Imágenes de páginas
PDF
EPUB
[blocks in formation]

debtedness." During 1889 (or about that time) Sebastian County, for the benefit of Greenwood District, issued certain non-interest-bearing warrants payable "out of any money in the Treasury appropriated for ordinary purposes" of which plaintiff in error became lawful holder and owner. It sued upon them in the United States Circuit Court, Western District of Arkansas, and obtained a judgment, January 26, 1891, for $13,703.29, "with interest at the rate of six per cent. per annum from this date until paid together with all its costs in and about this case laid out and expended." So far as not satisfied, this was revived in 1900 and again in 1910; and at different dates from 1896 to 1914 the county made payments thereon aggregating its face value together with six per cent. interest reckoned to March 21, 1893, and all costs.

An act of the Arkansas legislature, approved March 21, 1893, [Acts Ark. 1893, p. 145] provides: "No judgment rendered or to be rendered against any county in the State on county warrants or other evidence of county indebtedness shall bear any interest after the passage of this act"; and relying upon this inhibition the county claimed that the above-mentioned payments fully discharged the judgment against it. Thereupon, May 23, 1916, plaintiff in error petitioned the court below for a mandamus to compel payment of alleged accrued interest. Answering, the county denied further liability and then asked for an order requiring that the judgment be satisfied of record. The trial court refused a mandamus and directed satisfaction as prayed. Whether plaintiff in error's rights under the Federal Constitution would be violated by giving effect to the statute is the only question presented for our consideration. The Supreme Court of the State sustained its validity in Read v. Mississippi County, 69 Arkansas, 365, where the precise points here involved were presented.

The two revivals in 1900 and 1910 kept the judgment

Opinion of the Court.

249 U.S.

alive and permitted its enforcement beyond the periods fixed by statutes of limitation. Their entry gave it no greater efficacy than it possessed when first rendered.

Plaintiff in error maintains that the challenged act conflicts with § 10, Art. I, of the Constitution and also the Fourteenth Amendment forbidding a State from depriving any person of property without due process of law; but we think the contrary is settled by our opinion in Morley v. Lake Shore & Michigan Southern Ry. Co., 146 U. S. 162, 168, 171. There the judgment directed that interest should accrue from its entry without mentioning any rate, the statutory one then being seven per centum; later another act fixed six per centum for the future and the debtor claimed benefit of it while the creditor maintained that to permit this would violate both the contract clause and Fourteenth Amendment. Through Mr. Justice Shiras we said (p. 168): "After the cause of action, whether a tort or a broken contract, not itself prescribing interest till payment, shall have been merged into a judgment, whether interest shall accrue upon the judgment is a matter not of contract between the parties, but of legislative discretion, which is free, so far as the Constitution of the United States is concerned, to provide for interest as a penalty or liquidated damages for the non-payment of the judgment, or not to do so. When such provision is made by statute, the owner of the judgment is, of course, entitled to the interest so prescribed until payment is received, or until the State shall, in the exercise of its discretion, declare that such interest shall be changed or cease to accrue. Should the statutory damages for non-payment of a judgment be determined by a State, either in whole or in part, the owner of a judgment will be entitled to receive and have a vested right in the damages which shall have accrued up to the date of the legislative change; but after that time his rights as to interest as damages are, as when he first obtained his judg

[blocks in formation]

ment, just what the legislature chooses to declare. He has no contract whatever on the subject with the defendant in the judgment, and his right is to receive, and the defendant's obligation is to pay, as damages, just what the State chooses to prescribe. (p. 171). The discretion exercised by the legislature in prescribing what, if any, damages shall be paid by way of compensation for delay in the payment of judgments is based on reasons of public policy, and is altogether outside the sphere of private contracts. The further contention of the plaintiff in error, that he has been deprived of his property without due process of law, can be more readily disposed of. If, as we have seen, the plaintiff has actually received on account of his judgment all that he is entitled to receive, he cannot be said to have been deprived of his property." See Barnitz v. Beverly, 163 U. S. 118, 129.

[ocr errors]

It is insisted that as the judgment now under consideration specified a definite interest rate while the one in Morley v. Lake Shore & Michigan Southern Ry. Co., supra, did not, the doctrine there approved is inapplicable. To this we cannot assent; mere recital of a particular rate does not change the nature of the charge as a penalty or liquidated damages.

It should be noted that the county warrants, upon which plaintiff in error sued, bore no interest; if the parties had lawfully stipulated therefor, a different question would have been presented.

The judgment of the court below is

Affirmed.

Opinion of the Court.

249 U.S.

CITY OF RICHMOND v. BIRD ET AL.

CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE FOURTH CIRCUIT.

No. 195. Argued January 28, 29, 1919.-Decided March 3, 1919.

Under the law of Virginia and the charter of the City of Richmond, the city's claim for delinquent taxes on personal property, unsupported by distraint, is no better than the claim of a general creditor and is inferior to a landlord's lien secured by levy of a distress warrant. P. 177.

Section 64a of the Bankruptcy Act, in directing payment of taxes before dividends to creditors, means general creditors; when by the local law a lien for a private debt is superior to a claim for taxes, its status is preserved by § 67d (as it was before 1910), if the lien was given or accepted in good faith and not in fraud of the act, for a present consideration. Id.

240 Fed. Rep. 545, affirmed.

THE case is stated in the opinion.

Mr. George Wayne Anderson for petitioner.

Mr. James E. Cannon, with whom Mr. Samuel A. Anderson was on the brief, for respondents.

MR. JUSTICE MCREYNOLDS delivered the opinion of the

court.

November 4, 1909, the Chancery Court at Richmond upon petition filed the preceding day appointed a receiver for the Ainslie Carriage Company; February 3, 1910, the company was adjudged bankrupt in involuntary proceedings instituted November 6, 1909. At time of receiver's appointment taxes assessed upon the bankrupt's personal property for the years 1907, 1908 and 1909 were due the

[blocks in formation]

City of Richmond for which it had not distrained, although having authority so to do. Respondents, landlords of the bankrupt, under express statutory authority, levied a distress warrant November 1, 1909, upon its goods and chattels on account of rent due for the period since April 1, 1908. The question is whether their claim is entitled to priority of payment over the taxes. The Circuit Court of Appeals answered in the affirmative. 240 Fed. Rep. 545.

The city, while not disputing that levy of the distress warrant gave respondents a valid lien, claims priority under § 64a, Bankruptcy Act-"The court shall order the trustee to pay all taxes legally due and owing by the bankrupt to the United States, State, county, district, or municipality in advance of the payment of dividends to creditors, and upon filing the receipts of the proper public officers for such payment he shall be credited with the amount thereof, and in case any question arises as to the amount or legality of any such tax the same shall be heard and determined by the court."

Respondents maintain (1) that their lien, perfected through distraint, was fully protected by § 67d (as it read prior to 1910), Bankruptcy Act-"Liens given or accepted in good faith and not in contemplation of or in fraud upon this Act, and for a present consideration, which have been recorded according to law, if record thereof was necessary in order to impart notice, shall not be affected by this Act." And (2) that under Virginia law such a lien is superior to the inchoate one which the city had for unpaid taxes but neglected to perfect by exercising its summary power to distrain therefor after September first in year for which levied.

It is not denied that respondents obtained a present, valid lien upon the bankrupt's goods and chattels distrained November 1, 1909; nor is it now claimed this was annulled by adjudication of bankruptcy. That the

« AnteriorContinuar »