affidavit, and it was, therefore, practicable to serve each of tl1em personally with a copy of the order, which was done. I think the act has been sufficiently complied with to give the court jurisdiction over the property described in the bill, and the rights of the absent de· fendants thereto. If it becomes necessary, the question arising in connection with the intervening petition can be determined hereafter. Motion overruled.
RICHARDSON and others, .Ex'ra.
January 23, 1882.)
(Uircuit Court, D. Massachusetts.
CONTRACTS - OFFER TO PAY - "ALL CLAIMS" - EXECUTORS CAUSES OF ACTION-PENALTIES AND FORFEITURES-DUTIES.
W., an importer, against whom a personal action was pending in the district court of the United States for penalties alleged to have been incurred on account of certain importations of tobacco, made an offer to the government to pay a certain SUill on the suit in the district court in settlement of all claims it had against him. The government agreed to settle all the known claims, specifying them, for that sum, requiring immediate payment, aud that part of the sum so paid be considered as having been paid for duties, and the remainder only as a penalty. Boon afterwards W. died; before either he had paid the money or the government had tendered him a release. In an action against his executors, in which both parties agree that all suits and causes of action for penalties and forfeitures died with W. , and that the right of action for duties survived, it was held: (1) that the acceptance conformed to the offer; (2) that as no tender of a release had been made by the government before the death of W., and after that occurred the occasion for a release had passed, the contract was not binding upon the executors.
At Law. Geo. P. Sanger, U. S. Atty., and Prentiss Cummings, for the United States. Sydney Bartlett and Hem?! D. Hyde, for defendants. LOWELL, C. J. Action of contract. The first count of the declaration alleges that in May, 1872, a suit for penalties was pending in favor of the United States against Way, the testator of the defendants, in the district conrt at Boston; that claims were made for penalties and duties in respect to certain importations 8f tobacco; that the testator offered to pay the plaintiffs $55,000 in settlement of all said claims and causes of action; that upon due report by the district attorney, and upon the recommendation of the solicitor of the treasury, the secretary of the treasury accepted said offer, May 29, 1872; that the acceptance was notified to Way, June 1, 1872, and
UNITED STATES V. RICHARDSON.
was by him thereupon duly ratified and confirmed; that the defendants, as executors of said Way, owe said sum to the plaintiffs. The second and third counts allege a promise to pay $55.000, in consideration of an agreement that the plaintiffs would forbear to sue Way, and that they have so forborne. The answer sets up four defences:
(1) A denial of the contract. (2) No performance, or offer to perform, by the United States, during Way's life. (3) That in violation of the contract, if any was made, the plaintiffs have sued the defendants for a part of the sums alleged to be due from Way. (4) That after Way's death a compromise was duly made by the plaintiffs with these defendants, as executors, which took the place of the compromise declared on.
The cause was tried by the court.
I find the following facts:
An information wa.'> filed in the district court here, October 25, 1871, against 1,2!H bales of tobacco, imported by the brig Star, for a fraud said to have been attempted by Way in bribing a weigher to make a false return. Way claimed the goods, and received them upon giving bond, with sureties, for $100,000, which was their agreed value. April 1, 1872, a default was entered, and Way was ordered to pay into court, within 20 days, the $100,000 and costs. Several payments were made: the last instalment of the damages May 18,1872, and the costs May 27, 1872. At this time a personal action was pending by the United States against Way for penalties said to have been incurred in some other importations of tobacco, to the amount of $300,000. . In a letter dated May 8, 1872, Way offered the secretary of the treasury to pay $100.000 in full compromise and settlement of the jUdgment, and of all fines, penalties, and forfeitures incurred by reason of certain importations of tobacco, enumerated in his letter; also, all duties due on said importations. The offer having been referred back to Mr. Mason, district attorney, he wrote to the solicitor, May 18th, explaining that the United States had already recovered $100,000 for an attempted fraud, by which they had lost nothing; that the duties due the government were small; but yet that he would not recommend an acceptance of the offer of May 8th; but he did recommend the secretary to accept an offer of $55,000, which he inclosed, in these words: "May 18, 1872. I bereby propose to pay $55,000 on the suit against me in the district court in settlement of all claims of the government against me." Mason wrote, May 24, 1872, making further explanation of the case, and saying that the gross duties due were about $25,000, but, after allowance for tare, etc., would be about half that sum; and again advising to accept the $55,000. He said, besides, that the proposal to release "all claims" was intended by him to include only the tobacco importations; that he knew of no others, nor could Way have anticipated a settlement of unknown claims. May 27th Mason sent a telegram to the solicitor: "If you accept Way's offer, please make condition immediate payment." May 27th Mr. Banfield, the solicitor, w.rote the secretary, referring to both offers, and advising him to accept the second, "with the proviso that the matter be submitted to the proper
officer for an estimate of the duties withheld upon the several lots of tobacco involved, and that these be paid into the treasury and the balance to be treated as a penalty." May 28th the secretary wrote the solicitor: "I have received your communication of the twenty-seventh instant, returning the proposal of Mr. Samuel .A.. Way, of Boston, to pay one hundred and fifty-five thousand dollars, ($155,000,) as a settlement of all claims of the United States in consequence of the illegal importation of a quantity of tobacco at BostOIl, in the vessels and at the times designated below." Then follows a list, as in Way's letter of May 8th, and a statement of the facts showing the propriety of the settlement, adding: ., In consideration of those facts, and the recommendations by yourself, the United States district attorney, and the collector of customs at Boston, respectively, in favor of the settlement, I have concluded to compromise the claims on the basis proposed, and you are reqllested to instruct the district attorney accordingly." He directs that the duties due the United States shall be deducted by the collector of customs, and the residue of the sums received s'lOuld be treated as the proceeds of fines, penalties, and forfeitures. In calling the offer $155,000, the secretary included the $100,000 already paid. May 29, 1872, the solicitor inclosed a copy of this letter to Mr. Mason, and instructed him to cause the compromise to be carried out in the manner therein indicated; "the money to be paid at once, and the duties remaining due on the several importations to be estimated by the collector of customs and deducted and paid into the treasury as duties, the balance to be treated as a penalty, etc. Please report to this otlice upon settlement being made as directed." These letters were received by the district attorney on Saturday June 1, 1872, and Way was overheard discussing or disputing with him, on that day, about terms of payment, from which I infer that the letter of the secretary, or its substance, had been communicated to him. I do not find, in the terms of the declaration, that the acceptance was by him thereupon duly ratified and confirmed. I do not know whether it was confirmed or not. Way attended to no business after that Saturday. He was taken ill on Sunday and died on Tuesday. Mr. Mason died during the next year. The defendants, as executors of Way, made several written offers to the secretary. January 31, 1873, they offered to pay $11,000 in gold, in full settlement and compromise of all suits, claims, dues, duties, penalties, and demands of the United States against Way or his estate, heirs, or executors. This offer was referred to Mr. Hurd, assistant district attorney, and, while he was considering it, a fresh offer was made to him and transmitted with his report, and he advised its acceptance. His report was elaborate, expressing the opinion that the suit for $300,000 penalties had abated by the death of Way; that the court would not be likely to enter jUdgment for $55,000 nunc pro tunc, in that suit, because it would be a great hardship to enforce such an agreement made under circumstances of eXcitement, etc.; that no action could be maintained on the compromise as a contract. The offer which be approved was to enter judgment for the United States, in the pending suit, for the sum of $13,500. The solicitor answeretl, February 17, 1873, that the secretary rejected this offer; that the $13,500 was the estimated amount of
duties, and should not be recovered as a penalty; and, besides, that he desired the question of the liability of the estate of Mr. Way for the $55,000 offered by him, and accepted by the government before his death, should be tested and disposed of by a judicial determination. There the affair rested for some time, one of the executors of Way having become secretary of the treasury. October 5, 1874, Mr. Hyde, attorney for the executors, wrote a letter, dated at ·Washington, to Mr. Bristow, then secretary of the treasury, reciting briefly the history of the case as shown by the papers on file, and offering to pay, in settlement of the pending suit, (though claiming that it had, technically speaking, abated,) such sum as should be found due to the United States for duties by a master, or auditor, to be appointed by the court. October 8, 1874, 'Vilson, then solicitor of the treasury, in a report to the secretary upon this offer, recommended its acceptance on the ground that the suits and claims for penalt.ieshad died with Way, and that the compromise might probably have gone too, but if not, it would be harsh and unconscionable to exact the $55,000, under all the circumstances. October 13, 1874, he notified the district attorney, Mr. Sanger, of this offer, and that the secretary had accepted it, and asked Mr. Sanger to name some suitable person as master or auditor. MI'. Sanger named Mr Bassett, deputy clerk of the district court, and he was agreed on, and the court, at the request of both parties, made the order of reference. Mr. Bassett had one or more bearings in the case, but some disagreements arose between t.he parties, and the government declined to proceed further, and brought a suit for the duties, and this suit for the$55,000. The action and order of reference are still open on the docket. The pleadings in the present action, and the several letters above men. tioned, are made a part of this statement of facts. It has been discovered, since W"ay's death, that he owed the government about $300 for an inadequate payment caused by a mistake of the officers of the customs in respect to an importation of veneers. Upon these facts the defendants contend that the acceptance did not conform to the offer, and as there is no sufficient evidence that Way consented to a change, the agreement was not complete. The variations were that the government agreed to release, specifically, all the known claims, instead of "all claims;" that it required immediate payment; and that a part of the sum paid be considered as having been paid for duties, and the remainder only as a penalty. 'l'hese variations do not seem to me material, or rather. to be variations. "All claims" must be construed to mean known claims, else thu agreement might be a mere leap in the dark. An offer to pay, without more, means cash. With the mode in which the sums paid should be divided, the defendant had no concern. Both parties agree that all suits and causes of action for penalties and forfeitures died with Way, and that the right of action for duties survived.
The contract, then, was complete. In substance, it was that if the defendant would pay $55,000, immediately, the government would release him from all known claims. It was not a contract by which, in consideration of his promise to pay, they released him, or even promised to release him; or to forbear to sue him or his executors. If he had retracted his consent on Monday, they would have prosecuted their suits for penalties as well as duties. They did not intend to release those auits and claims, which, if he had lived, would have been their best security, Still, it was a contraot; and if Way had immediately tendered the money to the government, be might have pleaded the contract and tender in bar of the suit or suits ; and, on the other hand, if the government had chosen to tender to Way a release of all claims, I do not see why they might not have sned him on the contract. They made no such tender then, or !.lince, and when Way died the occasion for a release was gone; there was no longer a large unliquidated claim to be relieved by the payment. In thifl state of things I decide that there was no contract binding the executors to pay $55,000 to the government. As to the second compromise, the objection is taken by the government that there was no report upon it by the district attorney, as required by the statute, (now Rev. St. § 3469.) But there was a full and elaborate report and recommendation by Mr. Hurd upon a similar offer; and it is upon this report that the solicitor founded his own. This is plain upon the face of the ·papers. The offer thus reported on was not only similar, but, in substance, identical. It was to submit to a judgment for $13,500, the estimated amount of duties; and the accepted offer was to submit to a judgment for the amount of the same duties, to be a::lcertained by an auditor. There had been, therefore, a substantial compliance with the statute. Whether the new compromise was one which, in law, would have superseded the old one, if that had been of binding force after Way's death, I have no occasion to decide. Judgment for the defendants.
SECOR V. SINGLETON.
809 and others.
and others v.
(Circuit Court, E.
December 6, 1881.)
BILL-VERIFICATION-EQ,UITY RULE 31. to a bill in equity should be certified by counsel to be, in their opinion, well founded in point of law, and supported by the affidavit of the defendant that it is not interposed for delay.
TAXATION-DECISIONS OF STATE COURTS GoVERN.
The decision of the highest court of a state upon a question of local taxation is conclusive.
Where the stock of a company is by law exempt from taxation, its property cannot be taxed. Scotland County v. Missouri, Iowa II; Nebraska R. Co. 65 Mo. 120.
The bill alleged that the Alexandria & Bloomfield Railroad Company was duly incorporated by an act of the general assembly of the state of Missouri, and that by a provision of its charter its stock was made exempt from taxation for the period of 20 years after its completion, which period has not yet expired; that said road ran through the counties of Clark, Scotland, and Schuyler, in the state of Missouri, to a point on the northern boundary line of said state; that said company was afterwards consolidated, under the laws of Missouri and Iowa, with the Iowa Southern Railway Company, a corporation in the state of Iowa, and has been since known as the Missouri, Iowa & Nebraska Railway Company; that by virtue of the laws of said states the consolidated company became entitled to all the privileges and immunities of the original corporations; that said Iowa & Nebraska Railway Company has no property in said counties of Clark, Scotland, and Schuyler, except its roadbed and other property used in the operation of its road; that taxes had been illegally assessed against said property, and that the defendants, the auditor of the state of Missouri, the judges of the county courts of said counties, and' others, have combined to compel said company to pay taxes in said counties. upon its property therein situated, and had employed attorneys to institute, and maintain suits for taxes assessed against said property; that the complainants owned a large amount of stock in said company, and had requested the directors and officers of said company, and said company, to refuse to pay said taxes, and to take proper steps to resist the imposition of taxes upon said property,but that they had refused to take any such steps; and that said company had, through its officers, announced its intention to pay said illegal taxes. The prayer of the bill was that the taxation of said company's property should be declared illegal, and the acts of the auditor and the county officers void and of no effect; and for a writ of injunction to restrain the defendants from. taking any steps towards the assessment of taxes npon the property of ilaid road, or the collection thereof. The defendants demurred to the bill upon the ground that it set forth no ground of action or complaint against them. The,