[383]

VAN, Exr., AND EMILY S. SULLIVAN,
Exrx. of DANIEL F. SULLIVAN, Deceased,
Assignee of DANA SARGENT, Appts.,

ering the opinion of the court, Chief Justice | DANA SARGENT AND MARTIN H. SULLI-
Shaw said: "Grace is an allowance of three
days to the debtor, to make payment, beyond
the time at which, by the terms of the note, it
becomes due and payable." In regard to the
memorandum, "Due July 7, 1837," he said:
'It shows when the note is to become due, and

in this respect corresponds with the stipulation
in the body of the note. The time it becomes
due being fixed, the statute gives three days
from that time for payment, under the term
' grace,' unless the contrary be expressly stipu-
lated." A like decision was made in Mechan-
ics Bank v. Merchants Bank, 6 Met. 13, in
1843.

JOHN A. HELTON, Sheriff of Escambia
County, Alabama, JAMES H. GREEN,
Sheriff of Escambia County, Alabama, Suc-
cessor in Office of Said JOHN A. HELTON,
YOUNG M. RABB and McDuff Mann, and
YOUNG M. RABB and MCDUFF MANN under
the Style of RABB & MANN, HENRY
MORNINGSTAR, AND JAMES W. MANN.

(See S. C., Reporter's ed., 348-352.)

In Bowen v. Newell, 8 N. Y. 190, in 1853, it
was held that a negotiable draft on the cashier
of a bank, dated October 5, directing him to
pay a specified sum on October 12, could not
be presented for payment, so as to hold the Jurisdiction-bankruptcy-conveyance by as-
drawer and indorser, until October 15.

In Cook v. Renick, 19 Ill. 598, 602, in 1858, it was said that by the common law as adopted by the Legislature of Illinois, A bill of exchange payable on a given day does not mature till three days after the day appointed on its face for its payment."

In Coffin v. Loring, 5 Allen, 153, in 1862, it was held that the maker of a note which is payable by installments, at future times certain, with interest, is entitled to grace on both the principal and the interest; and that the condition of a mortgage given to secure the payment of the same sums and interest, at the same times, is not broken until the expiration of the grace which is allowed upon the note. On the same principle it was decided in Oridge v. Sher borne, ubi supra, that the maker of a promissory note, payable by installments on days named in the note, was entitled to days of grace on the falling due of each installment.

The case of Ivory v. State Bank, 36 Mo. 475, in 1865, was like that of Bowen v. Newell, ubi supra. A negotiable draft on a bank dated October 12, directing it to pay a specified sum on October 22, was held to be payable on Octo

ber 25, and not before.

signee-sale by state court-injunction.

*Where a sale of the lands of a bankrupt estate
has been made and confirmed by order of the bank-
ruptcy court, and the lands have been conveyed by
the assignee, the Circuit Count of the United States
is without jurisdiction at the suit of the purchaser
to enjoin a sale of the same lands about to be made
upon the order of a state court.
Argued Oct. 23, 1885.
[No. 30.]

Decided Nov. 16, 1885.

APPEAL from the Circuit Court of the
United States for the Southern District of
Alabama.

Statement of the case by Mr. Justice Woods:
Dana Sargent, one of the appellants, was the

sole plaintiff at the commencement of the suit
in the circuit court.
1879. It alleged in substance as follows:
His bill was filed July 10,

[348]

The Pensacola Lumber Company, a corporation of the State of New York, was, on February 27, 1875, adjudicated bankrupt by the District Court of the United States for the day of May following, a deed of assignment of Southern District of New York, and, on the 18th all the property of the bankrupt was executed The principle deducible from all the authori- to the assignee in bankruptcy. The property ties is, that, as to every bill not payable on de- so conveyed consisted in part of a large body of mand, the day on which payment is to be made land in Escambia County, in the State of Alato prevent dishonor is to be determined by add-made on December 22, 1875, these lands were bama. Under a decree of the bankruptcy court, ing three days of grace, where the bill itself sold at public sale on January 5, 1876, in the does not otherwise provide, to the time of pay- City of New York, and were purchased by [349] ment as fixed by the bill. This principle is formulated into a statutory provision in Eng- was confirmed by the court on January 18, 1876, Dana Sargent, one of the plaintiffs. The sale land, in the Bills of Exchange Act, 1882, 45, and, Sargent having complied with the terms of 46 Vict. chap. 61, § 14. sale, on the 25th of the same month the assignee conveyed the land to him, and he at once took and still retained possession of them. A few days before the Pensacola Lumber Co. was adjudicated bankrupt, to wit: on the 18th, 19th and 22d of February, 1875, all of the defendants respectively, except the sheriff of Escambia County, commenced actions against it by attachAlabama, and the writs of attachment were ment in the Circuit Court of Escambia County, levied on the lands above mentioned of the Pensacola Lumber Co. lying in the County of Escambia. More than two years afterwards, to wit: at the fall term in the year 1878, of the Circuit Court of Escambia County, that court *Head note by Mr. Justice WOODS.

In the present case, the time named in the
acceptance after the word
"due" can be re-
garded only as the time of payment fixed by
the bill, to which days of grace are to be add-
ed, and not as a date which includes days of
grace. This view goes to the foundation of the
action, and makes it unnecessary to examine
any other question, and leads to the conclusion
that the judgment must be reversed, and the case
be remanded to the Circuit Court, with a direc-
tion to award a new trial; and it is so ordered.

True copy. Test:

James H. McKenney, Clerk, Sup. Court, U. S.

rendered final judgments against the Pensacola | nolds, 96 U. S. 340 [Bk. 24, L. ed. 644]. In a
Lumber Co. in all the attachment suits, and or- timely suit brought by the assignee in bank-
dered the lands attached to be sold to satisfy the ruptcy, there is no doubt that, upon a proper
same, in disregard of the fact that the attach- showing, the circuit court might have enjoined
ments had been dissolved by the adjudication proceedings in the attachment suits in the state
of the defendant as a bankrupt. On June 24, court. This is the express ruling in Chapman
1879, the clerk of the Circuit Court of Escambia v. Brewer, 114 U. S. 158 [Bk. 29, L. ed. 83].
County issued to the sheriff an order, directing But the plaintiff in this case is not the assignee
him to advertise and sell the lands attached, in in bankruptcy. Sullivan, the transferee of Sar-
obedience to the judgments condemning them gent, the vendee at the bankruptcy sale, was the
to be sold, and the sheriff was about to execute real plaintiff and the only party who, at the final
the order.
hearing, asked for the injunction. The question
therefore is, Does any law relating to proceed.
ings in bankruptcy authorize an injunction at
the instance of a purchaser of property at a
bankruptcy sale or his vendee, to stay proceed-

The bill alleged that the said order of sale had
thrown a cloud upon the title of Sargent to the
lands, and had impaired their value; that the
execution of the order of sale would still further
increase the cloud upon the title, and furtherings in a state court?
depreciate the value of the lands, impair plain-
tiff's business and credit, and inflict an injury
for which he could obtain no satisfaction,
owing to the insolvency of the defendants and
the insufficiency of the sheriff's bond and estate;
and that the lands, consisting of ninety odd sec-
tions and parts of sections, would probably, if
sold, be bought by many persons, and thus
plaintiff would be involved in a multiplicity of
suits to vindicate his title.

The bill further alleged that the defendants, other than the sheriff, were general creditors of the bankrupt and parties to the bankrupt proceedings under which the lands were sold and [350] bought by Sargent. The prayer of the bill was that the sheriff, his agents and deputies might be enjoined from selling the lands attached. Before final hearing, by consent of the parties, an amendment was made to the bill, by which Daniel F. Sullivan, who was represented to be the assignee of Dana Sargent, the purchaser of the lands, was made a party plaintiff. The defendants demurred to the bill on several grounds, among which were that the bill was without equity, and the court without jurisdiction. The Circuit Court made a decree by which the demurrer was sustained and the bill dismissed. From that decree the plaintiffs appealed.

Messrs. Charles E. Mayer, Richard L.
Campbell and Lewis Abraham, for appellants.
Mr. H. A. Herbert, for appellees.

Mr. Justice Woods delivered the opinion of
the court:

Section 720 of the Revised Statutes of the United States provides "that the writ of injunction shall not be granted by any court of the United States to stay proceedings in any court of a State, except in cases where such injunction may be authorized by any law relating to proceedings in bankruptcy."

[351]

There is no Act of Congress expressly authorizing a Circuit Court of the United States to restrain by injunction, even at the suit of an assignee in bankruptcy, proceedings in a state court. The case of Chapman v. Brewer, ubi supra, was a bill in equity filed by an assignee in bankruptcy to enjoin the defendant from selling the property of the bankrupt, upon execution issued out of the state court. The jurisdiction to issue the writ in that case was placed by the court upon section 5024 of the Revised Statutes, which authorized the District Court, sitting in bankruptcy, when a petition in involuntary bankruptcy had been filed, to restrain by injunction all persons from interfering with the debtor's property; and upon section 4979, which gives the Circuit Court concurrent jurisdiction with the District Courts, of all suits at law or in equity brought by an assignee in bankruptcy against any person claiming an adverse interest in any property transferable to or vested in him. The court, in the case cited, said: "It must be held that Congress, in authorizing a suit in equity in a case like the present, has, in order to make the other relief granted completely effective, authorized an injunction as necessarily incidental and consequent to prevent further proceedings under the levies already made and new levies under the judgment." The case makes it clear that the injunction to stay proceedings in a state court is only allowed by the statute for the purpose of aiding the assignee in bankruptcy to discharge his duty and of protecting the property of the bankrupt estate for the equitable distribution among the creditors. But there is no Act of Congress from which can be inferred authority to a court of the United States to issue an injunction to restrain proceedings of a state court at the instance of a purchaser at a bankruptcy [352] sale, or of his vendee.

The right of the assignee in bankruptcy, by section 5057 of the Revised Statutes, to maintain any suit touching any property or rights of property transferable to or vested in him agains! any person claiming an adverse interest, is cut off by section 5057 of the Revised Statutes, by the lapse of two years from the time the cause of action accrued.

The sole purpose of the bill in this case was
to restrain the execution of an order of the Cir-
cuit Court for the County of Escambia, a court
of the State of Alabama; and no relief which,
upon the averments of the bill, this court could
grant would be effectual without the writ of
Injunction prayed for. The Circuit Court of
the United States was, therefore, deprived of! But the contention of the plaintiff in this case
power, by the section just quoted, to protect the is that the Bankruptcy Act, without limitation
rights of the plaintiff, unless the writ of injunc- of time, allows a purchaser at a bankruptcy
tion was authorized by the law relating to pro- sale, or his vendee, to sue out a writ of injunc
ceedings in bankruptcy. Haines v. Carpenter, tion from a federal court to restrain proceed-
91 U. S. 254 [Bk. 23, L. ed. 345]; Dial v. Rey-ings in a state court, while it denies that right

Decree affirmed.
True copy. Test:
James H. McKenney, Clerk, Sup. Court, U. S. full, as follows:

LOUISVILLE AND NASHVILLE R. R. CO., and in each county, city and incorporate town

"Sec. 2. That should any railroad, or part of 1. "Due process of law," as applied to proceed- a line of railroad, in this State, be in the hands Ings for the levy and collection of taxes, does not or under the control of a receiver or other perimply nor require the right to such notice and hear-son, by order or decree of any court in this or ing as are considered essential to the validity of the any other State, it shall be the duty of such re2. The mode of valuing property for taxation un-ceiver or other person to make, under his oath,

[322]

[323]

"Kentucky Railroad Tax Cases."

the returns and valuations required by the first | for state purposes and for the purposes of such
section of this Act; and should such president county, city, town or precinct. And all exist-
or chief officer of any railroad company, or such ing laws in this State, authorizing the assess-
receiver, fail to make said returns and valua- ment and taxation of the property of railroad
tions on or before the first day of August in companies by counties, cities or incorporated
each and every year, the said auditor shall pro- towns, are hereby repealed; and no county, city
ceed and ascertain the facts and values required or incorporated town in this State shall here-
by this Act to be returned, and in such manner after assess, levy or collect any taxes on the
and by such means as he may deem best, and property of railroad companies of this State,
at the cost of the company failing to make the except as provided by this Act.
returns and values.

"Sec. 3. That the governor of the State, on or before the first day of August, 1878, shall appoint three disinterested freeholders, citizens of this State, who shall constitute a Board of Equalization, who shall meet annually at the office of the auditor in Frankfort, on the first day of September in each year, a majority present constituting a quorum for the transaction of business; and at the said meetings the auditor shall lay before them the returns made to him under this Act, and any schedules and valuations as he may have made under the second section hereof; and should the valuations, or any of them, in the judgment of said board, be either too high or too low, they shall correct and equalize the same by a proper increase or decrease thereof. Said board shall keep a record of their proceedings, to be signed by each member present at any meeting; and the said board is hereby authorized to examine the books and property of any railroad company to ascertain the value of its property, or to have them examined by any suitable disinterested person, to be appointed by them for that purpose. The members of said board shall hold their office for the term of four years, and shall receive for their services ten dollars per day and all traveling and other necessary expenses whilst in actual service; Provided, That said service shall not be for a longer period of time [324] than twenty days in any one year; and before proceeding to act under their appointment, they shall take an oath before the governor of the State, that they will faithfully and impartially perform their duties as members of said Board of Equalization; and in the case of the death, resignation of either, or failure to act, the governor shall fill the vacancy by another appoint

ment.

"Sec. 4. The same rate of taxation for state purposes which is or may be in any year levied on other real estate in this Commonwealth shall be and is hereby levied upon the value so found by the said board, of the railroad, rolling stock and real estate of each company; and the same rate of taxation for the purposes of each county, city, town or precinct, in which any portion of any railroad is located, which is or may be in any year levied on other real estate therein, shall be, and is hereby, levied on the value of the real estate of said company therein, and of the number of miles of such road therein, reckoned as of the value of the average value of each mile of such railroad with its rolling stock, as ascertained as aforesaid. And immediately after the said board shall have completed its valuations each year, the Auditor of Fublic Accounts shall notify the clerk of each county court, of the amount so assessed for taxation in his county, and each railroad company of the amount of its assessment for taxation

"Sec. 5. All taxes levied under the provisions of this Act shall be paid on or before the 10th day of October in each year; and for a failure to pay the same, the officers of the said companies shall be subject to the same penalties to which they are now subject for a failure to pay the taxes now levied by law. And the taxes in behalf of the Commonwealth may be recovered by action in the Franklin Circuit Court, and those in behalf of the counties by actions [325] in the courts of civil common-law jurisdiction in such counties, respectively.

"Sec. 6. That all laws in conflict with this Act are repealed.

"Sec. 7. This Act shall take effect from its passage."

The powers and duties conferred by this Act upon the Board of Equalization were, by a subsequent Act approved April 19, 1882, devolved upon the Board of Railroad Comissioners, appointed under an Act approved April 6, 1882.

These actions were brought in the Franklin Circuit Court in pursuance of the 5th section of the Act.

The cause of action against the Cincinnati, New Orleans and Texas Pacific Railroad Company was set out in the petition, according to the practice in Kentucky, as follows:

"The plaintiff states that the defendant is a railroad company and corporation, and is, and was during the year 1882, the owner of, by lease, and operating, a line of railway lying in the State of Kentucky known as the Cincinnati Southern Railway, and the same constructed under, and chartered and incorporated by,an Act of the General Assembly of the Commonwealth of Kentucky, entitled 'An Act to authorize the trustees of the Cincinnati Southern Railway to acquire the right of way and to extend a line of railway through certain counties in this Commonwealth,' approved February 13, 1872.

"Plaintiff states that the defendant, for the purpose of assessment and taxation for the year 1882, as required by law, reported to the Auditor of Public Accounts of the State of Kentucky the total length of said road owned and operated by it as aforesaid and the value thereof per mile, and also reported its engines, cars, depot grounds, improvements and other real estate, and the value thereof. The total valuation of said roads, including sidings and other taxable property, as reported, was — dollars.

"Plaintiff states that after said report and valuation was made to the Auditor of Public Accounts by the defendant, the Board of Railroad Commissioners, who by law constitute a Board of Equalization to value and assess the railroad property of the State, after being sworn, as required by law, met on the first day of September, 1882, at the office of the auditor, in Frankfort, and with a majority of said board

[326]

[327]

present, constituting a quorum, the auditor
placed before them the valuations, returns and
report made to him by defendant.

Commonwealth in all the cases, and were af-
firmed by the court of appeals; and thereupon
the present writs of error were allowed and
have been prosecuted.

Messrs. C. B. Simrall, Wm. Lindsay and
Holmes Cummins, for plaintiffs in error:

Corporations and corporate property are within the 14th Amendment. Morawetz, Private Corp. § 457, and authoritics cited; Marshall v. B. & O. R. R. Co. 16 How. 327 (57 U. S. bk. 14, L. ed. 959; Sinking Fund Cases, 99 U. S. 718 (Bk. 25, L. ed. 501); Slaughter House Cases, 16 Wall. 36 (83 U. S. bk. 21, L. ed. 394); Butchers Union Co. v. Crescent City Co. 111 U. S. 746 (Bk. 28, L. ed. 585); Louisville v. Commonwealth, 1 Duvall, 295; L. & N. R.R. Co. v. Commonwealth, 1 Bush, 253.

"Plaintiff states that said Board of Equali-
zation continued its sittings from day to day,
as provided by law, of which the defendant had
due notice; and plaintiff avers that defendant State taxation is embraced in the 14th
did appear before said board by its officers, Amendment. San Mateo Tax Cases, 8 Am. &
agents, and attorneys, and presented such facts, Eng. R. R. Cas. 11; Poindexter v. Greenhow, 114
figures and information and argument in rela-. S. 270, 297, 335, 336 (ante, 185, 199, 202, 204.)
tion to the valuation and assessment for taxa-
tion of its said property as it saw proper to.
"Plaintiff states that said board, after a full
hearing of defendant, by her officers, agents,
and attorneys, and a full consideration of said
returns, reports, information, and arguments
before them, valued and assessed for taxation
for the year 1882 the defendant's line of rail-
road lying in this State, the same reported by
defendant to the auditor, together with the
rolling stock, engines, cars, depot grounds, im-
provements, and other real estate, at the sum
of $6,027,942, and on the day of Sep-
tember, 1882, returned and filed with the Aud-
itor of Public Accounts the record of said as-
sessment and valuation, signed and attested, as
provided by law, a certified copy of which,
marked 'A,' is filed herewith as a part hereof.
"Plaintiff states that the Auditor of Public
Accounts, before the 10th day of March, 1882,
duly notified defendant of the amount of its
assessment for taxation, and, as required by
law, opened an account with defendant, charg-
ing it with the sum of $28,632.42, the amount
of tax due the State of Kentucky upon said as-
sessment and valuation of the defendant's
property for the year 1882 at 47 cents on the
one hundred dollars, which is the rate of taxa-
tion prescribed by law on such property, and
all other real estate of the Commonwealth. A
certified copy of said account is filed herewith
as a part hereof, marked ‘B.'

"Plaintiff states that the defendant is indebted to him in the sum of $28,632.42, taxes due as aforesaid for the year 1882, no part of which has been paid.

"Wherefore plaintiff prays judgment against the defendant for said debt, and interest from October 10, 1882, and for her costs and all proper relief."

In the case against the Louisville and Nashville Railroad Company, the petition is sub stantially the same, except the averment of the valuation of its lines of railroad, which, it is alleged, were valued and assessed at the sum of $15,521,406, on which the amount of tax, at 47 cents to the one hundred dollars, is $72,726.69, on which there is admitted a credit of $25,000, paid January 22, 1883.

The taxable property of the other plaintiff in error, the Chesapeake, Ohio and Southwestern Railroad Company, it is averred in the petition, otherwise substantially the same as in the other cases, was valued and assessed at $2,791,994, on which the tax levied was $13,261.98, which is credited with $6,798.32, paid January 5, 1883.

An answer was filed in each case, but, so far as they raised an issue of fact, they were withdrawn, and the causes were heard on demurrers, the questions of law being such as arose upon the face of the petitions.

Judgments were rendered in favor of the

The taxpayer is entitled, as a matter of right, to notice of any proposed change in the valuation of his property for taxation. Stuart v. Palmer, 74 N. Y. 183; Patten v. Green, 13 Cal. 325; State Railroad Tax Cases, 92 U. S. 575 (Bk. 23, L. ed. 663); K. P. R. R. Co. v. Russell, 8 Kan. 558; Cooper v. Board of Works, 108 Eng. Com. Law, 180; Cooley, Tax. 266.

As to what is constitutional taxation, see McQuillan's Case, 9 Dana, 513; Howell v. Bristol, 8 Bush, 498; Exchange Bank v. Hines, 3 Ohio St. 15; Cummings v. National Bank, 101 U. S. 158 (Bk. 25, L. ed. 905).

As to classification of railroad property, see Applegate v. Ernst, 8 Bush, 650; E. &. P. R. R. Co. v. Elizabethtown, 12 Bush, 238; C. N. O. & T. P. R. R. Co. v. Commonwealth, 81 Ky. 492.

Messrs. P. W. Hardin, Atty-Gen. of Kentucky, and Alvin Duvall, for defendant in

error:

The terms due process of law" as used in
the Federal Constitution, and the "law of the
land" as used in the State Constitution, have
never been construed to invest the citizen with
the right of hearing, notice, or appeal, as up-
plied to the taxing power of the State.

Murray v. Hoboken Land Imp. Co. 18 How.
276 (59 U. S. bk. 15, L. ed. 372); McMillen v.
Anderson, 95 U. S. 37 (Bk. 24, L. ed. 335);
Davidson v. New Orleans, 96 U. S. 101 (Bk. 24,
L. ed. 618); High v. Shoemaker, 22 Cal. 370;
Weimar v. Bunbury, 30 Mich. 211; Griffin v.
Dogan, 48 Miss. 17; Doe v. Deavors, 11 Ga. 82;
Cooley, Tax. 39.

The power of the State in the whole question
of regulating and apportioning its taxes has
uniformly been held unlimited. McCulloch v.
Maryland, 4 Wheat. 428 (17 U. S. bk. 4, L. ed.
606); Providence Bank v. Billings, 4 Pet. 563
(29 U. S. bk. 7, L. ed. 956); St. Louis v. Ferry
Co. 11 Wall. 429 (78 U. S. bk. 20, L. ed. 194);
State Tax on Foreign-Held Bonds, 15 Wall. 319
(82 U. S. bk. 21, L. ed. 186); Kirtland v. Hotch-
kiss, 100 U. S. 491 (Bk. 25, L. ed. 558); Young-
blood v. Sexton, 32 Mich. 415.

Mr. Justice Matthews delivered the opinion of the court:

Two federal questions arise on the record, in these cases, contained in the following propositions affirmed by the plaintiffs in error:

[331]