pomeroy Flour Co. 41 Ohio St. 552; Bradley v. Ballard, 55 Ill. 413; Madison, W. & M. Pl. Road Co. v. Watertown & P. Pl. Road Co. 5 Wis. 178; Wheeler v. San Francisco & A. R. Co. 31 Cal. 46; South Wales R. Co. v. Red- Union Pac. R. Co. v. Credit Mobilier, 135 mond, 10 C. B. N. S. 674; Hill v. Nisbet, 100 Mass. 367; Alexander v. Williams, 14 Mo. App. Ind. 341; Ellis v. Howe Machine Co. 9 Daly, 13; Kitchen v. St. Louis, K. C. & N. R. Co. 69 78; 1 Morawetz, Corp. § 320; Clarke v. Im-Mo. 224; Ashhurst's App. 60 Pa. 291; Euro
There is no pretense of any actual fraud, and no facts are alleged from which it could be inferred.
pean & N. A. R. Co. v. Poor, 59 Maine, 277. A plea is not good which did not answer the whole complaint.
Smalley v. Anderson, 2 T. B. Mon. 56; Logan v. Moulder, 1 Ark. 313; Goodrich v. Reynolds, 31 Ill. 490.
Mr. Justice Field delivered the opinion of the court:
Company with the Georgia Pacific Railway Company was to locate and construct the road "by the nearest, cheapest and most suitable route from Atlanta, Georgia, through Alabama to Columbus in Mississippi," for the considera- tion of $20,000 a mile, and that it is averred in the pleadings and admitted by the demurrer, that in causing the road to be located by way of Anniston, it was necessary to deflect the same from the nearest and cheapest and most natural route between the designated termini, a distance of five miles, at an additional cost of $100,000. In the light of these facts there can be but one answer given to the question pre- [G56] sented respecting the contract between the fron Company and the Extension Company, name- ly: that it was a void contract, immoral in its conception and corrupting in its tendency. It was a contract by an employé of a railroad company with a third party, for a considera- tion to be received from that third party, to violate its engagement with its employer in the important business of locating and construct- ing a railroad, and instead of selecting the shortest, cheapest, and most suitable route, to locate the road by a longer route, and thus im- pose an unnecessary and heavy burden upon its employer. The proposition of the Iron Company, which was accepted, was to pay the Extension Company for a breach of its duty. In plain language, it was nothing less than the offer of a bribe to the latter company to be faithless to its engagements, and to do with reference to the business in which it was en- gaged what would amount to little less than robbery of its employer. The transaction on the part of the Iron Company was none the less offensive, because of the threats of the Exten- sion Company, made by its vice-president, who was also a director and stockholder of the rail- road company, that, if the land and money mentioned were not donated, it would cause the road to be located away from Anniston by the rival Town of Oxford. The threats did not excuse, much less justify, the offer.
As appears from the pleadings, which are set forth in the above statement, some time previ- ous to November, 1881, the plaintiff below, the Richmond and Danville Extension Company, a corporation created under the Laws of New Jersey, entered into a contract with the Georgia Pacific Railway Company, a corporation cre- ated under the laws of Georgia, to locate and construct for the latter company, by the nearest, cheapest, and most suitable route, a railroad from Atlanta in Georgia through Alabama to Columbus in Mississippi, at the rate of $20,000 a mile, to be paid in whole or part in the bonds of the railroad company; and in November, 1881, it was engaged in locating and construct- ing the road under the contract. At that time the defendant below, the Woodstock Iron Com- pany, a corporation created under the laws of Alabama for the manufacture and sale of prod- ucts of iron ore, was doing business at the Town of Anniston in that State; and it then made a formal proposition in writing to the Extension Company that if it would locate and construct, or cause to be located and constructed, the railroad by way of the Town of Anniston, then the Iron Company would donate and con- vey, or cause to be donated and conveyed, to the Extension Company sundry parcels of land both within and without the corporate limits of the town, for the location of the road, and which might be necessary for sidings or spare tracks; and would also donate and pay to the Extension Company $30,000, one half when the road made a connection with the line of the Alabama Great Southern Railroad Company at Birmingham, Alabama, and the other half when the road made a connection with the line We have thus far considered the case as one of the Louisville and Nashville Railroad Com- only between private parties, where an em- pany at that place; the payments to be made ployé has agreed, for a money consideration, provided the road should be so far completed to violate his obligation to his employer; but as to make the connections designated within there are other circumstances which add to the three years. The proposition was formally ac- offensiveness of the transaction. The business cepted in writing by the Extension Company, of the Extension Company was one in which through its vice-president, John W. Johnston. the public was interested. Railroads are for Pursuant to this contract the Extension Com- many purposes public highways. They are pany located and constructed the railroad by constructed for the convenience of the public way of the Town of Anniston by the first of in the transportation of persons and property. January, 1883, and made the connections speci- In their construction without unnecessary fied, within the period designated, and com-length between designated points, in their hav- plied in every respect with its terms.
The Woodstock Iron Company complied with the contract only in part. At the request of the Extension Company it conveyed to the railroad company the several parcels of land mentioned, and also upon like request furnished it with cars to the value of $6,325. For the balance, amounting to $23,675, the present suit was brought, and the principal question presented to the court below, and to this court, is whether the contract is obligatory upon the defendant, or whether it is void as being against public policy.
In determining this question, it must be borne in mind that the contract of the Extension
ing proper accommodations, and in their charges for transportation, the public is direct- ly interested. Corporations, it is true, formed for their construction are private corporations; but whilst their directors are required to look to the interests of their stockholders, they must do so in subordination to and in connection with the public interests, which they are equal. ly bound to respect and subserve. All arrange- ments, therefore, by which directors or stock- holders or other persons may acquire gain, by inducing those corporations to disregard their duties to the public, are illegal and lead to un- fair dealing, and thus being against public policy will not be enforced by the courts.
this case the Extension Company, to which the duty of locating and constructing the railroad between its termini was intrusted, in agreeing, for a consideration offered by a third party, to disregard that duty and locate and construct the road by a longer route than was required, not only committed a wrong upon the railroad company by thus imposing unnecessary bur- dens upon it, to meet which larger charges for transportation might be called for, but also a wrong upon the public.
acting as agents for the public, a confidence which, it seems, could be safely so reposed, when it is considered that the interests of the corporation as a company of passenger and freight carriers for profit was identical with the interests of those who were to be carried, and had goods to be carried, that is, with the pub- lic interest. This confidence, however, could only be safely so reposed under the belief that all the directors and members of the company should exercise their best and their unbiased The case of Fuller v. Dame is instructive judgment upon the question of such fitness, on this head. (18 Pick. 472.) It there ap- without being influenced by distinct and extra- peared that Dame, the defendant, was the own-neous interests, having no connection with the er of a large tract of land and flats situated on accommodation of the public or the interests Sea Street, and between it and Front Street, on of the company. Any attempt therefore, to the south side of Boston, which would be create and bring into efficient operation such greatly enhanced in value if the Boston and undue influence has all the injurious effects of Worcester Railroad Company would locate one a fraud upon the public, by causing a question of its depots between those streets and easterly which ought to be decided with a sole and sin- of Front Street. To induce the company to gle regard to public interests, to be affected make such location it was supposed to be nec- and controlled by considerations having no re- essary to form an association, which would gard to such interests. It is no answer to say pay to it a large sum of money and furnish a that, by the Act of incorporation, the execu large tract of land for the depot, besides mak- tive authority was vested in a board of direct- ing other donations; and to provide the money ors, and Mr. Fuller was not a director. He and land, also to form a Company to purchase was a member of the company and might be the flats and land between the streets named, chosen a director. He was an elector of the to be held as joint stock and laid out in due directors, and they were directly responsible to form and shape for sale. Fuller agreed to aid the stockholders. The immediate act of loca- Dame in getting up such company, and in in- tion was with directors, but the efficient au- ducing the railroad company to fix its termin- thority was with the members and stockholders ation and principal depot between those streets, of the corporation, who elect the directors. Fuller being himself of opinion that the_rail- The election may depend upon the known views road ought, from a view of the public good and and opinions of candidates upon this very ques- the good of its stockholders, to enter the city tion of location. They had a right to his dis- on the southerly side and have its principal de- interested judgment and advice upon the ques- pot there. In consideration of such agreement tion of location; and this could not be exercised Dame gave his note for $9,600, payable to Ful- whilst he held and relied on a promise for a ler in three years, the note being deposited with large sum of money, the payment of which de- third parties, to be delivered to him when the pended upon this decision of the question by principal depot of the railroad company for the directors." merchandise was constructed between the streets mentioned. Fuller was at the time of the agreement a stockholder in the railroad company. The road having been completed, and the principal depot located between the streets mentioned, and the note not being paid, suit was brought upon it. It was adjudged that the contract was contrary to public policy, and that the note given in consideration of it was therefore void. In coming to this conclu- sion the court considered somewhat at large the ground upon which contracts of this character were avoided, and held that it was because they tended to place one under wrong influences, by offering him a temptation to do that which might injuriously affect the rights and interests of third persons, and that the case before it was within the operation of this principle, the con- tract tending injuriously to affect the public in- terest in establishing the fittest and most suit- able location for the termination of the Boston and Worcester Railroad for the accommoda- tion of the public travel. It is true the road was constructed and located by the corporation at the expense of private parties under the sanction of the Legislature, incorporated for that purpose, who were to be remunerated by a toll levied and regulated by law; and it was left to its directors to fix the termination and place of deposit. But the court added: "In doing this a confidence was reposed in them,
The case before us is much stronger than the one thus decided by the Supreme Judicial Court of Massachusetts. There the contract was held invalid because made with a stockholder of the company, by which he promised, for a pecuniary consideration, to endeavor to procure the company to locate one of its depots at a particular place in the city. Here the contract was with an employé of the company, to induce it to disregard its obligations; and the principal person making that contract on the part of the employé was a director and stockholder of the company which was to be thus seriously affected.
The principle, which is so clearly and forci bly stated in Fuller v. Dame, has been applied in numerous instances by the highest courts of different States, to avoid contracts made to influence railroad companies in selecting their routes and locating their depots and stations, by donations of land and money to some of its directors or stockholders or agents. Thus in Bestor v. Wathen, 60 Ill. 138, it appeared that in 1849 the Legislature of Illinois incorporated a company to build a railroad from a point on the Mississippi River to Peoria, and that in 1852 the charter was amended so as to authorize the extension of the road from Peoria eastward to the state line. In 1855 the company made a contract with the firm of Cruger, Secor and Company, by which the latter undertook the construction and
this and another line in order to secure to them- selves the contract under consideration, as is somewhat indicated by the evidence, then they were practicing a species of fraud upon the de- fendants, and the use of a false pretext in order to acquire defendant's property without con- sideration. If on the other hand this line was not the best, but was adopted because of this contract, the case is still stronger against the complainants. If such was the fact they are asking the court to enforce the payment of a bribe, the promise of which induced them to sacrifice their official duty to their private gain. If, as a third contingency, the choice lay be- tween this line and another equally good, but not better, and they were influenced by this contract to adopt this line, then, although neither the company nor the public has been injured, yet the defendants have made their of- ficial power an instrument of private emolu- ment in a manner which no court of equity can sanction. In this particular case no wrong may have been done, and yet public policy plainly forbids the sanction of such contracts, because of the great temptation they would of- fer to official faithlessness and corruption.' The doctrine of this case was approved by the Supreme Court of Illinois in Linder v. Carpen- ter, 62 Ill. 309; and in St. Louis, J. & C. R. Co. v. Mathers, 71 Ill. 592.
equipment of the road. In 1856, whilst engaged | line, but professed to be hesitating between upon this work, the members of the firm, together with Bestor, the president of the rail- road company, Sweat, one of its directors, and Smith, its construction agent, entered into a contract with Wathen and Gibson, the defend- ants, by which the latter, being the owners of 160 acres of land, agreed, in consideration that the road then in process of construction should cross the Illinois Central Railroad where their land was situated, the land would be laid out into town lots and sold, and after proceeds amounting to $4,800 had been received, which were to be retained by Wathen and Gibson, a conveyance of an undivided half of the residue should be made to the other parties. The only consideration for this agreement, aside from the location of the road, was that the other parties should assist and contribute to the building up of the town on the land. The road was constructed across the Illinois Central, and Wathen and Gibson laid out the land into lots and proceeded to sell the same, and the Town of El Paso was built on the land and an adjoin- ing tract. In 1863 the plaintiffs filed their bill against Wathen and Gibson for an account of the sales and a conveyance of the undivided half of the lots unsold. The court held the contract void as against public policy, and dis- missed the suit, and the decree in this respect was affirmed by the supreme court of the State, that court observing that when the people through their Legislature grants to a company the right of eminent domain for the purpose of constructing a railroad it is upon the supposi- tion that the road will bring certain benefits to the public, and that when subscriptions are made to its stock, the money is subscribed upon the understanding that the officers intrusted with the construction of the road will so locate its line and establish its depots as to bring the highest pecuniary profit to the stockholders compatible with a proper regard for the public convenience; that these alone are the considera- tions which should control officers of the road; and so far as they permit their official action to be swayed by their private interests, they are guilty of a breach of trust towards the stock- holders, and a breach of duty to the public at large; and it added: "A court of equity will not enforce a contract resting upon such official delinquency, or even tending to produce it. Such is the character of the contract before us. If we enforce it we lend the sanction of the court to a class of contracts, the inevitable tendency of which is to make the officers of these powerful corporations pervert their trust to their private gain, at the price of injury at once to the stockholders and to the public. Rendered into plain English, the contract in this case was a bribe on the part of Wathen and Gibson to the president and other officers of the railway company, and to the contractors who were building the road, of an undivided half of one hundred and sixty acres of land, in consideration of which the road was to be con- structed on a certain line and a depot built at a certain point. Now if this was the best line for crossing the Illinois Central considered with reference to the interest of the stockholders and of the public, then it was the duty of the officers of the company to establish it there; and if they intended so to do because it was the proper
Holladay v. Patterson, decided by the Supreme Court of Oregon (5 Oreg. 177), is also in harmony with Fuller v. Dame, and Bestor v. Wathen, the court following a similar course of reasoning to that adopted in those cases. That doctrine and reasoning are also often applied where the reward or money consideration for taking a particular route or establishing a station or depot at a particular place is offered directly to the railroad conpany instead of to its directors, stockholders, or agents. But we do not refer to them, because there are exceptions or qualifications in the application of the doctrine in such cases requiring explanation, as where a subscription is conditioned upon the adoption of a particular route, or the construction of a station or depot at a particular place. Pacific R. Co. v. Seely, 45 Mo. 212; Racine Co. Bank v. Ayers, 12 Wis. 512; Fort Edward & F. M. Pl. Road Co. v. Payne, 15 N. Y. 583. There is no exception in any decision called to our attention as to the character of a contract when for a pecuniary consideration director, stockholders, or agents of a company undertake to influence its conduct in these matters. Indeed, the law is general that agreements upon pecuniary considerations, or the promise of them, to influence the conduct of officers charged with duties affecting the public interest, or with duties of a fiduciary character to private parties, are against the true policy of the State, which is to secure fidelity in the discharge of all such duties. Agreements of that character introduce mercenary considerations to control the conduct of parties, instead of considerations arising from the nature of their duties and the most efficient way of discharging them. They are, therefore, nccessarily corrupt in their tendencies. As we said in Providence Tool Co. v. Norris, 69 U. S. 2 Wall. 48, 56 [17: 868, 871], "that all agreements for pecuniary considerations to control the business operations of the
McCulloch v. Md. 17 U. S. 4 Wheat, 316 (4:579): Bank of Commerce v. N. Y. 67 U. S. 2 Black, 620 (17:451); Bank Tax Case, 69 U. S. 2 Wall. 200 (17:793); Banks v. N. Y. 74 U. S. 7 Wall. 16 (19:57); Weston v. Charleston, 27 U. S. 2 Pet. 449 (7:481); People v. New York Co. 74 U. S. 7 Wall, 26 (19:60); Ogden v. Walker, 59 Ind. 460.
The assessment against the shareholders was void because the assessors failed to observe a condition precedent to their right to assess. Albany City Nat. Bank v. Maher, 19 Blatchf.
Government, or the regular administration of | upon the obligations by levying it upon the justice, or the appointments to public offices, means put into the obligations. or the ordinary course of legislation, are void as against public policy, without reference to the question whether improper means are con- templated or used in their execution," so we say of agreements like the one in this case; they are against public policy because of their cor- rupt tendency, whether lawful or unlawful means are contemplated or used in carrying them into execution. "The law," as said in that case, "looks to the general tendency of such agreements; and it closes the door to temptation by refusing them recognition in any of the courts of the country." Oscanyan v. Arms Co. 103 U. S. 261, 274 [26: 539, 545]. From the views expressed it follows that the Court below erred in sustaining the demurrers to the special pleas above mentioned; and it is not necessary, therefore, to consider the other pleas. The judgment must be reversed and the cause re- manded with instructions to overrule the de- murrers to the above pleas, and take further proceedings not inconsistent with this opinion; and it is so ordered.
[590] STEWART B. SHOTWELL, Piff. in Err.,
SAMUEL A. MOORE, as Treasurer of HAR- RISON COUNTY, OHIO.
(See S. C. Reporter's ed. 590-601.) Frasion of taxation-Statute of Ohio.
1. Where a person has in bank, on general deposit subject to his order, moneys, and a day or two previous to the day fixed by the statute of the State for the assessment of property for taxation, draws out such moneys on a check, receiving the amount thereof in legal tender notes of the United States, which he incloses in an envelope, and places with the bank as a special deposit, writing his name thereon, and requesting the bank to put it in its safe for him, and within a week after the assessment, he takes the same greenbacks which he had placed on special deposit and immediately restored them to the bank as a general deposit, subject to his order; and all this was done for the purpose of avoiding payment of taxes on the moneys,-held, that this was an attempted evasion of the taxing
2. The Statute of Ohio which provides for the ascertainment of the monthly average amount or value of the property or goods held by persons during the preceding year, and for the assessment for taxation on that basis, is valid.
Argued Jan. 30, 1889. Decided March 5, 1889.
If the tax was illegal, the party had a remedy at law.
Greene v. Mumford, 5 R. I. 472; Kellogg v. Ely, 15 Ohio St. 64.
The Constitution permits no deduction of liabilities from moneys and credits.
Latimer v. Morgan, 6 Ohio St. 279; Champaign Co. Bank v. Smith, 7 Ohio St. 42, 57; Payne v. Watterson, 37 Ohio St. 121, 125.
Messrs. D. A. Hollingsworth, John M. Garren, County Solicitor, Harrison County, and David K. Watson, Atty-Gen. of Ohio, for defendant in error.
Mr. Justice Miller delivered the opinion of the court:
This writ of error to the Supreme Court of the State of Ohio brings up for review a judg ment of that court concerning the taxation by the state authorities imposed upon the plaintiff in error, Stewart B. Shotwell, as the owner of a certain amount of United States legal-tender treasury notes, commonly called "Greenbacks." The case was tried in the Court of Common Pleas of Harrison County, Ohio, by the court; without a jury, by consent of parties; and that court found the following conclusions of fact and law, under the provision of the state statute, upon which all the subsequent proceedings have been based:
"The parties to this cause having waived a jury, the same came on for trial to the court, and the parties, with a view of excepting to the decision of the court upon the questions of the law involved in the trial, having requested the court to state in writing the conclusions of fact found separately from the conclusions of law, and the testimony having been heard, the court finds as conclusions of fact as follows:
"That the defendant is and for many years has been a resident of Harrison County, Ohio, that on the Saturday preceding the second
and '85, the defendant had on deposit in bank, at the Town of Cadiz, in said county, to his credit as a general depositor, the following sums: In 1881, $30,900; in '82, $26,900; in '83, $29,550; in '84, $18,560; in '85, $4,700; that on said Saturday in each of said years he checked out the said balance so standing to his credit, and at his request the same was paid to him in United States securities commonly called 'greenbacks:' that on each occasion after counting the money so paid to him he inclosed the same in a pack- age, wrote his name thereon, and returned the same to the officer of the bank, requesting him to place the same in the bank's safe for him, which
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