Ayers Scott McCabe

Petition for writ of habeas corpus.

[Syllabus from pages 443-444 intentionally omitted]

A writ of habeas corpus, directed to the marshal of the United States for the Eastern district of Virginia, having heretofore been issued by this court on the application of Rufus A. Ayers, attorney general of the state of Virginia, the marshal has made return thereto that the petitioner, whose body he produces, was in his custody and detained by him by virtue of an order, judgment, decree, and commitment of the circuit court of the United States for the Eastern districts of Virginia, a certified copy of which is attached as a part of the return; and further returned that the petitioner had not paid, and refuses to pay, the fine imposed upon him by said order. The order of commitment, dated at Richmond, October 8, 1887, is as follows:

'ON ATTACHMENT FOR CONTEMPT-IN THE CIRCUIT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF VIRGINIA.

In re Rufus A. Ayers.

'This matter came on this day to be heard upon the rule heretofore issued against Rufus A. Ayers, attorney general of the state of Virginia, to show cause why he should not be attached for contempt in disobeying the restraining order heretofore granted in the suit of Cooper et al. v. Marye et al., on the sixth day of June, 1887, and his answer thereto; on consideration whereof the court is of opinion, and doth order and adjudge, that the said Rufus A. Ayers is guilty of contempt in his disobedience of said order, and that he do forthwith dismiss the suit of The Commonwealth v. The Baltimore & Ohio Railroad Company, instituted by him in the circuit court of the city of Richmond, and that for his said contempt he be fined the sum of $500, and stand committed in the custody of the marshal of this court until the same be paid, and he purge himself of his contempt by dismissing said suit last herein mentioned.'

A transcript of the proceedings, orders, and decrees of the circuit court of the United States for the Eastern district of Virginia in the suit of Cooper et al. v. Marye et al., referred to in the order of commitment, is also produced, and set out in full as a part of the record in this matter. From that it appears that on June 6, 1887, James P. Cooper and others, suing on their own behalf and for all others similarly situated, being aliens, subjects of Great Britain, filed their bill of complaint in the circuit court of the United States for the Eastern district of Virginia against Morton Marye, auditor of the state of Virginia, Rufus A. Ayers, the attorney general thereof, and the treasurers of counties, cities, and towns in Virginia, and the commonwealth attorneys of counties, cities, and towns in said state, whose names they prayed they might be allowed to insert in the bill as defendants when discovered.

In that bill it is alleged that, by an act of the general assembly of Virginia approved March 30, 1871, and another approved March 28, 1879, the state of Virginia had provided for the issue of a large number of bonds bearing interest coupons, which she thereby contracted should be received in payment of all taxes, debts, and demands due to her, of which large numbers, amounting to many millions of dollars, had been in fact issued; that said coupons, issued under both of said acts, are payable to bearer, and both as a contract to pay interest, and as a contract that they shall be received in payment of taxes, are negotiable instruments, free in the hands of any bona fide purchaser for value from any equity or burden whatever; that there are outstanding and overdue in the hands of the public at large more than $4,000,000 of these overdue coupons; that, in pursuance of a plan subsequently conceived and adopted to destroy the marketable value of these coupons, the general assembly of the state of Virginia, by the fifteenth section of an act dated February 14, 1882, forbade all the officers of the state to pay and redeem the same according to the tenor of the contract contained therein, and by an act dated January 26, 1882, the collectors of taxes were forbidden to receive the same in payment of any taxes due to them; that nevertheless these statutes were declared by the supreme court of the United States to be unconstitutional and void; that thereafter the complainants, on the faith of said decision, and the belief caused thereby that the said state would be utterly unable by any legislative enactment to impair the value of said coupons as a tender for taxes, had bought a large quantity of said coupons in the open money market of the city of London and elsewhere, amounting to more than $100,000 nominally, at a cost of more than $30,000; that this purchase was made for the purpose of selling said coupons to the tax-payers of Virginia, to be used by them as tenders for taxes due said state, the complainants believing that they would be able to sell said coupons to such tax-payers at a considerable advance on the price paid for them, many of which the complainants have sold to said tax-payers; that the general assembly of Virginia enacted another statute, dated May 12, 1887, a copy of which is set out as an exhibit to the bill, whereby, as is alleged, 'the treasurer of each county, city, and town in the state is ordered to furnish to the commonwealth's attorney thereof a list of all persons who have tendered the said state's coupons in payment of their taxes, and said commonwealth's attorneys are ordered to institute suits by summary proceedings in the name of said state against all such persons to recover a judgment against them for the amount of said taxes so previously due by them; that the said tax-payers are thereby required to submit to a judgment against them by default, or to appear in court and plead a tender of said coupons, and then prove affirmatively that the coupons tendered by them are the state's coupons, and not counterfeit and spurious coupons, the burden of proving the same being placed upon the tax-payer, and the coupon being taken to be prima facie spurious and counterfeit.'

In the bill it is further alleged 'that said act is repugnant to section ten of article one of the constitution of the United States, for the reason that, taken in connection with said act before mentioned of January 26, 1882, it first commands the state's officers to refuse to receive those coupons which are undoubtedly her own, as well as those which are spurious, (and your orators charge that there are none such,) and then commands her officers to bring said suits against those who have tendered said coupons of said state, as well as against those who have tendered spurious coupons; that it imposes upon the defendants heavy costs and fees, although all taxes due by them were paid by said tender; and it makes the judgment to be recovered in said suit a perpetual lien upon all the property of said tax-payer for said taxes, and for said costs and fees also; thus fixing a perpetual cloud upon the title of said taxpayer to his property.'

It is further alleged in the bill 'that, by another act of the general assembly of said state approved January 26, 1886, it is provided that upon a trial of the issue to be made up under said act of May 12, 1887, the defendant shall produce the bond from which the coupon so tendered by him was cut, and prove that it was cut from said bond;' and that, as very few of said bonds are owned by persons residing in Virginia, the tax-payers would be utterly unable to produce said bonds, as required by said act.

It is further alleged therein 'that, by another act of said general assembly, approved _____, 1886, it is provided that the tax-payer undertaking to prove said tender shall not be allowed to introduced expert evidence to prove the genuineness of said coupons, and all that have been issued under either of said acts are engraved only, as said acts provided they may be, and are not signed manually.' Wherefore it is alleged that 'said tax-payers who cannot produce said bonds will be utterly unable to prove their coupons to be genuine upon said trial, the state thus forcing them into a lawsuit in her own courts, in which she has taken effectual precautions beforehand to make it impossible they can win, and to make it a legal certainty that they must lose when they cannot produce said bonds; that said act is a device and trick enacted to take away from and deprive said coupons of their value as tender for taxes.'

It is further alleged therein that the supreme court of appeals of the state of Virginia has decided that said last-named two acts, requiring said bonds to be produced, and forbidding the use of expert testimony, are valid laws, not repugnant to the constitution of the United States. It is further alleged in the bill that, as the great bulk of the tax-payers of Virginia pay small sums, 'if her officers are allowed to enforce said act of May 12, 1887, against them, the profit to be derived from purchasing year orators' coupons will be too small to induce them to do so, and, indeed, it will be impossible for them to use said coupons at all, except in the very limited cases in which they can produce said bonds;' and that 'your orators will not only loss the profit which they had a right to expect they would make when they purchased said coupons, but they will be unable to sell them to Virginia's tax-payers at any price, and thus their entire property in the same will be destroyed; and your orators charge and aver that, in any event, unless they are granted the injunction hereinafter prayed for, they will lose a sum greater than $2,000.'

It is further charged in the bill 'that the treasurer of each county, city, and town in said state is about to report to each commonwealth's attorney the name of every tax-payer who has tendered coupons, and each commonwealth's attorney is going at once to institute the suits provided for by said act of May 12, 1887, against persons holding coupons bought from your orators, as well as against all others; and they are informed and believe, and so charge, that in every case in which tenders of coupons have been made to the auditor of the state, who is Morton Marye, (and many have been made to him,) the said auditor, and Hon. R. A. Ayers, who is attorney general thereof, are about to institute the suits which said act provides for their instituting, whereby all coupons which your orators have sold to Virginia tax-payers will be condemned as spurious, although they are all genuine coupons issued by the state of Virginia, and all her tax-payers will be intimidated and deterred from buying from your orators, and all others in the future, any more of said coupons.'

It is further charged in an amended bill 'that acts of the general assembly of the state of Virginia, which are repugnant to section 10 of article 1 of the constitution of the United States, commanded the treasurer of each county to levy on and sell the property of each tax-payer who has tendered coupons in payment of his taxes; and said acts also command said treasurers to return the real property of such tax-payers delinquent where no personal property can be found to be seized and sold; and your orators charge, therefore, that unless said officers are enjoined from bringing said suits hereinbefore described, the treasurer of each county will proceed to execute said other unconstitutional acts by levying on such tax-payer's property, or by returning the same delinquent where no personal property can be found, thus creating a cloud upon the title of such taxpayer's property.'

The prayer of the bill is that 'the said Morton Marye, auditor of Virginia, R. A. Ayers, the attorney general thereof, and the treasurer and commonwealth's attorney of each county, city, and town in the state of Virginia, may be made parties defendant hereto, and that they, their agents and attorneys, may be restrained and enjoined from bringing or commencing any suit provided for by said act of May 12, 1887, or from doing any other act to put said statute into force and effect, and that until the hearing of a motion for said injunction a restraining order may be made to that effect,' and for general relief.

The act of May 12, 1887, set out as an exhibit to the bill, is as follows:An act to provide for the recovery, by motion, of taxes and certain debts due the commonwealth for the payment of which papers purporting to be genuine coupons of the commonwealth have been tendered. (Approved May 12, 1887.)

'(1) Be it enacted by the general assembly of Virginia that all taxes, including taxes on licenses, now due, or which may hereafter become due, to the commonwealth, in payment of which any paper of instrument purporting to be a coupon detached from a bond of this state shall have been or may here after be tendered, and not accepted as payment, and not otherwise paid, may be recovered in the circuit court having jurisdiction over the county or corporation in which said taxes shall have been assessed, or, if the tender was made to the auditor of public accounts in payment of taxes which he is authorized by law to receive, the said taxes may be recovered in the circuit court of the city of Richmond.

'(2) The court shall have jurisdiction without regard to the amount of the taxes claimed, and though the amount be less than twenty dollars.

'(3) The proceeding shall be by motion, in the name of the commonwealth, on ten days' notice, and shall be instituted and prosecuted by the attorney for the commonwealth or corporation in which the proceeding is, or, if it be instituted by direction of the auditor of public accounts, in the circuit court of the city of Richmond.

'(4) The notice may be served in any county or corporation in the state in the mode prescribed by the first section of chapter one hundred and sixty-four of the Code, (edition of 1873,) or it may be served on any agent of the defendant in the county or corporation in which the proceeding is; and the word 'agent,' as here used, shall include any person who shall have made the tender aforesaid on behalf of the defendant; or, if there be no known agent of the defendant in the said county or corporation, it may be served by the publishing the same one time in some newspaper printed in the county or city where the tax was assessed; or, if there be no paper printed in such county or city, then in some newspaper published in some county or city nearest to the county or city where such tax was assessed.

'(5) The motion may be tried or heard by the court or jury as motions in other civil cases. If the defendant relies on a tender of coupons as payment of the taxes claimed, he shall plead the same specifically and in writing, and file with the plea the coupons averred therein to have been tendered, and the clerk shall carefully preserve them. Upon such plea filed the burden of proving the tender and the genuineness of the coupons shall be on the defendant. If the tender and the genuiness of the coupons be established, judgment shall be for the defendant on the plea of tender. In such case the clerk shall write the word 'proved,' and thereunder his name in his official character, across the face of the coupons, and transmit them, together with a certificate of the court that they have been proven in the case, to the auditor of public accounts, who shall deliver the coupons to the second auditor, receiving therefor the check of the second auditor upon the treasurer, which check he shall pay into the treasury to the credit of the proper tax account.

'(6) If the defendant fails in his defense, and the taxes claimed are found to be due the state, any coupon filed by him with a plea of tender (and not spurious) shall be returned to him, and there shall be judgment for the commonwealth for the aggregate amount of the taxes due, and the interest thereon from the time they became due till the date of the judgment, with interest on the said aggregate amount from the date of the judgment until payment, and costs.

'(7) No antecedent lien of the commonwealth for the taxes for which any judgment is rendered, shall be deemed to be merged in the judgment or otherwise impaired by the recovery of the same, but such lien shall continue in force notwithstanding the judgment.

'(8) Every such judgment shall be docketed as prescribed by law in other cases, and the clerk shall issue execution thereon, directed to the sheriff of any county, (or sergeant of any city,) who shall account for the money collected thereon to the auditor of public accounts.

'(9) Should coupons be tendered the officer in satisfaction of said execution, he shall note the fact of such tender upon the execution, and return it to the clerk's office; and thereupon the auditor of public accounts may direct an action to be brought upon the judgment. This action shall be instituted and prosecuted in the mode herein prescribed for actions to recover judgments for taxes, and similar actions may be instituted whenever coupons are tendered in satisfaction of any judgment obtained by the commonwealth under the provisions of this act.

'(10) The clerk of the court in which any such judgment is rendered in behalf of the commonwealth shall, as soon as it is rendered, transmit a certified abstract thereof to the auditor of public accounts, who shall record the same in a book to be kept for that purpose.

'(11) Immediately after the passage of this act the county and city treasurers, and all other officers authorized by law to collect or receive money for taxes due the commonwealth, including the license taxes, shall report to the commonwealth's attorneys of their respective counties and cities, and also to the auditor of public accounts, the names of all persons assessed or liable therein for taxes due the commonwealth who have heretofore tendered (otherwise than for identification and verification) coupons for such taxes, and which taxes remain unpaid, the amount of the taxes due, on what account, and when they become payable, and a description, as far as possible, of the coupons tendered, and when tendered; and they shall thereafter make like reports whenever and as soon as any such tender may be made. As soon as the auditor of public accounts shall receive such reports, he shall credit the proper officer with the taxes named therein for which coupons were tendered.

'(12) The attorneys for the commonwealth, and the attorney general, when it is his duty under this act to represent the commonwealth in any case in the circuit court in the city of Richmond, upon such report being made to them, or whenever they are otherwise informed of any such tender having been made, shall forthwith institute and prosecute such proceedings as are hereinbefore required.

'(13) In any case instituted under the provisions of this act, in which there is a judgment for the commonwealth, a fee of ten dollars shall be allowed the attorney for the commonwealth, or the attorney general, as the case may be, which fee and fees of the clerk and other officers for services rendered in the case, as well as such other costs as are allowed by law in other cases in which the commonwealth is a party, shall be taxed in the costs against the defendant. The commonwealth shall not be liable for any fees or costs in any proceedings under this act.

'(14) If any officer fail to perform any duty required of him by this act he shall be fined not less than one hundred dollars, nor more than five hundred dollars.

'(15) This act shall be in force from its passage.'

On this bill the following order was made:

'CIRCUIT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF VIRGINIA.

'James P. Cooper, H. R. Beeton, F. J. Burt, N. J. Chinnery, W. M. Chinnery, F. P. Leon, and W. G. Woolston, against Morton Marye, Auditor, R. A. Ayers, Attorney General, the Treasurers of Counties, Cities, and Towns in Virginia, and the Commonwealth Attorneys of Counties, Cities, and Towns in said State, whose names complainants have leave to insert as they may be discovered.

'Upon reading the bill of the complainants, it is ordered that Morton Marye, auditor, R. A. Ayers, attorney general, each and every treasurer of a county, city, or town in the state of Virginia, and each and every commonwealth attorney for a county, city, or town in said state, be restrained from bringing or commencing any suit against any person who has tendered the state of Virginia's tax-receivable coupons in payment of taxes due to said state, as provided for and directed by the act of the legislature of Virginia approved May 12, 1887, described in the bill, and of which a copy is attached thereto, and that each and all of said parties, their agents and attorneys, be restrained from doing any act to put said statute into force and effect until the further order of the court.

'And it is ordered that the motion for an injunction in this case be set down for hearing at the circuit court of the United States at Richmond, Virginia, on the first Monday in October next: provided, that the attorney general of the state of Virginia, or either of the defendants, may move the court for an earlier hearing thereof after ten days' written notice to the solicitor of the complainants: and provided, further, that a copy of this bill and of this order be served on the attorney general of the state of Virginia within ten days after the filing thereof.

'June 6, 1887.'

A copy of this order, together with a copy of the bill, was served on the petitioner Ayers, the attorney general of Virginia, on June 7, 1887.

On October 8, 1887, the following proceedings took place, viz.:

'And now, at this day, to-wit, at a circuit court of the United States for the Eastern district of Virginia, held at Richmond, in said district, this eighth day of October, A. D. 1887:

'J. P. Cooper and others against Morton Marye, Auditor, etc., and others. (In Equity.)

'This cause came on this day to be heard upon the motion of the complainants for a preliminary injunction, and was argued by counsel; upon consideration whereof it is adjudged, ordered, and decreed, for reasons stated in writing and made part of the record, that the injunction be issued as prayed in the bill, and remain in force until the further order of the court.

'HUGH L. BOND, Circuit Judge.