delphia representatives in both branches of the Legislature, for the Consolidation Act, in the form in which it was petitioned for. A comparison of the draft accompanying the petition The following is part of a note of the rewith the Act, shows them to be substan-porter to the case of Loscomb v. Wintringham, tially the same; but if they were substantially 13 Beav. 89: "The following, amongst other different, it would be incumbent on the de- bequests, have been held void as charitable fendants to make the difference avail them, to show the difference it is which renders them impossible, since the consolidation, the performance of these municipal uses. No other difference could avail them. The corporators and Corporation and their representatives in the State Legislature are united to procure the Act. If it is not to be regarded as the devisees' own Act, it is because there is a fiction of law (fictitione juris semper subsistit equitas) which prevails over the fact.

Case of Thetford School, 8 Co. 131; Magill Act, and there was no evidence to prove such ▼. Brown, Bright, 396; 4 Bro. Ch. 103; Pick- | fact. ering v. Shotwell, 10 Pa. 23; Witman v. Lex,

This trust for municipal purposes is not a 17 Serg. & R. 93; Beaver v. Filson, 8 Pa. trust in the sense that all gifts to municipal cor327; McLain v. School Directors, 51 Pa. 196;porations are in trust to devote them to munici Philadelphia v. Girard's Heirs, 45 Pa. 28; pal purposes; but an active one, whereof the Story, Eq. p. 524, sec. 1177. Corporation is the trustee, and the inhabitants of the City are the beneficiaries. This is shown conclusively by the circumstance that the trust only is available if the funds are not needed for the college. Atty-Gen. v. Vivian, 1 Russ. 226, 234; Atty-Gen. v. Mayor, etc. of Rochester, Finch, 193.

Public trusts and charitable uses may be considered as synonymous expressions. Attorney v. Heelis, 2 Sim. & Stu. 67 cited in note; Amb. 651; Atty-Gen. v. Corporation of Shrewsbury, 6 Beav. 230; Cresson's Appeal, 30 Pa. 450.

The trust for municipal purposes was to have effect only if there was a surplus beyond the wants of the college. The whole of the residue was given-1, to the maintenance of the college; 2 and 3, to certain municipal purposes. The first was the primary trust; the others were secondary.

The answer shows that the whole of the net income of the residuary estate since the year 1847, has been appropriated to the maintenance and endowment of the college, and used for that purpose. And further, that the applicants for admission to the college, have far exceeded the ability of the City to maintain them.

Mr. Justice Grier delivered the opinion of the court:

The case of Vidal v. The Executors of Girard, 2 How. 127, has put an end to any further controversy as to the validity of the trusts and the power of the City to execute them. Nor do the heirs, who are complainants in this bill, pretend to call in question the matters finally and conclusively settled by that case.

The facts which are supposed to rehabilitate their claim have occurred since its decision. Admitting that the will of Stephen Girard entirely excluded them from any claim of right to the property in question, they now contend that the Consolidation Act has made it impossible for anyone to execute the trusts for municipal purposes, and as a consequence the heirs are entitled to that portion of the estate appropriated by the testator for such uses. If it shall appear that the effect of the Consolidation Act is not that which the bill alleges, it may be unnecessary to discuss the question whether if it were, the consequence assumed from it, be legitimate.

At the time of the death of Mr. Girard, the City of Philadelphia was bounded by Vine and South Streets, and the Delaware and Schuylkill rivers. The legislative power of the Corporation was vested in two bodies, called the Select and Common Councils. The Legislature of the State had, from time to time, enlarged, modified and curtailed the powers of these bodies. The City of Philadelphia formed a part of the County of Philadelphia. The other parts of the county contained a number of municipal corporations, all of which were for The will of Stephen Girard, after sundry bethe purposes independent of each other. There quests to his relatives and friends, and to cerwere some corporations, or quasi corporations, tain specified charities, announces (§ 20) his which exercised authority and jurisdiction over great and favorite charity to be the establishthe whole county. The poor, the health, the ment of a college for the education of poor or public education, and the business of streets, phans. It then proceeds: "Now, I give, dewas managed and regulated by these last named vise and bequeath all the residue and remain. bodies; and the care of providing for the sup-der of my real and personal estate, etc., unto port of the administration of justice was devolved upon a separate and independent body. The evils following from such a system of government were found to be productive of such inconveniences, that in the year 1854, the Legislature of the Commonwealth incorporated all these independent municipalities into the City of Philadelphia.

Surely nothing was further from the intention of the Legislature than in interference with the trusts of Mr. Girard's will.

If the conduct of trustees can forfeit their cestuis que trust's estate, it must be shown that the trustee, by forbearing or acting, could save the estate. The councils of the City, or the people of the City, had neither nor both of them, the power to prevent the Legislature from enlarging the boundaries of this public corporation. 2 Kent, 275, 305; Ang. & Ames Corp. 5th ed. p. 27, § 31; North Yarmouth v. Skillings, 45 Me. 133; Brown v. Hummel, 6 Pa. 92; Kirby v. Shaw, 19 Pa. 258; 2 P. F. Smith, 52 Pa. St. 374; Grant, Corp. 62; Haddock's case, Sir T. Raym. 439; S. C. 1 Vent, 355; Luttrel's Case, 4 Co. Rep. 88.

The answer denies that the defendant sought to promote the enactment of the Consolidation

the mayor, aldermen, and citizens of Philadel phia in trust for the several uses, intents and purposes hereinafter declared."

The attempt to restrain the alienation being inoperative cannot effect the validity of this devise. After many and very special directions as to the college, its construction and government, it further directs that two millions of the personal estate be appropriated to the building; and if this sum should not be sufficient, the remainder should be taken "from the final residuary fund hereinafter expressly referred to." "And, as it regards the remainder of said residue of my personal estate to invest the same in good securities, and in like manner to invest the interest and income thereof, from time to time, so that the whole shall form a permanent fund, and to apply the income of the said fund-"first, to the further improvement and maintenance of the aforesaid college, as directed in the last paragraph of the 21st clause of this, my will.

"Second, to enable the Corporation of the City of Philadelphia to provide more effectually than they now do for the security of the inhabitants of the said City by a competent police, including a sufficient number of watch

*The Legislature may alter, modify or [*14 even annul the franchises of a public municipal corporation, although it may not impose burdens on it without its consent. In this case the Corporation has assented to accept the changes, assume the burdens and perform the duties imposed upon it; and it is difficult to conceive how they can have forfeited their The bill admits this to be a valid charity, and right to the charities which the law makes it claims only the residue after that is satisfied. their duty to administer. The objects of the Now, it is admitted (for it has been so decided), testator's charity remain the same, while the that till February, 1854, the Corporation was City, large or small, exists; the trust is an exvested with a complete title to the whole resi-isting and valid one, the trustee is vested by due of the estate of Stephen Girard, subject to law with the estate, and the fullest power and these charitable trusts and, consequently, at authority to execute the trust. that date, his heirs at law had no right, title or interest whatsoever in the same. But the

THE PEOPLE OF THE STATE OF NEW
YORK, ex rel. THE NATIONAL BROAD-
WAY BANK, Plffs. in Err.,

V.

JOHN T. HOFFMAN, Mayor, and Richard B.
Connelly, Comptroller, etc.;

and

public officers, as also by legislation (if needed), to have the charities properly administered. Now, there is no complaint here that the charity, so far as regards the primary and great object of the testator, is not properly administered; and it does not appear that there now is, or ever will be, any residue to apply to the secondary objects. If that time should ever arrive, the question, whether the charity shall be so applied as to have the "effect to diminish the burden of taxation" on all the Corporation, or only those within the former boundaries of the City, will have to be decided. The case of Soohan v. The City, 9 Casey, does not decide it; nor is this court bound to decide it. The answer shows how it may be done, and the Corporation has ample power conferred on it to execute the trust according to either hypothesis; and, if (See S. C. "The Banks v. The Mayor," 7 Wall. further powers were necessary, the Legislature, executing the sovereign power, can certainly

THE PEOPLE OF THE STATE OF NEW
YORK, ex rel. THE NATIONAL BANK OF
THE REPUBLIC OF THE CITY OF NEW
YORK, Plffs. in Err.,

V.

JOHN T. HOFFMAN, Mayor, Richard B. Connelly, Comptroller of the City of New York, et al.

16-25.)

grant them. In the meantime the heirs at law Jurisdiction over state decision involving taxa

tion of Federal securities-U. S. certificates of indebtedness not taxable.

of the testator have no concern in the matter, or any right to interfere by a bill quia timet. Their anticipations of the future perversion of the charity by the corruption or folly of the enlarged corporation, and the moral impossi-sociations of that State were entitled to re-imWhere, under a New York Act, the banking asbility of its just administration, are not suffi- bursement by bonds for taxes illegally collected by cient reasons for the interference of this court the State from them on federal securities, and to seize upon the fund, or any part of it, and the New York Court of Appeals denied them the relief, this court has jurisdiction to review that to deliver it up to the complainants, who never decision under the Act of Feb. 5, 1867. 16*] had, and by the will of Stephen Girard were not intended to have, any right, title or claim whatsoever to the property.

In fine, the bill was rightly dismissed, be

cause:

United States bonds are not liable to taxation under state legislation.

Certificates of indebtedness issued directly to creditors in payment of their demands, are not subject to state taxation.

[Nos. 246, 248, 252.]

1. The residue of the estate of Stephen Gi-Argued Dec. 15, 1868. rard, at the time of his death, was, by his will, vested in the Corporation on valid legal trusts, which it was fully competent to execute.

2. By the supplement to the Act incorporating the City (commonly called the "Consolidation Act"), the identity of the Corporation is not destroyed; nor can the change in its name, the enlargement of its area, or increase in the number of its corporators, affect its title to property held at the time of such change.

3. The Corporation, under its amended charter, has every capacity to hold, and every power and authority necessary to execute the trusts of the will.

4. That the difficulties anticipated by the bill, as to the execution of the secondary trusts, are imaginary. They have not arisen, and most probably never will.

Decided Jan. 18, 1869.

IN ERROR to the Co
N ERROR to the Court of Appeals of the

A writ of mandamus was sued out in each of these cases in the Supreme Court of New York by the plaintiffs in error, to compel the defend. ants to sign, seal, and deliver certain bonds. Judgments having been given by that court for the defendants, and having been affirmed on appeal by the Court of Appeals of that State, the plaintiffs sued out these writs of error.

A full statement of the case appears in the opinion of the court.

Messrs. Wheeler H. Peckham, John E. Burrill, and Thomas H. Rodman, for plaintiffs in error: 1. The "credit" of the United States is exempt from taxation under state authority. (a) This credit, which is exempt, is entirely

pressed, and from the instruments or evidence which may prove that it has been pledged.

5. And if they should, it is a matter, wheth-distinct from the forms in which it may be exer probable or improbable, with which the complainants have no concern, and cannot have on any possible contingency.

The judgment of the Circuit Court is, therefore, affirmed, with costs.

THE PEOPLE OF THE STATE OF NEW
YORK, ex rel. THE BANK OF NEW YORK
NATIONAL BANKING ASSOCIATION,
Plffs. in Err.,

Weston v. Charleston, 2 Pet. 449; Bank of Commerce Case, 2 Black, 620, 17 L. ed. 451, and note; Bank of Commonwealth Case, 32 Barb. 509; 23 N. Y. 192; Bank Tax Case, 2 Wall. 200, 17 L. ed. 793; and in Van Allen v. Assessors, 3 Wall. 573, 18 L. ed. 229.

Aside from authority, it is apparent to any one in the least degree familiar with the truths of political economy, that credit cannot be taxed and can pay no tax. If the credit of the United States is taxed through its bonds or other securities, the only effect is that, on a sale or RICHARD B. CONNELLY, Comptroller, and issue of those bonds, the United States realizes John T. Hoffman, Mayor, etc.,

V.

and

so much less.
A tax upon an instrument employed by the

government to carry into execution powers vested in it by the Constitution, is illegal. McCulloch v. Maryland, 4 Wheat. 316; Osborn v. Bank of U. S. 9 Wheat. 738; Brown v. Maryland, 12 Wheat. 419.

2. The certificates are, clearly, within the principle of exemption herein before stated.

(a) The certificates are not mere certificates of a pre-existing indebtedness. (b) The preexisting indebtedness was itself not taxable. See Metropolitan Bank v. Van Dyck, 27 N. Y. 491; Dobbins v. Com. of Erie Co. 16 Pet. 449. 3. The certificates are exempt by the Statutes of the United States, and those statutes are constitutional.

Act, Feb. 25th, 1862, 12 U. S. Stat. at L. 346, § 2; Act, March 3, 1863; 12 Stat. 710, § 1; Act, March 3, 1864, 13 Stat. p. 12, § 1; Act June 30, 1864, 13 Stat. at L. p. 222, §§ 1, 13.

The certificates are not property in the hands of its citizens. They are the debts of the United States, and as such represent the credit of the United States.

That the certificates of indebtedness ($188,000) on which it was attempted to tax the bank in 1863, are exempt from taxation by the State, is res judicata as between the City and the relator.

include every indebtedness of the United States. Securities and obligations issued to secure the repayment of moneys borrowed, were alone understood at these times to be exempt from state taxation by the State Constitution, and nothing more was intended by these statutes than to declare and promulgate that exemption.

Mr. Chief Justice Chase delivered the opinion of the court in these causes:

These three cases present, under somewhat different forms, the same question, namely: Are the obligations of the United States, known as certificates of indebtedness, liable to be taxed by state legislation?

These three cases were argued, and will be considered, together.

In 1863, and in 1864, the proper officers of the State, acting under the laws of New York, assessed certain taxes upon the capital stock of the several banking associations in that State. Some of these banking associations resisted the collection of the tax, on the ground that, though nominally imposed upon their respective capital, it was, in fact, imposed upon the bonds and obligations of the United States, in which a large proportion of these capitals was invested and which, under the Constitution and laws of the United States, were exempt from state taxation.

This question was brought before the Court of Appeals, which sustained the assessments and disallowed the claim of the banking as

Birckhead v. Brown, 5 Sandf. 134; Doty v. Brown, 4 N. Y. 173, and cases cited by Ruggles, J.; Bouchaud v. Dias, Den. 238; White v. Coatsworth, 6 N. Y. 137; Castle v. Noyes, 14 N. Y. 329; Ogsbury v. LaFarge, 3 N. Y. 113; Morris v. Floyd, 5 Barb. 130; Embury v.sociations. Conner, 3 N. Y. 511; Per Jewett, J., and cases cited at p. 522; Southgate v. Montgomery, 1 Paige, 41; People v. Supervisors of Delaware, 12 How. Pr. 50.

Messrs. Richard O'Gorman and Chas. O'Conor, for defendants in error:

1. The judgment of the state court is not subject to review in this court. The re-imbursement contemplated by the State in its legislative Act of April 3, 1866, was a voluntary grace and favor.

From this decision an appeal was taken to this court, upon the hearing of which, at the December Term, 1864, it was adjudged that the taxes imposed upon the capitals of the associations *were a tax upon the national [*18 bonds and obligations in which they were invested and, therefore, so far contrary to the Constitution of the United States. 2 Wall. 210, 17 L. ed. 795.

A mandate in conformity with this decision was sent to the Court of Appeals of New York, which court thereupon reversed its judgment and entered a judgment agreeably to the man

When the plaintiffs in error voluntarily paid the tax in question, they waived any exemption that may have existed. When they ap-date. peared as suitors or parties in the state court, Afterwards, April 30, 1866, the Legislature they had no title, right or privilege, save such of New York provided by law for refunding to as may have been conferred by the state Act. the banking associations and other corpora2. It cannot be maintained that the claim of tions in like conditions, the taxes of 1863 and a person upon the government is an instrument 1864, collected upon that part of their capital or agency, or that it is the property of the gov-invested in securities of the United States, ernment. It is simply a property or "chose," exempt by law from taxation. The Board of belonging to the creditor. Supervisors of the County of New York was 3. Congress has no authority to grant an ex- charged with the duty of auditing and allowemption from the taxing power of the States.ing, with the approval of the Mayor of the City It is only where an exemption arises from the and Corporation Council, the amount colnature of the subject, and might be implied lected from each corporation for taxes on the from the Constitution itself, that Congress may exempt portion of its capital, together with declare it. costs, damages, and interest. Upon such aud4. Issuing a certificate acknowledging a pre-iting and allowance, the sums awarded were existing indebtedness arising from the purchase of supplies or procurement of services, is not borrowing money.

5. None of the Acts of Congress exempting federal securities from state taxation, apply to certificates of indebtedness. In the Act of February 25, 1862, and the Act of June 30, 1864, the phrases "other securities," and "other obligations," are not to be taken so largely as to

to be paid to the corporations severally entitled, by the issue to each, of New York County seven per cent. bonds on equal amounts. These bonds were to be signed by the Comptroller of the City of New York, countersigned by the mayor, and sealed with the seal of the Board of Supervisors, and attested by the Clerk of the Board.

Under this Act, the Board of Supervisors