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Vol. II.]

UNITED STATES v. HUGHES.

[No. 7.

than was required when the offence was committed for which this suit is brought. It has always been held that the provisions of the Constitution of the United States (Article 1, section 9), that no ex post facto law shall be passed by Congress, and (Article 1, section 10), that no state shall pass any ex post facto law, apply not merely to criminal laws and cases, but to cases for the recovery of penalties and forfeitures. The point of contention before the supreme court in the cases of Cummings and of Garland was in regard to the question of how far the definition of an ex post facto law extended, and whether a given provision of law amounted to the infliction of a penalty or punishment.

In the case of Cummings, the Constitution of the State of Missouri, adopted in 1865, contained a provision requiring that every priest and clergyman, in order that he might continue in the exercise of his profession in that state, and be allowed to preach or teach, should take and subscribe an oath that he never had aided the Rebellion or committed certain other designated acts, and that if he exercised such profession without taking and subscribing such oath, he should, on conviction, be punished. Mr. Cummings, a priest of the Roman Catholic Church, was indicted and convicted in a state court in Missouri, for teaching and preaching, as a priest of that religious denomination, without having taken such oath. The case was removed to the supreme court of the United States, and that court held that the provisions of law which deprived Mr. Cummings of the privilege of acting as a priest or minister, and of preaching or teaching, imposed a penalty for some acts which were innocent at the time they were committed, and increased the penalty prescribed for such of the acts specified as at the time constituted public offences, and in both particulars violated the provision of the federal Constitution, prohibiting the passage by any state of an ex post facto law; and, further, that they violated such provision of the federal Constitution by altering the rules of evidence with respect to the proof of the acts specified, and assuming the guilt, instead of the innocence of the party, and requiring him to establish his innocence by taking the oath, instead of requiring the government to prove his guilt, and declaring that he could show his innocence. only by taking the oath. In all these respects the provisions of the Constitution of Missouri were an ex post facto law.

To apply these principles to the present case, if the defendants do not produce these books and papers, as required by the 5th section of the Act of 1874, the allegations set forth in the written motion, and which are allegations contained in the declaration, are to be taken as confessed. The defendants are obliged to produce the books and papers in order to save themselves from having a judgment entered against them. They are required by the statute to establish their innocence in this case by producing the papers, and there is only one way in which they can establish their innocence, and that is by producing the papers. That is precisely what existed in the case of Cummings. The fact of the non-production of the books and papers is made conclusive evidence of the guilt of the defendants, unless explained to the satisfaction of the court. In respect to the acts specified in the declaration, which are set forth in the written motion, the statute alters the rules of evidence as to the proof of those acts. The language of the court in the case of Cummings seems to me to entirely

Vol. II.]

UNITED STATES v. HUGHES.

[No. 7

cover the 5th section of the Act of 1874, as applicable to a pending suit to recover penalties and forfeitures; for I intend to limit my decision to that point, and do not intend to express any opinion about that section in its applicability to cases arising after the passage of the statute in which it is found. In the case of Cummings the court held that the disability imposed on the party to act as a teacher or a preacher constituted a punishment, by depriving him of a right he had to exercise a lawful avocation. The court then go on to give the definition of an ex post facto law, which is found in Calder v. Bull, supra, and further say: "The clauses in the Missouri Constitution which are the subject of consideration do not in terms define any crime, or declare that any punishment shall be inflicted, but they produce the same result upon the parties against whom they are directed, as though the crimes were defined and the punishment was declared. They assume that there are persons in Missouri who are guilty of some of the acts designated. They would have no meaning in the Constitution were not such the fact. They are aimed at past acts and not future acts. They were intended especially to operate upon parties who, in some form or manner, by action or words, directly or indirectly, had aided or countenanced the Rebellion, or sympathized with parties engaged in the Rebellion, or had endeavored to escape the proper responsibilities and duties of a citizen in time of war; and they were intended to operate by depriving such persons of the right to hold certain offices and trusts, and to pursue their ordinary and regular avocations. This deprivation is punishment; nor is it any less so because a way is opened for escape from it by the expurgatory oath." Just as, in this case, a way is opened for escape from the consequence of not producing the books, by producing them. "The framers of the Constitution of Missouri knew at the time that whole classes of individuals would be unable to take the oath prescribed. To them there is no escape provided; to them the deprivation was intended to be, and is absolute and perpetual. . . . . Clauses which prescribe a penalty for an act of this nature are within the terms of the definition of an ex post facto law; they impose a punishment for an act not punishable at the time it was committed."

Then followed immediately the Garland case, supra. That case arose on the provision of the federal Constitution which prohibits Congress from passing an ex post facto law. On the 24th of January, 1865 (13 U. S. Stat. at Large, 424), Congress passed an act, providing that thereafter no person should be admitted to practise as an attorney or counsellor in any federal court, or should continue to so practise by virtue of any previous admission, unless he should first have taken and subscribed the oath prescribed by the Act of July 2, 1862 (12 U. S. Stat. at Large, 502), to the effect that he had not given aid to the Rebellion. The court held that this operated to exclude from practising law in the federal courts all parties who had offended in the particulars enumerated; that such exclusion for past conduct was punishment for such conduct; and that, in such exclusion, the act imposed a punishment for some of the acts specified, which were not punishable at the time they were committed, and for others of the acts it added a new punishment to that before prescribed, and was thus within the inhibition of the Constitution against the passage of an ex post facto law.

UNITED STATES v. HUGHES.

Vol. II.]

[No. 7.

In its application to the present case, the 5th section of the Act of 1874 seems to me to be clearly open to the objections stated in the cases of Cummings and Garland. A suit to enforce a penalty or a forfeiture is a suit to inflict a punishment for the commission of the offence set forth in the statute counted upon in the declaration. The Act of 1874 provides that if the books or papers are not produced, if the defendant fails or refuses to produce them, these allegations stated in the motion, and which are allegations contained in the declaration, shall be taken as confessed, unless the failure or refusal is explained to the satisfaction of the court. The only way to escape this consequence is to produce the books or papers. It will not do to say that the court must grant this motion upon the theory that the defendants will produce the books and papers, and, therefore, that the question will not arise, and that then judgment will not pass against the defendants by confession. The act must be construed as a whole. The court must contemplate that the defendants will fail to produce the books and papers.

The question would perhaps be presented in a better form if the motion now made by the district attorney, for a notice to be issued requiring the defendants to produce the books and papers, under the 5th section of the Act of 1874, were to be granted pro forma, and then the defendants were to fail to produce the books and papers. Then, when the district attorney should ask the court to take as confessed the allegations set forth in his motion, the court would, on the objection of the defendants, hold that this could not be done, because the statute is ex post facto, as applied to this case, and unconstitutional. If the defendants should produce the books and papers, no question would arise; except that, perhaps, they might produce them, and when they were offered in evidence, the defendants might raise the objection that it was equally unlawful for the court. to receive them in evidence when produced, as for the court to give judgment against the defendants by confession because of their non-production. But it is to be assumed that if the defendants wish them to be excluded, they will not produce them in obedience to the notice. However this may be, it seems to me that in a case of this kind, where the statute, after providing for the serving of the notice, specifies what shall follow if the party fails to produce the books and papers, the court must contemplate the consequences of a failure to produce. A resort is had to this procedure with a view on the part of the government to the entire benefit supposed to exist in the statute, which is, that if the books are not produced the allegations are to be taken as confessed. If the notice should be issued and served, and the defendants should fail or refuse to produce the books and papers, and the district attorney should then make a motion to the court to take the allegations as confessed, I should deny the motion upon the ground that to do so would be to enforce a provision of law that is unconstitutional and void, as being ex post facto. being ex post facto. Whether it would or would not be more advisable to take this last course which I have suggested is for counsel to consider. Of course, down to a certain point in the statute, there is nothing ex post facto in it. It is the penalty afterwards imposed that makes it ex post facto; and therefore the court, when called upon to issue a notice of the kind, must contemplate the consequences prescribed in the statute. At the same time, under these circumstances, the parties

Vol. II.]

HOTCHKISS v. THE NATIONAL SHOE AND LEATHER BANK.

[No. 7.

being present and understanding the views of the court, such a notice will, if it shall be considered more desirable, be issued in this case, that not being regarded as a precedent for issuing such a notice in any other case.

SUPREME COURT OF THE UNITED STATES.

[OCTOBER, 1874.]

AS TO WHAT CIRCUMSTANCES ARE SUFFICIENT TO PUT A PURCHASER OF NEGOTIABLE INSTRUMENTS ON INQUIRY.

HOTCHKISS v. THE NATIONAL SHOE AND LEATHER BANK.

1. In May, 1863, the Milwaukee and Saint Paul Railway Company issued coupon bonds, by each of which the company acknowledged its indebtedness to certain persons named, or bearer, in the sum of $1,000, and promised to pay the amount to the bearer on the 1st day of January, 1893, at the office of the company in the city of New York, with semi-annual interest at the rate of seven per cent. per annum, on the presentation and surrender of the coupons annexed as they severally become due. Immediately following this acknowledgment of indebtedness and promise of payment, there was in each of the instruments a further agreement of the company to make what was termed "the scrip preferred stock," attached to the bond, full-paid stock at any time within ten days after any dividend should have been declared and become payable on such preferred stock, upon surrender, in the city of New York, of the bond and the unmatured interest warrants. To each of the bonds there was originally attached by a pin the certificate of scrip preferred stock thus referred to, which stated that the complainant was entitled to ten shares of the capital stock of the company, designated as "scrip preferred stock ;" and that upon the surrender of the certificate and accompanying bond, and all unmatured coupons thereon, as provided in the agreement, he should be entitled to receive ten shares of full-paid preferred stock. Three of these bonds with certificates attached were stolen from the plaintiff, and were taken by the defendants as collateral security for notes discounted by them, without actual notice of any defect in the title of the holder; but the certificates were at the time detached from the bonds. Held, (1), that the bonds were negotiable instruments, notwithstanding the agreement respecting the scrip preferred stock contained in them, that agreement being independent of the pecuniary obligation of the company; and, (2), that the absence of the certificates originally attached to the bonds, when the latter were taken by the defendants, was not of itself a circumstance sufficient to put the defendants upon inquiry as to the title of the holder.

2. The title of a person who takes negotiable paper before due for a valuable consideration can only be defeated by showing bad faith in him, which implies guilty knowledge or wilful ignorance of facts impairing the title of the party from whom he received it; and the burden of proof lies on the assailant of the taker's title.

MR. JUSTICE FIELD delivered the opinion of the court.

This was a suit to compel the defendants to surrender to the complainant three coupon bonds of the Milwaukee and Saint Paul Railway Company, each for one thousand dollars, of which he claims to be the owner, and which he alleges were received by the defendants in bad faith, with notice of his rights. These instruments are dated May 6, 1863; by each of them the company acknowledges its indebtedness to certain persons named, or bearer, in the sum designated, and promises to pay the amount to the bearer on the 1st of January, 1893, at the office of the

Vol. II.]

HOTCHKISS V. THE NATIONAL SHOE AND LEATHER BANK.

[No. 7.

company in the city of New York, with semi-annual interest at the rate of seven per cent. per annum, on the presentation and surrender of the coupons annexed as they severally become due, with a provision that in case of non-payment of interest for six months, the whole principal of the bond shall become due and payable.

Immediately following this acknowledgment of the indebtedness of the company and its promise of payment, there is in each of these instruments a further agreement of the company to make what is termed "the scrip preferred stock," attached to the bond, full-paid stock at any time within ten days after any dividend shall have been declared and become payable on such preferred stock, upon surrender, in the city of New York, of the bond and the unmatured interest warrants.

The several instruments also state that the bonds are parts of a series of bonds issued by the company, amounting to $2,200,000, and that upon the acquisition of certain other railroads the issue of bonds may be increased in certain designated amounts; that the bonds are executed and delivered in conformity with the laws of Wisconsin, the articles of association of the company, the vote of the stockholders, and resolution of the board of directors; and that the bearer of each bond is entitled to the security derived from a mortgage of the property and franchises of the company, executed to certain designated trustees, and to the benefits to be derived from a sinking fund, established by the mortgage, of all such sums of money as are received from the sales of lands granted to the company by the United States or by the State of Wisconsin.

To each of these bonds there was originally attached by a pin the certificate of scrip preferred stock which is referred to in the body of the instrument. This certificate was to the effect that the complainant was entitled to ten shares of the capital stock of the company, designated as "scrip preferred stock;" and that upon the surrender of the certificate and accompanying bond, and all unmatured coupons thereon, at any time within ten days after any dividends should have been declared and become payable on the full stock of the preferred stocks of the company, the complainant should be entitled to receive ten shares of such full-paid preferred stock, and that this scrip preferred stock was only transferable on the books of the company at their office in the city of New York, in person or by attorney, on the surrender of the certificate.

In November, 1868, these bonds, with coupons and certificates attached, belonged to the complainant, and during that month, were stolen from a bank in Bridgeport, Connecticut, together with a large amount of other property there on deposit. They were received in January and February, 1869, by the defendants, banking institutions in the city of New York, as collateral security for notes discounted by them, and are now held as such security for those notes, or new notes given in renewal of them, and they were received without actual notice of any defect in the holders' title. At that time the certificates of scrip preferred stock, originally pinned to the bonds, were detached from them.

And the questions for determination are whether the agreement in the instruments as to the scrip preferred stock affected their negotiability, and whether the absence of the certificates attached was a circumstance sufficient to put the banks upon inquiry as to the title of the holder.

VOL. II.

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