and co-operation, to accept the offer. "You may, therefore," said he, "from this date, consider the 1-32 part interest [meaning 1-37 part] of the lands in question mine, and proceed to make the necessary legal transfer. The money, $10,000, will be ready at an early date." Barney replied under date of November 30th, express. ing his pleasure that the heirs had concluded to take the interests in the lands to themselves, and saying that it could not be sold to other parties than those now owning 36-37 of the interest. "Should they buy it, they might be charged with misrepresentation should the purchase prove profitable. Should it not prove a good investment for the heirs, none will be able to say that they went in blind.'" To this Latham replied, under date of December 26th, saying that he supposed the moneys accrued upon sales made since the division and estimate will be deducted from the $10,000; asking the amount to be refunded, and saying that he had it in his hands, and would forward it as soon as the parties could come to an understanding of how and when the transfer should be made. Barney replied January 2, 1873, that the parties had no title to the lands, the title being in the railroad company; and suggesting that he make a contract for the purchase from each individual heir, and saying that since the division of the estate $1,265.38 had been collected. Again he wrote him on January 13th, saying that he was not in a position to give him title to any interest in the lands, owing to the fact that it was still in the railroad company, and suggesting as follows: "I see no way for you to get an interest in the property, other than your legal share, except by contract with each heir, and theu file said contract with me, and I will make the distribution of the proceeds of the sales the same as I do all others holding the original interest." The affair remained in this condition for more than two years, when Barney, being informed that all objections to the sale had been withdrawn, remitted him, under date of April 16, 1875, a final statement, with explanations, and a check for $298.33, to close the estate. This check was acknowledged and retained, though he declined to give a receipt. No further correspondence passed between these parties until December of that year.

In the mean time, however, and on January 30, 1873, William H. Latham wrote to Mr. Barney that he had been in communication with his brother Edward; had seen Mr. Barney's last letters to him, and was glad he was willing to give up to him and such others of the heirs as desired their share of the proceeds of these sales, upon being reimbursed the $10,000 paid; and saying that six, if not more, of the heirs were willing to make this arrange. ment; and that, if he had known anything whatever of these lands, he would have been unwilling to sign away his interest for one-ninth of $10,000. This letter was partly, at least, in reply to Mr. Barney's letter to Mr. Edward P Latham of January 13th. To this Barney replied, under date of February 10th, protesting that the parties had no title to the lands, and offer

ing to make a distribution of all the money in his hands for lands sold since the date of the final distribution, upon being refunded the $10,000, and offering to continue to make such distribution as long as he continued to be the agent of the party now having an interest in the proceeds of the lands. Again he wrote him, under date of April 4th, saying that the $10,000 had been promised last December. by his brother Edward, and that it was due to the parties that advanced it that it should be at once refunded. Receiving no answer to this, he wrote him again, May 13th, to the same effect, saying that there were important suits being threatened, which, if successful, would take from them a por. tion of the lands, and saying that the purchasers were perfectly willing that the heirs should have their interest returned to them, provided a decision were made "within, say thirty days from this date; but they are not willing to pay for the property, and have you hold the right at* any future time to elect to return the money for the purchase and take the interest. They have now held the matter open for six months. To this Latham replied, May 19th, by a somewhat evasive letter, saying that he had been ready to pay his proportion; but, as Barney required the assent of all the heirs before relinquishing the lands as a whole or any portion, he had dismissed the whole thing from his mind as impracticable. He closed by saying that perhaps his brother had acted hastily and injudiciously, and he had written and urged him to immediate, decisive action.

On June 19th Mr. Barney wrote again, protesting that none of the parties desired to make a great bargain out of the estate; that the settlement was made to avoid expense; that the time had passed which he had named for the heirs to avail themselves of the privilege of taking their proportion of the lands; but, that there might be no cause for complaint, he would again open the matter for a 30-days option for one or all of the heirs. "If," says he," the heirs do not take the interest, I am compelled under my agreement to become one of the purchasers. That being the case, I wish to rid myself of the ugly position of being a seller and a purchaser. I would not, for thrice the value of the prop. erty, have the ill will of the heirs."

It seems that at this time a controversy had arisen between the Winona & St. Peter Railroad Company and the St. Paul & Sioux City Railroad, which was pending before the secretary of the interior, and had been decided alternately in favor of each party, and was subsequently carried into the courts. There was also a claim pending in favor of one Drake for a threeeighths interest in all the stock, lands, and other property of the defendant; and another by one Kirk, who claimed one-fourth of the property, franchises, stock, and profits of the defendants, which culminated in a suit in the following October.

The state had also made a claim for taxes upon these lands, and it was then believed that these taxes, if enforced,; would render them nearly valueless. *No reply was made to Barney's letter of*

latter power was expressly or by reasonable implication conferred by statute. In the opinion in the case of Norton v. Dyersburg, the case of Claiborne Co. v. Brooks, 111 U. S. 400, 4 Sup. Ct. Rep. 489, was cited with approval.

In Young v. Clarendon Tp., 132 U. S. 340, 10 Sup. Ct. Rep. 107, it was held to be settled law that a municipality has no power to issue its bond in aid of a railroad, except by legislative permission; and in the opinion of the court, delivered by Mr. Justice LAMAR, the cases of Claiborne Co. v. Brooks and of Kelley v. Milan were cited and approved.

In Hill v. Memphis, 134 U. S. 198, 203, 10 Sup. Ct. Rep. 562, the opinion of the court being delivered by Mr. Justice FIELD, it was held that the power conferred by a statute on a municipal corporation to subscribe for the stock of a railroad company did not include the power to issue negotiable bonds representing a debt, in order to pay for that subscription; and it was said that that rule was well settled. It was added: "The inability of municipal corporations to issue negotiable paper for their indebtedness, however incurred, unless authority for that purpose is expressly given or necessarily implied for the execution of other express powers, has been affirmed in repeated decisions of this court;" and the cases of Police Jury v. Britton, Claiborne Co. v. Brooks, Kelley v. Milan, and Young v. Clarendon Tp. were cited with approval.

In Merrill v. Monticello, 138 U. S. 673, 687, 691, 11 Sup. Ct. Rep. 441, it was held that the implied power. of a municipal corporation to borrow money to enable it to execute the powers expressly conferred upon it by law, if existing at all, did not authorize it to create and issue negotiable securities to be sold in the market and to be taken by the purchaser freed from the equities that might be set up by the maker; and that to borrow money, and to give a bond or obligation therefor which might circulate in the market as a negotiable security, freed from any equities that might be set up by the maker of it, were essentially different transactions in their nature and legal effect. In the opinion of the court, which was delivered by Mr. Justice LAMAR, the cases of Police Jury v. Britton, Claiborne Co. v. Brooks, Kelley v. Milan, Young v. Clarendon Tp., and Hill v. Memphis were cited with approval. It was added: "It is admitted that the power to borrow money, or to incur indebtedness, carries with it the power to issue the usual evidences of indebtedness, by the corporation, to the lender or other creditor. Such evidences may be in the form of promissory notes, warrants, and, perhaps, most generally, in that of a bond. But there is a marked legal difference between the power to give a note to a lender for the amount of money borrowed, or to a creditor for the amount due, and the power to issue for sale, in open market, a bond, as a commercial security, with immunity, in the hands of a bona fide holder for value, from equitable defenses. The plaintiff in error contends that there is no legal or substantial difference between the two;

that the issuing and disposal of bonds in market, though in common parlance, and sometimes in legislative enactment, called a sale, is not so in fact; and that the socalled purchaser who takes the bond and advances his money for it is actually a lender, as much so as a person who takes a bond payable to him in his own name. The opinion then stated that the logical result of the doctrines announced in the five cases which it cited clearly showed that the bonds sued on in the case of Merrill v. Monticello were invalid, and* added: "It does not follow that, because the town of Monticello had the right to contract a loan, it had, therefore, the right to issue negotiable bonds, and put them on the market as evidences of such loan. To borrow money, and to give a bond or obligation therefor which may circulate in the market as a negotiable security, freed from any equities that may be set up by the maker of it, are, in their nature and in their legal effect, essentially different transactions. In the present case, all that can be contended for is that the town had the power to contract a loan, under certain specified restrictions and limitations. Nowhere in the statute is there any express power given to issue negotiable bonds as evidence of such loan. Nor can such power be implied, because the existence of it is not necessary to carry out any of the purposes of the municipality. It is true that there is a considerable number of cases, many of which are cited in the brief of counsel for plain tiff in error, which hold a contrary doctrine. But the view taken by this court in the cases above cited and others seems to us more in keeping with the well-recog nized and settled principles of the law of municipal corporations.

"9

See

We therefore must regard the cases of Rogers v. Burlington and Mitchell v. Burlington as overruled, in the particular referred to, by later cases in this court. 1 Dill. Mun. Corp. (4th Ed.) §§ 507, 507a. The case of Dwyer v. Hackworth, 57 Tex. 245, is relied upon by the plaintiff. In that case Dwyer, a tax-payer, brought suit against Hack worth, assessor and collector of taxes of the city of Brenham, to enjoin the collection of certain taxes assessed against Dwyer, to pay the interest on the bonds involved in the present suit. In the district court of Washington county, Tex., in which the suit was brought, the defendant had judgment, sustaining the legality of the taxes and dismissing the plaintiff's suit. The case was carried by the plaintiff to the supreme court of Texas, and in the opinion of that court it is said that the city of Brenhamn had authority under its charter to borrow money for general purposes, "and did son borrow, by selling its bonds, to the amount of $15,000." This expression is urged by the plaintiff as recognizing the lawfulness of the issue of the bonds; but the court, while reversing the judgment below, said that it could not enjoin the collection of the taxes on the ground of the invalidity of the bonds, without making the holders of those bonds parties to the suit, citing Board v. Railway Co., 46 Tex. 316. There was therefore no adjudi

cation in that case as to the validity of the bonds, and the remark of the court that the city borrowed money by selling its bonds to the amount of $15,000 is of no force on the question of the validity of the bonds. Lewis v City of Shreveport, 108 U. S. 282, 287, 2 Sup. Ct. Rep. 634.

It is also to be remarked that the ordinance of June 7, 1879, provided that the city should have the right to redeem the bonds "at any time after five years from date," while each bond on its face states that it is redeemable by the city "after the expiration of ten years from date hereof." The officers of the city had no power to depart from the terms of the ordinance by varying the time limited for redemption.

We see nothing in the provisions of the constitution of Texas of 1876, before cited, to aid the power of the city to issue these negotiable bonds.

We cannot regard the provision in the charter of the city, that bonds of the corporation of the city "shall not be subject to tax under this act," as recognizing the validity of the bonds in question. Whatever that provision may mean, it cannot include bonds unlawfully issued.

As there was no authority to issue the bonds, even a bona fide holder of them cannot have a right to recover upon them or their coupons. Marsh v. Fulton Co., 10 Wall. 676; East Oakland v. Skinner, 94 U. S. 255; Buchanan v. Litchfield, 102 U. S. 278; Hayes v. Holly Springs, 114 U. S. 120, 5 Sup. Ct. Rep. 785; Daviess Co. v. Dickinson, 117 U. S. 657, 6 Sup. Ct. Rep. 897; Hopper v. Covington, 118 U. S. 148, 151, 6 Sup. Ct. Rep. 1025; Merrill v. Monticello, 138 Ū. S. 673, 681, 682, 11 Sup. Ct. Rep. 441.

As the action here is directly upon the coupons, and there is no right of recovery upon them, the judgment must be reversed, and the case remanded to the circuit court, with a direction to sustain the defendant's general demurrer and special demurrer and exceptions to the plaintiff's original petition, and to sustain the special exceptions and demurrers of the defendant to the plaintiff's supplemental petition, and to enter judgment thereon in favor of the defendant, and dismissing both of said petitions, with a general iudgment for the defendant.

MR. Justice HARLAN, (dissenting.)

Mr. Justice BREWER, Mr. Justice BROWN, and myself being unable to concur in the opinion just rendered, the grounds of our dissent will be stated.

The charter of the city of Brenham, granted in 1873, provided that "the city council shall have the power and authority to borrow, for general purposes, not exceeding fifteen thousand dollars, on the credit of said city;" also that the "bonds of the corporation of the city of Brenham shall not be subject to tax under this act." Sp. Laws Tex. pp. 14, 23.

Under the authority conferred by this charter, the city council in 1879 passed an ordinance, entitled "An ordinance to provide for the issue and sale of fifteen thousand dollars in coupon bonds of the city, to borrow money for general purposes. Bonds, negotiable in form, and

to the full amount authorized by the ordinance, were issued by the city in 1879, and the coupons held by the German-American Bank were from the bonds so issued The court does not hold that the issuing of these bonds was in violation of the constitution of Texas adopted in 1876. But it does hold that while the city, under its power to borrow, could give to the lender non-negotiable paper as a "voucher" for the repayment of the money borrowed, it could not legally issue negotiable instruments or bonds as evidence of the loan. This view is conceded to be in conflict with Rogers v. Burlington, 3 Wall. 654, and Mitchell v. Burlington, 4 Wall. 270.3 But it is said that later adjudications of* this court have, in effect, overruled those cases. We cannot give our assent to the doctrine announced in the present case. Nor, we submit with some confidence, is that doctrine sustained by any decision of this court which has been cited.

What was the case of Rogers v. Burlingtop? Besides the general powers appertaining to municipal corporations, the city of Burlington had express power, by its charter, "to borrow money for any public purpose, the matter being first submitted to popular vote. The peopl having voted, by the requisite majority, in favor of issuing and lending $75,000 in the bonds of the city to a particular railroad company, bonds for that amount, negotiable in form, were issued. The court held the construction of a railroad to be a public purpose, within the meaning of the charter of the city, and that it made no difference whether the bonds were sold in the market by the officers of the municipality, or were first delivered to the company and sold by its agents for the same purpose. "Technically speaking," the court observed, "it may be said that the transaction, as between the company and the defendants, was, in form, a contract of lending; but, as between the defendants and the persons who pur. chased the bonds in the market, it was undeniably a contract of borrowing money; and the same remark applies to the transaction in its practical and legal effect upon all subsequent holders of the securities who have since become such for value, and in the usual course of busi

The minority dissented, not upon the ground that an express power in a munici pal corporation to borrow money did not give authority to execute negotiable instruments for the money borrowed,— although that question was upon the very face of the case,-but upon the ground that the transaction was not one of borrowing money. Mr. Justice FIELD, Speaking for the minority, said: "Here the au thority conferred is to borrow money; yet no money was borrowed, but the bonds of the city were lent. 'Borrowing money' and lending credit' are not convertible terms. The two things which they in-dicate are essentially distinct and different. Mr. Justice* MILLER, in a separate dissenting opinion, called attention to the fact that the supreme court of Iowa had then recently held the bonds, involved in that suit, to be void, upon the ground

"

tended by his letter of June 19th. Nothing was done for nearly two years, when Latham reopened the correspondence by asking further particulars. Another correspondence of a year then ensued, the property in the mean time apparently having come into the market, and largely increased in value. In view of the lapse of time, the organization of a new company, and the change of circumstances, Mr. Barney was apparently unwilling to renew his first proposition, but submitted a new one, or rather a modification of the first, which the plaintiffs declined to consider, and in December, 1876, filed this bill. In the mean time Danford N. Barney and Judge Kelly, the two most material wit. nesses, who acted for the other heirs and advised the sale, have both died, and the parties have lost the benefit of their testimony.

Under the circumstances, we think the plaintiffs should have taken immediate action. They were fully informed of the facts of the transaction, or at least they were informed of enough to put upon them the necessity for further inquiry, and they must have known that delay, even for a year or two, might work a very great change in the value of their brother's interest. If the syndicate were successful in their litigation with respect to these lands, they would undoubtedly largely increase in value; upon the other hand, if they were unsuccessful, the interest might be comparatively worthless. No explanation is given for their delay, and none is suggested, except an apparent intention to wait and see what the value of these lands was likely to become, and whether it would prove more profitable to set aside the sale or let it stand. While the delay in this case was not a long one, measured simply by the time which elapsed after the sale was made, we think, under the circumstances, it amounted to a ratification of such sale, and that the bill should have been dismissed.

The decree of the court below is therefore reversed, and the case remanded with directions to dismiss the bill, with costs.

Mr. Justice FIELD dissented.

Mr. Justice BREWER did not sit upon the argument of this case, and took no part in its decision.

(144 U. S. 198)

SHERMAN V. GRINNELL et al.
(April 4, 1892.)

SUPREME COURT-JURISDICTION-FEDERAL QUES

TION.

1. A decision by a state court that an attorney, who has received money for his client under an award against the United States, is estopped from denying his client's title thereto, or from setting up as against him the fact that the award has been vacated, and that the matter is pending in the court of claims, involves no federal question, and is not reviewable in the supreme court.

2. In a suit by the client against the attorney, the question whether the award and the receipt for the money paid under it are admissible in evidence depends either upon the local or general law of evidence, and presents no federal question.

In error to the city court of New York. Dismissed.

STATEMENT BY MR. CHIEF JUSTICE fuller.

This was an action brought by the executors of the estate of Moses H. Grinnell, deceased, formerly collector of the port of New York, in the city court of New York. against Roger M. Sherman, to recover the sum of $1,778.95 collected from the United States for plaintiffs' testator by defendant as his attorney.

An award by the secretary of the treasury in favor of Mr. Grinnell for the sum in question, made May 2, 1885, was offered in evidence on the trial, to which the defendant objected on the ground that the jurisdiction of the secretary of the treasury to make the award had not been shown, and that it appeared affirmatively on the face of the award that the secretary had no power to make it. This objection was overruled, and exception taken. Plaintiffs also put in evidence a copy, certified under the seal of the collector of customs for the port of New York, of a paper whereby Roger M. Sherman receipted to the collector for the sum in question as attorney for the executors of Mr. Grinnell. Defendant objected to the admission of this receipt in evidence on the ground that the certification was insufficient, and alsoɔ that the receipt purported to be part of the proceedings in the treasury matter, in respect of which no proof had been offered of the jurisdiction of the secretary. The objection was overruled, and exception taken.

The court made findings of fact and conclusions of law, and among other things found that the defendant, as attorney for the executors, received the sum of $1,778.95 from the treasurer of the United States on or about May 9, 1885. On June 1, 1885, the executors make demand upon Sherman for the money, which he refused to pay over, alleging that since the award the matter had been reopened by the secretary, and was still in debate, and evidence was offered on his behalf tending to show this, and that the matter of the award had been sent to the court of claims.

The city court held that the defendant wasestopped from denying his clients' title after having collected the money for them, and gave judgment for the amount claimed, with interest, costs, etc., whereupon the defendant took the case by appeal to the general term of the court, by which the judgment was affirmed.

It was said in the opinion of the general term, delivered by HALL, J.: "Defendant seeks to justify his refusal to pay over by the claim that since the money was paid over to him the matters out of which it arose or accrued have been reopened by the government, and referred to the court of claims, and he fears that, in case the award should be revoked, he may be compelled to repay the money to the government. Defendant's relations with plaintiffs were simply as attorney at law, and in fact the money was paid by the government to them, not to him. He was a mere conduit through which it passed. His receipt was their act, not his own; his acts were their acts, and binding upon them. The money was theirs, not his, and he